Turlock City Council
January 27, 2026

December 2025
Confidential and proprietary document by Sharecare, Inc. Dates and materials are subject to change.

Person-Centered
Care Program
Program Update

Program Demographics

PERSON-CENTERED CARE PROGRAM
2 69 Participants served from Turlock
76 Average age of enrollees
23% Enrollees living alone
62% Female enrollees
81% Enrollees reporting 2 or more
chronic conditions
33% Enrollees reporting mobility issues
92% Enrollees reporting 2 or more
Activities of Daily Living (ADL) needs
31% Reporting Diabetes as diagnosis

Comorbidities and ADLs

PERSON-CENTERED CARE PROGRAM
3 Self-reported Conditions Percentage
Impaired mobility/weakness/paralysis 38%
Diabetes (w/ and without complications) 29%
Cancer 24%
Lung Disease, COPD 21%
Cardiovascular Disease 18%
ALS/Parkinsons/Neurodegenerative Disease 18%
Arthritis/Chronic Pain 18%
Hypertension 12%
Dementia or Cognitive Impairment 12%
Behavioral Health (Anxiety, Depression, PTSD) 12%
Stroke 6%
Hearing Impaired or Blind 3%
Kidney Disease / Epilepsy 1%
Activities of Daily Living (ADL) Needs  Percentage
Light Housekeeping 81%
Mobility 65%
Meal Preparation 60%
Bathing 59%
Grocery Shopping or Errands 56%
Transfers (in/out of bed, chair) 55%
Laundry 54%
Managing medications 48%
Transportation 48%
Dressing 47%
Grooming 40%
Toileting 36%
Feeding 35%
Other (Companionship) 27%

Program Results

PERSON-CENTERED CARE PROGRAM
4 Non-professional caregivers experienced a large reduction in burden—especially those under significant strain.

High-Stress Caregivers:
• Those who began with the highest burden saw the greatest impact o Their average starting score was 20.7 (out of a maximum 30 points) o Their scores went down by 13.1 points, a 63.6% decrease All Caregivers with Positive Baseline Scores:
• Their average starting score was 19.7
• Their scores went down by 7.7 points, a 39.1% decrease All Caregivers with Positive Baseline
Burden Score (>0)
Caregivers with Positive Baseline and a
Decrease in Burden Score
Number of Participants 54 38
Avg Baseline Score 19.7 20.7
Avg Final Score 12.1 7.5
Avg Change in Score -7.7 -13.1
P-values:

All Caregivers: 0.007
Positive Baseline Score: <0.001
Positive Score + Decrease: <0.001
Caregiver Burden Among the Care Recipients’ Friend and Family Caregivers Summary

Program Results

PERSON-CENTERED CARE PROGRAM
5 Positive Baseline Score Positive Score + Decrease
# of Positive Screens 23 14
Avg Baseline Score 6.9 7
Avg Final Score 5.3 4.1
Avg Decrease in Score 1.6 2.9
P-values:

Positive Baseline Score: 0.008
Positive Score + Decrease: <0.001
Loneliness Among Care Recipients
Participants experiencing loneliness saw measurable improvements over time.

Participants Analyzed:
• 84 total with multiple check-ins
• 23 had positive loneliness scores at baseline and were included in the analysis Results for Those with High Loneliness:
• Average reduction: 1.6 points (↓ 23.4%)
• Impact: 47.8% improved enough to move into the “No or Mild” loneliness category Summary

Program Cost Impact

PERSON-CENTERED CARE PROGRAM
6 Living Arrangement Monthly Median Cost
(2025) - California*
Assisted Living  $6,631/month
Nursing Home:

Semi-private Room  $12,101/month
Nursing Home:

Private Room $14,037/month
*Source: Cost of Long-Term Care by
State | Cost of Care Report | Genworth
41,418
Total hours of in-home, non-medical care
$1,344/month
Cost to cover 32 hours per month of in-home,
community-based care

Member Story

PERSON-CENTERED CARE PROGRAM
7 Age & Gender
• 95-year-old female
Medical History
• Alzheimer’s disease
• Hypertension
• Dementia
Program Enrollment
• Enrolled since: March 2023
• Services received: Over 32 hours of free
care monthly
Program Impact
• Goal: Prevent institutionalization and
unnecessary hospitalizations
Age & Gender
• 65-year-old male
Member Health Status
• Cancer
• Undergoing active radiation therapy
• Suffered a stroke resulting in left-side paralysis
Partner Health Status
• 77-year-olf female
• Managing multiple chronic conditions
• Cancer, Barrett's Esophagus, Diverticulitis
Program Support
• The couple received 64 hours of free respite care
• Support provided to aid both in recovery

Confidential and proprietary document by Sharecare, Inc. Dates and materials are subject to change.

Confidential and proprietary document by Sharecare, Inc. Dates and materials are subject to change.

Program Impact

PERSON-CENTERED CARE PROGRAM
• Reduced caregiver burden  less likely to
be institutionalized
• Reduced loneliness  improved quality of
life, reduced mortality
• Lower cost of care as compared to
institutionalization  strong ROI
• Better patient experience (care recipients
rated caregivers 4.9/5 for quality and
professionalism)  they get to stay home

City Council Staff Report
January 27, 2026

From: Isaac Moreno, Acting Deputy City Manager
Prepared by: Isaac Moreno, Acting Deputy City Manager
Agendized by: Susan E. Borrego, Interim City Manager

1. ACTION RECOMMENDED:

Motion: Approving the Measure A Annual Accountability Report for the Fiscal Year 2024- 2025

2. NARRATIVE:

Measure A general sales tax adoption requires a Citizens’ Oversight Committee to review all revenues and expenditures allocated to these funds. This Committee shall meet on a quarterly basis per fiscal year with specific meeting dates to be determined by Committee members. The Finance Department will provide a summary and accounting records within these meetings plus an annual accountability report for review and approval. At the November 12, 2025 meeting, the Committee reviewed and approved unanimously the Annual Accountability Report.

Per TMC 3-11-15 this report shall be presented to Council for review and approval. This report is included as Attachment A.

The Citizens’ Oversight Committee recommends approval of this annual report and has no findings.

3. FISCAL IMPACT / BUDGET AMENDMENT:

There is no fiscal impact for this action

4. ENVIRONMENTAL DETERMINATION:

This action is not subject to the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) of the CEQA guidelines. This action consists of “organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment” and therefore is not considered a project.

5. ATTACHMENTS:

1. Measure A Annual Accountability Report FY 2024-2025

Prepared:

Fund:

FISCAL YEAR:

Period:
2024-2025
Amended Budget
2024-2025
Actual to Date
2024-2025
Remaining Budget
% of Budget Received/
Expended
Revenues
Sales Tax 8,041,463$ 8,202,980.49$ (161,517)$ 102% Program 801 - 2025 Roads Bond Program
Interest Income 2025 Roads Bond -$ 405,497.58$ (405,498)$ Long Term Debt Proceeds -$ 31,649,327.00$ (31,649,327)$ 8,041,463$ 40,257,805.07$ (32,216,342)$ 501% Expenditures
Division 115 - Measure A
Salaries & Benefits - Measure A 240,563$ 189,363.27$ 51,200$ 79% Contract Attorney 10,000$ 22,901.65$ (12,902)$ 229% City Engineering Services 350,000$ 405,121.47$ (55,121)$ 116% Construction Management 2,335,000$ 2,204,328.94$ 130,671$ 94% Roads Design 4,536,500$ 3,506,343.71$ 1,030,156$ 77% Advertising -$ 228.00$ (228)$ 0% Shoe Allowance 200$ 250.00$ (50)$ 125% Construction Project 13,050,000$ 10,857,011.73$ 2,192,988$ 83% Program 801 - 2025 Roads Bond Program
Cost of Issuance 2025 Roads Bond -$ 421,940.77$ (421,941)$ #DIV/0! Total Expenditures 20,522,263$ 17,607,489.54$ 2,800,926 $ 86% Revenue Over / (Under) Expenses (12,480,800)$ 22,650,315.53$

FUND BALANCE
Balance Forward from Prior Fiscal Year 12,563,335.76$
Net Change to Fund Balance 22,650,315.53$
Current Balance 35,213,651.29$
2024-2025
Actual to Date
P#23031 Construction for Roads CIP Task #1 4,202,851.63$ P#23032 Construction for Roads CIP Task #1 4,146,419.07$ P#23033 Construction for Roads CIP Task #1 2,436,747.42$ 70,993.61$ P#24046 Emergency Repair of Farr Street Sanitary Sewer Main Construction Project
MEASURE A (Roads) - Annual Accountability Report
11/3/25
115-Measure A Roads
2024-2025
07/01/2024-06/30/2025

22-001 Design of Projects for 2022 Construction for Roads Program Bid Package #1
Streets Limits Year Length (Feet)
Delbon Avenue N. Olive Ave. to Colorado Ave. Completed in 2023 1,296 20th Century Blvd. Geer Rd. to N. Golden State Blvd. Completed in 2023 2,442 Flower Street N. Soderquist Rd. to N. 1st St. Completed in 2023 3,693 N. Orange Street W. Main St. to Flower St. Completed in 2023 1,053 Spruce Street South Ave. to High St. Completed in 2023 1,818 Locust Street Vermont Ave. to W. Main St. Completed in 2023 1,709 Mira Flores Drive El Paseo Dr. to Murphy Dr. Completed in 2023 2,849 Corello Street Marlee Dr. to Sierra Vista Dr. Completed in 2023 1,608 Julian Street N. Soderquist Rd. to N. 1st St. Completion in 2024 2,981 Park Street N. Soderquist Rd. to N. 1st St. Completion in 2024 3,445 East Avenue S. Golden State Blvd. to S. Daubenberger Rd. Completion in 2024 5,967 Old Vineyard Road E. Marshall St. to E. Canal Dr. Completion in 2024 1,312 Carrigan St. N. Johnson Rd. to N. Quincy Rd. Completion in 2024 974 Wayside Drive Geer Rd. to Pioneer Ave. Completed in 2023; NOC Recorded 3,251 Fosberg Road E. Monte Vista Ave. to E. Christoffersen Pkwy. Completed in 2023; NOC in 2024 2,677 TOTAL LENGTH 37,075
23-031 Mark Thomas Task Order No. 1 for Roads Program CIP Projects Streets Limits Year Length (Feet)
Mission Street Old Vineyard Rd. to N. Quincy Rd. 2024 construction 613 Tokay Avenue N. Johnson Rd. to N. Quincy Rd. 2024 construction 1,315 N. Quincy Road E. Marshall St. to E. Canal Dr. 2024 construction 1,348 El Capitan Drive N. Berkeley Ave. to Murphy Dr. 2024 construction 3,683 Kenneth Drive N. Berkeley Ave. to East End 2024 construction 627 El Camino Drive El Paseo Dr. to Murphy Dr. 2024 construction 2,845 La Linda Ct. El Capitan Dr. to El Capitan Dr. 2024 construction 485 N. Quincy Road E. Canal Dr. to Marie Dr. 2024 construction 1,343 Murphy Drive E. Canal Dr. to Mira Flores Dr. 2024 construction 889 TOTAL LENGTH 13,148
23-032 Provost & Pritchard Task Order No. 1 for Roads Program CIP Projects Streets Limits Year Length (Feet)
Lincoln Avenue Geer Rd. to Monroe Ave. 2024 construction 584 Monroe Avenue N. Center St. to N. Palm St. 2024 construction 771 Wolfe Avenue N. Center St. to E. Canal Dr. 2024 construction 1,476 N. Thor Street Wolfe Ave. to E. Canal Dr. 2024 construction 889 N. Center Street E. Main St. to Monroe Ave. 2024 construction 1,446 Myrtle Street Bell St. to N. Berkeley Ave. 2024 construction 1,299 Colorado Avenue E. Marshall St. to E. Canal Dr. 2024 construction 1,384 S. Broadway Avenue W. Main St. to D St. 2024 construction 915 TOTAL LENGTH 8,764
23-033 Siegfried Task Order No. 1 for Roads Program CIP Projects Streets Limits Year Length (Feet)
Columbia Avenue Lander Ave. to West Ave. South 2024 construction 2,595 Lane Street High St. to Castor St. 2024 construction 466 S. Beech Street W. Main St. to South End 2024 construction 662 S. Laurel Street Columbia St. to Vermont Ave. 2024 construction 1,345 Farr Street W. Main St. to Castor St. 2024 construction 1,305 TOTAL LENGTH 6,373
23-069 Siegfried Task Order No. 2 for Roads Program CIP Projects Street Name Limits Year Length (Feet)
The Burl North End to Chestnut St. 2025-26 construction 374 Florence St. N. 1st St. to West Ave. North 2025-26 construction 2,785 N. Beech St. W. Main St. to Park St. 2025-26 construction 1,388 Clifford Ave. W. Main St. to Park St. 2025-26 construction 1,351 W. Olive Ave. Lander Ave. to West Ave. North 2025-26 construction 2,532 Angelus St. S. Soderquist Rd. to Lander Ave. 2025-26 construction 3,848 S. Orange St. Lewis St. to Montana Ave. 2025-26 construction 519 S. Orange St. South Ave. to Bernell Ave. 2025-26 construction 718 Bernell Ave. Bethany Ave. to S. Orange St. 2025-26 construction 400 TOTAL LENGTH 13,915

Prepared:

Fund:

FISCAL YEAR:

Period:
2024-2025
Amended Budget
2024-2025
Actual to Date
2024-2025
Remaining Budget
% of Budget
Received/
Expended
Revenues 6,579,379$ 6,711,529.50$ (132,151)$ 102% Expenditures
Services, Supplies and Equipment:

Sales Tax Contingency Audit 15,000$ 8,422.87$ 6,577$ 56% Public Safety Building HVAC Project 325,377$ 309,055.14$ 16,322$ 95% Pierce Velocity Pumper Debt Payment 151,415$ 151,413.84$ 1$ 100% Police - Minor Equipment 75,000$ 54,286.85$ 20,713$ 72% Salaries & Benefits:

Administration Salaries & Benefits - City Manager 81,408$ 66,570.60$ 14,837$ 82% Administration Salaries & Benefits - Economic Development 81,777$ 68,572.32$ 13,205$ 84% Administration Salaries & Benefits - Finance 76,440$ 58,281.24$ 18,159$ 76% Administration Salaries & Benefits - Human Relations 43,266$ 33,405.08$ 9,861$ 77% Police Salaries & Benefits - Special Operations 144,664$ 143,926.20$ 738$ 99% Police Salaries & Benefits - Support Operations 548,226$ 590,137.96$ (41,912)$ 108% Police Salaries & Benefits - Field Operations 2,676,283$ 2,587,291.46$ 88,992$ 97% Fire Salaries & Benefits - Operations 1,753,586$ 1,643,521.43$ 110,065$ 94% Development Services Salaries & Benefits - Planning 63,463$ 4,284.00$ 59,179$ 7% Municipal Services and Benefits - Public Facilities 34,458$ 24,752.63$ 9,705$ 72% Parks Salaries & Benefits - Maintenance 331,996$ 88,502.06$ 243,494$ 27% Recreation Salaries & Benefits - Recreation Administration 102,410$ 77,951.73$ 24,458$ 76% Transfers Out:

Police Transfers Out - To F240 for LPR's 566,775$ 566,775.00$ -$ 100% Total Expenditures 7,071,544$ 6,477,150.41$ 550,780 $ 92% Revenue Over / (Under) Expenses (492,165)$ 234,379.09$

FUND BALANCE
Balance Forward from Prior Fiscal Year 7,037,772.59$
Net Change to Fund Balance 234,379.09$
Current Balance 7,272,151.68$
MEASURE A (General) - Accountability Report
11/3/25
118-Measure A General
2024-2025
07/01/2024-06/30/2025

This report illustrates the total expenditures from the passing of Measure A to June 30, 2025. These amounts include expenditures in Fund 115 Measure A - Roads Program and Fund 118 Measure A - General. The total Public Safety expenditures are 27.6% of the $61.1 million spent but 67.9% of the total expenditures in Fund 118 Measure A – General.

Roads Program59%General Fund Reserves6%Administrative Salaries3%Administrative Services/Support1%Fire Salaries7%Fire Services/Support6%Parks Salaries1%Planning Salaries0%Planning Services/Support1%Police Salaries12%Police Services/Support3%Public Facilities Salaries0%Recreation Salaries1%LIFE TO DATE EXPENDITURES Measure A Expenditures Total YTD Expenditures %Roads Program 36,241,782.70 59%General Fund Reserves 3,363,796.28 6%Administrative Salaries 1,899,834.82 3%Administrative Services/Support 531,492.80 1%Fire Salaries 4,516,745.04 7%Fire Services/Support 3,361,546.50 6%Parks Salaries 432,410.46 1%Planning Salaries 149,266.86 0%Planning Services/Support 750,000.00 1%Police Salaries 7,396,404.61 12%Police Services/Support 1,613,708.10 3%Public Facilities Salaries 208,727.29 0%Recreation Salaries 645,093.77 1%61,110,809.23 100%

City Council Staff Report
January 27, 2026

From: Isaac Moreno, Acting Deputy City Manager
Prepared by: Jennifer Figueroa, Housing Program Manager Agendized by: Susan E. Borrego, Interim City Manager

1. ACTION RECOMMENDED:

Resolution: Approving the purchase and sale agreement and joint escrow instructions, loan agreement, regulatory agreement, promissory note, deed of trust, and grant deed for the sale of the property located at 573 Birchwood Way, Turlock (APN 043-055-049), to be sold to Great Valley Housing Development Corporation, a non-profit organization, in the amount of $420,000, subject to the terms and conditions as outlined in Attachment B and authorize the Interim City Manager to sign all necessary documents to effectuate the transaction.

Resolution: Approving the purchase and sale agreement and joint escrow instructions, loan agreement, regulatory agreement, promissory note, deed of trust, and grant deed for the sale of the property located at 591 Birchwood Way, Turlock (APN 043-055-048), to be sold to Great Valley Housing Development Corporation, a non-profit organization, in the amount of $410,000, subject to the terms and conditions as outlined in Attachment C and authorize the City Manager to sign all necessary documents to effectuate the transaction.

2. NARRATIVE:

The City of Turlock currently owns three (3) residential properties that were purchased with the intent to rehabilitate the housing units, as necessary, to meet housing quality standards, and transfer the properties to qualified non-profit agencies to provide and sustain affordable rental housing or to sell to income eligible first-time homebuyers. Currently, one (1) unit is occupied by income-eligible tenants, while the other two (2) are vacant. One of the vacant properties is currently in the process of being sold through the First-Time Homebuyer Program.

A Request for Proposals (RFP) was issued in December 2025 for two (2) of the three (3) residential properties owned by the City of Turlock Housing Division. These properties were purchased with CDBG and HOME funds with the intent to be sold to an eligible non-profit organization to be used as affordable rental housing. The Loan Committee reviewed the proposals from responding agencies and has recommendations for the Council’s consideration. The transfers would be subject to the terms as detailed in Attachments B and C.

573 Birchwood Way

The property located at 573 Birchwood Way, Turlock, California, is a single-family home with three (3) bedrooms and two (2) bathrooms and is currently vacant. It was acquired in February 2023 with Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) program funds. The unit was rehabilitated in October 2025 utilizing Permanent Local Housing Allocation (PLHA) funds and HOME funds. Due to PLHA being used for the rehabilitation, the unit must remain affordable housing for a minimum period of 55 years.

Agenda Staff Report
1/27/2026

The property was appraised on April 3, 2025, by a certified appraiser for $420,000.00. Deed restrictions will ensure that the property remains designated as affordable housing for a minimum of 55 years. The property is proposed to have two (2) liens. The first lien will be in the form of a forgivable loan for $395,000.00, and a percentage of the loan will be forgiven each year for 55 years. The second lien will be a deferred equity share loan. In the event of a transfer of the property, $25,000.00, which is equal to the amount of PLHA used in the rehabilitation of the property price plus 50% of the amount by which the sales price exceeds the total purchase price of $420,000.00 will be due and payable to the City.

591 Birchwood Way

The property located at 591 Birchwood Way, Turlock, California, is a single-family home with three (3) bedrooms and two (2) bathrooms and is currently occupied with an income-eligible tenant. It was acquired in February 2021 and rehabilitated in April 2021 with CDBG funds.

Additional maintenance and repairs were completed on this property with Housing Successor Agency funds in December 2025. This unit will remain affordable housing for a minimum period of 30 years.

The property was appraised on June 24, 2025, by a certified appraiser for $410,000. Deed restrictions will ensure that the property remains designated as affordable housing for a minimum of 30 years. The property is proposed to have two (2) liens. The first lien will be in the form of a forgivable loan for $205,000.00, and a percentage of the loan will be forgiven each year for 30 years. The second lien will be a deferred equity share loan. In the event of a transfer of the property, $205,000.00, plus 50% of the amount by which the sales price exceeds the total purchase price of $410,000.00 will be due and payable to the City.

There were two (2) responses received for the property located at 573 Birchwood Way and two (2) responses received for the property located at 591 Birchwood. After reviewing the proposals, the loan committee recommended awarding the sale to Great Valley Housing Development Corporation (GVHDC).

Great Valley Housing Development Corporation is a nonprofit affordable housing organization based in Modesto, California. The corporation has over 25 years of experience developing and managing affordable housing throughout Stanislaus County. After reviewing the proposals, the loan committee determined that GVHCD demonstrated a stronger understanding of preparing financial budget projections and submitted a more thorough proposal, indicating extensive experience in providing affordable housing.

Based on the recommendations from the loan committee in response to the RFP, staff is recommending the sale of the two (2) properties located at 573 and 591 Birchwood Way to Great Valley Housing Development Corporation.

3. FISCAL IMPACT / BUDGET AMENDMENT:

No Fiscal Impact has been identified. In the future, if the properties are sold and the equity share is paid to the City, it will go back into the HOME, PLHA and CDBG funds as program income to be used for other qualifying housing programs.

Agenda Staff Report
1/27/2026

4. ENVIRONMENTAL DETERMINATION:
573 Birchwood Way

The NEPA Environmental review concluded on February 28, 2023 that this project is categorically excluded and converts to exempt per 24 CFR 58.34(a)(12).

591 Birchwood Way

The NEPA Environmental review concluded on February 12, 2021 that this project is categorically exclude and converts to exempt per 24 CFR 58.34(a)(12).

5. ATTACHMENTS:

1. Draft Resolution 573 Birchwood

2. 1. Attachment B - Loan Documents - 573 Birchwood

3. Draft Resolution 591 Birchwood

4. 1. Attachment C -Loan Documents - 591 Birchwood

BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK

IN THE MATTER OF APPROVING THE } RESOLUTION NO. 2026- PURCHASE AND SALE AGREEMENT AND }
JOINT ESCROW INSTRUCTIONS, LOAN }
AGREEMENT, REGULATORY AGREEMENT, }
PROMISSORY NOTE, DEED OF TRUST, AND }
GRANT DEED FOR THE SALE OF THE }
PROPERTY LOCATED 573 BIRCHWOOD WAY, }
TURLOCK, (APN 043-055-049), TO BE SOLD TO }
GREAT VALLEY HOUISNG DEVELOPMENT }
CORPORATION, A NON-PROFIT }
ORGANIZATION, IN THE AMOUNT OF $420,000 }
SUBJECT TO THE TERMS AND CONDITIONS }
AS OUTLINED IN ATTACHMENT B AND }
AUTHORIZE THE INTERIM CITY MANAGER TO }
SIGN ALL NECESSARY DOCUMENTS TO }
EFFECTUATE THE TRANSACTION. }
}

WHEREAS, the City of Turlock purchased the property at 573 Birchwood Way, Turlock, a single-family dwelling, in 2023 with Community Development Block Grant (CDBG) funds and HOME Investment Partnerships (HOME) funds and rehabilitated the property in 2025 with HOME and Permanent Local Housing Allocation (PLHA) funds for the purpose of implementing the goal of the Consolidated Plan and Annual Action Plan of creating affordable housing; and

WHEREAS, the City of Turlock put out a Request of Proposal (RFP) for the sale of 573 Birchwood Way, to be for affordable rental units to income eligible tenants; and

WHEREAS, Great Valley Housing Development Corporation submitted a RFP Proposal for the acquisition of 573 Birchwood Way; and

WHEREAS, the sale of 573 Birchwood Way will be granted to Great Valley Housing Development Corporation in the amount of $420,000.00; and

WHEREAS, the City will grant Great Valley Housing Development Corporation a first lien in the form of a forgivable loan of $395,000.00 to be forgiven by a percentage annually over the 55-year term and a second lien in the form of a deferred loan of $25,000 plus 50% of the amount by which the sales price exceeds the total purchase price of $420,000.00, and

WHEREAS, the City of Turlock has taken steps to provide affordable housing options throughout the community that will assist our nonprofit service providers in building capacity to enhance the affordable housing stock, including providers who can provide services and programs to help prevent and address homelessness in Turlock.

Resolution No. 2026-

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Turlock does hereby approve the purchase and sale agreement and joint escrow instructions, loan agreement, regulatory agreement, promissory note, deed of trust, and grant deed for the sale of the property located at 573 Birchwood Way, Turlock, (APN 043-055-049), to Great Valley , a nonprofit organization, in the amount of $420,000.00, subject to the terms and conditions as outlined in Attachment B and authorize the Interim City Manager to sign all necessary documents to effectuate the transaction

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Turlock this 27th day of January, 2026, by the following vote:

AYES:

NOES:

NOT PARTICIPATING:

ABSENT:

ATTEST:

__________________________
Nichole Fiez, City Clerk,
City of Turlock, County of Stanislaus,
State of California

2251\02\4022077.1

LOAN AGREEMENT
CDBG/HOME/PLHA Funds

Between

CITY OF TURLOCK
And

GREAT VALLEY HOUSING DEVELOPMENT CORPORATION

dated (January 27, 2026)

TABLE OF CONTENTS
Page
-i-

2251\02\4022077.1
ARTICLE 1 DEFINITIONS AND EXHIBITS ......................................................................... 2 Section 1.1 Definitions..................................................................................... 2 ARTICLE 2 LOAN PROVISIONS ........................................................................................... 3 Section 2.1 Loan .............................................................................................. 3 Section 2.2 Interest........................................................................................... 3 Section 2.3 Use of Loan Funds ........................................................................ 4 Section 2.4 Security ......................................................................................... 4 Section 2.5 Subordination ................................................................................ 4 Section 2.6 Repayment Schedule ..................................................................... 4 Section 2.7 Reports and Accounting of Residual Receipts.............................. 5 Section 2.8 Non-Recourse ............................................................................... 5 ARTICLE 3 LOAN REQUIREMENTS.................................................................................... 5 Section 3.1 Annual Operating Budget ............................................................. 5 Section 3.2 Information ................................................................................... 5 Section 3.3 Records ......................................................................................... 6 Section 3.4 City and or HUD Audits ............................................................... 6 Section 3.5 Hazardous Materials ..................................................................... 9 Section 3.6 Maintenance and Damage ............................................................. 9 Section 3.7 Fees and Taxes ............................................................................ 10 Section 3.8 Notice of Litigation ..................................................................... 10 Section 3.9 Operation of Development as Affordable Housing .................... 10 Section 3.10 Nondiscrimination....................................................................... 11 Section 3.11 Transfer ....................................................................................... 11 Section 3.12 Insurance Requirements .............................................................. 11

TABLE OF CONTENTS (cont.)
Page
2251\02\4022077.1
Section 3.13 Anti-Lobbying Certification ....................................................... 12 Section 3.14 Covenants Regarding Approved Financing ................................ 13 ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BORROWER ..................... 15 Section 4.1 Representations and Warranties .................................................. 15 ARTICLE 5 DEFAULT AND REMEDIES ............................................................................ 17 Section 5.1 Events of Default ........................................................................ 17 Section 5.2 Remedies ..................................................................................... 18 Section 5.3 Right of Contest .......................................................................... 19 Section 5.4 Remedies Cumulative ................................................................. 19 ARTICLE 6 GENERAL PROVISIONS ................................................................................. 19 Section 6.1 Relationship of Parties ................................................................ 19 Section 6.2 No Claims ................................................................................... 21 Section 6.3 Amendments ............................................................................... 21 Section 6.4 Indemnification ........................................................................... 21 Section 6.5 Non-Liability of City Officials, Employees and Agents ......................................................................................... 21 Section 6.6 No Third Party Beneficiaries ...................................................... 21 Section 6.7 Conflict of Interest ...................................................................... 21 Section 6.8 Notices, Demands and Communications .................................... 22 Section 6.9 Applicable Law ........................................................................... 23 Section 6.10 Parties Bound .............................................................................. 23 Section 6.11 Attorneys’ Fees ........................................................................... 23 Section 6.12 Severability ................................................................................. 23 Section 6.13 Force Majeure ............................................................................. 22

TABLE OF CONTENTS (cont.)
Page
2251\02\4022077.1
Section 6.14 City Approval.............................................................................. 23 Section 6.15 Waivers ....................................................................................... 23 Section 6.16 Title of Parts and Sections .......................................................... 23 Section 6.17 Entire Understanding of the Parties ............................................ 24 Section 6.18 Multiple Originals; Counterpart .................................................. 24

1 2251\02\4022077.1

LOAN AGREEMENT
573 Birchwood Way –CDBG, HOME and PLHA funds

This CDBG, PLHA and HOME Loan Agreement (the “Agreement”) is dated January 27, 2026, and is between the CITY OF TURLOCK, a municipal corporation (the “City”), and GREAT VALLEY HOUSING DEVLEOPMENT CORPORATION, a California nonprofit public benefit corporation (“Borrower”).

RECITALS
A. Defined terms used but not defined in these recitals are as defined in Article 1 of this Agreement.

B. The City acquired that certain property located at 573 Birchwood Way, City of Turlock, County of Stanislaus, State of California more particularly described in Exhibit A (the “Property”) with Home Investment Partnership Program (“HOME Funds”) and Community Development Block Grant (“CDBG Funds”) from the United States Department of Housing and Urban Development (“HUD”) created under the National Affordable Housing Act of1990 (NAFA), as amended. Such funds must be used by the City in accordance with 24 CFR 92 et seq. and 24 CFR 570 et seq.

C. The City has received Permanent Local Housing Allocation (“PLHA”) funds from the California Department of Housing and Community Development (“HCD”), which will be used along with additional HOME Funds to rehabilitate the Property.

D. Borrower intends to acquire the Property pursuant to a Purchase and Sale Agreement and Joint Escrow instructions between City and Borrower dated substantially concurrently herewith (“Purchase Agreement”) for Four Hundred Twenty Thousand Dollars ($420,000) (“Purchase Price”).

E. The Property is the site of a residential building that contains a single-family residential home. The building and all other improvements to the Property, including all landscaping, roads and parking spaces, are referred to herein as the “Improvements”, or as the “Development.” Borrower intends to acquire the Development and rent the Development to families or persons with household incomes at or below eighty percent (80%) of the median income for Stanislaus County, as defined by HUD.

F. Borrower desires to borrow the Purchase Price from the City and the City desires to lend the Purchase Price to Borrower in accordance with the terms of this Loan Agreement.

The loan shall consist of two components, Twenty-Five Thousand Dollars ($25,000.00) in PLHA Funds (the “PLHA Loan”) and Three Hundred Ninety-Five Thousand Dollars ($395,00000) in HOME Funds (the “HOME Loan”) (collectively, the “Loans”). The Development will assist in maintaining the supply of affordable rental housing in the City of Turlock.

G. The Loans will be (i) evidenced by the Notes, (ii) conditioned on the parties entering into the Regulatory Agreement, and (iii) secured by separate Deeds of Trust for each of the Notes.

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H. Due to the assistance provided to Borrower through the Loans, the City is classifying the single-family residence on the Property as an assisted unit (“City Assisted Unit”).

I. The City has concluded that actions contemplated by this Agreement are exempt from the California Environmental Quality Act (Public Resources Code Sections 21000 et seq.) (“CEQA”).

J. In accordance with the National Environmental Policy Act of 1969, as amended (42 U.S.C. 4321-4347) (“NEPA”), the City has completed and approved all applicable environmental review for the activities proposed to be undertaken under this Agreement.

The parties therefore agree as follows:

AGREEMENT
ARTICLE 1

DEFINITIONS AND EXHIBITS
Section 1.1 Definitions.

The following terms have the following meanings:
(a) “Agreement” means this CDBG/PLHA/ HOME Loan Agreement. (b) “Borrower” has the meaning set forth in the first paragraph of this Agreement. (c) “CDBG Funds” has the meaning set forth in Paragraph B of the Recitals. (d) “CEQA” has the meaning set forth in Paragraph I of the Recitals. (e) “City” means the City of Turlock, a municipal corporation. (f) “City-Assisted Unit” has the meaning set forth in Paragraph H of the Recitals. (g) “Deeds of Trust” means the Deeds of Trust with Assignment of Rents, Security Agreement, and Fixture Filing of even date herewith among Borrower, as Trustor, Old Republic Title Company, as trustee, and the City, as beneficiary, that will encumber the Property to secure repayment of the Loans and performance of the covenants of the Loan Documents.
(h) “Default Rate” means the lesser of the maximum rate permitted by law and ten percent (10%) per annum.
(i) “Development” has the meaning set forth in Paragraph E of the Recitals. (j) “Event of Default” has the meaning set forth in Section 5.1. (k) “Hazardous Materials” has the meaning set forth in Section 3.5.

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(l) “Hazardous Materials Claims” has the meaning set forth in Section 3.5. (m) “Hazardous Materials Law” has the meaning set forth in Section 3.5. (n) “HOME Funds” has the meaning set forth in Paragraph B of the Recitals. (o) “HUD” has the meaning set forth in Paragraph B of the Recitals. (p) “Improvements” has the meaning set forth in Paragraph E of the Recitals. (q) “Loans” has the meaning set forth in Paragraph F of the Recitals. (r) “Loan Documents” means this Agreement, the Notes, the Regulatory Agreement, and the Deeds of Trust.
(s) “NEPA” has the meaning set forth in Paragraph J of the Recitals. (t) “Notes” means the (i) PLHA Promissory Note of even date herewith that evidences Borrower’s obligation to repay the PLHA Funds in the amount of Twenty-Five Thousand Dollars ($25,000) and ((ii) the HOME Promissory Note of even date herewith that evidences the Borrower’s obligation to repay the HOME Funds and CDBG Funds in the amount of Three Hundred Ninety-Five Thousand Dollars ($395,000). (u) “PLHA Funds” has the meaning set forth in Paragraph C of the Recitals. (v) “Property” has the meaning set forth in Paragraph B of the Recitals. (w) “Regulatory Agreement” means the Regulatory Agreement and Declarations of Restrictive Covenants, between the City and Borrower related to the Loan, to be recorded against the Property.
(x) “Tenant” means the tenant household that occupies the unit in the Development. (y) "Term" means the period of time that commences on the date of this Agreement, and expires, unless sooner terminated in accordance with this Agreement, on the fifty-fifth (55th) anniversary of the date of this Agreement.
(z) “Transfer” has the meaning set forth in Section 3.11 below.

ARTICLE 2 LOAN PROVISIONS
Section 2.1 Loan.

Upon acquisition of the Property by the Borrower, the City shall lend to Borrower the Loans for the purposes set forth in Section 2.3 of this Agreement. Borrower’s obligation to repay the Loans is evidenced by the Notes.

Section 2.2 Interest.

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(a) Subject to the provisions of Subsection (b) below, interest will not accrue on the outstanding principal balance of the Loan.
(b) Upon the occurrence of an Event of a Default, interest on the Loan will begin to accrue, beginning on the date of such occurrence and continuing until the date the Loan is repaid in full or the Event of Default is cured, at the Default Rate.

Section 2.3 Use of Loan Funds.

The Loan is purchase money financing for the Borrower’s acquisition of the Development. The Loan funds shall be used in accordance with the HOME Regulations, the CDBG Regulations, and the PLHA Guidelines and the PLHA Program Requirements.

Section 2.4 Security.

The Loans will be secured by the Deeds of Trust which shall be recorded against the Property upon Borrower’s acquisition of the Property. Borrower shall also cause or permit the Regulatory Agreement to be recorded against the Property upon its acquisition of the Property, all as described in the Purchase Agreement.

Section 2.5 Subordination.

The Deeds of Trust and the Regulatory Agreement shall not be subordinated to any other financing or encumbrances on the Property.

Section 2.6 Repayment Schedule.
(a) Annual Payments. Payments on the Loans shall be due as set forth below. (b) Payment in Full. No payments shall be due on the Loan except as set forth below. (i) PLHA Loan. In the event of a Transfer of the Property or an Event of Default, the full amount of the PLHA Loan, plus the City Appreciation Share, as defined below, will be due and payable to the City (“Repayment Amount”). For purposes of this Agreement, the City Appreciation Share shall mean fifty percent (50%) of the amount by which the sales price for the Property received by the Borrower upon Transfer exceeds the Purchase Price. (ii) HOME Loan. One-Fifty-Fifth (1/55th) of the HOME Loan principal amount shall be forgiven each year on the anniversary date of the HOME Note, provided, if an Event of Default occurs or Borrower Transfers the Property the outstanding principal balance of the Loan evidenced by the HOME Loan Note at the time of the Transfer or Event of Default as well as Default Interest accruing as of the date of the Transfer or the Event of Default shall be immediately due and payable as set forth in the HOME Note. (iii) The principal balance and any interest on the Notes shall be due in full in an Event of Default.

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(c) Prepayment. Borrower may prepay the Loan at any time without premium or penalty. However, the Regulatory Agreement and the Deeds of Trust will remain in effect for the entire Term, regardless of any prepayment or Transfer.

Section 2.7 Reports.

On or before December of each calendar year, Borrower shall furnish to the City:
(i) Income eligibility of tenants;
(ii) Rent limits calculation sheet;
(iii) All HUD required tenant documents; and
(iv) Any other documents or information that may be required by the City, HUD or HCD.

Section 2.8 Non-Recourse.

Except as provided below, Borrower will not have any direct or indirect personal liability for payment of the principal of, and interest on, the Loan. Following recordation of the Deeds of Trust, the sole recourse of the City with respect to the principal of, or interest on, the Notes will be to the property described in the Deeds of Trust; provided, however, that nothing contained in the foregoing limitation of liability limits or impairs the enforcement of all the rights and remedies of the City against all such security for the Notes, or impairs the right of City to assert the unpaid principal amount of the Notes 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 to repay the principal and interest on the Notes. Except as hereafter set forth; nothing contained herein is intended to relieve Borrower of its obligation to indemnify the City under Sections 3.4, and 6.4 of this Agreement, or liability for (i) loss or damage of any kind resulting from waste, fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the Deeds of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value of any personal property or fixtures removed or disposed of by Borrower other than in accordance with the Deeds 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.

ARTICLE 3 LOAN REQUIREMENTS
Section 3.1 Information.

Borrower shall provide any information reasonably requested by the City in connection with the Development, including (but not limited to) any information required by HUD and/or HCD in connection with Borrower’s use of the Loan funds and the Property.

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Section 3.2 Records.
(a) Borrower shall keep and maintain at the principal place of business of the Borrower set forth in Section 6.8 below, or elsewhere with the City’s written consent, full, complete and appropriate books, records and accounts relating to the Borrower’s compliance with the terms, provisions, covenants and conditions of this Agreement. The Borrower shall provide the City with such information as is required by the City to comply with the City’s reporting requirements regarding PLHA Funds. All such books, records, and accounts are to be open to and available for inspection and copying by HUD, HCD, the City, its auditors or other authorized representatives at reasonable intervals during normal business hours.

Copies of all tax returns and other reports that Borrower may be required to furnish to any governmental agency are to be open for inspection by the City, HCD, and HUD at all reasonable times at the place that the books, records and accounts of Borrower are kept.

Borrower shall preserve such records for a period of not less than five (5) years after the repayment of the Loans and all such records will be maintained in compliance with all HUD records and accounting requirements. If any litigation, claim, negotiation, audit exception, monitoring, inspection or other action relating to the use of the Loans is pending at the end of the record retention period stated herein, then Borrower shall retain the records until such action and all related issues are resolved. The records are to include all invoices, receipts, and other documents related to expenditures from the Loan funds. Borrower shall cause records to be accurate and current and in such a form as to allow the City to comply with the record keeping requirements contained in 24 C.F.R. 570.506, 24 C.F.R. 92.508 and the PLHA Guidelines and Program Requirements. Such records are to include but are not limited to:
(i) Records demonstrating the eligibility of activities under CDBG regulations set forth in 24 CFR 570 et seq. and meets one of the national objectives of the CDBG program set forth in 24 CFR 570.208;
(ii) Records demonstrating the eligibility of activities under HOME regulations set forth in 24 CFR 92 et seq.;
(iii) Records demonstrating compliance with the HUD property standards and lead-based paint requirements;
(iv) Records documenting compliance with the fair housing, equal opportunity, and affirmative fair marketing requirements;
(v) Financial records as required by24 C.F.R. 92.508 and, OMB Circular A- 110 (24 C.F.R. Part 84);
(vi) Records demonstrating compliance with local hiring and MBE/WBE requirements;
(vii) Records demonstrating compliance with the Regulatory Agreement;

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(viii) Records demonstrating compliance with applicable acquisition and relocation requirements, which must be retained for at least five (5) years after the date by which persons displaced from the property have received final payments; (ix) Records demonstrating compliance with labor requirements including certified payrolls from Borrower’s general contractor evidencing that applicable prevailing wages have been paid.
(b) The City shall notify Borrower of any records it deems insufficient. Borrower has fifteen (15) calendar days after the receipt of such a notice to correct any deficiency in the records specified by the City in such notice, or if a period longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Borrower must begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible.

Section 3.3 City and/or HUD Audits.
(a) Each year, Borrower shall provide the City and HUD with a copy of Borrower’s annual audit, which is to include information on all of Borrower’s activities and not just those pertaining to the Development. Borrower shall also follow audit requirements of the Single Audit Act and OMB Circulars A-122 and 110.
(b) In addition, the City and HUD may, at any time, audit all of Borrower’s books, records, and accounts pertaining to the Development. Any such audit is to be conducted during normal business hours at the principal place of business of Borrower and wherever records are kept. Immediately after the completion of an audit, the City shall deliver a copy of the results of the audit to Borrower.

Section 3.4 Hazardous Materials.
(a) Borrower shall keep and maintain the Property in compliance with, and may not cause or permit the Property to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Borrower may not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of “hazardous substances,” hazardous wastes,” “hazardous materials,” or “toxic substances” under any applicable federal or state laws or regulations (collectively referred to hereinafter as “Hazardous Materials”) except such of the foregoing as may be customarily used in construction of projects like the Development or kept and used in and about residential property of this type. (b) Borrower shall immediately advise the City in writing if at any time it receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Borrower or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, (“Hazardous Materials Law”), (ii) all claims made or threatened by any third party against Borrower or the Property relating to damage, contribution, cost

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recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as “Hazardous Materials Claims”), and (iii) Borrower’s discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law.
(c) The City has the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys’ fees in connection therewith paid by Borrower. Borrower shall indemnify and hold harmless the City and its council members, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Property including without limitation: (i) all foreseeable consequential damages, (ii) the costs of any required or necessary repair, cleanup or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans, and (iii) all reasonable costs and expenses incurred by the City in connection with clauses (i) and (ii), including but not limited to reasonable attorneys’ fees and consultant’s fees. This indemnification applies whether or not any government agency has issued a cleanup order. Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision include, but are not limited to: (1) losses attributable to diminution in the value of the Property, (2) loss or restriction of use of rentable space on the Property, (3) adverse effect on the marketing of any rental space on the Property, and (4) penalties and fines levied by, and remedial or enforcement actions of any kind issued by any regulatory agency (including but not limited to the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the Property and surrounding properties). This obligation to indemnify will survive termination of this Agreement. (d) Without the City’s prior written consent, which will not be unreasonably withheld, Borrower may not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in the City’s judgment, impair the value of the City ‘s security hereunder; provided, however, that the City’s prior consent is not necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain the City’s consent before taking such action, provided that in such event Borrower shall notify the City as soon as practicable of any action so taken. The City agrees not to withhold its consent, where such consent is required hereunder, if (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) Borrower will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action, (iii) Borrower establishes to the satisfaction of the City that there is no reasonable alternative to such remedial action which would result in less impairment of the City’s security hereunder, or (iv) the action has been agreed to by the City.

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(e) Borrower hereby acknowledges and agrees that (i) this Section is intended as the City‘s written request for information (and Borrower’s response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5, and (ii) each representation and warranty in this Agreement (together with any indemnity obligation applicable to a breach of any such representation and warranty) with respect to the environmental condition of the Property is intended by the Parties to be an “environmental provision” for purposes of California Code of Civil Procedure Section 736. (f) In the event that any portion of the Property is determined to be “environmentally impaired” (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an “affected parcel” (as that term is defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the City’s or the trustee’s rights and remedies under the Deeds of Trust, the City may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to (i) waive its lien on such environmentally impaired or affected portion of the Property and (ii) exercise (1) the rights and remedies of an unsecured creditor, including reduction of its claim against Borrower to judgment, and (2) any other rights and remedies permitted by law. For purposes of determining the City’s right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), Borrower will be deemed to have will fully permitted or acquiesced in a release or threatened release of Hazardous Materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of Hazardous Materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Property and Borrower knew or should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys’ fees, incurred by the City in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the lesser of ten percent (10%) and the maximum rate permitted by law, until paid, will be added to the indebtedness secured by the Deeds of Trust and is due and payable to the City upon its demand made at any time following the conclusion of such action.

Section 3.5 Maintenance and Damage.
(a) During the course of operation of the Development, Borrower shall maintain the Development and the Property in good repair and in a neat, clean and orderly condition. If there arises a condition in contravention of this requirement, and if Borrower has not cured such condition within thirty (30) days after receiving a City notice of such a condition, then in addition to any other rights available to the City, the City may perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property, subject to the provisions provided in subsection (b) below. (b) If economically feasible in the City’s judgment after consultation with Borrower, if any improvement now or in the future on the Property is damaged or destroyed, then Borrower shall, at its cost and expense, diligently undertake to repair or restore such improvement consistent with the plans and specifications approved by the City with such changes as have been approved by the City. Such work or repair is to be commenced no later

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than the later of one hundred twenty (120) days, or such longer period approved by the City in writing, after the damage or loss occurs or thirty (30) days following receipt of the insurance proceeds, and is to be complete within one (1) year thereafter. Any insurance proceeds collected for such damage or destruction are to be applied to the cost of such repairs or restoration and, if such insurance proceeds are insufficient for such purpose, then Borrower shall make up the deficiency. If Borrower does not promptly make such repairs, then any insurance proceeds collected for such damage or destruction are to be promptly delivered by Borrower to the City as a special pro-rata repayment of the loans.

Section 3.6 Fees and Taxes.

Borrower is solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property or the Development, and shall pay such charges prior to delinquency. However, Borrower is not required to pay and discharge any such charge so long as (i) the legality thereof is being contested diligently and in good faith and by appropriate proceedings, and (ii) if requested by the City, Borrower deposits with the City any funds or other forms of assurance that the City in good faith from time to time determines appropriate to protect the City from the consequences of the contest being unsuccessful.

Section 3.7 Notice of Litigation.

Borrower shall promptly notify the City in writing of any litigation that has the potential to materially affect Borrower or the Property and of any claims or disputes that involve a material risk of such litigation.

Section 3.8 Operation of Development as Affordable Housing. (a) Borrower shall operate the Development as an affordable housing development consistent with (i) HUD’s requirements for use of the HOME Funds, (ii) HUD’s requirements for the use of the CDBG Funds; (iii) HCD’s requirements for use of the PLHA Funds; (iv) the Regulatory Agreement, and (iv) any other regulatory requirements imposed on Borrower.
(b) Before leasing any unit in the Development, Borrower shall submit its proposed form of lease agreement for the City’s review and approval. The form of lease must at a minimum, comply with the Regulatory Agreement.
(c) Before leasing any unit in the Development, Borrower shall provide the City, for its review and approval, with Borrower’s written tenant selection plan pursuant to the Regulatory Agreement.
(d) Borrower shall evaluate the income eligibility of each Tenant household in City- Assisted Unit pursuant to the City’s approved Tenant certification procedures set forth in the Regulatory Agreement.
(e) Borrower shall maintain all documents setting forth the household income of each household occupying a City Assisted Unit, and the total amount for rent, utilities, and related

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services charged to each household occupying the Development, as prescribed by the Regulatory Agreement.

Section 3.9 Nondiscrimination.

Borrower covenants by and for itself and its successors and assigns that, there will be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age (except for lawful senior housing in accordance with state and federal law), familial status, disability, sex, sexual orientation, marital status, ancestry, veteran status, or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor may Borrower or any person claiming under or through Borrower establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property. The foregoing covenant will run with the land.

Section 3.10 Transfer.
(a) For purposes of this Agreement, “Transfer” means any sale, assignment, or transfer, whether voluntary or involuntary, of (i) any rights and/or duties under this Agreement, and/or (ii) any interest in the Development, including (but not limited to) a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a land contract by which possession of the Development is transferred and Borrower retains title. The term “Transfer” excludes the leasing of any single unit in the Development to an occupant in compliance with the Regulatory Agreement.
(b) No Transfer is permitted without the prior written consent of the City, which the City may withhold in its sole discretion. The Loans will automatically accelerate and all outstanding principal shall be due in full upon any Transfer made without the prior written consent of the City along with the City Appreciation Share and any interest due on such amounts.

Section 3.11 Insurance Requirements.
(a) Borrower shall maintain Commercial General Liability insurance with limits not less than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform Property Damage, Products and Completed Operations. (b) Borrower shall cause any general contractor, agent, or subcontractor working on the Development under direct contract with Borrower or subcontract to maintain insurance of the types and in at least the minimum amounts described above, except that the limit of liability for comprehensive general liability insurance for subcontractors must be One Million Dollars ($2,000,000), and must require that such insurance will meet all of the general requirements of subsections (d) and (e) below.
(c) The required insurance must be provided under an occurrence form, and Borrower shall maintain the coverage described in subsections (a) continuously throughout the Term.

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Should any of the required insurance be provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs be included in such annual aggregate limit, such annual aggregate limit must be three times the occurrence limits specified above.
(d) Comprehensive General Liability, Comprehensive Automobile Liability and Property insurance policies must be endorsed to name as an additional insured the City and its officers, agents, employees and members of the Turlock City Council. (e) All policies and bonds are to contain (i) the agreement of the insurer to give the City at least thirty (30) days’ notice prior to cancellation (including, without limitation, for non-payment of premium) or any material change in said policies; (ii) an agreement that such policies are primary and non-contributing with any insurance that may be carried by the City; (iii) a provision that no act or omission of Borrower shall affect or limit the obligation of the insurance carrier to pay the amount of any loss sustained; and (iv) a waiver by the insurer of all rights of subrogation against the City and its authorized parties in connection with any loss or damage thereby insured against.

Section 3.12 Anti-Lobbying Certification.

Borrower certifies, to the best of Borrower’s knowledge or belief, that:
(a) No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement; (b) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, Disclosure Form to Report Lobbying, in accordance with its instructions.

This certification is a material representation of fact upon which reliance was placed when this Agreement was made or entered into. Submission of this certification is a prerequisite for making or entering into this Agreement imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than Ten Thousand Dollars ($10,000) and no more than One Hundred Thousand Dollars ($100,000) for such failure.

Section 3.13 Compliance with Applicable Laws.

Borrower shall comply with all ordinances, resolutions, statutes, rules and regulations of City and any federal, state or local governmental agency having jurisdiction at the time service is

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rendered. This Agreement is subject to and incorporates the terms of Federal Home Investment Partnership Act (Pub. L. 93-383), as amended and the Federal Housing and Community Development Act of 1974 (Pub. L. 93-383), as amended (collectively the “Act”), and the regulations promulgated thereunder (24 CFR, Part 92 and 24 CFR Chapter V, Part 570) (“Regulations”), and all amendments or successor regulations or guidelines thereto. Without limiting the foregoing, Borrower shall comply with the following requirements and standards:
(a) OMB Circular No. A-122 “Cost Principles for Non-Profit Organizations”; (b) Attachments A, B, C, F, H, N (excluding paragraph 3 and except that paragraph 6 and 7 are modified so that [i] when any personal property is sold, the proceeds are program income, and;
(c) All federal laws and regulations described in Subpart K of the Regulations, including all affirmative action requirements set forth therein, but excluding City’s environmental responsibilities under 24 CFR § 352 and 24 CFR §570.604 and City’s responsibility for initiating the review process under 24 CFR Part 52; (d) Borrower may not incur any indebtedness of any kind or encumber the Development with any liens without the prior written consent of the City.

Section 3.14 Licenses, Permits, Fees and Assessments. Borrower shall obtain and maintain all licenses, registrations, accreditations and inspections from all agencies governing its performance under this Agreement. Borrower shall insure that its staff shall obtain and maintain all required licenses, registrations, accreditations and inspections from all agencies governing Borrower’s performance under this Agreement.

Section 3.15 Program Income. Borrower agrees that it shall not use funds received from City in any manner that will provide Borrower with program income as set forth in 24 CFR Part 92.503 and/or 24 CFR Part 570.504. If program income is generated, at the discretion of City, Borrower shall return all program income to City at the end of the Agreement term.

Section 3.16 Further Responsibilities of Parties. Both parties shall use reasonable care and diligence to perform their respective obligations under this Agreement. Both parties shall act in good faith to execute all instruments, prepare all documents and take all actions as may be reasonably necessary to carry out the purposes of this Agreement. Unless hereafter specified, neither party shall be responsible for the obligations of the other.

Section 3.17 Special Requirements. Additional terms and conditions of this Agreement, if any, which are made a part hereof are set forth in the “Special Conditions” attached hereto as Exhibit A. In the event of a conflict between any provisions of this Agreement, the provisions of Exhibit A shall govern.

Section 3.18 HOME Requirements. Because the City acquired the Property with HOME Funds and a portion of the Loan is funded with Home Funds, Borrower is required to operate the Development in compliance with all requirements of the HOME Investment Partnerships Program and the HOME Regulations (24 C.F.R. §92 et seq.), including, but not limited to, those requirements set forth in this Section. In the event of any conflict between the

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requirements of the HOME Investment Partnerships Program and the HOME Regulations, on the one hand, and the provisions set forth in this Agreement, the HOME Investment Partnerships Program and the HOME Regulations shall control. Application of more restrictive requirements than set forth in the HOME Investment Partnerships Program or HOME Regulations shall not be deemed a conflict. Not by way of limitation of the foregoing, in compliance with 24 C.F.R. §

92.504(c), from the date of this Agreement through the end of the Term, Developer shall comply with all of the following requirements:
(a) Affordability. The HOME-Assisted Units shall meet the affordability requirements of the HOME Regulations (24 C.F.R. §92.252) or the Regulatory Agreement, whichever is more restrictive. Failure of Borrower to meet the affordability requirements of the HOME Regulations for the for the required time period shall be a breach of the HOME Note and entitle City to accelerate the Loans and demand immediate repayment. (b) Development Requirements. Borrower shall comply with all of the following: (i) Development requirements set forth in Sections 92.250-92.258 of the HOME Regulations, as applicable in accordance with the type of project assisted; (ii) the applicable provisions of this Agreement; and (iii) the Regulatory Agreement.
(c) Housing Quality Standard. Borrower shall maintain the Development in compliance with all of the following and in the event of conflict between the following, the most restrictive of the following: (i) applicable federal Housing Quality Standards; (ii) applicable local housing code requirements; (iii) the provisions of this Agreement; and (iv) the Regulatory Agreement.
(d) Records and Reports. In addition to the other provisions of this Agreement, Borrower shall provide to City all records and reports relating to the Development that may be reasonably requested by City in order to enable it to perform its record keeping and reporting obligations pursuant to the HOME Regulations, including but not limited to Section

92.508 and 92.509 of the HOME Regulations.
(e) Monitoring. Not less than once per year during the period covered by the Regulatory Agreement, City shall review Borrower’s activities and operations under this Agreement and Borrower’s compliance with the requirements of the HOME Program and the Regulations, including, but not limited to, Borrower’s compliance with the requirements of this Section. Such review may include an on-site inspection of the Development (including unit interiors). If such an on-site inspection of the Development is to be undertaken, City shall coordinate such inspection with Borrower. The monitoring required pursuant to this paragraph shall be in compliance with the requirements of the HOME Regulations, including 24 C.F.R. § 92.504(e).
(f) Equal Opportunity and Fair Housing. Borrower agrees to comply with federal regulations, which state that no person shall be excluded from participating in, be denied the benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with HOME Funds based on race, color, national origin, religion, or sex. In addition, HOME Funds will be made available in accordance with the following:

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(i) All applicable requirements under the Fair Housing Act. (ii) All applicable requirements under the Equal Opportunity Act. (iii) To the greatest extent feasible, all opportunities for training and employment arising in connection with the planning and carrying out of any project assisted with HOME Funds will be given to low-income persons residing within the City (but the foregoing shall not relieve Borrower of any similar requirements imposed by HOME Regulations or other applicable laws or regulations).
(iv) To the greatest extent feasible, contracts for work to be performed in connection with any such project be awarded to business concerns, including but not limited to individuals or firms doing business in the field of planning, consulting or design, architecture, building, rehab, construction, which are located in or owned by persons residing in the project areas.
(g) Affirmative Marketing Plan. In accordance with the HOME Regulations, Borrower will establish a plan and procedures to affirmatively market unit. The objective of the plan is to provide information and attract eligible persons from all racial, ethnic, and general groups in the housing market area to the available housing, subject to the Development’s age restrictions in light of the development of the Development as an affordable rental housing project. The affirmative marketing plan includes the following components listed in 24 C.F.R. §921.351(b) which are as follows:
(i) Methods for informing eligible potential tenants about the Development. (ii) Procedures to be used to inform and solicit rental applications from eligible potential tenants who are not likely to apply for the housing without special outreach. (iii) Records that will be kept describing actions taken by Borrower pertaining to the affirmative marketing of unit and records to assess the results of those actions, (iv) A description of how Borrower will assess the success of affirmative marketing actions and what corrective actions will be taken where affirmative marketing requirements are not met.
(h) Other Requirements with Which Participant Shall Be Required to Comply.

Borrower shall comply with the following additional requirements applicable to HOME Funds:
(i) Consistent with the other goals and objectives of subpart H of 24 C.F.R. §92, Borrower must ensure that it has taken all reasonable steps to minimize the displacement of persons as a result of this Development assisted with HOME Funds. (ii) It is understood that housing assisted with HOME Funds is subject to 24 C.F.R. part 35.

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(iii) Participant shall hereby comply with all requirements set forth regarding conflict-of-interest provisions as they apply in 24 CFR Section 92.356. (iv) Under the Flood Disaster Protection Act of 1973, HOME funds may not be used with respect to the acquisition or rehabilitation of a project located in an area identified by the Federal Emergency Management Agency (FEMA) as having special flood hazards, unless: (A) the community in which the area is situated is participating in the National Flood Insurance Program, or less than a year has passed since FEMA notification regarding such hazards; and (B) flood insurance is obtained in an area identified by FEMA as having special flood hazards; City is responsible for assuring that flood insurance under the National Flood Insurance Program is obtained and maintained, and Borrower hereby agrees to obtain and maintain such insurance, if applicable.
(v) Violence Against Women. Borrower shall comply with the requirements of the Violence Against Women Reauthorization Act of 2013 (Pub. L. 113–4, 127 Stat. 54) applicable to HUD-funded programs.

Section 3.19 PLHA Requirements. Borrower hereby agrees to comply with all requirements set forth by HCD in the Amended 2022 PLHA Formula Component Notice of Funding Availability, dated August 17, 2022 and as amended on October 18, 2022, the PLHA Final Guidelines, the UMRs, the Standard Agreement PLHA, and all applicable rules and regulations imposed by HCD on PLHA funding recipients.

The Borrower agrees that the Development is subject to Subchapter 19 of Title 25, Division 1, Chapter 7 of the Uniform Multifamily Regulations (commencing with Section 8300) and the Multifamily Housing Program Guidelines (commencing with Section 7300)(collectively, the "UMRs"), which such UMRs are incorporated by reference as amended in Section 402 of the PLHA Program Guidelines; and that the Development shall meet all City requirements and all applicable federal, state and local codes including, but not limited to, the prevailing wage requirements in accordance with Labor Code section 1720 et. seq., to the extent applicable.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BORROWER
Section 4.1 Representations and Warranties.

Borrower hereby represents and warrants to the City as follows and acknowledges, understands, and agrees that the representations and warranties set forth in this Article 4 are deemed to be continuing during all times when any portion of the Loan remains outstanding:
(a) Organization. Borrower is duly organized, validly existing and in good standing under the laws of the State of California and has the power and authority to own its property and carry on its business as now being conducted.
(b) Authority of Borrower. Borrower has full power and authority to execute and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute and deliver the Loan Documents and all other documents or instruments executed

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and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above. (c) Authority of Persons Executing Documents. This Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of Borrower, and all actions required under Borrower’s organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken. (d) Valid Binding Agreements. The Loan Documents and all other documents or instruments executed and delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered, constitute legal, valid and binding obligations of Borrower enforceable against it in accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of the Loan Documents or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will (i) conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever that is binding on Borrower, or conflict with any provision of the organizational documents of Borrower, or conflict with any agreement to which Borrower is a party, or (ii) result in the creation or imposition of any lien upon any assets or property of Borrower, other than liens established pursuant hereto. (f) Compliance with Laws; Consents and Approvals. The acquisition of the Development will comply with all applicable laws, ordinances, rules and regulations of federal, state and local governments and agencies and with all applicable directions, rules and regulations of the fire marshal, health officer, building inspector and other officers of any such government or agency.
(g) Pending Proceedings. Borrower is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of Borrower, threatened against or affecting Borrower or the Development, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to Borrower, materially affect Borrower’s ability to repay the Loan or impair the security given to the City pursuant hereto.
(h) Financial Statements. The financial statements of Borrower and other financial data and information furnished by Borrower to the City fairly and accurately present the information contained therein. As of the date of this Agreement, there has not been any material adverse change in the financial condition of Borrower from that shown by such financial statements and other data and information.

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(i) Sufficient Funds. Borrower holds sufficient funds and/or binding commitments for sufficient funds to complete any repairs of the Property. It is recommended that a minimum of 2% of the property value is to be held as reserves at all times. (j) Taxes. Borrower and its subsidiaries have filed all federal and other material tax returns and reports required to be filed, and have paid all federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their income or the Property otherwise due and payable, except those that are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with generally accepted accounting principles. There is no proposed tax assessment against Borrower or any of its subsidiaries that could, if made, be reasonably expected to have a material adverse effect on the property, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of Borrower and its subsidiaries, taken as a whole, or which could result in (i) a material impairment of the ability of Borrower to perform under any loan document to which it is a party, or (ii) a material adverse effect upon the legality, validity, binding effect or enforceability against Borrower of any Loan Document.

ARTICLE 5 DEFAULT AND REMEDIES
Section 5.1 Events of Default.

Each of the following constitutes an “Event of Default” by Borrower under this Agreement:
(a) Failure to Make Payment. Failure to make any payment when such payment is due pursuant to the Loan Documents.
(b) Breach of Covenants. Failure by Borrower to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the Loan Documents or the Project Agreement (other than obligations described in subsections (a) and (b) above), and Borrower fails to cure such default within thirty (30) days after receipt of written notice thereof from the City to Borrower; provided, however, that if a different period or notice requirement is specified under any other section of this Article 5, the specific provisions shall control.
(c) Default Under Other Loans. A default is declared under any other financing for the Development by the lender of such financing and such default remains uncured following any applicable notice and cure period.
(d) Insolvency. A court having jurisdiction makes or enters any decree or order (i) adjudging Borrower to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of Borrower, or seeking any arrangement for Borrower under the bankruptcy law or any other applicable debtor’s relief law or statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of Borrower in bankruptcy or insolvency or for any of their properties, (iv) directing the winding up or liquidation of Borrower if any such decree or order described in clauses (i) to (iv), inclusive, is unstayed or undischarged for a period of ninety (90) calendar days; or (v)

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Borrower admits in writing its inability to pay its debts as they fall due or will have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the Events of Default in this paragraph will act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Notes.
(e) Assignment; Attachment. Borrower assigns its assets for the benefit of its creditors or suffers a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon is returned or released within ninety (90) calendar days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Notes. (f) Suspension; Termination. Borrower voluntarily suspends its business or, the partnership is dissolved or terminated, other than a technical termination of the partnership for tax purposes.
(g) Liens on Property and the Development. Any claim of lien (other than liens approved in writing by the City) is filed against the Development or any part thereof, or any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds of the Loan and the continued maintenance of said claim of lien or notice to withhold for a period of twenty (20) days, without discharge or satisfaction thereof or provision therefor (including, without limitation, the posting of bonds) satisfactory to the City. (h) Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Property and the Development.
(i) Unauthorized Transfer. Any Transfer other than as permitted pursuant to Section

3.10. (j) Representation or Warranty Incorrect. Any Borrower representation or warranty contained in this Agreement, or in any application, financial statement, certificate, or report submitted to the City in connection with any of the Loan Documents, proves to have been incorrect in any material respect when made.

Section 5.2 Remedies.

Upon the occurrence of an Event of Default and until such Event of Default is cured or waived, the City is relieved of any obligation to disburse any portion of the Loan. In addition, upon the occurrence of an Event of Default and following the expiration of all applicable notice and cure periods the City may proceed with any and all remedies available to it under law, this Agreement, and the other Loan Documents. Such remedies include but are not limited to the following:
(a) Acceleration of Notes. The City may demand repayment of all indebtedness of Borrower to the City under this Agreement and the Notes. Borrower waives all right to presentment, demand, protest or notice of protest or dishonor. The City may proceed to

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enforce payment of the indebtedness and to exercise any or all rights afforded to the City as a creditor and secured party under the law, including the Uniform Commercial Code, including foreclosure under one or both the Deeds of Trust. Borrower is liable to pay the City on demand all reasonable expenses, costs and fees (including, without limitation, reasonable attorney’s fees and expenses) paid or incurred by the City in connection with the collection of the Loan and any such foreclosure the preservation, maintenance, protection, sale, or other disposition of the security given for the Loan.
(b) Specific Performance. The City has the right to mandamus or other suit, action or proceeding at law or in equity to require Borrower to perform its obligations and covenants under the Loan Documents or to enjoin acts on things that may be unlawful or in violation of the provisions of the Loan Documents.
(c) Right to Cure at Borrower’s Expense. The City has the right (but not the obligation) to cure any monetary default by Borrower under a loan other than the Loans.

Upon demand therefore, Borrower shall reimburse the City for any funds advanced by the City to cure such monetary default, together with interest from the date of expenditure until the date of reimbursement at the Default Rate.

Section 5.3 Right of Contest.

Borrower may contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute an Event of Default hereunder. Any such contest is to be prosecuted diligently and, in a manner, unprejudicial to the City or the rights of the City hereunder.

Section 5.4 Remedies Cumulative.

No right, power, or remedy given to the City by the terms of this Agreement or the other Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy is cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against Borrower and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies will operate as a waiver thereof, nor does any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy.

ARTICLE 6 GENERAL PROVISIONS
Section 6.1 Relationship of Parties.

Nothing contained in this Agreement is to be interpreted or understood by any of the Parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the City and Borrower or its agents, employees or contractors, and Borrower will at all times be deemed an independent contractor and to be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. Borrower has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. In regards to the operation of the

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Development, Borrower is solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding, and all other laws and regulations governing such matters, and must include requirements in each contract that contractors are solely responsible for similar matters relating to their employees. Borrower is solely responsible for its own acts and those of its agents and employees.

Section 6.2 No Claims.

Nothing contained in this Agreement creates or justifies any claim against the City by any person that Borrower may have employed or with whom Borrower may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the purchase of the Property, the operation of the Development, and Borrower shall include similar requirements in any contracts entered into for the operation of the Development.

Section 6.3 Amendments.

No alteration or variation of the terms of this Agreement is valid unless made in writing by the Parties. The City Housing Manager is authorized to execute on behalf of the City amendments to the Loan Documents or amended and restated Loan Documents as long as any discretionary change in the amount or terms of this Agreement is approved by the City Council.

Section 6.4 Indemnification.

Borrower shall indemnify, defend and hold the City and its board members, supervisors, directors, officers, employees, agents, successors and assigns harmless against any and all claims, suits, actions, losses and liability of every kind, nature and description made against it and expenses (including reasonable attorneys’ fees) which arise out of or in connection with this Agreement, including but not limited to the purchase of the Property, and the development, construction, marketing and operation of the Development, except to the extent such claim arises from the grossly negligent or willful misconduct of the City, its agents, and its employees. The provisions of this Section will survive the expiration of the Term and the reconveyance of the Deeds of Trust.

Section 6.5 Non-Liability of City Officials, Employees and Agents.

No member, official, employee or agent of the City is personally liable to Borrower in the event of any default or breach of this Agreement by the City or for any amount that may become due from the City pursuant to this Agreement.

Section 6.6 No Third-Party Beneficiaries.

There are no third-party beneficiaries to this Agreement.

Section 6.7 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person described in Section 6.7(b) below who exercises or has exercised any functions or

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responsibilities with respect to the activities funded pursuant to this Agreement or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from the activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties, during, or at any time after, such person’s tenure. Borrower shall exercise due diligence to ensure that the prohibition in this Section 6.7(a) is followed. (b) The conflict-of-interest provisions of Section 6.7(a) above apply to any person who is an employee, agent, consultant, officer, or any immediate family member of such person, or any elected or appointed official of the City, or any person related within the third (3rd) degree of such person.
(c) In accordance with California Government Code Section 1090 and the Political Reform Act, California Government Code section 87100 et seq., no person who is a director, officer, partner, trustee or employee or consultant of Borrower, or immediate family member of any of the preceding, may make or participate in a decision, made by the City or a City board, commission or committee, if it is reasonably foreseeable that the decision will have a material effect on any source of income, investment or interest in real property of that person or Borrower. Interpretation of this section is governed by the definitions and provisions used in the Political Reform Act, California Government Code Section 87100 et seq., its implementing regulations manual and codes, and California Government Code Section 1090. (d) Borrower shall comply with the conflict-of-interest provisions set forth in 24 C.F.R. 570.611.

Section 6.8 Notices, Demands and Communications.

All notices required or permitted by any provision of this Agreement must be in writing and sent by registered or certified mail, postage prepaid, return receipt requested, or delivered by express delivery service, return receipt requested, or delivered personally, to the principal office of the Parties as follows:

City: City of Turlock
Housing Program Services Division
156 South Broadway, Suite 140
Turlock, CA 95380
Attention: City Manager
Borrower: Great Valley Housing Development Corporation 1701 Robertson Road
Modesto, CA 95350
Attn: Executive Director
Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected Party may from time to time designate by mail as provided in this Section. Receipt will be

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deemed to have occurred on the date shown on a written receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable).

Section 6.9 Applicable Law.

This Agreement is governed by the laws of the State of California.

Section 6.10 Parties Bound.

Except as otherwise limited herein, this Agreement binds and inures to the benefit of the parties and their heirs, executors, administrators, legal representatives, successors, and assigns.

This Agreement is intended to run with the land and to bind Borrower and its successors and assigns in the Property and the Development for the entire Term, and the benefit hereof is to inure to the benefit of the City and its successors and assigns.

Section 6.11 Attorneys’ Fees.

If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing Party will have the right to recover its reasonable attorneys’ fees and costs of suit from the other Party.

Section 6.12 Severability.

If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions will continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.

Section 6.13 City Approval.

The City has authorized the City Manager to execute the Loan Documents and deliver such approvals or consents as are required by this Agreement, and to execute estoppel certificates concerning the status of the Loan and the existence of Borrower defaults under the Loan Documents.

Section 6.14 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 Borrower or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to Borrower to perform any obligation under this Agreement does not operate as a waiver or release from any of its obligations under this Agreement. Consent by the City to any act or omission by Borrower may not be construed to be consent to any other or subsequent act or omission or to waive the requirement for the City’s written consent to future waivers.

Section 6.15 Title of Parts and Sections.

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Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only and are to be disregarded in interpreting any part of the Agreement’s provisions.

Section 6.16 Entire Understanding of the Parties
The Loan Documents and the Project Agreement constitute the entire agreement of the Parties with respect to the Loan; provided, however, if there is a conflict between the Project Agreement and the Loan Documents, the terms of the Loan Documents will prevail.

Section 6.17 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.

Section 6.18 Time of Essence. Time is of the essence of this Agreement.

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WHEREAS, this Agreement has been entered into by the undersigned as of the date first above written.

CITY:

CITY OF TURLOCK
By: _________________________________
Susan E. Borrego
Interim City Manager
Date: _____________________________
APPROVED AS TO FORM:

George A. Petrulakis
City Attorney
Date: _____________________________
ATTEST:

Nichole Fiez
City Clerk
Date: _____________________________

BORROWER:

Great Valley Housing Development
Corporation, a California nonprofit public
benefit corporation
By: ______________________________
Jim Kruse
Executive Director

Date: _____________________________

By: _________________________________
Greg Raynes
Secretary

Date: _____________________________

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SPECIAL CONDITIONS
A. Financial Management

a. Accounting Standards

Borrower agrees to comply with 24 CFR §§ 84.21−28 and agrees to adhere to the accounting principles and procedures required therein, utilize adequate internal controls, and maintain necessary source documentation for all costs incurred.

b. Cost Principles

Borrower shall administer its program in conformance with OMB Circulars A -122, “Cost Principles for Non -Profit Organizations,” or A -21, “Cost Principles for Educational Institutions,” as applicable. These principles shall be applied for all costs incurred whether charged on a direct or indirect basis.

B. Documentation and Record-Keeping

a. Records to be Maintained

Borrower shall maintain all records required by the Federal regulations specified in 24 CFR § 92.508 and 24 CFR §570.506, that are pertinent to the activities to be funded under this Agreement. Such records shall include but not be limited to:

i. Records providing a full description of each activity undertaken; ii. Records demonstrating that each activity undertaken meets one of the National Objectives of the CDBG program;

iii. Records required to determine the eligibility of activities; iv. Records required to document the acquisition, improvement, use or disposition of real property acquired or improved with CDBG assistance;

v. Records documenting compliance with the fair housing and equal opportunity components of the HOME program and the CDBG program; vi. Financial records as required by 24 CFR 92.508, 24 CFR §570.502, and 24 CFR 84.21−28; and
vii. Other records necessary to document compliance with of 24 CFR Part 92.

b. Retention

Borrower shall retain all financial records, supporting docu ments, statistical records, and all other records pertinent to this Agreement for a period of no less than five (5) years after the full repayment of the loan . The retention period begins on the date of the submission of City’s annual performance and evaluation report to HUD in which the activities assisted under this Agreement are reported on for the final time. Notwithstanding the above, if there is litigation, claims, audits, negotiations or other actions that involve any of the

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records cited and that have started before the expiration of the retention period, then such records must be retained until completion of the actions and resolution of all issues, or the expiration of the retention period, whichever occurs later.

c. Client Data

Borrower shall maintain client data demonstrating client eligibility for services provided.

Such data shall include, but not be limited to, client name, address, income level or other basis for determining eligibility, and description of service provided. Such informat ion shall be made available to City monitors or their designees for review upon request.

d. Disclosure

Borrower understands that client information collected under this Agreement is private and the use or disclosure of such information, when not directly connected with the administration of City’s or Borrower’s responsibilities with respect to services provided under this Agreement, is prohibited unless written consent is obtained from such person receiving service and, in the case of a minor, that of a responsible parent/guardian.

e. Property Records

Borrower shall maintain real property inventory records that clearly identify properties purchased, improved or sold. Properties retained shall continue to meet eligibility criteria and shall conform with the "changes in use" restrictions specified in 24 CFR § 570.503(b)(8).

f. National Objectives

Borrower agrees to maintain documentation that demonstrates that the activities carried out with funds provided under this Agreement meet one or more of the CDBG program's national objectives 1) benefit low- and moderate-income persons, 2) aid in the prevention or elimination of slums or blight, or 3) meet community development needs having a particular urgency, as defined in 24 CFR Part § 570.208.

g. Audits and Inspections

All Borrower records with respect to any matters covered by this Agreement shall be made available to City, HUD, and the Comptroller General of the United States or any of their authorized representatives, at any time during City’s normal busine ss hours, as often as deemed necessary, to audit, examine, and make excerpts or transcripts of all relevant data.

Any deficiencies noted in audit reports must be fully cleared by Borrower within thirty (30) calendar days after receipt by Borrower. Failur e of Borrower to comply with the above audit requirements will constitute a violation of this Agreement and may result in the withholding of future payments. Borrower hereby agrees to have an annual agency audit

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conducted in accordance with current City p olicy concerning Borrower audits and OMB Circular A-133.

C. Reporting and Payment Procedures

a. Budgets

Borrower will submit a detailed Development budget of a form and content prescribed by City for approval by City. City and Borrower may agree to revise the budget from time to time in accordance with existing City policies.

b. Program Income

Borrower shall report quarterly all program income (as defined at 24 CFR § 92.503 and 24 CFR § 570.500(a)) generated by activities carried out with HOME Funds or CDBG Funds made available under this Agreement. The use of program income by Borrower shall comply with the requirements set forth at 24 CFR §92.503 and 24 CFR § 570.504. By way of further limitations, Borrower may use such income during the term of this Agreement for activities permitted under this Agreement and shall reduce requests for additional funds by the amount of any such program income bala nces on hand. All unexpended program income shall be returned to City at the expiration or termination of this Agreement. Any interest earned on cash advances from the U.S. Treasury and from funds held in a revolving fund account is not program income and shall be remitted promptly to City.

c. Indirect Costs

If indirect costs are charged, Borrower shall develop an indirect cost allocation plan for determining the appropriate Borrower’s share of administrative costs and shall submit such plan to City for approval, in a form specified by City.

d. Relocation, Real Property Acquisition and One-For-One Housing Replacement

Borrower shall comply with (a) the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (URA), and implementing regulations at 49 CFR Part 24, 24 CFR § 92.353 and 24 CFR § 570.606(b); (b) the requirements of 24 CFR § 92.353(c) and 24 CFR § 570.606(c)governing the Residential Anti -displacement and Relocation Assistance Plan under section 104(d) of the HCD Act; (c) the requirements in 24 CFR § 92.353 (d) and 24 CFR § 570.606(d) governing optional relocation policies; and (d) California Government Code Section 7260 et seq. and implementing regulations at 25 California Code of Regulations Sections 6000 et seq. Borrower shall provide relocation assistance to displaced persons as defined by 24 CFR § 92.353 (b)(2) and 24 CFR § 570.606(b)(2) that are displaced as a direct result of acquisition, rehabilitation, demolition or conversion for a HOME-assisted project or a CDBG assisted project , Borrower shall comply with applicable City ordinances, resolutions and policies concerning the displacement of persons from their residences.

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D. Personnel & Participant Conditions

a. Civil Rights

i. Compliance

The Fair Housing Act (42 U.S.C. Section 3601 et seq.) and implementing regulations at 24 C.F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title VIII of the Civil Rights Act of 1968 as amended; Section 104(b) and Section 109 of Title I of the Housing and Community Development Act of 1974 as amended; Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. Section 794, et seq.); the Age Discrimination Act of 1975 (42 U.S.C. Section 6101, et seq.); Executive Order 11063 as amended by Execu tive Order 12259 and implementing regulations at 24 C.F.R. Part 107; Executive Order 11246 as amended by Executive Orders 11375, 12086, 11478, 12107; Executive Order 11625 as amended by Executive Order 12007; Executive Order 12432; Executive Order 12138 as amended by Executive Order 12608; Executive Orders referenced in 24 C.F.R. 570.607, as revised by Executive Order 13279.

ii. Nondiscrimination

Borrower shall comply with the non-discrimination in employment and contracting opportunities laws, regulations, a nd executive orders referenced in 24 CFR § 92.350 and 24 CFR § 570.607, as revised by Executive Order 13279. The applicable non-discrimination provisions in Section 282 of the Home Investment Partnership Act and Section 92 of the HCDA are still applicable.

iii. Land Covenants

This Agreement is subject to the requirements of Title VI of the Civil Rights Act of 1964 (Pub. L. 88 -352) and 24 CFR §§ 92.351. In regard to the sale, lease, or other transfer of land acquired, cleared or improved with assistance provided under this Agreement, Borrower shall cause or require a covenant running with the land to be inserted in the deed or lease for such transfer, prohibiting discrimination as herein defined, in the sale, lease or rental, or in the use or occupancy of such land, or in any improvements erected or to be erected thereon, providing that City and the United States are beneficiaries of and entitled to enf orce such covenants.

Borrower, in undertaking its obligation to carry out the program assisted hereunder, shall take such measures as are necessary to enforce such covenant, and will not itself so discriminate.

iv. Section 504

Borrower shall comply with all Federal regulations issued pursuant to compliance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), which prohibits discrimination against the individuals with disabilities or handicaps in any

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Federally assisted program. City shall prov ide Borrower with any guidelines necessary for compliance with that portion of the regulations in force during the term of this Agreement.

b. Affirmative Action

i. Women- and Minority-Owned Businesses (W/MBE)

Borrower shall use its best efforts to afford sm all businesses, minority business enterprises, and women’s business enterprises the maximum practicable opportunity to participate in the performance of this Agreement. As used in this Agreement, the terms “small business” means a business that meets the criteria set forth in section 3(a) of the Small Business Act, as amended (15 U.S.C. § 632), and “minority and women’s business enterprise” means a business at least fifty -one percent (51%) owned and controlled by minority group
members or women. For the purpose of this definition, "minority group members" are Afro -Americans, Spanish -speaking, Spanish surnamed or Spanish -heritage Americans, Asian-Americans and American Indians. Borrower may rely on written representations by businesses regarding their status as minority and female business enterprises in lieu of an independent investigation.

ii. Access to Records

Borrower shall furnish and cause each of its contractors to furnish all information and reports required hereunder and w ill permit access to its books, records and accounts by City, HUD, HCD, or their agent, or other authorized Federal officials for purposes of investigation to ascertain compliance with the rules, regulations and provisions stated herein.

iii. Notifications

Borrower shall send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer, advising the labor union or worker’s repr esentative of Borrower’s commitments hereunder, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

iv. Equal Employment Opportunity and Affirmative Action (EEO/AA) Statement

Borrower will, in all solicitations or advertisements for employees placed by or on behalf of Borrower, state that it is an Equal Opportunity of Affirmative Action employer.

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v. Subcontract Provisions

Borrower shall include the provisions of Paragraphs D.A, Civil Rights, and B, Affirmative Action, in every subcontract or purchase order, specifically or by reference, so that such provisions will be binding upon each of its own contractors.

c. Employment Restrictions

i. Prohibited Activity

Borrower is prohibited from using personnel employed in the administration of the program for: political activities; inherently religious activities; lobbying; political patronage; and nepotism activities.

ii. OSHA

Where employees are engaged in activities not covered under the Occupational Safety and Health Act of 1970, they shall not be required or permitted to work, be trained, or receive services in buildings or surroundings or under working conditions which are unsanitary, hazardous or dangerous to the participant's health or safety.

iii. Right to Know

Participants employed or trained for inherently dangerous occupations, shall be assigned to work in accordance with reasonable safety practices.

iv. Labor Standards

Borrower shall comply with the requirements of the Secretary of Labor in accordance wit h the Davis -Bacon Act, as amended, the provisions of Contract Work Hours and Safety Standards Act (40 U.S.C. § 327 et seq. ) and all other applicable federal, state and local laws and regulations pertaining to labor standards insofar as those acts apply to the performance of this Agreement. Borrower shall comply with the Copeland Anti -Kick Back Act (18 U.S.C. § 874 et seq.) and its implementing regulations of the U.S. Department of Labor at 28 CFR Part 5.

Borrower shall maintain documentation which demonstrates compliance with hour and wage requirements of this part. Such documentation shall be made available to City for review upon request.

d. Conduct

i. Assignability

Borrower shall not assign or transfer any interest in this Agreement without City’s prior written consent.

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ii. Hatch Act

Borrower agrees that no funds provided, nor personnel employed under this Agreement, shall be in any way or to any extent engaged in the conduct of political activities in violation of Chapter 15 of Title V of the U.S.C.

iii. Conflict of Interest

Borrower agrees to abide by the provisions of 24 CFR §§ 84.42 and 92.356, which include (but are not limited to) the following:

1. Borrower shall maintain a written code or standards of conduct that shall govern the performance of its officers, employees or agents engaged in the award and administration of contracts supported by Federal funds.

2. No employee, officer or agent of Borrower shall participate in the selection, or in the award, or administration of, a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved.

3. No covered persons who exercise or have exercised any functions or responsibilities with respect to HOME-assisted activities, or who are in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a financial interest in any contract, or have a financial interest in any contract, subcontract, or agreement with respect to the HOME- assisted activity, or with respect t o the proceeds from the HOME- assisted activity, either for themselves or those with whom they have business or immediate family ties, during their tenure or for a period of one (1) year thereafter. For purposes of this paragraph, a “covered person” includ es any person who is an employee, agent, consultant, officer, or elected or appointed official of City, Borrower, or any designated public agency.

iv. Lobbying

Borrower hereby certifies that:

1. No federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any federal contract, the making of any federal grant, the making of any federal

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loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any federal contract, grant, loan or cooperative agreement;

2. If any funds other than federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Agreement, it will complete and submit Standard Form -LLL, “Disclosure Form to Report
Lobbying,” in accordance with its instructions; and

3. It will require that the following language be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all Borrowers shall certify and disclose accordingly:

“Lobbying Certification. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S.C. Any p erson who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.”

v. Subcontracts

1. Approvals

Borrower shall not enter into any subcontracts with any agency or individual in the performance of this Agreement without the written consent of City prior to the execution of such agreement.

2. Monitoring

Borrower shall monitor all subcontracted services on a regular basis to assure contract compliance. Results of monito ring efforts shall be summarized in written reports and supported with documented evidence of follow-up actions taken to correct areas of noncompliance.

3. Content

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Borrower shall cause all of the provisions of this Agreement in its entirety to be included in and made a part of any subcontract executed in the performance of this Agreement.

4. Selection Process

Borrower shall undertake to ensure that all subcontracts let in the performance of this Agreement shall be awarded on a fair and open competition basis in accordance with applicable procurement requirements.

Executed copies of all subcontracts shall be forwarded to City along with documentation concerning the selection process.

5. Copyright

If this Agreement results in any copyrightable material or inven tions, City and HUD reserves the right to royalty -free, non-exclusive and irrevocable license to reproduce, publish or otherwise use and to authorize others to use, the work or materials for governmental purposes.

6. Religious Activities

Borrower agrees tha t funds provided under this Agreement will not be utilized for inherently religious activities prohibited by 24 CFR § 570.200(j), such as worship, religious instruction, or proselytization.

E. Environmental Conditions

a. Air and Water

Borrower shall comply with the following requirements insofar as they apply to the performance of this Agreement:

i. Clean Air Act, 42 U.S.C. 7401 et seq;
ii. Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq., as amended 1318 relating to inspection, monitoring, entry reports, and information, as well as other requirements specified in said Section 114 and Section 308, and all regulations and guidelines issued thereunder; iii. Environmental Protection Agency (EPA) regulations pursuant to 40 CFR Part 50, as amended;

b. Flood Disaster Protection

In accordance with the requirements of the Flood Disaster Protection Act of 1973 (42 U.S.C. § 4001), Borrower shall assure that for activities located in an area identified by the Federal Emergency Management Agency (FEMA) as hav ing special flood hazards, flood insurance under the National Flood Insurance Program is obtained and maintained as a

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condition of financial assistance for acquisition or construction purposes (including rehabilitation).

c. Lead-Based Paint

Borrower agrees that any construction or rehabilitation of residential structures with assistance provided under this Agreement shall be subject to HUD Lead -Based Paint Regulations at 24 CFR § 92.355, and 24 CFR Part 35, Subpart B. Such regulations pertain to all HOME-assisted housing and require that all owners, prospective owners, and tenants of properties constructed prior to 1978 be properly notified that such properties may include lead-based paint. Such notification shall point out the hazards of lead-based paint and explain the symptoms, treatment and precautions that should be taken when dealing with lead-based paint poisoning and the advisability and availability of blood lead level screening for children under seven. The notice should also point out that if lead-based paint is found on the property, abatement measures may be undertaken.

The regulations further require that, depending on the amount of Federal funds applied to a property, paint testing, risk assessment, treatment and/or abatement may be conducted.

d. Historic Preservation

Borrower shall comply with the Historic Preservation requirements set forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C. § 470) and the procedures set forth in 36 CFR Part 800, Advisory Council on Hist oric Preservation Procedures for Protection of Historic Properties, insofar as they apply to the performance of this agreement.

In general, this requires concurrence from the State Historic Preservation Officer for all rehabilitation and demolition of historic properties that are fifty (50) years old or older or that are included on a Federal, state, or local historic property list.

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PROMISSORY NOTE
(573 Birchwood Way– HOME Loan)
$395,000 Turlock, California
January 27, 2026
FOR VALUE RECEIVED, the undersigned, GREAT VALLEY HOUSING DEVELOPMETN CORPORATION, a California nonprofit public benefit corporation (“Borrower”) hereby promises to pay to the order of the CITY OF TURLOCK, a municipal corporation (“Holder”), the principal amount of Three Hundred Ninety-Five Thousand Dollars ($395,000) plus interest thereon pursuant to Section 2 below.

All capitalized terms used but not defined in this Note have the meanings set forth in the Loan Agreement.

1. Borrower’s Obligation. This Note evidences Borrower’s obligation to repay Holder the principal amount of Three Hundred Ninety-Five Thousand Dollars ($395,000) for the funds loaned to Borrower by Holder to finance the acquisition of the Development pursuant to the Loan Agreement between Borrower and Holder of even date herewith (the “Loan Agreement”).

2. Interest. No interest shall be charged on the principal amount of the Loan except if an Event of Default (as defined in the Loan Agreement) occurs, interest will accrue on all amounts due under this Note at the lesser of 10% per annum or the highest rate permitted by law until such Event of Default is cured by Borrower or waived by Holder.

3. Term. This Note shall have a term of fifty-five (55) years from the date set forth above (“Term”)

4. Repayment Requirements. Each year on the anniversary date of this Note, during the term of this Note, provided an Event of Default has not occurred and Borrower has not Transferred the Property, one Fifty Fifth (1/55th) of the principal due under the Note shall be forgiven such that at the end of the Term the full amount of the principal and any interest owed will be forgiven and this Note shall be cancelled. If during the Term, the Borrower Transfers (as that term is defined in the Loan Agreement) the Property, the remaining amount of principal owed plus default interest in the amount set forth in Section 2 above shall be due in full at the time of Transfer. If an Event of Default occurs, the Holder is entitled to accelerate the amounts owed under this Note and require the Borrower to repay all principal and any interest owed at the time of such Event of Default.

5. No Assumption. This Note is not assumable by the successors and assigns of Borrower without the prior written consent of Holder.

6. Security. This Note is secured by a Deed of Trust that refers to this Note.

7. Terms of Payment.

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(a) Borrower shall make all payments due under this Note in currency of the United States of America to Holder at City of Turlock, Housing Program Services Division, 156 S. Broadway, Suite 140, CA 95380, Attention: Housing Manager, or to such other place as Holder may from time to time designate.
(b) All payments on this Note are without expense to Holder. Borrower shall pay all costs and expenses, including re-conveyance fees and reasonable attorney’s fees of Holder, incurred in connection with the payment of this Note and the release of any security hereof.
(c) The obligations of Borrower under this Note are absolute and Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reason whatsoever.

8. Event of Default; Acceleration.
(a) Upon the occurrence of an Event of Default, the entire unpaid principal balance, together with all interest thereon, and together with all other sums then payable under this Note and the Deed of Trust will, at the option of Holder, become immediately due and payable without further demand.
(b) Holder’s failure to exercise the remedy set forth in Subsection 8(a) above or any other remedy provided by law upon the occurrence of an Event of Default does not constitute a waiver of the right to exercise any remedy at any subsequent time in respect to the same or any other Event of Default. The acceptance by Holder of any payment that is less than the total of all amounts due and payable at the time of such payment does not constitute a waiver of the right to exercise any of the foregoing remedies or options at that time or at any subsequent time, or nullify any prior exercise of any such remedy or option, without the express consent of Holder, except as and to the extent otherwise provided by law.

9. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and demand, and notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.

Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time, and that Holder may accept further security or release any security for this Note, all without in any way affecting the liability of Borrower. (b) Any extension of time for payment of this Note or any installment hereof made by agreement of Holder with any person now or hereafter liable for payment of this Note must not operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part.

10. Miscellaneous Provisions.
(a) All notices to Holder or Borrower are to be given in the manner and at the addresses set forth in the Loan Agreement, or to such addresses as Holder and Borrower may therein designate.

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(b) Borrower promises to pay all costs and expenses, including reasonable attorney’s fees, incurred by Holder in the enforcement of the provisions of this Note, regardless of whether suit is filed to seek enforcement.
(c) This Note is governed by the laws of the State of California. (d) The times for the performance of any obligations hereunder are to be strictly construed, time being of the essence.
(e) The Loan Documents (as defined in the Loan Agreement), of which this Note is a part, contain the entire agreement between the parties as to the loan evidenced by this Note. This Note may not be modified except upon the written consent of the parties.

IN WITNESS WHEREOF, Borrower has executed this Promissory Note as of the day and year first above written.

Great Valley Housing Development
Corporation, a California nonprofit public
benefit corporation

By:

Print Name: Jim Kruse
Title: Executive Director

Date:________________________________

Witness:

By: __________________________________
Print Name: Greg Raynes
Title: Secretary
Date:_________________________________

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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Turlock
Housing Program Services Division
156 South Broadway, Suite 140
Turlock, CA 95380
Attn: Housing Manager
No fee for recording pursuant to
Government Code Section 27383

DEED OF TRUST WITH ASSIGNMENT OF RENTS,

SECURITY AGREEMENT, AND FIXTURE FILING
(573 Birchwood Way, Turlock, CA-HOME)

THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT, AND FIXTURE FILING (“ Deed of Trust ”) is made as of January 27, 2026 by and among GREAT VALLEY HOUSING DEVELOPMENT CORPORATION , a California nonprofit public benefit corporation (“Trustor”), Title Company, a California corporation (“Trustee”), and the CITY OF TURLOCK, a California municipal corporation (“Beneficiary”).

FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, Trustor’s fee interest in the property located at 573 Birchwood Way, Turlock, State of California, that is described in the attached Exhibit A, incorporated herein by this reference (the “Property”).

TOGETHER WITH all interest, estates or other claims, both in law and in equity which Trustor now has or may hereafter acquire in the Property and the rents; TOGETHER WITH all easements, rights -of-way and rights used in connection therewith or as a means of access thereto, including (without limiting the generality of the foregoing) all tenements, hereditaments and appurtenances thereof and thereto; TOGETHER WITH any and all buildings and improvements of every kind and description now or hereafter erected thereon, and all property of the Trustor now or hereafter affixed to or placed upon the Property;
TOGETHER WITH all building materials and equipment now or hereafter delivered to said property and intended to be installed therein;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right -of-way of any street, open or proposed, adjoining the

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Property, and any and all sidewalk s, alleys and strips and areas of land adjacent to or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every nature, in and to such property, including the Property, both in law and in equity, including, but not limited to, all deposits made with or other security given by Trustor to utility companies, the proceeds from any or all of such property, including the Property, claims or demands with respect to the proceeds of insurance in effect wi th respect thereto, which Trustor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by any proceeding or purchase in lieu thereof of the whole or any part of such property, including without limitation, any awards resulting from a change of grade of streets and awards for severance damages to the extent Beneficiary has an interest in such awards for taking as provided in Paragraph 4.1 herein; TOGETHER WITH all of Trustor’s interest in all articles of personal property or fixtures 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 complete and 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 will be, attached to said building or buildings in any manner; and TOGETHER WITH all of Trustor’s interest in all building materials, fixtures, equipment, work in process and other personal property to be incorporated into the Property; all goods, materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other personal property now or hereafter appropriated for use on the Property, whether stored on the Property or elsewhere, and used or to be used in connection with the Property; all rents, issues and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles, chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance and condemnation awards and proceeds, trade names, trademarks and service marks arising from or related to the Property and any business conducted thereon by Trustor; a ll replacements, additions, accessions and proceeds; and all books, records and files relating to any of the foregoing.

All of the foregoing, together with the Property, is herein referred to as the “Security.” To have and to hold the Security together with acquaintances to the Trustee, its successors and assigns forever.

FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS (the “Secured Obligations”):

A. Payment to Beneficiary of all sums at any time owing under or in connection with the Note (defined in Section 1.4 below) until paid or cancelled. Said principal and other payments are due and payable as provided in the Note. The Note and all its terms are incorporated herein by reference, and this conveyance secures any and all extensions thereof, however evidenced;

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B. Payment of any sums advanced by Beneficiary to protect the Security pursuant to the terms and provisions of this Deed of Trust following a breach of Trustor’s obligation to advance said sums and the expiration of any applicable cure period, with interest thereon as provided herein; C. All modifications, extensions and renewals of any of the foregoing (including without limitation, (i) modifications, extensions or renewals at a different rate of interest, or (ii) deferrals or accelerations of the required principal payment dates or interest payment dates or both, in whole or in part), however evidenced, whether or not any such modification, extension or renewal is evidenced by a new or additional promissory note or notes.

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

ARTICLE 1

DEFINITIONS
In addition to the terms defined elsewhere in this Deed of Trust, the following terms have the following meanings in this Deed of Trust:

Section 1.1 The term “Loan” means the loan made by the Beneficiary to the Trustor in the amount of Four Hundred Twenty Thousand Dollars ($420,000.00).

Section 1.2 The term “Loan Agreement” means that certain CDBG/PLHA/HOME Loan Agreement between Trustor and Beneficiary, of even date herewith, as such may be amended from time to time, providing for the Beneficiary to loan to Trustor Four Hundred Twenty Thousand Dollars ($420,000.00).

Section 1.3 The term “Loan Documents” means this Deed of Trust, the Note, the Loan Agreement, and the Regulatory Agreement, and any other debt, loan or security instruments between Trustor and the Beneficiary relating to the Loan.

Section 1.4 The term “ Note” means the HOME Promissory Note in the principal amount of Three Hundred Ninety -Five Thousand Dollars ($395,000.00) of even date herewith, executed by Trustor in favor of the Beneficiary, as it may be amended or restated, the payment of which is secured by this Deed of Trust. (A copy of the Note is on file with the Beneficiary and terms and provisions of the Note are incorporated herein by reference.) Section 1.5 The term “Principal” means the amount required to be paid under the Note.

Section 1.6 The term “ Regulatory Agreement” means the Regulatory Agreement and Declaration of Restrictive Covenants of even date herewith by and between the Beneficiar y and the Trustor.

ARTICLE 2

MAINTENANCE AND MODIFICATION OF THE PROPERTY

AND SECURITY
Section 2.1 Maintenance and Modification of the Property by Trustor.

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The Trustor agrees that at all times prior to full payment and performance of the Secured Obligations, the Trustor will, at the Trustor’s own expense, maintain, preserve and keep the Security or cause the Security to be maintained and preserved in good condition. The Trustor will from time to time make or cause to be made all repairs, replacements and renewals deemed proper and necessary by it. The Beneficiary has no responsibility in any of these matters or for the making of improvements or additions to the Security.

Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all claims for labor done and for material and services furnished in connection with the Security, diligently to file or procure the filing of a valid notice of cessation upon the event of a cessation of labor on the work or construction on the Security for a continuous period of thirty (30) days or more, and to take all other reasonable steps to forestall the assertion of claims of lien against the Security or any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary as its agent (said agency being coupled with an interest) with the authority, but without any obligation, to file for record any notices of completion or cessation of labor or any other notice that Beneficiary deems necessary or desirable to protect its interest in and to the Security o r the Loan Documents; provided, however, that Beneficiary exercises its rights as agent of Trustor only in the event that Trustor fails to take, or fails to diligently continue to take, those actions as hereinbefore provided.

Upon demand by Beneficiary, Tr ustor shall make or cause to be made such demands or claims as Beneficiary specifies upon laborers, material men, subcontractors or other persons who have furnished or claim to have furnished labor, services or materials in connection with the Security. N othing herein contained requires Trustor to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting provided that Trustor shall, within thirty (30) days after the filing of any claim of lien, record in the Office of the Recorder of Stanislaus County, a surety bond in an amount 1 and 1/2 times the amount of such claim item to protect against a claim of lien.

Section 2.2 Granting of Easements.

Trustor may not grant easements, licenses, rights-of-way or other rights or privileges in the nature of easements with respect to any property or rights included in the Security except those required or desirable for installation and maintenance of public utilities including, without limitation, water, gas, electricity, sewer, telephone and telegraph, or those required by law, and as approved, in writing, by Beneficiary.

Section 2.3 Assignment of Rents.

As part of the consideration for the indebtedness evidenced by the Note, Trustor hereby absolutely and unconditionally assigns and transf ers to Beneficiary all the rents and revenues of the Property including those now due, past due, or to become due by virtue of any lease or other agreement for the occupancy or use of all or any part of the Property, regardless of to whom the rents and rev enues of the Property are payable, subject to the rights of senior lenders. Trustor hereby authorizes Beneficiary or Beneficiary’s agents to collect the aforesaid rents and revenues and hereby directs each tenant of the Property to pay such rents to Benef iciary or Beneficiary’s agents; provided, however, that prior to written notice given by Beneficiary to Trustor of the breach

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by Trustor of any covenant or agreement of Trustor in the Loan Documents, Trustor shall collect and receive all rents and revenues of the Property as trustee for the benefit of Beneficiary and Trustor to apply the rents and revenues so collected to the Secured Obligations with the balance, so long as no such breach has occurred, to the account of Trustor, it being intended by Trustor and Beneficiary that this assignment of rents constitutes an absolute assignment and not an assignment for additional security only. Upon delivery of written notice by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement of Trusto r in the Loan Documents, and without the necessity of Beneficiary entering upon and taking and maintaining full control of the Property in person, by agent or by a court -appointed receiver, Beneficiary shall immediately be entitled to possession of all ren ts and revenues of the Property as specified in this Section 2.3 as the same becomes due and payable, including but not limited to, rents then due and unpaid, and all such rents will immediately upon delivery of such notice be held by Trustor as trustee for the benefit of Beneficiary only; provided, however, that the written notice by Beneficiary to Trustor of the breach by Trustor contains a statement that Beneficiary exercises its rights to such rents. Trustor agrees that commencing upon delivery of such written notice of Trustor’s breach by Beneficiary to Trustor, each tenant of the Property shall make such rents payable to and pay such rents to Beneficiary or Beneficiary’s agents on Beneficiary’s written demand to each tenant therefor, delivered to each tenant personally, by mail or by delivering such demand to each rental unit, without any liability on the part of said tenant to inquire further as to the existence of a default by Trustor.

Trustor hereby covenants that Trustor has not executed any prior assignment of said rents except in connection with the Bond Loan, that Trustor has not performed, and will not perform, any acts or has not executed and will not execute, any instrument which would prevent Beneficiary from exercising its rights under this Section 2.3, and that at the time of execution of this Deed of Trust, here has been no anticipation or prepayment of any of the rents of the Property for more than two (2) months prior to the due dates of such rents. Trustor covenants that Trustor will no t hereafter collect or accept payment of any rents of the Property more than two (2) months prior to the due dates of such rents. Trustor further covenant that Trustor will execute and deliver to Beneficiary such further assignments of rents and revenues of the Property as Beneficiary may from time-to-time request.

Upon Trustor’s breach of any covenant or agreement of Trustor in the Loan Documents, Beneficiary may in person, by agent or by a court -appointed receiver, regardless of the adequacy of Beneficiary’s security, enter upon and take and maintain full control of the Property in order to perform all acts necessary and appropriate for the operation and maintenance thereof including, but not limited to, the execution, cancellation or modification of leas es, the collection of all rents and revenues of the Property, the making of repairs to the Property and the execution or termination of contracts providing for the management or maintenance of the Property, all on such terms as are deemed best to protect t he security of this Deed of Trust. In the event Beneficiary elects to seek the appointment of a receiver for the Property upon Trustor’s breach of any covenant or agreement of Trustor in this Deed of Trust, Trustor hereby expressly consents to the appoint ment of such receiver. Beneficiary or the receiver will be entitled to receive a reasonable fee for so managing the Property.

All rents and revenues collected subsequent to delivery of written notice by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan Documents

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are to be applied first to the costs, if any, of taking control of and managing the Property and collecting the rents, including, but not limited to, attorney’s fees, receiver’s fees, premiums on receiver’s bonds, costs of repairs to the Property, premiums on insurance policies, taxes, assessments and other charges on the Property, and the costs of discharging any obligation or liability of Trustor as lessor or landlord of the Property and then to the sums secured by this deed of Trust. Beneficiary or the receiver is to have access to the books and records used in the operation and maintenance of the Property and will be liable to account only for those rents actually received.

Beneficiary is not li able to Trustor, anyone claiming under or through Trustor or anyone having an interest in the Property by reason of anything done or left undone by Beneficiary under this Section 2.3.

If the rents of the Property are not sufficient to meet the costs, if an y, of taking control of and managing the Property and collecting the rents, any funds expended by Beneficiary for such purposes will become part of the Secured Obligations pursuant to Section 3.3 hereof. Unless Beneficiary and Trustor agree in writing to other terms of payment, such amounts are payable by Trustor to Beneficiary upon notice from Beneficiary to Trustor requesting payment thereof and will bear interest from the date of disbursement at the rate stated in Section 3.3.

If the Beneficiary or the receiver enters upon and takes and maintains control of the Property, neither that act nor any application of rents as provided herein will cure or waive any default under this Deed of Trust or invalidate any other right or remedy available to Beneficiary under applicable law or under this Deed of Trust. This assignment of rents of the Property will terminate at such time as this Deed of Trust ceases to secure the Secured Obligations.

ARTICLE 3
TAXES AND INSURANCE; ADVANCES
Section 3.1 Taxes, Other Governmental Charges and Utility Charges.

Trustor shall pay, or cause to be paid, prior to the date of delinquency, all taxes, assessments, charges and levies imposed by any public authority or utility company that are or may become a lien affecting the Security or any part thereof; provided, however, that Trustor is not required to pay and discharge any such tax, assessment, charge or levy so long as (a) the legality thereof is promptly and actively contested in good faith and by appropriate proceedings, and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant to this Section 3.1.

With respect to taxes, special assessments or other similar governmental charges, Trustor shall pay such amount in full prior to the attachment of any lien therefor on any part of the Security; provided, however, if such taxes, assessments or charges can be paid in installments, Trustor may pay in such installments. Except as provided in clause (b) of the first sentence of this paragraph, the provisions of this Section 3.1 may n ot be construed to require that Trustor maintain a reserve account, escrow account, impound account or other similar account for the payment of future taxes, assessments, charges and levies.

In the event that Trustor fails to pay any of the items required by this Section to be paid by Trustor, Beneficiary may (but is under no obligation to) pay the same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to fully pay such items within seven (7) business days after receipt of such notice. Any amount so advanced therefor by Beneficiary, together with

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interest thereon from the date of such advance at the maximum rate permitted by law, will become part of the Secured Obligations secured hereby, and Trustor agrees to pay all such amounts.

Section 3.2 Provisions Respecting Insurance.

Trustor agrees to provide insurance conforming in all respects to that required under the Loan Documents at all times until all amounts secured by this Deed of Trust have been paid, all Secured Obligations secured hereunder have been fulfilled, and this Deed of Trust has been reconveyed.

All such insurance policies and coverages are to be maintained at Trustor’s sole cost and expense. Certificates of insurance for all of the above insurance policies, showing the same to be in full force and effect, are to be delivered to the Beneficiary upon demand therefor at any time prior to Trustor’s satisfaction of the Secured Obligations.

Section 3.3 Advances.

In the event the Trustor fails to maintain the full insurance coverage required by this Deed of Trust or fails to keep the Security in accordance with the Loan Documents, the Beneficiary, after at least seven (7) days prior notice to Trustor, may (but is under no obligation to) (i) take out the required policies of insurance and pay the premiums on the same, and (ii) make any repairs or replacements that are necessary and provide for payment thereof. All amounts so advanced by the Beneficiary will become part of the Secured Obligations (together with interest as set forth below) and will be secured hereby, which amounts the Trustor agrees to pay on the demand of the Beneficiary, and if not so paid, will bear interest from the date of the advance at the lesser of ten percent (10%) per annum or the maximum rate permitted by law.

ARTICLE 4

DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1 Awards and Damages.

Subject to the rights of senior lenders, all judgments, awards of damages, settlements and compensation made in connection with or in lieu of (1) the taking of all or any part of or any interest in the Property by or under assertion of the power of eminent domain, (2) any damage to or destruction of the Property or any part thereof by insured casualty, and (3) any other injury or damage to all or any part of the Property (collectively, the “Funds”) are hereby assigned to and are to be paid to the Beneficiary by a check made payable to the Beneficiary. The Beneficiary is authorized and empowered (but not required) to collect and receive any Funds and is authorized to apply them in whole or in part to any indebtedness or obligation secured hereby, in such order and manner as the Beneficiary determines at its sole option. The Beneficiary is entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust and m ay deduct and retain from the proceeds of such insurance the amount of all expenses incurred by it in connection with any such settlement or adjustment. All or any part of the amounts so collected and recovered by the Beneficiary may be released to Trusto r upon such conditions as the Beneficiary may impose for its disposition. Application of all or any part of the Funds collected and received by the Beneficiary or the release thereof will not cure or waive any default under this Deed of Trust. The rights of the Beneficiary under this Section 4.1 are subject to the rights of any

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senior mortgage lender. The Beneficiary shall release the Funds to Trustor to be used to reconstruct the improvements on the Property provided that Beneficiary reasonably determin es that Trustor (tak e into account the Funds) has sufficient funds to rebuild the improvements in substantially the form that existed prior to the casualty or condemnation.

ARTICLE 5
AGREEMENTS AFFECTING THE PROPERTY;
FURTHER ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.1 Other Agreements Affecting Property.

The Trustor shall duly and punctually perform all terms, covenants, conditions and agreements binding upon it under the Loan Documents and any other agreement of any nature whatsoever now or hereafter involving or affecting the Security or any part thereof.

Section 5.2 Agreement to Pay Attorneys’ Fees and Expenses.

In the event of any Event of Default (as defined in Section 7.1) hereunder, and if the Beneficiary employs attorneys or incurs other expenses for the collection o f amounts due hereunder or the enforcement of performance or observance of an obligation or agreement on the part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Beneficiary. Any such amounts paid by the Beneficiary will be added to the Secured Obligations, and will bear interest from the date such expenses are incurred at the lesser of ten percent (10%) per annum or the maximum rate permitted by law.

Section 5.3 Payment of the Principal.

The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth in the Note in the amounts and by the times set out therein.

Section 5.4 Personal Property.

To the maximum extent permitted by law, the personal property subject to this Deed of Trust is deemed to be fixtures and part of the real property and this Deed of Trust constitutes a fixtures filing under the California Commercial Code. As to any personal property not deemed or permitted to be fixtures, this Deed of Trust constitutes a security agreement under the California Commercial Code.

Section 5.5 Financing Statement.

The Trustor shall execute and deliver to the Beneficiary such financing statements pursuant to the appropriate statutes, and any other documents or instruments as are required to convey to the Beneficiary a valid perfected security interest in the Security. The Trustor shall perform all acts that the Beneficiary reasonably requests so as to enable the Be neficiary to maintain a valid perfected security interest in the Security in order to secure the payment of the Note in accordance with its terms. The Beneficiary is authorized to file a copy of any such financing statement in any

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jurisdiction(s) as it de ems appropriate from time to time in order to protect the security interest established pursuant to this instrument.

Section 5.6 Operation of the Security.

The Trustor shall operate the Security (and, in case of a transfer of a portion of the Security subject to this Deed of Trust, the transferee shall operate such portion of the Security) in full compliance with the Loan Documents.

Section 5.7 Inspection of the Security.

At any and all reasonable times upon seventy -two (72) hours’ notice, the Beneficiary and its duly authorized a gents, attorneys, experts, engineers, accountants and representatives, may inspect the Security, without payment of charges or fees.

Section 5.8 Nondiscrimination.

The Trustor herein covenants by and for itself, its heirs, executors, administrators, and assigns, and a ll persons claiming under or through them, that there will be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, age, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor will the Trustor itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Security. The foregoing covenants run with the land.

ARTICLE 6

HAZARDOUS WASTE
Trustor shall keep and maintain the Property in compliance with , and shall not cause or permit the Property to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Trustor shall not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances o r related materials, including without limitation, any substances defined as or included in the definition of “hazardous substances,” hazardous wastes,” “hazardous materials,” or “toxic substances” under any applicable federal or state laws or regulations (collectively referred to hereinafter as “Hazardous Materials”) except such of the foregoing as may be customarily used in construction or operation of a multi-family residential development.

Trustor shall immediately advise Beneficiary in writing if at any time it receives written notice of: (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Trustor or the Property pursuant to any applicable federal, state or local laws, o rdinances, or regulations relating to any Hazardous Materials, (“ Hazardous Materials Law ”); (ii) all claims made or threatened by any third party against Trustor or the Property relating to damage, contribution, cost recovery compensation, loss

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or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as “Hazardous Materials Claims”); and (iii) Trustor’s discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law.

Beneficiary has the right to join and partici pate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys’ fees in connection therewith paid by Trustor. Trustor shall indemnify and hold harmless Beneficiary and its board members, supervisors, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Property including without limitation: (a) all foreseeable consequential damages; (b) the costs of any required or necessary repair, clean-up or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans; and (c) all reasonable costs and expenses incurred by Beneficiary in connection with clauses (a) and (b), including but not limited to reasonable attorneys’ fees and consultant’s fees. This indemnification applies whether or not any government agency has issued a clean-up order. Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision include, but are not limited to: (1) losses attributable to diminution in the value of the Property; (2) loss or restriction of use of rentable space on the Property; (3) adverse effect on the marketing of any rental space on the Property; and (4) penalties and fines levied by, and remedial or enforcement actions of any kind issued by any regulatory agency (including but not limited to the costs of any required testing, remediation, repair, removal, clean- up or detoxification of the Property and surrounding properties).

Without Beneficiary’s prior written consent, which may not be unreasonably withheld, Trustor may not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in Beneficiary’s reasonable judgment, impairs the value of the Beneficiary’s security hereunder; provi ded, however, that Beneficiary’s prior consent is not necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain Beneficiary’s consent before taking such action, provided that in such event Trustor notifies Beneficiary as soon as practicable of any action so taken. Benefic iary agrees not to withhold its consent, where such consent is required hereunder, if (i) a particular remedial action is ordered by a court of competent jurisdiction; (ii) Trustor will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) Trustor establishes to the reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial action which would result in less impairment of Beneficiary’s security hereunder; or (iv) the action has been agreed to by Beneficiary.

The Trustor hereby acknowledges and agrees that (i) this Article is intended as the Beneficiary’s written request for information (and the Trustor’s response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section

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726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other Loan Documents (together with any indemnity applicable to a breach of any such representation and warranty) with respect to the environmental condition of the property is intended by the Beneficiary and the Trustor to be an “environmental provision” for purposes of California Code of Civil Procedure Section 736.

In the event that any portion of the Property is determined to be “environmentally impaired” (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an “affected parcel” (as that term is defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the Beneficiary’s or the Trustee’s rights and remedies under this Deed of Trust, the Beneficiary may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and remedies of an unsecured creditor, including reduction of its claim against the Trustor to judgment, and (b) any other rights and remedies permitted by l aw. For purposes of determining the Beneficiary’s right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Trustor will be deemed to have willfully permitted or acquiesced in a release or threatened release o f hazardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of hazardous materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any p ortion of the Property and the Trustor knew or should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys’ fees, in curred by the Beneficiary in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the default rate specified in the Loan Agreement until paid, will be added to the indebtedness secured by this Deed of Trust and will be due and payable to the Beneficiary upon its demand made at any time following the conclusion of such action.

ARTICLE 7

EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default.

The following are events of default following the expiration of any applicable notice and cure periods (each an “Event of Default”): (i) failure to make any payment to be paid by Trustor under the Loan Documents; (ii) failure to observe or perform any of Trustor’s other covenants, agreements or obligations under the Loan Documents, including, without limitation, the provisions concerning discrimination; (iii) failure to make any payment or observe o r perform any of Trustor’s other covenants, agreements, or obligations under any Secured Obligations, which default is not cured within the times and in the manner provided therein; and (iv) failure to make any payments or observe or perform any of Trustor ’s other covenants, agreements or obligations under any other debt instrument or regulatory agreement secured by the Property, which default is not cured within the time and in the manner provided therein.

Section 7.2 Acceleration of Maturity.

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If an Event of Default has occurred and is continuing, then at the option of the Beneficiary, the amount of any payment related to the Event of Default and all unpaid Secured Obligations are immediately due and payable, and no omission on the part of the Beneficiary to exercise such option when entitled to do so may be construed as a waiver of such right.

Section 7.3 The Beneficiary’s Right to Enter and Take Possession.

If an Event of Default has occurred and is continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Property and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the nam e of Trustee, and do any acts that it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security will not cure or waive any Event of Default or Notice of Sale (as defined in Section 7.3(c), below) hereunder or invalidate any act done in response to such Event of Default or pursuant to such Notice of Sale, and, notwithstanding t he continuance in possession of the Security, Beneficiary will be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any Event of Default, including the right to exercise the power of sale; (b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (c) Deliver to Trustee a written declaration of an Event of Default and demand for sale, and a written notice of default and election to cau se Trustor’s interest in the Security to be sold (“Notice of Sale”), which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of Stanislaus County; or
(d) Exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing the Secured Obligations.

Section 7.4 Foreclosure By Power of Sale.

Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Beneficiary shall deliver to the Trustee the Notice of Sale and shall deposit with Trustee this Deed of Trust which is secured hereby (and the deposit of which will be deemed to constitute evidence that the Secured Obligations are immediately due and payable), and such receipts and evidence of any expenditures made that are additionally secured hereby as Trustee may require. (a) Upon receipt of the Notice of Sale from the Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Sale as is then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after the lapse of that amount of time as is then required by law and after recordation of such Notice of Sale as required by law, sell the Security, at the time and place of sale set forth in the Notice of Sale, whether as a whole or in separate lots or parcels or items, as Trustee deems expedient and in such order as it determines, unless specified otherwise by the Trustor according to California Civil Code Section 2924g(b), at

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public auction to the highest bidder, for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers there of its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed or any matters of facts will be conclusive proof of the truthfulness thereof. Any person, includi ng, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale.
(b) After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds of s ale to payment of: (i) the unpaid Principal amount of the Note; (ii) all other Secured Obligations owed to Beneficiary under the Loan Documents; (iii) all other sums then secured hereby; and (iv) the remainder, if any, to Trustor.
(c) Trustee may postpone sal e of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new Notice of Sale.

Section 7.5 Receiver.

If an Event of Default occurs and is continuing, Beneficiary, as a matter of right and without further notice to Trustor or anyone claiming under the Security, and without regard to the then value of the Security or the interest of Trustor therein, may apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice of any application therefor. Any such receiver or receivers will have all the usual powers and duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided herein, and will continue as such and exercise all such powers until the date o f confirmation of sale of the Security, unless such receivership is sooner terminated.

Section 7.6 Remedies Cumulative.

No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of Trust is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy will be cumulative and concurrent and will be in addition to any other right, power and remedy given hereunder or now or hereafter existing at law or in equity.

Section 7.7 No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or remedy accruing upon any Event of Default will exhaust or impair any such right, power or remedy, and may not be construed to be a waiver of any such Event of Default or acquiescence t herein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may be exercised from time to time and as often as may be deemed expeditious by the Beneficiary. Beneficiary’s express or implied consent to breach, or waiver of, any obligation of the Trustor hereunder will not be deemed or construed to be a consent to any subsequent breach, or further waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default, irrespective

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of how long such failure continues, will not constitute a waiver by the Beneficiary of its right hereunder or impair any rights, power or remedies consequent on any Event of Default by the Trustor.
(b) If the Beneficiary (i) grants forbearance or an extension of time for the payment or performance of any Secured Obligation, (ii) takes other or additional security or the payment of any sums secured hereby, (iii) waives or does not exercis e any right granted in the Loan Documents, (iv) releases any part of the Security from the lien of this Deed of Trust, or otherwise changes any of the terms, covenants, conditions or agreements in the Loan Documents, (v) consents to the granting of any eas ement or other right affecting the Security, or (vi) makes or consents to any agreement subordinating the lien hereof, any such act or omission will not release, discharge, modify, change or affect the original liability under this Deed of Trust, or any ot her obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, co-signer, endorser, surety or guarantor (unless expressly released); nor will any such act or omission preclude the Beneficiary from exercising any right, power or privilege herein granted or intended to be granted in any Event of Default then made or of any subsequent Event of Default, nor, except as otherwise expressly provided in an instrument or instruments executed by the Beneficiary, will the lien of this Deed of Trust be altered thereby.

Section 7.8 Suits to Protect the Security.

The Beneficiary has the power to (a) institute and maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Security and the rights of the Beneficiary as may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its interest (as described in this Deed of Trust) in the Security, and (c) restrain the enforcement of or compliance with any legislation or other governmental ena ctment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment, rule or order would impair the Security thereunder or be prejudicial to the interest of the Beneficiary.

Section 7.9 Trustee May File Proofs of Claim.

In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Trustor, its creditors or its property, the Beneficiary, to the extent permitted by law, will be ent itled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of the Beneficiary allowed in such proceedings and for any additional amount that becomes due and payable by the Trustor hereunder after such date.

Section 7.10 Waiver.

The Trustor waives presentment, demand for payment, notice of dishonor, notice of protest and nonpayment, protest, notice of interest on interest and late charges, and diligence in taking any action to collect any Secured Obligations or in proceedings against the Security, in connection with the delivery, acceptance, performance, default, endorsement or guaranty of this Deed of Trust.

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ARTICLE 8

MISCELLANEOUS
Section 8.1 Amendments.

This Deed of Trust cannot be waived, changed, discharged or terminated orally, bu t only by an instrument in writing signed by Beneficiary and Trustor.

Section 8.2 Reconveyance by Trustee.

Upon written request of Beneficiary stating that all Secured Obligations have been paid or forgiven, and all obligations under the Loan Documents have been performed in full, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee’s reasonable fees, Trustee shall reconvey the Security to Trustor, or to the person or persons legally entitled thereto.

Section 8.3 Notices.

If at any time after the execution of this Deed of Trust it becomes necessary or convenient for one of the parties hereto to serve any notice, demand or communication upon the other party, such notice, demand or communication must be in wri ting and is to be served personally or by depositing the same in the registered United States mail, return receipt requested, postage prepaid and (1) if intended for Beneficiary is to be addressed to:

City of Turlock
Housing Program Services Division
156 South Broadway, Suite 140
Turlock, CA 95380
Attention: Housing Manager
and (2) if intended for Trustor is to be addressed to:

Great Valley Housing Development Corporation
1701 Robertson Road
Modesto, CA 95350
Attn: Executive Director
Any notice, demand or communication will be deemed given, received, made or communicated on the date personal delivery is affected or, if mailed in the manner herein specified, on the delivery date or date delivery is refused by the addressee, as shown on the return receipt.

Either party may change its address at any time by giving written notice of such change to Beneficiary or Trustor as the case may be, in the manner provided herein, at least ten (10) days prior to the date such change is desired to be effective.

Section 8.4 Successors and Joint Trustors.

Where an obligation created herein is binding upon Trustor, the obligation also applies to and binds any transferee or successors in interest. Where the terms of the Deed of Trust have the

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effect of creating an obligation of the Trustor and a transferee, such obligation will be deemed to be a joint and several obligations of the Trustor and such transferee. Where Trustor is more than one entity or person, all obligations of Trustor will be deemed to be a joint and several obligations of each and every entity and person comprising Trustor.

Section 8.5 Captions.

The captions or headings at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust.

Section 8.6 Invalidity of Certain Provisions.

Every provision of this Deed of Trust is intended to be severable. In the event any term or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or other body of competent jurisdiction, such illegality or invalidity will not affect the balance of the terms and provisions hereof, which terms and provisions will remain binding and enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or partially secured portion of the debt, and all payments made on the debt, whether voluntary or under foreclosure or other enforcement action or procedure, will be considered to have been firs t paid or applied to the full payment of that portion of the debt that is not secured or partially secured by the lien of this Deed of Trust.

Section 8.7 Governing Law.

This Deed of Trust is governed by the laws of the State of California.

Section 8.8 Gender and Number.

In this Deed of Trust the singular includes the plural and the masculine includes the feminine and neuter and vice versa, if the context so requires.

Section 8.9 Deed of Trust, Mortgage.

Any reference in this Deed of Trust to a mortgage also refers to a deed of trust and any reference to a deed of trust also refers to a mortgage.

Section 8.10 Actions.

Trustor shall appear in and defend any action or proceeding purporting to affect the Security.

Section 8.11 Substitution of Trustee.

Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Trust. Upon such appointment, and without conveyance to the successor trustee, the latter will be vested with all title, powers, and duties conferred upon any Trustee herein named or acting h ereunder. Each such appointment and

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substitution is to 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, will be conclusive proof of proper appointment of the successor trustee.

Section 8.12 Statute of Limitations.

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.

Section 8.13 Acceptance by Trustee.

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, the Trustee is not obligated to notify any party hereto of a pending sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee is a party unless brought by Trustee.

IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first above written.

Great Valley Housing Development
Corporation, a California nonprofit public
benefit corporation
By:

Print Name: Jim Kruse
Title: Executive Director
Date: _____________________________
Witness:

By: __________________________________
Print Name: Greg Raynes
Title: Secretary
Date: _____________________________

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
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State of California )
County of Stanislaus )
On _________________________, before me, ,
(Insert name and title of the officer)
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 signatur e(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature (Seal)

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.

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EXHIBIT “A”

Legal Description of The Property
The land referred to herein below is situated Turlock, in the County of Stanislaus, State of California, and is described as follows:

Lot 47 of Reich Estates South No. 2, as per Map Recorded May 19, 1980 in Volume 29 of Maps,

APN: 043-055-049-000

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PROMISSORY NOTE
(573 Birchwood Way– PLHA Loan)
$25,000 Turlock, California
January 27, 2026
FOR VALUE RECEIVED, the undersigned, GREAT VALLEY HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation (“Borrower”) hereby promises to pay to the order of the CITY OF TURLOCK, a municipal corporation (“Holder”), the principal amount of Twenty-Five Thousand Dollars ($25,000) plus interest thereon pursuant to Section 2 below.

All capitalized terms used but not defined in this Note have the meanings set forth in the Loan Agreement.

1. Borrower’s Obligation. This Note evidences Borrower’s obligation to repay Holder the principal amount of Twenty-Five Thousand Dollars ($25,000) for the funds loaned to Borrower by Holder to finance the acquisition of the Development pursuant to the Loan Agreement between Borrower and Holder of even date herewith (the “Loan Agreement”).

2. Interest. No interest shall be charged on the principal amount of the Loan except if an Event of Default (as defined in the Loan Agreement) occurs, interest will accrue on all amounts due under this Note at the lesser of 10% per annum or the highest rate permitted by law until such Event of Default is cured by Borrower or waived by Holder.

3. Term and Repayment Requirements. Principal and interest plus the City Appreciation Share, as defined below, under this Note is due and payable in the event of a Transfer (as defined in the Loan Agreement) of the Property or an Event of Default (as defined in the Loan Agreement). For purpose of this Note, the City Appreciation Share shall mean fifty percent (50%) of the amount by which the sales price of the Property received by the Borrower upon transfer exceeds Four Hundred Twenty Thousand Dollars ($420,000). This Note shall have a term of fifty-five (55) years from the date set forth above.

4. No Assumption. This Note is not assumable by the successors and assigns of Borrower without the prior written consent of Holder.

5. Security. This Note is secured by a Deed of Trust that refers to this Note.

6. Terms of Payment.
(a) Borrower shall make all payments due under this Note in currency of the United States of America to Holder at City of Turlock, Housing Program Services Division, 156 S. Broadway, Suite 140, CA 95380, Attention: Housing Manager, or to such other place as Holder may from time to time designate.

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(b) All payments on this Note are without expense to Holder. Borrower shall pay all costs and expenses, including re-conveyance fees and reasonable attorney’s fees of Holder, incurred in connection with the payment of this Note and the release of any security hereof.
(c) The obligations of Borrower under this Note are absolute and Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reason whatsoever.

7. Event of Default; Acceleration.
(a) Upon the occurrence of an Event of Default, the entire unpaid principal balance, together with all interest thereon, the City Appreciation Share, and together with all other sums then payable under this Note and the Deed of Trust will, at the option of Holder, become immediately due and payable without further demand. (b) Holder’s failure to exercise the remedy set forth in Subsection 7(a) above or any other remedy provided by law upon the occurrence of an Event of Default does not constitute a waiver of the right to exercise any remedy at any subsequent time in respect to the same or any other Event of Default. The acceptance by Holder of any payment that is less than the total of all amounts due and payable at the time of such payment does not constitute a waiver of the right to exercise any of the foregoing remedies or options at that time or at any subsequent time, or nullify any prior exercise of any such remedy or option, without the express consent of Holder, except as and to the extent otherwise provided by law.

8. Waivers.
(a) Borrower hereby waives diligence, presentment, protest and demand, and notice of protest, notice of demand, notice of dishonor and notice of non-payment of this Note.

Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time, and that Holder may accept further security or release any security for this Note, all without in any way affecting the liability of Borrower. (b) Any extension of time for payment of this Note or any installment hereof made by agreement of Holder with any person now or hereafter liable for payment of this Note must not operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part.

9. Miscellaneous Provisions.
(a) All notices to Holder or Borrower are to be given in the manner and at the addresses set forth in the Loan Agreement, or to such addresses as Holder and Borrower may therein designate.
(b) Borrower promises to pay all costs and expenses, including reasonable attorney’s fees, incurred by Holder in the enforcement of the provisions of this Note, regardless of whether suit is filed to seek enforcement.

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(c) This Note is governed by the laws of the State of California. (d) The times for the performance of any obligations hereunder are to be strictly construed, time being of the essence.
(e) The Loan Documents (as defined in the Loan Agreement), of which this Note is a part, contain the entire agreement between the parties as to the loan evidenced by this Note. This Note may not be modified except upon the written consent of the parties.

IN WITNESS WHEREOF, Borrower has executed this Promissory Note as of the day and year first above written.

Great Valley Housing Development
Corporation a California nonprofit public
benefit corporation

By:

Print Name: Jim Kruse
Title: Executive Director
Date:_________________________________
Witness:

By: __________________________________
Print Name: Greg Raynes
Title: Secretary

Date:__________________________________

1 2251\02\4022131.1

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Turlock
Housing Program Services Division
156 South Broadway, Suite 140
Turlock, CA 95380
Attn: Housing Manager
No fee for recording pursuant to
Government Code Section 27383

DEED OF TRUST WITH ASSIGNMENT OF RENTS,

SECURITY AGREEMENT, AND FIXTURE FILING
(573 Birchwood Way, Turlock, CA-PLHA)

THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT, AND FIXTURE FILING (“ Deed of Trust ”) is made as of January 27, 2026 by and among GREAT VALLEY HOUSING DEVELOPMENT CORPORATION , a California nonprofit public benefit corporation (“Trustor”), Title Company Name, a California corporation (“Trustee”), and the CITY OF TURLOCK, a California municipal corporation (“Beneficiary”).

FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, Trustor’s fee interest in the property located at 573 Birchwood Way, Turlock, State of California, that is described in the attached Exhibit A, incorporated herein by this reference (the “Property”).

TOGETHER WITH all interest, estates or other claims, both in law and in equity which Trustor now has or may hereafter acquire in the Property and the rents; TOGETHER WITH all easements, rights -of-way and rights used in connection therewith or as a means of access thereto, including (without limiting the generality of the foregoing) all tenements, hereditaments and appurtenances thereof and thereto; TOGETHER WITH any and all buildings and improvements of every kind and description now or hereafter erected thereon, and all property of the Trustor now or hereafter affixed to or placed upon the Property;
TOGETHER WITH all building materials and equipment now or hereafter delivered to said property and intended to be installed therein;
TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right -of-way of any street, open or proposed, adjoining the

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Property, and any and all sidewalk s, alleys and strips and areas of land adjacent to or used in connection with the Property;
TOGETHER WITH all estate, interest, right, title, other claim or demand, of every nature, in and to such property, including the Property, both in law and in equity, including, but not limited to, all deposits made with or other security given by Trustor to utility companies, the proceeds from any or all of such property, including the Property, claims or demands with respect to the proceeds of insurance in effect wi th respect thereto, which Trustor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by any proceeding or purchase in lieu thereof of the whole or any part of such property, including without limitation, any awards resulting from a change of grade of streets and awards for severance damages to the extent Beneficiary has an interest in such awards for taking as provided in Paragraph 4.1 herein; TOGETHER WITH all of Trustor’s interest in all articles of personal property or fixtures 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 complete and 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 will be, attached to said building or buildings in any manner; and TOGETHER WITH all of Trustor’s interest in all building materials, fixtures, equipment, work in process and other personal property to be incorporated into the Property; all goods, materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other personal property now or hereafter appropriated for use on the Property, whether stored on the Property or elsewhere, and used or to be used in connection with the Property; all rents, issues and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles, chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance and condemnation awards and proceeds, trade names, trademarks and service marks arising from or related to the Property and any business conducted thereon by Trustor; a ll replacements, additions, accessions and proceeds; and all books, records and files relating to any of the foregoing.

All of the foregoing, together with the Property, is herein referred to as the “Security.” To have and to hold the Security together with acquaintances to the Trustee, its successors and assigns forever.

FOR THE PURPOSE OF SECURING THE FOLLOWING OBLIGATIONS (the “Secured Obligations”):

A. Payment to Beneficiary of all sums at any time owing under or in connection with the Note (defined in Section 1.4 below) until paid or cancelled. Said principal and other payments are due and payable as provided in the Note. The Note and all its terms are incorporated herein by reference, and this conveyance secures any and all extensions thereof, however evidenced;

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B. Payment of any sums advanced by Beneficiary to protect the Security pursuant to the terms and provisions of this Deed of Trust following a breach of Trustor’s obligation to advance said sums and the expiration of any applicable cure period, with interest thereon as provided herein; C. All modifications, extensions and renewals of any of the foregoing (including without limitation, (i) modifications, extensions or renewals at a different rate of interest, or (ii) deferrals or accelerations of the required principal payment dates or interest payment dates or both, in whole or in part), however evidenced, whether or not any such modification, extension or renewal is evidenced by a new or additional promissory note or notes.

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

ARTICLE 1

DEFINITIONS
In addition to the terms defined elsewhere in this Deed of Trust, the following terms have the following meanings in this Deed of Trust:

Section 1.1 The term “Loan” means the loan made by the Beneficiary to the Trustor in the amount of Four Hundred Twenty Thousand Dollars ($420,000.00).

Section 1.2 The term “Loan Agreement” means that certain CDBG/PLHA/HOME Loan Agreement between Trustor and Beneficiary, of even date herewith, as such may be amended from time to time, providing for the Beneficiary to loan to Trustor Four Hundred Twenty Thousand Dollars ($420,000.00).

Section 1.3 The term “Loan Documents” means this Deed of Trust, the Note, the Loan Agreement, and the Regulatory Agreement, and any other debt, loan or security instruments between Trustor and the Beneficiary relating to the Loan.

Section 1.4 The term “Note” means the PLHA Promissory Note in the principal amount of Twenty-Five Thousand Dollars ($25,000.00) of even date herewith, executed by Trustor in favor of the Beneficiary, as it may be amended or restated, the payment of which is secured by this Deed of Trust. (A copy of the Note is on file with the Beneficiary and terms and provisions of the Note are incorporated herein by reference.)
Section 1.5 The term “Principal” means the amount required to be paid under the Note.

Section 1.6 The term “ Regulatory Agreement” means the Regulatory Agreement and Declaration of Restrictive Covenants of even date herewith by and between the Beneficiar y and the Trustor.

ARTICLE 2

MAINTENANCE AND MODIFICATION OF THE PROPERTY

AND SECURITY
Section 2.1 Maintenance and Modification of the Property by Trustor.

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The Trustor agrees that at all times prior to full payment and performance of the Secured Obligations, the Trustor will, at the Trustor’s own expense, maintain, preserve and keep the Security or cause the Security to be maintained and preserved in good condition. The Trustor will from time to time make or cause to be made all repairs, replacements and renewals deemed proper and necessary by it. The Beneficiary has no responsibility in any of these matters or for the making of improvements or additions to the Security.

Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all claims for labor done and for material and services furnished in connection with the Security, diligently to file or procure the filing of a valid notice of cessation upon the event of a cessation of labor on the work or construction on the Security for a continuous period of thirty (30) days or more, and to take all other reasonable steps to forestall the assertion of claims of lien against the Security or any part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary as its agent (said agency being coupled with an interest) with the authority, but without any obligation, to file for record any notices of completion or cessation of labor or any other notice that Beneficiary deems necessary or desirable to protect its interest in and to the Security o r the Loan Documents; provided, however, that Beneficiary exercises its rights as agent of Trustor only in the event that Trustor fails to take, or fails to diligently continue to take, those actions as hereinbefore provided.

Upon demand by Beneficiary, Tr ustor shall make or cause to be made such demands or claims as Beneficiary specifies upon laborers, material men, subcontractors or other persons who have furnished or claim to have furnished labor, services or materials in connection with the Security. N othing herein contained requires Trustor to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting provided that Trustor shall, within thirty (30) days after the filing of any claim of lien, record in the Office of the Recorder of Stanislaus County, a surety bond in an amount 1 and 1/2 times the amount of such claim item to protect against a claim of lien.

Section 2.2 Granting of Easements.

Trustor may not grant easements, licenses, rights-of-way or other rights or privileges in the nature of easements with respect to any property or rights included in the Security except those required or desirable for installation and maintenance of public utilities including, without limitation, water, gas, electricity, sewer, telephone and telegraph, or those required by law, and as approved, in writing, by Beneficiary.

Section 2.3 Assignment of Rents.

As part of the consideration for the indebtedness evidenced by the Note, Trustor hereby absolutely and unconditionally assigns and transf ers to Beneficiary all the rents and revenues of the Property including those now due, past due, or to become due by virtue of any lease or other agreement for the occupancy or use of all or any part of the Property, regardless of to whom the rents and rev enues of the Property are payable, subject to the rights of senior lenders. Trustor hereby authorizes Beneficiary or Beneficiary’s agents to collect the aforesaid rents and revenues and hereby directs each tenant of the Property to pay such rents to Benef iciary or Beneficiary’s agents; provided, however, that prior to written notice given by Beneficiary to Trustor of the breach

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by Trustor of any covenant or agreement of Trustor in the Loan Documents, Trustor shall collect and receive all rents and revenues of the Property as trustee for the benefit of Beneficiary and Trustor to apply the rents and revenues so collected to the Secured Obligations with the balance, so long as no such breach has occurred, to the account of Trustor, it being intended by Trustor and Beneficiary that this assignment of rents constitutes an absolute assignment and not an assignment for additional security only. Upon delivery of written notice by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement of Trusto r in the Loan Documents, and without the necessity of Beneficiary entering upon and taking and maintaining full control of the Property in person, by agent or by a court -appointed receiver, Beneficiary shall immediately be entitled to possession of all ren ts and revenues of the Property as specified in this Section 2.3 as the same becomes due and payable, including but not limited to, rents then due and unpaid, and all such rents will immediately upon delivery of such notice be held by Trustor as trustee for the benefit of Beneficiary only; provided, however, that the written notice by Beneficiary to Trustor of the breach by Trustor contains a statement that Beneficiary exercises its rights to such rents. Trustor agrees that commencing upon delivery of such written notice of Trustor’s breach by Beneficiary to Trustor, each tenant of the Property shall make such rents payable to and pay such rents to Beneficiary or Beneficiary’s agents on Beneficiary’s written demand to each tenant therefor, delivered to each tenant personally, by mail or by delivering such demand to each rental unit, without any liability on the part of said tenant to inquire further as to the existence of a default by Trustor.

Trustor hereby covenants that Trustor has not executed any prior assignment of said rents except in connection with the Bond Loan, that Trustor has not performed, and will not perform, any acts or has not executed and will not execute, any instrument which would prevent Beneficiary from exercising its rights under this Section 2.3, and that at the time of execution of this Deed of Trust, here has been no anticipation or prepayment of any of the rents of the Property for more than two (2) months prior to the due dates of such rents. Trustor covenants that Trustor will no t hereafter collect or accept payment of any rents of the Property more than two (2) months prior to the due dates of such rents. Trustor further covenant that Trustor will execute and deliver to Beneficiary such further assignments of rents and revenues of the Property as Beneficiary may from time to time request.

Upon Trustor’s breach of any covenant or agreement of Trustor in the Loan Documents, Beneficiary may in person, by agent or by a court -appointed receiver, regardless of the adequacy of Beneficiary’s security, enter upon and take and maintain full control of the Property in order to perform all acts necessary and appropriate for the operation and maintenance thereof including, but not limited to, the execution, cancellation or modification of leas es, the collection of all rents and revenues of the Property, the making of repairs to the Property and the execution or termination of contracts providing for the management or maintenance of the Property, all on such terms as are deemed best to protect t he security of this Deed of Trust. In the event Beneficiary elects to seek the appointment of a receiver for the Property upon Trustor’s breach of any covenant or agreement of Trustor in this Deed of Trust, Trustor hereby expressly consents to the appoint ment of such receiver. Beneficiary or the receiver will be entitled to receive a reasonable fee for so managing the Property.

All rents and revenues collected subsequent to delivery of written notice by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement of Trustor in the Loan Documents

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are to be applied first to the costs, if any, of taking control of and managing the Property and collecting the rents, including, but not limited to, attorney’s fees, receiver’s fees, premiums on receiver’s bonds, costs of repairs to the Property, premiums on insurance policies, taxes, assessments and other charges on the Property, and the costs of discharging any obligation or liability of Trustor as lessor or landlord of the Property and then to the sums secured by this deed of Trust. Beneficiary or the receiver is to have access to the books and records used in the operation and maintenance of the Property and will be liable to account only for those rents actually received.

Beneficiary is not li able to Trustor, anyone claiming under or through Trustor or anyone having an interest in the Property by reason of anything done or left undone by Beneficiary under this Section 2.3.

If the rents of the Property are not sufficient to meet the costs, if an y, of taking control of and managing the Property and collecting the rents, any funds expended by Beneficiary for such purposes will become part of the Secured Obligations pursuant to Section 3.3 hereof. Unless Beneficiary and Trustor agree in writing to other terms of payment, such amounts are payable by Trustor to Beneficiary upon notice from Beneficiary to Trustor requesting payment thereof and will bear interest from the date of disbursement at the rate stated in Section 3.3.

If the Beneficiary or the receiver enters upon and takes and maintains control of the Property, neither that act nor any application of rents as provided herein will cure or waive any default under this Deed of Trust or invalidate any other right or remedy available to Beneficiary under applicable law or under this Deed of Trust. This assignment of rents of the Property will terminate at such time as this Deed of Trust ceases to secure the Secured Obligations.

ARTICLE 3
TAXES AND INSURANCE; ADVANCES
Section 3.1 Taxes, Other Governmental Charges and Utility Charges.

Trustor shall pay, or cause to be paid, prior to the date of delinquency, all taxes, assessments, charges and levies imposed by any public authority or utility company that are or may become a lien affecting the Security or any part thereof; provided, however, that Trustor is not required to pay and discharge any such tax, assessment, charge or levy so long as (a) the legality thereof is promptly and actively contested in good faith and by appropriate proceedings, and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant to this Section 3.1.

With respect to taxes, special assessments or other similar governmental charges, Trustor shall pay such amount in full prior to the attachment of any lien therefor on any part of the Security; provided, however, if such taxes, assessments or charges can be paid in installments, Trustor may pay in such installments. Except as provided in clause (b) of the first sentence of this paragraph, the provisions of this Section 3.1 may n ot be construed to require that Trustor maintain a reserve account, escrow account, impound account or other similar account for the payment of future taxes, assessments, charges and levies.

In the event that Trustor fails to pay any of the items required by this Section to be paid by Trustor, Beneficiary may (but is under no obligation to) pay the same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to fully pay such items within seven (7) business days after receipt of such notice. Any amount so advanced therefor by Beneficiary, together with

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interest thereon from the date of such advance at the maximum rate permitted by law, will become part of the Secured Obligations secured hereby, and Trustor agrees to pay all such amounts.

Section 3.2 Provisions Respecting Insurance.

Trustor agrees to provide insurance conforming in all respects to that required under the Loan Documents at all times until all amounts secured by this Deed of Trust have been paid, all Secured Obligations secured hereunder have been fulfilled, and this Deed of Trust has been reconveyed.

All such insurance policies and coverages are to be maintained at Trustor’s sole cost and expense. Certificates of insurance for all of the above insurance policies, showing the same to be in full force and effect, are to be delivered to the Beneficiary upon demand therefor at any time prior to Trustor’s satisfaction of the Secured Obligations.

Section 3.3 Advances.

In the event the Trustor fails to maintain the full insurance coverage required by this Deed of Trust or fails to keep the Security in accordance with the Loan Documents, the Beneficiary, after at least seven (7) days prior notice to Trustor, may (but is under no obligation to) (i) take out the required policies of insurance and pay the premiums on the same, and (ii) make any repairs or replacements that are necessary and provide for payment thereof. All amounts so advanced by the Beneficiary will become part of the Secured Obligations (together with interest as set forth below) and will be secured hereby, which amounts the Trustor agrees to pay on the demand of the Beneficiary, and if not so paid, will bear interest from the date of the advance at the lesser of ten percent (10%) per annum or the maximum rate permitted by law.

ARTICLE 4

DAMAGE, DESTRUCTION OR CONDEMNATION
Section 4.1 Awards and Damages.

Subject to the rights of senior lenders, all judgments, awards of damages, settlements and compensation made in connection with or in lieu of (1) the taking of all or any part of or any interest in the Property by or under assertion of the power of eminent domain, (2) any damage to or destruction of the Property or any part thereof by insured casualty, and (3) any other injury or damage to all or any part of the Property (collectively, the “Funds”) are hereby assigned to and are to be paid to the Beneficiary by a check made payable to the Beneficiary. The Beneficiary is authorized and empowered (but not required) to collect and receive any Funds and is authorized to apply them in whole or in pa rt to any indebtedness or obligation secured hereby, in such order and manner as the Beneficiary determines at its sole option. The Beneficiary is entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust and may deduct and retain from the proceeds of such insurance the amount of all expenses incurred by it in connection with any such settlement or adjustment. All or any part of the amounts so collected and recovered by the Beneficiary may be released to Trustor u pon such conditions as the Beneficiary may impose for its disposition. Application of all or any part of the Funds collected and received by the Beneficiary or the release thereof will not cure or waive any default under this Deed of Trust. The rights of the Beneficiary under this Section 4.1 are subject to the rights of any

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senior mortgage lender. The Beneficiary shall release the Funds to Trustor to be used to reconstruct the improvements on the Property provided that Beneficiary reasonably determines that Trustor (tak e into account the Funds) has sufficient funds to rebuild the improvements in substantially the form that existed prior to the casualty or condemnation.

ARTICLE 5
AGREEMENTS AFFECTING THE PROPERTY;
FURTHER ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST
Section 5.1 Other Agreements Affecting Property.

The Trustor shall duly and punctually perform all terms, covenants, conditions and agreements binding upon it under the Loan Documents and any other agreement of any nature whatsoever now or hereafter involving or affecting the Security or any part thereof.

Section 5.2 Agreement to Pay Attorneys’ Fees and Expenses.

In the event of any Event of Default (as defined in Section 7.1) hereunder, and if the Beneficiary employs attorneys or incurs other expenses for the collection of a mounts due hereunder or the enforcement of performance or observance of an obligation or agreement on the part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the Beneficiary the reasonable fees of such att orneys and such other reasonable expenses so incurred by the Beneficiary. Any such amounts paid by the Beneficiary will be added to the Secured Obligations, and will bear interest from the date such expenses are incurred at the lesser of ten percent (10%) per annum or the maximum rate permitted by law.

Section 5.3 Payment of the Principal.

The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth in the Note in the amounts and by the times set out therein.

Section 5.4 Personal Property.

To the max imum extent permitted by law, the personal property subject to this Deed of Trust is deemed to be fixtures and part of the real property and this Deed of Trust constitutes a fixture filing under the California Commercial Code. As to any personal property not deemed or permitted to be fixtures, this Deed of Trust constitutes a security agreement under the California Commercial Code.

Section 5.5 Financing Statement.

The Trustor shall execute and deliver to the Beneficiary such financing statements pursuant to the appropriate statutes, and any other documents or instruments as are required to convey to the Beneficiary a valid perfected security interest in the Security. The Trustor shall perform all acts that the Beneficiary reasonably requests so as to enable the Benefi ciary to maintain a valid perfected security interest in the Security in order to secure the payment of the Note in accordance with its terms. The Beneficiary is authorized to file a copy of any such financing statement in any

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jurisdiction(s) as it deems appropriate from time to time in order to protect the security interest established pursuant to this instrument.

Section 5.6 Operation of the Security.

The Trustor shall operate the Security (and, in case of a transfer of a portion of the Security subject to this Deed of Trust, the transferee shall operate such portion of the Security) in full compliance with the Loan Documents.

Section 5.7 Inspection of the Security.

At any and all reasonable times upon seventy -two (72) hours’ notice, the Beneficiary and its duly authorized agent s, attorneys, experts, engineers, accountants and representatives, may inspect the Security, without payment of charges or fees.

Section 5.8 Nondiscrimination.

The Trustor herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all p ersons claiming under or through them, that there will be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, age, sex, sexual orientation, marital status, national origin or ancestry in t he sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Security, nor will the Trustor itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Security. The foregoing covenants run with the land.

ARTICLE 6

HAZARDOUS WASTE
Trustor shall keep and maintain the Property in compliance with, an d shall not cause or permit the Property to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Trustor shall not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of “hazardous substances,” hazardous wastes,” “hazardous materials,” or “toxic substances” under any applicable federal or state laws or regulations (col lectively referred to hereinafter as “Hazardous Materials”) except such of the foregoing as may be customarily used in construction or operation of a multi-family residential development.

Trustor shall immediately advise Beneficiary in writing if at any time it receives written notice of: (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Trustor or the Property pursuant to any applicable federal, state or local laws, ordin ances, or regulations relating to any Hazardous Materials, (“ Hazardous Materials Law ”); (ii) all claims made or threatened by any third party against Trustor or the Property relating to damage, contribution, cost recovery compensation, loss

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or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as “Hazardous Materials Claims”); and (iii) Trustor’s discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law.

Beneficiary has the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys’ fees in connection therewith paid by Trustor. Trustor shall indemnify and hold harmless Ben eficiary and its board members, supervisors, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Property including without limitation: (a) all foreseeable consequential damages; (b) the costs of any required or necessary repair, clean-up or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans; and (c) all reasonable costs and expenses incurred by Beneficiary in connection with clauses (a) and (b), including but not limited to r easonable attorneys’ fees and consultant’s fees. This indemnification applies whether or not any government agency has issued a clean-up order. Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision include, but are not limited to: (1) losses attributable to diminution in the value of the Property; (2) loss or restriction of use of rentable space on the Property; (3) adverse effect on the marketing of any rental space on the Property; and (4) penalties and fines levied by, and remedial or enforcement actions of any kind issued by any regulatory agency (including but not limited to the costs of any required testing, remediation, repair, removal, clean- up or detoxification of the Property and surrounding properties).

Without Beneficiary’s prior written consent, which may not be unreasonably withheld, Trustor may not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in Beneficiary’s reasonable judgment, impairs the value of the Beneficiary’s security hereunder; provided, however, that Beneficiary’s prior consent is not necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain Beneficiary’s consent before taking such action, provided that in such event Trustor notifies Beneficiary as soon as practicable of any action so taken. Beneficiary agrees not to withhold its consent, where such consent is required hereunder, if (i) a particular remedial action is ordered by a court of competent jurisdiction; (ii) Trustor will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) Trustor establishes to the reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial action which would result in less impairment of Beneficiary’s security hereunder; or (iv) the acti on has been agreed to by Beneficiary.

The Trustor hereby acknowledges and agrees that (i) this Article is intended as the Beneficiary’s written request for information (and the Trustor’s response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section

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726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other Loan Documents (together with any indemnity applicable to a breach of any such representation and warranty) wit h respect to the environmental condition of the property is intended by the Beneficiary and the Trustor to be an “environmental provision” for purposes of California Code of Civil Procedure Section 736.

In the event that any portion of the Property is dete rmined to be “environmentally impaired” (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an “affected parcel” (as that term is defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without oth erwise limiting or in any way affecting the Beneficiary’s or the Trustee’s rights and remedies under this Deed of Trust, the Beneficiary may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on suc h environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and remedies of an unsecured creditor, including reduction of its claim against the Trustor to judgment, and (b) any other rights and remedies permitted by law. For purposes of determining the Beneficiary’s right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Trustor will be deemed to have willfully permitted or acquiesced in a release or threatened release of ha zardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of hazardous materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any porti on of the Property and the Trustor knew or should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys’ fees, incurr ed by the Beneficiary in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the default rate specified in the Loan Agreement until paid, will be added to the indebtedness secured by this Deed of Trust and will be due and payable to the Beneficiary upon its demand made at any time following the conclusion of such action.

ARTICLE 7

EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default.

The following are events of default following the expiration of any applicable notice and cure periods (each an “Event of Default”): (i) failure to make any payment to be paid by Trustor under the Loan Documents; (ii) failure to observe or perform any of Trustor’s other covenants, agreements or obligations under the Loan Documents, including, without limitation, the provisions concerning discrimination; (iii) failure to make any payment or observe or pe rform any of Trustor’s other covenants, agreements, or obligations under any Secured Obligations, which default is not cured within the times and in the manner provided therein; and (iv) failure to make any payments or observe or perform any of Trustor’s o ther covenants, agreements or obligations under any other debt instrument or regulatory agreement secured by the Property, which default is not cured within the time and in the manner provided therein.

Section 7.2 Acceleration of Maturity.

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If an Event of Default has occurred and is continuing, then at the option of the Beneficiary, the amount of any payment related to the Event of Default and all unpaid Secured Obligations are immediately due and payable, and no omission on the part of the Beneficiary to exercise such option when entitled to do so may be construed as a waiver of such right.

Section 7.3 The Beneficiary’s Right to Enter and Take Possession.

If an Event of Default has occurred and is continuing, the Beneficiary may:
(a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Property and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the na me of Trustee, and do any acts that it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security will not cure or waive any Event of Default or Notice of Sale (as defined in Section 7.3(c), below) hereunder or invalidate any act done in response to such Event of Default or pursuant to such Notice of Sale, and, notwithstanding the continuance in possession of the Security, Beneficiary will be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any Event of Default, including the right to exercise the power of sale; (b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (c) Deliver to Trustee a written declaration of an Event of Default and demand for sale, and a written notice of default and election to ca use Trustor’s interest in the Security to be sold (“Notice of Sale”), which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of Stanislaus County; or
(d) Exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing the Secured Obligations.

Section 7.4 Foreclosure By Power of Sale.

Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Beneficiary shall deliver to the Trustee the Notice of Sale and shall deposit with Trustee this Deed of Trust which is secured hereby (and the deposit of which will be deemed to constitute evidence that th e Secured Obligations are immediately due and payable), and such receipts and evidence of any expenditures made that are additionally secured hereby as Trustee may require. (a) Upon receipt of the Notice of Sale from the Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Sale as is then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after the lapse of that amount of time as is then required by law and after recordation of such Notice of Sale as required by law, sell the Security, at the time and place of sale set forth in the Notice of Sale, whether as a whole or in separate lots or parcels or items, as Trustee deems expedient and in such order as it determines, unless specified otherwise by the Trustor according to California Civil Code Section 2924g(b), at

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public auction to the highest bidder, for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers ther eof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed or any matters of facts will be conclusive proof of the truthfulness thereof. Any person, includ ing, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale.
(b) After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds of sale to payment of: (i) the unpaid Principal amount of the Note; (ii) all other Secured Obligations owed to Beneficiary under the Loan Documents; (iii) all other sums then secured hereby; and (iv) the remainder, if any, to Trustor.
(c) Trustee may postpone sa le of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new Notice of Sale.

Section 7.5 Receiver.

If an Event of Default occurs and is continuing, Beneficiary, as a matter of right and without further notice to Trustor or anyone claiming under the Security, and without regard to the then value of the Security or the interest of Trustor therein, may apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice of any application therefor. Any such receiver or receivers will have all the usual powers and duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided herein, and will continue as such and exercise all such powers until the date of confirmation of sale of the Security, unless such receivership is sooner terminated.

Section 7.6 Remedies Cumulative.

No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of Trust is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy will be cumulative and concurrent and will be in addition to any other right, power and remedy given hereunder or now or hereafter existing at law or in equity.

Section 7.7 No Waiver.
(a) No delay or omission of the Beneficiary to exercise any right, power or remedy accruing upon any Event of Default will exhaust or impair any such right, power or remedy, and may not be construed to be a waiver of any such Event of Default or acquiescence t herein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may be exercised from time to time and as often as may be deemed expeditious by the Beneficiary. Beneficiary’s express or implied consent to breach, or waiver of, any obligation of the Trustor hereunder will not be deemed or construed to be a consent to any subsequent breach, or further waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default, irrespective

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of how long such failure continues, will not constitute a waiver by the Beneficiary of its right hereunder or impair any rights, power or remedies consequent on any Event of Default by the Trustor.
(b) If the Beneficiary (i) grants forbearance or an extension of time for the payment or performance of any Secured Obligation, (ii) takes other or additional security or the payment of any sums secured hereby, (iii) waives or does not exercis e any right granted in the Loan Documents, (iv) releases any part of the Security from the lien of this Deed of Trust, or otherwise changes any of the terms, covenants, conditions or agreements in the Loan Documents, (v) consents to the granting of any eas ement or other right affecting the Security, or (vi) makes or consents to any agreement subordinating the lien hereof, any such act or omission will not release, discharge, modify, change or affect the original liability under this Deed of Trust, or any ot her obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, co-signer, endorser, surety or guarantor (unless expressly released); nor will any such act or omission preclude the Beneficiary from exercising any right, power or privilege herein granted or intended to be granted in any Event of Default then made or of any subsequent Event of Default, nor, except as otherwise expressly provided in an instrument or instruments executed by the Beneficiary, will the lien of this Deed of Trust be altered thereby.

Section 7.8 Suits to Protect the Security.

The Beneficiary has the power to (a) institute and maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Security and the rights of the Beneficiary as may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its interest (as described in this Deed of Trust) in the Security, and (c) restrain the enforcement of or compliance with any legislation or other governmental ena ctment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment, rule or order would impair the Security thereunder or be prejudicial to the interest of the Beneficiary.

Section 7.9 Trustee May File Proofs of Claim.

In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Trustor, its creditors or its property, the Beneficiary, to the extent permitted by law, will be ent itled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of the Beneficiary allowed in such proceedings and for any additional amount that becomes due and payable by the Trustor hereunder after such date.

Section 7.10 Waiver.

The Trustor waives presentment, demand for payment, notice of dishonor, notice of protest and nonpayment, protest, notice of interest on interest and late charges, and diligence in taking any action to collect any Secured Obligations or in proceedings against the Security, in connection with the delivery, acceptance, performance, default, endorsement or guaranty of this Deed of Trust.

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ARTICLE 8

MISCELLANEOUS
Section 8.1 Amendments.

This Deed of Trust cannot be waived, changed, discharged or terminated orally, bu t only by an instrument in writing signed by Beneficiary and Trustor.

Section 8.2 Reconveyance by Trustee.

Upon written request of Beneficiary stating that all Secured Obligations have been paid or forgiven, and all obligations under the Loan Documents have been perfo rmed in full, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee’s reasonable fees, Trustee shall reconvey the Security to Trustor, or to the person or persons legally entitled thereto.

Section 8.3 Notices.

If at any time after the execution of this Deed of Trust it becomes necessary or convenient for one of the parties hereto to serve any notice, demand or communication upon the other party, such notice, demand or communication must be in writing and is to be served personally or by depositing the same in the registered United States mail, return receipt requested, postage prepaid and (1) if intended for Beneficiary is to be addressed to:

City of Turlock
Housing Program Services Division
156 South Broadway, Suite 140
Turlock, CA 95380
Attention: Housing Manager
and (2) if intended for Trustor is to be addressed to:

Great Valley Housing Development Corporation
1701 Robertson Road
Modesto, CA 95350
Attn: Executive Director
Any notice, demand or communication will be deemed given, received, made or communicated on the date personal delivery is affected or, if mailed in the manner herein specified, on the delivery date or date delivery is refused by the addressee, as shown on the return receipt.

Either party may change its address at any time by giving written notice of such change to Beneficiary or Trustor as the case may be, in the manner provided herein, at least ten (10) days prior to the date such change is desired to be effective.

Section 8.4 Successors and Joint Trustors.

Where an obligation created herein is binding upon Trustor, the obligation also applies to and binds any transferee or successors in interest. Where the terms of the Deed of Trust have the

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effect of creating an obligation of the Trustor and a transferee, such obligation will be deemed to be a joint and several obligations of the Trustor and such transferee. Where Trustor is more than one entity or person, all obligations of Trustor will be deemed to be a joint and several obligations of each and every entity and person comprising Trustor.

Section 8.5 Captions.

The captions or headings at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust.

Section 8.6 Invalidity of Certain Provisions.

Every provision of this Deed of Trust is intended to be severable. In the event any term or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or other body of competent jurisdiction, such illegality or invalidity will not affect the balance of the terms and provisions hereof, which terms and provisions will remain binding and enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or partially secured portion of the debt, and all payments made on the debt, whether voluntary or under foreclosure or other enforcement action or procedure, will be considered to have been firs t paid or applied to the full payment of that portion of the debt that is not secured or partially secured by the lien of this Deed of Trust.

Section 8.7 Governing Law.

This Deed of Trust is governed by the laws of the State of California.

Section 8.8 Gender and Number.

In this D eed of Trust the singular includes the plural and the masculine includes the feminine and neuter and vice versa, if the context so requires.

Section 8.9 Deed of Trust, Mortgage.

Any reference in this Deed of Trust to a mortgage also refers to a deed of trust and any reference to a deed of trust also refers to a mortgage.

Section 8.10 Actions.

Trustor shall appear in and defend any action or proceeding purporting to affect the Security.

Section 8.11 Substitution of Trustee.

Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Trust. Upon such appointment, and without conveyance to the successor trustee, the latter will be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and

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substitution is to 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, will be conclusive proof of proper appointment of the successor trustee.

Section 8.12 Statute of Limitations.

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

Section 8.13 Acceptance by Trustee.

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, the Trustee is not obligated to notify any party hereto of a pending sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee is a party unless brought by Trustee.

IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first above written.

Great Valley Housing Development
Corporation, a California nonprofit public
benefit corporation
By:

Print Name: Jim Kruse
Title: Executive Director
Date: _____________________________
Witness:

By: __________________________________
Print Name: Greg Raynes
Title: Secretary
Date: _____________________________

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
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State of California )
County of Stanislaus )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature (Seal)

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.

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EXHIBIT “A”

Legal Description of The Property
The land referred to herein below is situated Turlock, in the County of Stanislaus, State of California, and is described as follows:

Lot 47 of Reich Estates South No. 2, as per Map Recorded May 19, 1980 in Volume 29 of Maps,

APN: 043-055-049-000

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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Turlock
Housing Program Services Division
156 S. Broadway, Suite 140
Turlock, CA 95380
Attn: Housing Manager
No fee for recording pursuant to
Government Code Section 27383
__________________________________________________________________________

REGULATORY AGREEMENT AND

DECLARATION OF RESTRICTIVE COVENANTS
(573 Birchwood Way, Turlock, CA – CDBG/HOME/PLHA Funds)

This Regulatory Agreement and Declaration of Restrictive Covenants (the “Agreement”) is dated January 27, 2026, and is between the CITY OF TURLOCK, a municipal corporation (the “City “), and GREAT VALLEY HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation, (“Borrower”).

RECITALS
A. Defined terms used but not defined in these recitals are as defined in Article 1 of this Agreement.

B. Borrower is the owner of the real property commonly known as 573 Birchwood Way, located in the City of Turlock, State of California, and more particularly described in Exhibit A (the “Property”) which Owner acquired from the City.

C. In conjunction with the acquisition of the Property, the City and the Borrower entered into a loan agreement (“Loan Agreement”) whereby the City loaned to the Borrower the purchase price for the Property in the amount of Four Hundred Twenty Thousand Dollars ($420,000) (“Loan”). The City acquired the Property with the use of Home Investment Partnerships Act (“HOME Funds”) and Community Development Block Grant (“CDBG Funds”) and is providing additional HOME Funds as well as Permanent Local Housing Allocation Funds (“PLHA Funds”) from the California Department of Housing and Community Development (“HCD”) to assist with the rehabilitation of the Property.

D. The Property is the site of a single-family residential building. The building and all other improvements to the Property, including all landscaping, roads and parking spaces, are referred to herein as the “Improvements”, or as the “Development.” Borrower intends to acquire the Development and rent the home to Low Income families. .

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E. The City has adopted the Home Investment Partnerships Act (“HOME”) program standards at 24 C.F.R Part 92 (the “HOME Regulations”) to define the affordable rents, continued affordability standards which govern the use of the HOME Funds. The PLHA Final Guidelines, the Uniform Multifamily Regulations (“UMRs”), the Standard Agreement 22- PLHA-17792, and all applicable rules and regulations imposed by HCD on PLHA funding recipients govern the use of the PLHA Funds. The CDBG Regulations at 24 CFR Part 570 govern the use of the CDBG Funds and the HOME Regulations govern the use of the HOME Funds.

F. The City has the authority to make the Loan to Borrower for programs that will further a City’s public purposes consistent with the HOME Regulations, the CDBG Regulations and the PLHA Guidelines and regulations.

G. The City has agreed to make the Loans on the condition that the Borrower maintain and operate the Development in accordance with restrictions set forth in this Agreement.

In consideration of receipt of the Loan at an interest rate substantially below the market rate, Borrower agrees to observe all the terms and conditions set forth below.

AGREEMENT
ARTICLE 1 DEFINITIONS
Section 1.1 Definitions.

The following terms have the following meanings:
(a) “Actual Household Size” means the actual number of persons in the applicable household.
(b) “Adjusted Income” means the total anticipated annual income of all persons in the Tenant household as calculated pursuant to 24 C.F.R. 92.203(b)(1). (c) “Agreement” has the meaning set forth in the first paragraph of this Agreement.
(d) “Assumed Household Size” means the household size “adjusted for family size appropriate to the unit” as such term is defined in Health & Safety Code Section 50052.5(h) (e) CDBG Funds” has the meaning set forth in Paragraph C of the Recitals.

(f) “City” means the City of Turlock, a municipal corporation.

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(g) “City-Assisted Units” means the single unit within the Development designated as assisted by the City pursuant to this Agreement. (h) “Deed of Trust” means the one Deeds of Trust with Assignment of Rents, Security Agreement and Fixture Filing of even date herewith by and among Borrower, as trustor, Old Republic Title, Inc., as trustee, and the City, as beneficiary, that will encumber the Property to secure repayment of the Loans and Borrower’s performance of the covenants set forth in the documents evidencing the Loan.
(i) “Development” has the meaning set forth in Paragraph D of the Recitals. (j) “HOME” has the meaning set forth in Paragraph E of the Recitals. (k) “HOME Loan” has the meaning set forth in Paragraph C of the Recitals. (l) “"HOME Term” expires fifteen (15) years after the date of this Agreement.
(m) “Loan Agreement” has the meaning set forth in Paragraph C of the Recitals.
(n) “Loan Documents” means this Agreement, the Notes, the Deeds of Trust, and the Loan Agreement.
(o) “Low Income Household” means a Tenant household with an Adjusted Income that does not exceed eighty percent (80%) of Median Income, with adjustments for smaller and larger families, except that HUD may establish income ceilings higher or lower than eighty percent (80%) of Median Income on the basis of HUD findings that such variations are necessary because of prevailing levels of construction costs or fair market rents, or unusually high or low family incomes, as such definition may be amended pursuant to 24 C.F.R. Section

92.2. (p) “Median Income” means the median gross yearly income, adjusted for Actual Household Size as specified herein, in the City of Turlock, California, as published from time to time by HUD. 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 Borrower with other income determinations that are reasonably similar with respect to methods of calculation to those previously published by HUD.
(q) “Notes” means the promissory notes of even date herewith executed by Borrower in favor of City that evidences Borrower’s obligation to repay the HOME Loan and the PLHA Loan.
(r) “PLHA Loan” has the meaning set forth in Paragraph C of the Recitals. (s) “Property” has the meaning set forth in Paragraph B of the Recitals.

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(t) “Rent” means the total monthly payments by the Tenant of a Unit for the following: use and occupancy of the Unit and land and associated facilities, including parking; any separately charged fees or service charges assessed by Borrower which are required of all Tenants, other than security deposits; an allowance for the cost of an adequate level of service for utilities paid by the Tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service or cable TV; 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 Borrower, and paid by the Tenant. (u) “Tenant” means the household that occupies a Unit in the Development. (v) “Term” means the term of this Agreement which commences as of the date of this Agreement and expires fifty-five (55) years after the date of this Agreement. (w) “Unit(s)” means one (1) or more of the units in the Development.

ARTICLE 2

AFFORDABILITY AND OCCUPANCY COVENANTS
Section 2.1 Occupancy Requirements.
(a) Low Income Units. During the Term, Borrower shall rent the Unit and ensure that the Unit is occupied or, if vacant, available for occupancy, by a Low-Income Household.
(b) Disabled Persons Occupancy. Borrower shall cause the Development to be operated at all times in compliance with the provisions of: (i) the Unruh Act, (ii) the California Fair Employment and Housing Act, (iii) Section 504 of the Rehabilitation Act of 1973, (iv) the United States Fair Housing Act, as amended, and (v) the Americans With Disabilities Act of 1990, which relate to disabled persons access. Borrower shall indemnify, protect, hold harmless and defend (with counsel reasonably satisfactory to the City) the City, and its council members, officers and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of Borrower’s failure to comply with applicable legal requirements related to housing for persons with disabilities. The provisions of this subsection will survive expiration of the Term or other termination of this Agreement, and remain in full force and effect.

Section 2.2 Allowable Rent.
(a) Rent. During the HOME Term, the Borrower shall rent the Unit for an amount that does not exceed the High Home Rent as determined pursuant to 24 CFR

92.252(a)(1). Upon expiration of the HOME Term, Borrower shall rent the Unit for a rent that does not exceed the affordable rent for a lower income household as determined in accordance with Health and Safety Code Section 50053.
(b) No Additional Fees. Borrower may not charge any fee, other than Rent, to any Tenant of the City Assisted Units for any housing or other services provided by Borrower.

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All Tenants must have equal access to and enjoyment of all common facilities in the Development.

Section 2.3 Rent Increases; Increased Income of Tenants. (a) Rent Increases. The initial Rents and subsequent Rents for all City- Assisted Units must be approved by the City prior to occupancy and are subject to the HOME Regulations. All Rent increases for all City-Assisted Units are also subject to City approval.

The Rent for such Units may be increased no more than once annually based upon the annual income certification described in Article 3. Tenants are to be given at least sixty (60) days written notice prior to any Rent increase. The City will provide Borrower with a schedule of maximum permissible Rents for the City-Assisted Units annually. (b) Non-Qualifying Household. If, upon the annual certification of the income of a Tenant of a City Assisted Unit, Borrower determines that the income of a Household has increased above the qualifying limit for the Household, such Tenant shall be permitted to retain the Unit and upon expiration of the Tenant’s lease and upon sixty (60) days written notice, the Rent must be increased to the lesser of thirty percent (30%) of the actual Adjusted Income of the Tenant or the fair market rent. When the Tenant vacates the Unit, the Borrower shall rent the Unit to a Low-Income Household, to comply with the requirements of Section 2.1 above. (c) Termination of Occupancy. Upon termination of occupancy of a Unit by a Tenant, Borrower shall rent such Unit to a Low-Income Household to comply with the requirements of Section 2.1 above.

ARTICLE 3

INCOME CERTIFICATION AND REPORTING
Section 3.1 Income Certification. Borrower shall obtain, complete, and maintain on file, immediately prior to initial occupancy, and annually thereafter, income certifications from each Tenant renting any of the City-Assisted Units. Borrower shall make a good faith effort to verify the accuracy of the income provided by the applicant or occupying household, as the case may be, in an income certification. To verify the information Borrower shall take two or more of the following steps: (i) obtain a pay stub for the most recent pay period; (ii) obtain an income tax return for the most recent tax year; (iii) conduct a credit agency or similar search; (iv) obtain an income verification form from the applicant’s current employer; (v) 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 (vi) if the applicant is unemployed and does not have a tax return, obtain another form of independent verification. Copies of Tenant income certifications are to be available to the City upon request.

Section 3.2 Tenant Selection Plan. Before leasing any Unit in the Development, Borrower shall submit to the City for review and approval, a written tenant selection plan.

Borrower’s tenant selection plan must, at a minimum, during the HOME Term meet the requirements for tenant selection set out in 24 C.F.R. 92.253(d) and any modifications thereto.

Borrower may not make material modifications to its tenant selection plan without the prior written approval of the City.

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Section 3.3 Reporting Requirements. Borrower shall submit to the City (a) not later than the forty-fifth (45th) day after the close of each calendar year, or such other date as may be requested by the City, a statistical report, including income and rent data for all Units, setting forth the information called for therein, and (b) within fifteen (15) days after receipt of a written request, any other information or completed forms requested by the City in order to comply with reporting requirements of HUD, HCD, and the City.

Section 3.4 Additional Information. Borrower shall provide any additional information reasonably requested by the City.

Section 3.5 Records. Borrower shall maintain complete, accurate and current records pertaining to the Development, and shall permit any duly authorized representative of the City, HCD, and HUD to inspect records, including records pertaining to the selection of Tenants, and income and household size of Tenants. All Tenant lists, applications and waiting lists relating to the Development are to be at all times: (i) separate and identifiable from any other business of Borrower, (ii) maintained as required by the City, in a reasonable condition for proper audit, and (iii) subject to examination during business hours by representatives of the City, HCD, and HUD. Borrower shall retain copies of all materials obtained or produced with respect to occupancy of the units for a period of at least five (5) years or after the expiration of the Term.

The City may examine and make copies of all books, records or other documents of Borrower that pertain to the Development.

Section 3.6 HOME Record Requirements. For the period of the HOME Term all records maintained by Borrower pursuant to Sections 3.3 and 3.5 above are to be (i) maintained in compliance with all applicable HUD records and accounting requirements, and (ii) open to and available for inspection and copying by HUD and its authorized representatives at reasonable intervals during normal business hours; provided however, records pertaining to Tenant income verifications, Rents, and Development inspections are subject to HUD inspection for five (5) years after expiration of the Term. Borrower is subject to the audit requirements set forth in 24 CFR 92.506 during the Term.

Section 3.7 On-Site Inspection. The City may perform an on-site inspection of the Development at least one (1) time per year. Borrower shall cooperate in such inspection.

ARTICLE 4

OPERATION OF THE DEVELOPMENT
Section 4.1 Residential Use. Borrower shall operate the Development for affordable housing residential use only. No part of the Development may be operated as transient housing.

Section 4.2 Compliance with Loan Documents and Program Requirements.

Borrower’s actions with respect to the Property shall at all times be in full conformity with: (i) all requirements of the Loan Documents; (ii) all requirements imposed on projects assisted with HOME Funds, CDBG Funds, and PLHA Funds, and (iii) any other regulatory requirements imposed on the Development.

Section 4.3 Taxes and Assessments. Borrower shall pay all real and personal property taxes, assessments and charges and all franchise, income, employment, old age benefit,

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withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Borrower may contest in good faith, any such taxes, assessments, or charges. In the event Borrower exercises its right to contest any tax, assessment, or charge against it, Borrower, on final determination of the proceeding or contest, will immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest.

Section 4.4 Property Tax Exemption. Borrower shall not apply for a property tax exemption for the Property under any provision of law except California Revenue and Taxation Section 214(g) without the prior written consent of the City.

ARTICLE 5

PROPERTY MANAGEMENT AND MAINTENANCE
Section 5.1 Management Responsibilities. Borrower is responsible for all management functions with respect to the Development, including without limitation the selection of Tenants, certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The City has no responsibility for management of the Development. Borrower may retain a professional property management company approved by the City in its reasonable discretion to perform Borrower’s management duties hereunder.

Section 5.2 Periodic 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 Development. The purpose of each periodic review will be to enable the City to determine if the Development is being operated and managed in accordance with the requirements and standards of this Agreement. Borrower shall cooperate with the City in such reviews.

Section 5.3 Replacement of Management Agent. If, as a result of a periodic review, the City determines in its reasonable judgment that the Development is not being operated and managed in accordance with any of the material requirements and standards of this Agreement, the City shall deliver notice to Borrower of its intention to cause replacement of the Management Agent, including the reasons therefor. Within fifteen (15) days after receipt by Borrower of such written notice, the City staff and Borrower shall meet in good faith to consider methods for improving the financial and operating status of the Development, including, without limitation, replacement of the Management Agent.

If, after such meeting, City staff recommends in writing the replacement of the Management Agent, Borrower shall promptly dismiss the then-current Management Agent, and shall appoint as the Management Agent a person or entity meeting the standards for a management agent.

Any contract for the operation or management of the Development entered into by Borrower shall provide that the Management Agent may be dismissed and the contract terminated as set forth above. Failure to remove the Management Agent in accordance with the

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provisions of this Section constitutes a default under this Agreement, and the City may enforce this provision through legal proceedings as specified in Section 6.7 below.

Section 5.4 Approval of Management Policies. Borrower shall submit its written management policies with respect to the Development to the City for its review, and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement.

Section 5.5 Property Maintenance. Borrower shall maintain, for the entire Term of this Agreement, 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 all 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, and in accordance with the following maintenance conditions:

The City places prime importance on quality maintenance to protect its investment and to ensure that all City and City-assisted affordable housing projects within the City are not allowed to deteriorate due to below-average maintenance. Normal wear and tear of the Development will be acceptable to the City assuming Borrower agrees to provide all necessary improvements to assure the Development is maintained in good condition. Borrower shall make all repairs and replacements necessary to keep the improvements in good condition and repair.

In the event that Borrower breaches any of the covenants contained in this section and such default continues for a period of seven (7) days after written notice from the City with respect to graffiti, debris, waste material, and general maintenance or thirty (30) days after written notice from the City with respect to landscaping and building improvements, then the City, in addition to whatever other remedy it may have at law or in equity, has the right to enter upon the Property and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the City is permitted (but is not required) to enter upon the Property and to perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, and to attach a lien on the Property, or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the City and/or costs of such cure, which amount shall be promptly paid by Borrower to the City upon demand.

ARTICLE 6

MISCELLANEOUS
Section 6.1 Lease Provisions. In leasing the Units within the Development, Borrower shall use a form of lease approved by the City. The lease must not contain any provision which is prohibited by 24 C.F.R. Section 92.253(b) and any amendments thereto. The form of lease must comply with all requirements of this Agreement, the other Loan Documents and must, among other matters:
(a) provide for termination of the lease for failure to: (i) provide any information required under this Agreement or reasonably requested by Borrower to establish or

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recertify the Tenant’s qualification, or the qualification of the Tenant’s household, for occupancy in the Development in accordance with the standards set forth in this Agreement, or (ii) qualify as a Low-Income Household as a result of any material misrepresentation made by such Tenant with respect to the income computation.
(b) be for an initial term of not less than one (1) year, unless by mutual agreement between the Tenant and Borrower, and provide for no increase in Rent during such year. After the initial year of tenancy, the lease may be month-to-month by mutual agreement of Borrower and the Tenant. Notwithstanding the above, any rent increases are subject to the requirements of Section 2.3(a) above.

Section 6.2 Lease Termination. Any termination of a lease or refusal to renew a lease for a City-Assisted Unit within the Development must during the Home Term be in conformance with 24 C.F.R. 92.253(c) and subsequent to the expiration of the HOME Term, in conformance with the PLHA Guidelines, and must be preceded by not less than sixty (60) days written notice to the Tenant by Borrower specifying the grounds for the action.

Section 6.3 Nondiscrimination.
(a) All of the Units must be available for occupancy on a continuous basis to members of the general public who are income eligible. Borrower may not give preference to any particular class or group of persons in renting or selling the Units, except to the extent that the Units are required to be leased to income eligible households pursuant to this Agreement.

Borrower herein covenants by and for Borrower, it successors and assigns, and all persons claiming under or through Borrower, that there exist no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, familial status, national origin, veteran status, source of income (e.g., SSI), ancestry, or disability, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any unit nor will Borrower or any person claiming under or through Borrower, 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 in connection with the employment of persons for the construction, operation and management of any unit.
(b) Borrower shall 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.

Borrower may not apply selection criteria to Section 8 certificate or voucher holders that is more burdensome than criteria applied to all other prospective Tenants, nor will Borrower apply or permit the application of management policies or lease provisions with respect to the Development which have the effect of precluding occupancy of units by such prospective Tenants.

Section 6.4 Term. The provisions of this Agreement apply to the Property for the Term even if the Loans are paid in full prior to the end of the Term. This Agreement binds any

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successor, heir or assign of Borrower, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by City. City is making the Loans on the condition, and in consideration of, this provision, and would not do so otherwise.

Section 6.5 Notice of Expiration of Term.
(a) At least six (6) months prior to the expiration of the Term, Borrower shall provide by first-class mail, postage prepaid, a notice to all Tenants containing (i) the anticipated date of the expiration of the Term, (ii) any anticipated increase in Rent upon the expiration of the Term, (iii) a statement that a copy of such notice will be sent to the City , and (iv) 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. Borrower shall also file a copy of the above-described notice with the City’s Housing Manager. (b) In addition to the notice required above, Borrower shall comply with the requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such notice requirements include: (i) a three (3) year notice to existing tenants, prospective tenants and Affected Public Agencies (as defined in California Government Code Section 65863.10(a)), prior to the expiration of the Term; (ii) a twelve (12) month notice to existing tenants, prospective tenants and Affected Public Agencies, prior to the expiration of the Term, (ii) a six (6) month notice requirement to existing tenants, prospective tenants and Affected Public Agencies prior to the expiration of the Term; (iii) a notice of an offer to purchase the Development to “qualified entities” (as defined in California Government Code Section 65863.11(d)), if the Development is to be sold within the Term; (iv) a notice of right of first refusal within the one hundred eighty (180) day period that qualified entities may purchase the Development.

Section 6.6 Covenants to Run With the Land. The City and Borrower hereby declare their express intent that the covenants and restrictions set forth in this Agreement run with the land, and bind all successors in title to the Property, provided, however, that on the expiration of the Term of this Agreement said covenants and restrictions expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof, is to be held conclusively to have been executed, delivered and accepted subject to the covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument, unless the City expressly releases such conveyed portion of the Property from the requirements of this Agreement.

Section 6.7 Enforcement by The City. If Borrower fails to perform any obligation under this Agreement, and fails to cure the default within thirty (30) days after the City has notified Borrower 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 may enforce this Agreement by any or all of the following actions, or any other remedy provided by law:

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(a) Calling the Loan. The City may declare a default under the Notes, accelerate the indebtedness evidenced by the Note, and proceed with foreclosure under one or both of the Deeds of Trust.
(b) Action to Compel Performance or for Damages. The City may bring an action at law or in equity to compel Borrower’s performance of its obligations under this Agreement, and may seek damages.
(c) Remedies Provided Under Loan Documents. The City may exercise any other remedy provided under the Loan Documents.

Section 6.8 Attorneys’ Fees and Costs. In any action brought to enforce this Agreement, the prevailing party must be entitled to all costs and expenses of suit, including reasonable attorneys’ fees. This section must be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute.

Section 6.9 Recording and Filing. The City and Borrower shall cause this Agreement, and all amendments and supplements to it, to be recorded in the Official Records of the Stanislaus County.

Section 6.10 Governing Law. This Agreement is governed by the laws of the State of California.

Section 6.11 Waiver of Requirements. Any of the requirements of this Agreement may be expressly waived by the City in writing, but no waiver by the City of any requirement of this Agreement extends to or affects any other provision of this Agreement, and may not be deemed to do so.

Section 6.12 Amendments. This Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title that is duly recorded in the official records of the City of Turlock.

Section 6.13 Notices. Any notice requirement set forth herein will be deemed to be satisfied three (3) days after mailing of the notice first-class United States certified mail, postage prepaid, addressed to the appropriate party as follows:

City: City of Turlock
Housing Program Services Division
156 S. Broadway Street, Suite 140
Turlock, CA 95380
Attn: Housing Manager
Borrower: Great Valley Housing Development Corporation
1701 Robertson Road
Modesto, CA 95350
Attn: Executive Director

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Such addresses may be changed by notice to the other party given in the same manner as provided above.

Section 6.14 Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Agreement will not in any way be affected or impaired thereby.

Section 6.15 Multiple Originals; Counterparts. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.

Section 6.16 Time of Essence. Time is of the essence of each provision of this Agreement in which time is a factor.

WHEREAS, this Agreement has been entered into by the undersigned as of the date first written above.

CITY:

CITY OF TURLOCK,
a municipal corporation
By:

Print Name: Susan E. Borrego
Title: Interim City Manager
Date: _____________________________

APPROVED AS TO FORM:

Print Name: George A. Petrulakis
Title: City Attorney

Date: _____________________________

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BORROWER:

Great Valley Housing Development
Corporation, a California nonprofit public
benefit corporation

By:

Print Name: Jim Kruse
Title: Executive Director
Date: _____________________________
Witness:

By: _______________________________
Print Name: Greg Raynes
Title: Secretary
Date: _____________________________

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
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State of California )
County of Stanislaus )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature (Seal)

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.

2251\02\3776626.1
2251\02\4022133.1

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

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

WITNESS my hand and official seal.

Signature (Seal)

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.

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EXHIBIT “A”
Legal Description of The Property

The land referred to herein below is situated Turlock, in the County of Stanislaus, State of California, and is described as follows:

Lot 47 of Reich Estates South No. 2, as per Map Recorded May 19, 1980 in Volume 29 of Maps,

APN: 043-055-049-000

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PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS
This PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (“Agreement”) is dated January 27, 2026, (“Effective Date”), and is entered into by and between the CITY OF TURLOCK, a municipal corporation (“Seller”) and GREAT VALLEY HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation (“Buyer”) for the purchase of the property located at 573 Birchwood Way, Turlock, California 95380.

Recitals
A. Seller owns land in the City of Turlock, described on Exhibit “A” and improvements thereon (“Real Property”). Such Real Property and any improvements thereon, and all rights and appurtenances relating thereto (but excluding any public rights of way and easements), are hereinafter collectively referred to as the “Property”.

B. Seller desires to sell the Property to Buyer, and Buyer desires to purchase the Property from Seller upon and subject to the terms and conditions hereafter set forth, including the conditions that Seller lend Buyer the purchase price (with the loan to be secured by the Property).

NOW, THEREFORE, Buyer and Seller hereby agree as follows Agreement
ARTICLE 1. PURCHASE AND SALE.

1.1 Purchase Price. In consideration of the sum of Four Hundred Twenty Thousand Dollars ($420,000.00) (“Purchase Price”) and the Buyer ’s expenditure of fun ds to pay costs of investigating title to and the physical condition of the Property, Seller agrees to sell the Property to Buyer and Buyer agrees to purchase the Property from Seller on the ter ms and subject to the conditions hereinafter set forth herein.

ARTICLE 2. ESCROW.

2.1 Opening Escrow. The purchase and sale of the Property shall be consummated by means of an escrow, which is to be opened by the parties promptly after the execution of this Agreement at WFG National Title Insurance Company, 1550 Fulkerth Road, Turlock, California 95380 (“Escrow Holder ”), Attn: Title Officer , Reyna Rico (Phone: (209) 664 -9723; email:

[email protected]. The parties shall promptly deliver a copy of this executed Agreement to Escrow Holder.

2.2 Escrow Instructions. Escrow Holder shall open an escrow ( “Escrow”) for the consummation of the sale of the Property to Buyer pursuant to the terms of this Agreement , and this Agreement shall constitute the joint escrow instructions of Buyer and Seller to Escrow Holder, but each may deliver separate escrow instructions consistent with this Agreement. Upon opening Escrow, Escrow Holder is authorized to act in accordance with the terms of this Agreement. Buyer and Seller shall execute Escrow Holder ’s general escrow instructions upon request; provided,

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however, that if there is any conflict or inconsistency between such general escrow instructions and this Agreement, this Agreement shall control.

2.3 Close of Escrow. Escrow shall close no later than February 28, 2026 (the “Outside Closing Date”).

2.4 Costs.
(a) Seller shall pay one hundred percent (100%) of the escrow charges and other fees and costs charged by Escrow Holder, the premium for the Standard Owner’s Policy of title insurance, any transfer taxes, and any recording charges for both the Seller and Buyer. Buyer shall pay for the costs of an Extended Coverage Owner’s Policy of title insurance, if requested by Buyer, and for the Seller’s lenders policy of title insurance.

ARTICLE 3. CONDITIONS TO CLOSE OF ESCROW.

3.1 General. The provisions of this Article are conditions precedent to the close of escrow. If not satisfied or waived in writing by Buyer by the Outside Closing Date, Buyer may terminate this Agreement by written notice to Seller and Escrow Holder , in which event Buyer shall be responsible for any escrow charges incurred.

3.2 Title. Seller shall cause title to the Property to be conveyed to Buyer, subject only to title exceptions approved by Buyer pursuant to Section 3.3 below (the “Permitted Exceptions”).

At closing, Seller shall cause Escrow Holder to issue a Standard Owner’s Policy of title insurance insuring title to the Property in Buyer with liability in the amount of the Purchase Price at Buyer’s cost and Buyer may obtain an ALTA extended coverage policy and shall be required to pay the additional cost of the ATLA Extended Policy of title insurance (“Title Policy”). The Title Policy shall include as title exceptions only prorated property assessments (if any), the Permitted Exceptions, and the printed exceptions common to such title policies. At Closing, Buyer shall cause Escrow Holder to issue, at Buyer’s cost, one lender’s title policies to Seller in the amounts of $420,000 for the Seller’s deed of trust securing the promissory note evidencing Seller’s purchase money loans to Buyer.

3.3 Approval of Title Exceptions. Buyer shall, upon the signing of this Agreement, order from Escrow Holder for delivery to Buyer a preliminary title report (“Preliminary Title Report”) and legible copies of all documents referred to therein covering or relating to the Property. Buyer shall have ten (10) business days from the date of this Agreement to perform an ALTA survey (if desired by Buyer) and disapprove the exceptions revealed by the survey or listed in the Preliminary Title Report by written notice to Seller. Failure to give written notice of disapproval to Seller of some or all of the exceptions shall be deemed to be approval of all exceptions, except for monetary liens, including, but not limited to, property taxes. If Buyer disapproves any exceptions, Seller shall have ten (10) business days after receipt of Buyer’s notice within which to agree to remove the exception. Seller ’s failure to give timely written notice of such agreement to remove all disapproved exceptions to Buyer shall be deemed to be refusal, except that Seller shall automatically be deemed to agree to remove monetary liens, including, but not limited to, current property taxes. If Seller does not timely and unconditionally agree in writing to remove any other exceptions timely disapproved by Buyer , this Agreement shall