Agenda packet — West Sacramento City Council, October 19, 2022 (part 2 of 4)

EXHIBIT F

FEDERAL CONTRACT PROVISIONS
2 C.F.R. § 200.326 and 2 C.F.R. Part 200, Appendix II, Required Contract Clauses In the event of any contradictions or inconsistencies between these provisions and the provisions of the Agreement itself, the terms of this Exhibit shall control.

Please review and check the appropriate boxes to determine the applicability of provisions to the federally funded contract or purchase order and remove highlights before finalizing. ☒TERMINATION FOR CAUSE (in addition to standard Termination language) Criteria: All Contracts over $10k

1. In the event of any default by the Consultant as described below, the City may, after giving ten (10) days’ written notice to the Consultant, terminate the Consultant’s right to proceed with the Work or any part of the Work in the City’s sole discretion. Events of default include:
a. Failure or refusal to prosecute the Work, or any separable part thereof, with such diligence as will ensure the completion within the time specified in the Contract, or any extension thereof, or failure to complete said work within such time.
b. Filing of bankruptcy by the Consultant, or the making of a general assignment for the benefit of its creditors, or appointment of a receiver on account of Consultant’s insolvency without discharge of the receiver within ten (10) days after its appointment.
c. Failure to make prompt payments to Subcontractors or suppliers. d. Persistent disregard of laws, ordinances, or the instructions of the City, or other substantial violation of any provision of the Contract.

2. In the event the right of the Consultant to proceed with the Work, or any portion thereof, has been terminated because of the default of the Consultant and the Consultant has been given ten (10) days’ notice to cure such fault and has not done so, the City may take over the Work and prosecute the same to completion by contract or any other method the City deems expedient, and may take possession of and utilize in completing the Work such materials, appliances, equipment and plant as may be on the site of the Work and necessary therefore. In such event, the Consultant and its sureties shall be liable for all damages including costs of managerial and administrative services, engineering, legal and other consultant fees, and liquidated damages sustained or incurred by the City.

3. Upon termination, the Consultant shall not be entitled to receive any further payment until the Work is finished. If upon completion of the Work the total cost to the City, including engineering, legal and other consultant fees, costs of managerial and administrative services, construction costs, and liquidated damages shall be less than the amount which would have been paid if the Work had been completed by the Consultant in accordance with the terms of the Contract, then the difference shall be paid to the Consultant in the same manner as the final payment under the Contract. If the total cost incurred by the City on account of termination of the Contract and subsequent completion of the Work by the City by whatever method the City may deem expedient shall exceed said amount which the Consultant would otherwise have been paid, the Consultant and its sureties shall be liable to the City for the full amount of such excess expense.
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4. The rights and remedies of the City provided in this section are in addition to any of the rights and remedies provided by the law or under this Contract. ☐ EQUAL EMPLOYMENT OPPORTUNITY 41 CFR Part 60-1.4b
Criteria: Construction or repair work. Select either Government Contracts or Federally Assisted Construction Contracts.

Criteria: Government Contracts
During the performance of this contract, the contractor agrees as follows

1. The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin. Such action shall include, but not be limited to the following: Employment, upgrading, demotion, or transfer, recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause.

2. The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin.

3. The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information.

4. The contractor will 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 workers' representative of the contractor's commitments under section 202 of Executive Order 11246 of September 24, 1965, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

5. The contractor will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.

6. The contractor will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the contracting agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

7. In the event of the contractor's non-compliance with the nondiscrimination clauses of this contract or with any of such rules, regulations, or orders, this contract may be canceled, terminated or suspended in whole or in part and the contractor may be 141

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declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.

8. The contractor will include the provisions of paragraphs (1) through (8) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as may be directed by the Secretary of Labor as a means of enforcing such provisions including sanctions for noncompliance: Provided, however, that in the event the contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction, the contractor may request the United States to enter into such litigation to protect the interests of the United States. ☐ Criteria: Federally assisted construction contracts
Except as otherwise provided, each administering agency shall require the inclusion of the following language as a condition of any grant, contract, loan, insurance, or guarantee involving federally assisted construction which is not exempt from the requirements of the equal opportunity clause: The applicant hereby agrees that it will incorporate or cause to be incorporated into any contract for construction work, or modification thereof, as defined in the regulations of the Secretary of Labor at 41 CFR Chapter 60, which is paid for in whole or in part with funds obtained from the Federal Government or borrowed on the credit of the Federal Government pursuant to a grant, contract, loan, insurance, or guarantee, or undertaken pursuant to any Federal program involving such grant, contract, loan, insurance, or guarantee, the following equal opportunity clause:

During the performance of this contract, the contractor agrees as follows:

Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause.

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an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information.

4. The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers' representatives of the contractor's commitments under this section and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

5. The contractor will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.

6. The contractor will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the administering agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

7. In the event of the contractor's noncompliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, this contract may be canceled, terminated, or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts or federally assisted construction contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.

8. The contractor will include the portion of the sentence immediately preceding paragraph (1) and the provisions of paragraphs (1) through (8) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as the administering agency may direct as a means of enforcing such provisions, including sanctions for noncompliance:

Provided, however, that in the event a contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the administering agency, the contractor may request the United States to enter into such litigation to protect the interests of the United States.

The applicant further agrees that it will be bound by the above equal opportunity clause with respect to its own employment practices when it participates in federally assisted construction work: Provided, That if the applicant so participating is a State or local government, the above equal opportunity clause is not applicable to any agency, instrumentality or subdivision of such government which does not participate in work on or under the contract.

The applicant agrees that it will assist and cooperate actively with the administering agency and the Secretary of Labor in obtaining the compliance of contractors and subcontractors with the equal opportunity clause and the rules, regulations, and relevant orders of the Secretary of Labor, that it will furnish the administering agency and the Secretary of Labor such information as they may require for the supervision of such 143

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compliance, and that it will otherwise assist the administering agency in the discharge of the agency's primary responsibility for securing compliance.

The applicant further agrees that it will refrain from entering into any contract or contract modification subject to Executive Order 11246 of September 24, 1965, with a contractor debarred from, or who has not demonstrated eligibility for, Government contracts and federally assisted construction contracts pursuant to the Executive Order and will carry out such sanctions and penalties for violation of the equal opportunity clause as may be imposed upon contractors and subcontractors by the administering agency or the Secretary of Labor pursuant to Part II, Subpart D of the Executive Order. In addition, the applicant agrees that if it fails or refuses to comply with these undertakings, the administering agency may take any or all of the following actions: Cancel, terminate, or suspend in whole or in part this grant (contract, loan, insurance, guarantee); refrain from extending any further assistance to the applicant under the program with respect to which the failure or refund occurred until satisfactory assurance of future compliance has been received from such applicant; and refer the case to the Department of Justice for appropriate legal proceedings.

Subcontracts. Each nonexempt prime contractor or subcontractor shall include the equal opportunity clause in each of its nonexempt subcontracts.

Inclusion of the equal opportunity clause by reference. The equal opportunity clause may be included by reference in all Government contracts and subcontracts, including Government bills of lading, transportation requests, contracts for deposit of Government funds, and contracts for issuing and paying U.S. savings bonds and notes, and such other contracts and subcontracts as the Director of OFCCP may designate.

Incorporation by operation of the order. By operation of the order, the equal opportunity clause shall be considered to be a part of every contract and subcontract required by the order and the regulations in this part to include such a clause whether or not it is physically incorporated in such contracts and whether or not the contract between the agency and the contractor is written.

Adaptation of language. Such necessary changes in language may be made in the equal opportunity clause as shall be appropriate to identify properly the parties and their undertakings.
☐ DAVIS-BACON ACT (40 U.S.C. §§ 3141-3144 and 3146-3148) Criteria: Construction or repair work (not applicable to FEMA)

1. All transactions regarding this contract shall be done in compliance with the Davis-Bacon Act (40 U.S.C. 3141- 3144, and 3146-3148) and the requirements of 29 C.F.R. pt. 5 as may be applicable. The contractor shall comply with 40 U.S.C. 3141-3144, and 3146-3148 and the requirements of 29 C.F.R. pt. 5 as applicable.

2. Contractors are required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor.

3. Additionally, contractors are required to pay wages not less than once a week. 144

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☐ COPELAND ANTI-KICKBACK ACT
Criteria: Construction or Repair Work >$2k (not applicable to FEMA)

1. Contractor. The contractor shall comply with 18 U.S.C. § 874, 40 U.S.C. § 3145, and the requirements of 29 C.F.R. pt. 3 as may be applicable, which are incorporated by reference into this contract.

2. Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clause above and such other clauses as FEMA may by appropriate instructions require, and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all of these contract clauses.

3. Breach. A breach of the contract clauses above may be grounds for termination of the contract, and for debarment

☐ CONTRACT WORK HOURS AND SAFETY STANDARDS ACT
Criteria: Construction or Repair contracts >$100k involving employment of Mechanics or Laborers (does not apply to purchase or service contracts)

1. Overtime requirements. No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek.

2. Violation; liability for unpaid wages; liquidated damages. In the event of any violation of the clause set forth in paragraph (a) of this section the contractor and any subcontractor responsible therefor shall be liable for the unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in paragraph (a) of this section, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph (a) of this section.

3. Withholding for unpaid wages and liquidated damages. The City of West Sacramento shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor under any such contract or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (b) of this section.

4. Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraph (a) through (d) of this section and also a clause requiring the 145

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subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs (a) through (d) of this section. ☐ Rights to Inventions Made Under a Contract or Agreement.

Criteria: Funding agreement (not applicable to FEMA)
(F) Rights to Inventions Made Under a Contract or Agreement. If the Federal award meets the definition of “funding agreement” under 37 CFR §401.2 (a) and the recipient or subrecipient wishes to enter into a contract with a small business firm or nonprofit organization regarding the substitution of parties, assignment or performance of experimental, developmental, or research work under that “funding agreement,” the recipient or subrecipient must comply with the requirements of 37 CFR Part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,” and any implementing regulations issued by the awarding agency. ☒ CLEAN AIR ACT
Criteria: All contracts over $150k
(G) Clean Air Act (42 U.S.C. 7401-7671q.) and the Federal Water Pollution Control Act (33 U.S.C. 1251-1387), as amended—Contracts and subgrants of amounts in excess of $150,000 must contain a provision that requires the non-Federal award to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401- 7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251-1387).

Violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).

The contractor agrees to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act, as amended, 42 U.S.C. § 7401 et seq.

1. The contractor agrees to report each violation to the City of West Sacramento and understands and agrees that the City of West Sacramento will, in turn, report each violation as required to assure notification to the State of California, Federal Emergency Management Agency, and the appropriate Environmental Protection Agency Regional Office.

2. The contractor agrees to include these requirements in each subcontract exceeding $100,000 financed in whole or in part with Federal assistance provided by FEMA. ☒ FEDERAL WATER POLLUTION CONTROL ACT
Criteria: All contracts over $150k

1. The contractor agrees to comply with all applicable standards, orders or regulations issued pursuant to the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.

2. The contractor agrees to report each violation to the City of West Sacramento and understands and agrees that the City of West Sacramento will, in turn, report each violation as required to assure notification to the State of California, Federal Emergency Management Agency, and the appropriate Environmental Protection Agency Regional Office.

3. The contractor agrees to include these requirements in each subcontract exceeding $100,000 financed in whole or in part with Federal assistance provided by FEMA. 146

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☒ DEBARMENT AND SUSPENSION
Criteria: Over $25k
(H) Debarment and Suspension (Executive Orders 12549 and 12689)—A contract award (see 2 CFR 180.220) must not be made to parties listed on the governmentwide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), “Debarment and Suspension.” SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549.

5. This contract is a covered transaction for purposes of 2 C.F.R. pt. 180 and 2 C.F.R. pt. 3000. As such the contractor is required to verify that none of the contractor, its principals (defined at 2 C.F.R. § 180.995), or its affiliates (defined at 2 C.F.R. § 180.905) are excluded (defined at 2 C.F.R. §180.940) or disqualified (defined at 2 C.F.R. § 180.935).

6. The contractor must comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C and must include a requirement to comply with these regulations in any lower tier covered transaction it enters into.

7. This certification is a material representation of fact relied upon by the City of West Sacramento. If it is later determined that the contractor did not comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C, in addition to remedies available to the City of West Sacramento, the Federal Government may pursue available remedies, including but not limited to suspension and/or debarment. The City will insure the Contractor and any lower participants are not debarred by checking the government’s System Award Management (SAM).

8. The bidder or proposer agrees to comply with the requirements of 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C while this offer is valid and throughout the period of any contract that may arise from this offer. The bidder or proposer further agrees to include a provision requiring such compliance in its lower tier covered transactions.
☒ BYRD ANTI-LOBBYING AMENDMENT 31 U.S.C. § 1352 (AS AMENDED) Criteria: All contracts require. Any contracts over $100k also require additional certification.
(I) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)—Contractors that apply or bid for an award exceeding $100,000 must file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the non-Federal award.

Contractors who apply or bid for an award of $100,000 or more shall file the required certification (see Appendix A, 44 C.F.R Part 18 – Certification Regarding Lobbying). Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection 147

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with obtaining any Federal contract, grant, or any other award covered by 31 U.S.C. § 1352. Each tier shall also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the recipient. ☒ RECORD RETENTION
Criteria: All contracts
In addition to the reports specified in this Agreement, Consultant shall retain the records required by the applicable provisions of 2 CFR § 200.333, no less than three (3) years after City's final payment to Consultant under this Agreement and provide the City with the reports required pursuant to 2 CFR §§ 200.328 and 200.343, and such other records and reports as the City may reasonably require in the administration of this Agreement. Consultant shall keep all other necessary books and records, including property, personnel, loan documentation and financial records, in connection with the operation and services performed under this Agreement, in accordance with 2 CFR §200.333
☒ NO OBLIGATION BY FEDERAL GOVERNMENT
Criteria: All contracts
The Federal Government is not a party to this contract and is not subject to any obligations or liabilities to the non-Federal entity, Consultant, or any other party pertaining to any matter resulting from the contract.

☐ PROCUREMENT OF RECOVERED MATERIALS
Criteria: All contracts over $10k where work involves the use of materials (J) §200.323 Procurement of recovered materials.

A non-Federal entity that is a state agency or agency of a political subdivision of a state and its contractors must comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 CFR part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines."

1. In the performance of this contract, the Consultant shall make maximum use of products containing recovered materials that are EPA- designated items unless the product cannot be acquired—

2. Competitively within a timeframe providing for compliance with the contract performance schedule;

3. Meeting contract performance requirements; or

4. At a reasonable price.
a. Information about this requirement, along with the list of EPA- designate items, is available at EPA’s Comprehensive Procurement Guidelines web site, https://www.epa.gov/smm/comprehensive- procurement-guideline-cpg-program. 148

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☐ Prohibition on certain telecommunications and video surveillance services or equipment.

Criteria: Contracts related to telecommunications or video surveillance or equipment (K) §200.216 Prohibition on certain telecommunications and video surveillance services or equipment.
(a) Recipients and subrecipients are prohibited from obligating or expending loan or grant funds to:
(1) Procure or obtain;
(2) Extend or renew a contract to procure or obtain; or (3) Enter into a contract (or extend or renew a contract) to procure or obtain equipment, services, or systems that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. As described in Public Law 115-232, section 889, covered telecommunications equipment is telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities).
(i) For the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities).
(ii) Telecommunications or video surveillance services provided by such entities or using such equipment.
(iii) Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of the National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country. (b) In implementing the prohibition under Public Law 115-232, section 889, subsection (f), paragraph (1), heads of executive agencies administering loan, grant, or subsidy programs shall prioritize available funding and technical support to assist affected businesses, institutions and organizations as is reasonably necessary for those affected entities to transition from covered communications equipment and services, to procure replacement equipment and services, and to ensure that communications service to users and customers is sustained. (c) See Public Law 115-232, section 889 for additional information. (d) See also §200.471."
☐ Domestic preferences for procurements
Criteria: All contracts over $10k where work involves the use of materials (L) §200.322 Domestic preferences for procurements.
(a) As appropriate and to the extent consistent with law, the non-Federal entity should, to the greatest extent practicable under a Federal award, provide a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including but not limited to iron, aluminum, steel, cement, and other manufactured products). The requirements of this section must be included in all subawards including all contracts and purchase orders for work or products under this award.
(b) For purposes of this section:
(1) “Produced in the United States” means, for iron and steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.
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(2) “Manufactured products” means items and construction materials composed in whole or in part of non-ferrous metals such as aluminum; plastics and polymer-based products such as polyvinyl chloride pipe; aggregates such as concrete; glass, including optical fiber; and lumber." 150
Attachment 2
RESOLUTION 22-129

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST SACRAMENTO AUTHORIZING THE TRANSFER OF $24,129 FROM THE MEASURE N FUND FOR THE

SACRAMENTO AVENUE COMPLETE STREETS CORRIDOR IMPROVEMENT PLAN (CIP 10048)
WHEREAS, on April 15, 2021, the City of West Sacramento was awarded $273,000 in grant funding from the Sacramento Area Council of Governments for the 2021 Community Design Grant Program for the Sacramento Avenue Complete Streets Corridor Improvement Plan; and
WHEREAS, the City Council approved Resolution 21-49 on June 16, 2021 to authorize an allocation in the amount of $35,330 toward the Sacramento Avenue Complete Streets Corridor Improvement Plan (CIP 10048) to fulfill its local match requirement as a condition of the Sacramento Area Council of Government Community Design – Funding Program; and WHEREAS, a Request for Proposal was publicly advertised for a professional services contract for the development of the Sacramento Avenue Complete Streets Corridor Improvement Plan, available on OpenGov (an online procurement system) on July 6, 2022; and WHEREAS, the staff is recommending City Council to award a contract for professional services with GHD, Inc., in the amount of $273,000; and WHEREAS, additional funding of $24,129 is needed to fully support staff time and resources, and a 10 percent contingency for the professional services contract; and WHEREAS, staff is proposing to transfer $24,129 of Measure N – Community Improvement Funds to fully support the Sacramento Avenue Complete Streets Corridor Improvement Plan;
WHEREAS, there are sufficient funds available in the sources identified to fund the additional appropriations as requested for this project; and WHEREAS, the City Council has considered all information related to this matter, as presented at the public meetings of the City Council identified herein, including any supporting reports by City staff, and any other information provided during public meetings.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of West Sacramento as follows:

1. The City Council hereby approves amendments to the budget for the 2022-23 fiscal year as provided below:

SOURCES
$24,129 111-0000-3110 Measure N (Fund 111)
$24,129 400-9900-4990/10048-4990 Transfer In from Measure N-Comm Invest $24,129 Total Sources
USES
$24,129 400-9900-5530/10048-5800 Sacramento Avenue Complete Streets Corridor Improvement Plan
$24,129 111-9375-5950 Transfer Out to Sacramento Avenue Complete Streets Corridor Improvement
Plan
$24,129 Total Uses
151
Resolution 22-60

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*Note – Interfund transfers are not included in funding sources and uses total to avoid duplication of total project budget and funding.

2. The City Council hereby finds that the facts set forth in the recitals to this Resolution are true and correct and establish the factual basis for the City Council’s adoption of this Resolution.

3. This Resolution shall take effect immediately upon its adoption.

PASSED AND ADOPTED by the West Sacramento City Council this 19th day of October, 2022 by the following vote:

AYES:

NOES:

ABSENT:

Martha Guerrero, Mayor
ATTEST:

Jennifer Cusmir, City Clerk
152

CITY COUNCIL AGENDA REPORT
MEETING DATE: October 19, 2022 ITEM # 10
SUBJECT:

CONSIDERATION OF A REAPPOINTMENT TO THE YOLO HABITAT IMPLEMENTATION

ADVISORY COMMISSION
INITIATED OR REQUESTED BY: REPORT COORDINATED OR PREPARED BY:
[ ] Council [X] Staff Kathy Allen, Senior Planner
[ ] Other Community Development Department
ATTACHMENT [ ] Yes [X] No [ ] Information [ ] Direction [X] Action

OBJECTIVE
This item concerns consideration of an approval by the City Council for a reappointment to fill a position on the Yolo Habitat Implementation Advisory Commission.

RECOMMENDED ACTION
Staff respectfully recommends that the City Council approve the reappointment of Ari Neumann to the Yolo Habitat Implementation Advisory Commission.

BACKGROUND
The Yolo Habitat Conservancy Board of Directors approved the revised Yolo HCP/NCCP Implementation Advisory Committee composition and appointment process at its November 16, 2020 meeting. The appointment term is generally two years, but the initial appointment was staggered with some members appointed for two years and others one year. The City is a member jurisdiction of the Conservancy.

The Conservancy, by way of the City, recruited volunteers to serve on the Committee when it was created. The City received two application and on November 17, 2021, the City Council appointed Ari Neumann to serve as the City’s representative on the Yolo HCP/NCCP Implementation Advisory Committee. Ms. Neumann was appointed for one of the initial one-year terms, and as such, is now up for reappointment.

ANALYSIS
Ms. Neumann has served her initial term on the Committee. During that time, Ms. Neumann attended one Board Meeting where two Special Participating Entity (SPE) requests were reviewed. The Implementation Advisory Committee reviews SPE requests and makes recommendations to the Board of Directors as to whether the project should receive coverage under the Yolo HCP/NCCP. SPEs are non-member agencies that must request and receive authorization to utilize the HCP/NCCP’s streamlined permit coverage. To allow for continuity on the Committee, staff is recommending that the Council reappoint Ms. Neumann for the upcoming two-year term.

Environmental Considerations
This item is not considered a project under the CEQA Guidelines and does not require CEQA review.

Strategic Plan Integration
This project advances the 2022 Policy Agenda, West Sacramento: A Preferred Place to Live, Work, and Play by helping to ensure that critical habitat within the City is preserved.

Alternatives
The City Council’s primary alternatives are summarized below.

1. Approve the reappointment of Ari Neumann to the Yolo Habitat Implementation Advisory Committee.

2. Continue the item (to a date certain if known, the City Council shall specify additional information to be provided if needed).
153
HCP Commission Appointment
October 19, 2022

Page 2 ends

Alternative 1 is staff’s recommended action. While staff believes the analysis presented in this report is correct, staff is prepared to effectuate Alternative 2 at the City Council’s direction.

Coordination and Review
The application was coordinated with staff from the Yolo Habitat Conservancy.

Budget/Cost Impact
There is no budget impact related to this action.

ATTACHMENT(S)
None
154
*Notes firms that offer contract planning services

CITY COUNCIL AGENDA REPORT
MEETING DATE: October 19, 2022 ITEM # 11
SUBJECT:

CONSIDERATION OF APPROVAL FOR PRE-QUALIFIED ON-CALL LIST OF

CONSULTANTS FOR ENVIRONMENTAL AND CONTRACT PLANNING SERVICES INITIATED OR REQUESTED BY: REPORT COORDINATED OR PREPARED BY:

Kathy Allen, Senior Planner
Community Development Department
[ ] Council [X] Staff
[ ] Other
ATTACHMENT [ ] Yes [X] No [ ] Information [ ] Direction [X] Action

OBJECTIVE
The purpose of this report is to obtain City Council approval of a pre-qualified on-call list of consultants to provide as-needed environmental and contract planning support services.

RECOMMENDED ACTION
Staff respectfully recommends that the Council:

1. Approve a pre-qualified on-call list for environmental and contract planning services.

BACKGROUND
The City periodically relies on the services of outside firms to provide various environmental and contract planning services when workload has exceeded City staff capacity or when specialized expertise is required for a specific project. The City last updated its on-call list for environmental and contract planning services in 2018.

A pre-qualified on-call list provides a shortlist of consultants that can be called upon to provide services for any needed project within the scope of environmental and contract planning services. During the time period that the new list is in use, staff anticipates that on-call services may be required for preparation of EIRs, Mitigated Negative Declarations that require a level of analysis in an area(s) exceeding staff’s level of expertise, NEPA documents for various grant applications, and in the preparation of specialized reports, such as Tribal Cultural Resources reports. In addition, generalist contract planning services may be needed to prepare amendments to the municipal code and provide staff augmentation on complex planning applications. Developing a pre-qualified on-call list reduces staff time and expedites project delivery by avoiding repeated solicitations of qualifications and review of proposals.

ANALYSIS
A Request for Qualifications (RFQ) for on-call environmental support services was issued August 10, 2022 through the City’s ProcureNow system. A total of 39 firms downloaded the RFQ and staff received responses from nine (9) firms.

After closure of the RFQ, staff representing Community Development and Economic Development and Housing reviewed the proposals. After careful consideration of each firm’s qualifications, staff is recommending that five (5) firms be placed on the City’s on-call list. The individual firms which staff are recommending possess levels of expertise in varying areas of environmental review (preparation of EIRs, experience in evaluating tribal cultural resources, etc.). The firms all have offices within the greater Sacramento area and range in size from smaller local firms to large firms with an international presence. The firm’s staff is recommending for approval are as follows:

AECOM Technical Services, Inc. TRC Solutions, Inc.* Dudek* LSA Associates, Inc. Michael Baker International*
155
Environmental and Contract Planning Consultant On-Call List October 19, 2022

Page 2 ends

As the need for environmental and contract planning services is identified, services will be contracted with one of the consultants from the on-call list through a Contract for Services in accordance with the City’s Purchasing Policy. Having five (5) firms on a short list will save staff time in soliciting and reviewing proposals, while still complying with the City’s Purchasing Policy. Contracts under $50,000 will be executed by the City Manager and contracts greater than $50,000 will be agendized for approval by the City Council.

This pre-qualified on-call list of consultants will be valid for three (3) years, and eligible for two (2), one (1) year extensions. This on-call list does not preclude City staff from holding separate solicitations for additional services.

Staff anticipates using the list almost immediately for a development project which will need extensive environmental review.

Strategic Plan Integration
These recommendations support the City Council’s Mission to provide Quality Municipal Services and a City government that is financially sound.

Alternatives
The City Council’s primary alternatives are summarized below.

1. Approve the recommended on-call list for environmental support services.

2. Reject all proposals and direct staff to repeat the Request for Qualifications process.

Alternative 1 is staff’s recommended action. While staff believes the analysis presented in this report is correct, staff is prepared to effectuate Alternative 2 at the City Council’s direction.

Coordination and Review
Statements of Qualifications have been evaluated by staff from the Community Development and Economic Development and Housing Departments.

Budget/Cost Impact
Consulting services will be charged to each assigned project. Costs will be dictated by the approved scope of work for each project and paid for by developers with the exception for Capital Improvement Projects.

ATTACHMENT(S)
None
156

CITY COUNCIL AGENDA REPORT
MEETING DATE: October 19, 2022 ITEM # 12
SUBJECT:

CONSIDERATION OF A CONTRACT WITH NOMAD TRANSIT LLC AND RESOLUTION 22- 119 APPROPRIATING FUNDS FOR THE BRODERICK AND BRYTE VIA

TRANSPORTATION PILOT
INITIATED OR REQUESTED BY: REPORT COORDINATED OR PREPARED BY:
[ ] Council [X] Staff
[ ] Other
Stephanie Chhan, Senior Transportation Planner
Community Development Department
ATTACHMENT [X] Yes [ ] No [ ] Information [ ] Direction [X] Action

OBJECTIVE
The purpose of this report is to request City Council approval of a contract with NoMad Transit LCC to subsidize the fares on the On-Demand Rideshare Service for the Broderick & Bryte Via Transportation Pilot Program. Staff is requesting approval of Budget Resolution 22-119 to support the subsidize fares and staff time for project management of the Broderick & Bryte Via Transportation Pilot Program.

RECOMMENDED ACTION
Staff respectfully recommends that the City Council:
1) Adopt Resolution 22-119 to appropriate $10,000 in Clean Air Fund Grant funds awarded by the Yolo Solano Air Quality Management District and $50,000 from the Transportation Development Act (TDA) funds to fund the Broderick and Bryte Transportation Pilot; and 2) Approve and authorize the City Manager, or his designee, to execute a contract with Via OnDemand Rideshare for the Broderick & Bryte Via Transportation Pilot Program in an amount not to exceed $60,000.

BACKGROUND
In May 2022, the City launched a Summer Transportation Pilot to provide free rides on Via, the City’s on-demand rideshare program, between Broderick and Bryte neighborhoods and the Recreation Center located at 2801 Jefferson Blvd. The pilot ran between May 1, 2022, and September 1, 2022 and would subsidize up to $47,500 in rides. During the Summer Transportation Pilot, the City sought funding from Yolo Solano Air Quality Management District (YSAQMD) for a Clean Air Fund Grant in hopes to secure additional funding for the Summer Transportation Pilot. The grant application deadline was on April 15, 2022, with an anticipated grant award on June 8, 2022. In June 2022, the City was awarded a $10,000 Clean Air Fund grant from the YSAQMD to support the Summer Transportation Pilot.

ANALYSIS
Between May through August, the Summer Transportation Pilot subsidized a total of 1,005 rides - 152 rides in the month of May, 190 rides in June, 191 rides in July, and 472 rides in August. With lower-than-expected ridership and funding remaining from the Summer Transportation Pilot after the project term ends, City staff is proposing to utilize the remaining Summer Transportation Pilot funds and the Clean Air Funds grant to support up to $49,967.85 in fare subsidies for the Broderick & Bryte Via Transportation Pilot Program.

The Broderick & Bryte Via Transportation Pilot Program will provide Broderick and Bryte residents with free rides to and from anywhere in the City until June 30, 2023, or until funding is expended. In the last two weeks of August 2022, Via averaged 1,150 weekly rides (2,299 rides total) that start and/or end at Broderick and Bryte. During this time, 42% of rides were taken using weekly passes and 4% were discounted rides for seniors and riders with disabilities. Given the estimated number of rides taken during the last two weeks of August, staff estimates that the Broderick/Bryte Transportation Pilot may subsidize rides for three to four months.

Environmental Considerations
This action is not a project that is subject to CEQA because it is not an activity that may cause either a direct or reasonably foreseeable indirect physical change in the environment. (Pub. Resources Code, § 21065; CEQA Guidelines §§ 15060(c), 15378(a))
Commission Recommendation
Not applicable. This item is an administrative function with no policy implications and was therefore not submitted for Transportation, Mobility, and Infrastructure (TMI) Commission consideration. The Summer Transportation Pilot was shared with the Transportation, Mobility, and Infrastructure Commission on May 2, 2022 as part of the 157 Broderick & Bryte Via Transportation Pilot Program
October 19, 2022

Page 2 ends

Workshop on a 1-Year Contract Renewal with Nomad Transit LLC. In the future, staff may return to Commission with policies on a long-term transportation program.

Strategic Plan Integration
This project advances the 2021 Strategic Plan goals of “Mobility & Connectivity” as part of the City’s “Mobility Action Plan Implementation” policy agenda.

The Broderick & Bryte Via Transportation Pilot is directly supporting Strategy 3, Action 4 from the Mobility Action Plan: “Strategy 3: Provide convenient and accessible transit and shared mobility options that connect to local and regional destinations. Action 4: Establish approaches to work with community organizations, employers, and retail partners to offer free and discounted rides to populations in need, including those who are low-income or access-limited.” This action also directly aims to achieve the goals as identified in the Mayors’ Commission on Climate Change.

Alternatives
The City Council may decide to:

1. Approve the recommended actions as stated above; or

2. Modify the scope and budget of the Broderick & Bryte Via Transportation Pilot Program; or

3. Direct staff to solicit proposals for another transit operator for the Broderick & Bryte Via Transportation Pilot Program.

Staff recommends Alterative 1 as it provides the City the ability to utilize the grant funding from the YSAQMD Clean Air Funds grant. Alternatives 2 and 3 may result in delays to the Broderick & Bryte Via Transportation Pilot Program, cost increases, or an inability to meet the grant completion deadline. Alternatives 2 and 3 are not recommended as this work is a starting point to analyze transportation needs in the City’s most disadvantaged neighborhoods, identify opportunities to implement equitable transportation programs, and supports the City’s climate action goals.

Coordination and Review
This report was prepared by the Transportation and Mobility Division of the Community Development Department and has been reviewed by the Finance Department and City Attorney’s Office.

Budget/Cost Impact
Staff plans to request $50,000 in Local Transportation Funds on the Fiscal Year 2022-23 Transportation Development Act claim to the Sacramento Area Council of Governments to fund a portion of this contract and other project related expenses. The City was also awarded $10,000 in a Clean Air Funds grant for the expenses incurred during the Via Summer Transportation Pilot, and the upcoming Broderick/Bryte Via Transportation Pilot.

Expenses
Contract for Services with NoMad Transit LLC: $53,000
City Staff Time & Materials: $7,000
Total FY 2022/23 Program Expenses $60,000
Funding Sources
FY 2022/23 TDA Allocation $50,000
Clean Air Funds Grant $10,000
Total $60,000
Resolution 22-119 seeks Council approval of the above appropriations.

ATTACHMENTS

1. Resolution 22-119

2. Contract for Services
158
Attachment 1
RESOLUTION 22-119

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST SACRAMENTO APPROVING AN APPROPRIATION OF $50,000 FROM THE TRANSPORTATION DEVELOPMENT ACT (TDA) FUND (FUND 202) AND $10,000 FROM THE CLEAN AIR

FUNDS GRANT TOWARD THE BRODERICK/BRYTE VIA TRANSPORTATION PILOT WHEREAS, on January 17th, 2018, the City awarded a contract to NoMad Transit LLC, a wholly owned subsidiary of Via Transportation, Inc., for a one (1) year Pilot operation based on the Contractor’s proposal submitted in response to the City’s Request for Proposals dated May 26, 2017; and,
WHEREAS, the City Council approved an Amended and Restated Contract on May 1, 2019 to NoMad Transit LLC, a wholly owned subsidiary of Via Transportation Inc., to continue operations of the West Sacramento On-Demand Rideshare program, launched on May 14, 2018; and
WHEREAS, the May 1, 2019 contract had an expiration date of June 30, 2020, after which operations would otherwise cease and provided that, by mutual agreement, the Contract may be extended annually for a total of up to four (4) additional years; and WHEREAS, at its June 17, 2020 meeting, the City Council approved a 2-year contract renewal with NoMad Transit LLC to continue operations of the West Sacramento On-Demand Rideshare program from July 1, 2020 through June 30, 2022; and WHEREAS, the City executed a contract with Via on April 19, 2022 to conduct a Summer Transportation Pilot program utilizing the Program to serve the Broderick/Bryte neighborhood with free rides to the Recreation Center from May 1, 2022 to September 1, 2022; WHEREAS, the City Council approved Amendment No. 4 to the Existing Contract on June 15, 2022, extending the term of the contract through June 30, 2023, and updating the Schedule of Fees; and
WHEREAS, the City was awarded a $10,000 Clean Air Fund grant by the Yolo Solano Air Quality Management District Board of Directors on June 8, 2022; and WHEREAS, the Summer Transportation Pilot ended on September 1, 2022 and there is unspent funds remaining in the Summer Transportation Pilot allocation; and WHEREAS, the City wishes utilize the Clean Air Fund grant and continue to fund Via fares to and from Broderick and Bryte through a Broderick and Bryte Via Transportation Pilot Program; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of West Sacramento as follows:

1. The City Council hereby approves amendments to the budget for the 2022-23 fiscal year as provided below:

SOURCES
$50,000 202-9221-4050 TDA Funds
$10,000 202-9221-4500 Clean Air Funds Grant
$60,000 Total Sources
USES
$60,000 202-9211-5258 Bryte & Broderick Via Pilot Program $60,000 Total Uses
159
Resolution 22-80

Page 2 ends

2. The City Council hereby finds that the facts set forth in the recitals to this Resolution are true and correct and establish the factual basis for the City Council’s adoption of this Resolution.

3. This Resolution shall take effect immediately upon its adoption.

PASSED AND ADOPTED by the West Sacramento City Council this 19th day of October, 2022 by the following vote:

AYES:

NOES:

ABSENT:

Martha Guerrero, Mayor
ATTEST:

Jennifer Cusmir, City Clerk
160
Attachment 2

CONTRACT FOR SERVICES
THIS CONTRACT is made on November 1, 2022, by and between the CITY OF WEST SACRAMENTO ("City"), and Nomad Transit LLC ("the Contractor"), a wholly owned subsidiary of Via Transportation, Inc. (collectively, the "Parties").

WITNESSETH:

WHEREAS, the City and Contractor entered into the Amended and Restated Contract (“Existing Contract”) for the Contractor to provide citywide public transportation services, including the technology, customer support and professional services for the design, marketing, operations and maintenance of the West Sacramento On-Demand Rideshare Program (the “Program”) on May 1, 2019; and
WHEREAS, on June 17, 2020 the City Council approved Amendment No.1 amending the Existing Contract, extending the term of the contract from June 30, 2020 through June 30, 2022, and updating the Schedule of Fees; and
WHEREAS, on January 20, 2021 the City Council approved Amendment 2 amended the Existing Contract to comply with California Proposition 22, the App-Based Drivers as Contractors and Labor Policies Initiative, by updating the Schedule of Fees; and WHEREAS, the City Council approved Amendment No. 3 to the Existing Contract on June 17, 2021 to update the Schedule of Fees for Fiscal Year 21/22; WHEREAS, the City executed a contract with Via on April 19, 2022 to conduct a Summer Transportation Pilot program utilizing the Program to serve the Broderick/Bryte neighborhood with free rides to the Recreation Center from May 1st, 2022 to September 1st, 2022; WHEREAS, the City Council approved Amendment No. 4 to the Existing Contract on June 15, 2022, extending the term of the contract through June 30, 2023, and updating the Schedule of Fees; and
WHEREAS, the City was awarded a $10,000 Clean Air Fund grant by the Yolo Solano Air Quality Management District Board of Directors on June 8, 2022; and WHEREAS, the Summer Transportation Pilot ended on September 1, 2022 and there is funding remaining in the Summer Transportation Pilot; and WHEREAS, the City wishes utilize the Clean Air Fund grant and continue to fund Via fares to and from Broderick and Bryte through a Broderick and Bryte Via Transportation Pilot Program; NOW, THEREFORE, the parties hereto mutually agree as follows:

1. SCOPE OF SERVICES
A. Consultant shall do all work, attend all meetings, produce all reports and carry out all activities necessary to completion of the services described in the Scope of Work which is attached hereto and incorporated herein by this reference as Exhibit "A" (the “Work”). 161
Attachment 2

2. COMPENSATION:

The compensation for the Broderick and Bryte Via Transportation Pilot Program shall not exceed $49,967.85.

3. TERM:

The contract term for the Broderick and Bryte Via Transportation Pilot Program shall end on June 30, 2023.

4. INCORPORATION OF TRANSPORTATION SERVICES AGREEMENT TERMS AND

CONDITIONS
Except as expressly provided herein and in Exhibit A, the terms of the Existing Contract, as previously amended by Amendments 1, 2, 3 and 4, are hereby incorporated by reference as if they were set forth fully herein. In the event of conflict between the terms contained in this Contract (including its exhibits) and the Existing Contract (as previously amended), the terms in this Contract shall control.

WORK FUNDED IN WHOLE OR IN PART FROM GRANT FUNDS
This Contract is funded in whole in part through grant funds received under the following grant: Clean Air Fund grant by the Yolo Solano Air Quality Management District Board of Directors on June 8, 2022 (the “Grant”), the terms of which are incorporated herein. Copies of the Grant and any related materials have been made available to Consultant, and Consultant shall ensure that its performance under this Contract, and that of any subcontractors, conforms to the requirements of the Grant.
162
Attachment 2
IN WITNESS WHEREOF the parties hereto have executed this Agreement as the date herein set forth.

CITY OF WEST SACRAMENTO
By:

Aaron Laurel, City Manager
NoMad Transit LLC
By:

Alex Lavoie, Global Head of Operations

APPROVED AS TO FORM
By:

Jeffrey Mitchell, City Attorney
ATTEST:

By: ________________________________________________________ Jennifer Cusmir, City Clerk
163

EXHIBIT A

SCOPE OF WORK
Broderick and Bryte Via Transportation Pilot Program:

The City wishes to provide a pilot program to subsidize Via riders with free rides to and/or from the Broderick and Bryte neighborhoods.

The City will pay to NoMad Transit LLC up to $49,967.85 for fares to/from the Broderick and Bryte neighborhood. In lieu of rider payment for such rides, the City will pay to the Consultant the current per ride fares: $3.50 per ride for the general population and $1.75 per ride for Seniors/Disabled riders. All fares collected from the On-Demand Rideshare program shall be reinvested into ongoing operations and/or City approved expansions of the Program. The City will fully subsidize the Broderick and Bryte Transportation Pilot program fares separate from the regular rides, operations, and maintenance of the OnDemand Ridership Program.

The scope of this contract will cover the fares of the rides taken through the pilot program. The Consultant will provide monthly reports and status updates regarding the ridership to assist in determining trends in the ridership of the pilot program. This information includes but is not limited to, total number of requested rides, time of requested rides, senior/disabled ridership, new/existing Via signups who participate in the pilot.

Schedule:

The services described herein shall begin on November 1, 2022. The fare subsidy program shall end on June 30, 2023 or when the $49,967.85 for fare subsidy runs out, whichever comes first.

The City and/or NoMad Transit may amend the term associated and may, for good cause, request extensions of time to perform the services required hereunder. Such extensions shall be authorized in advance by the City in writing and shall be incorporated in written amendments to this Contract.
164
Service Area
The service area of the Broderick and Bryte neighborhoods will be confirmed by City staff. The general neighborhood boundaries are identified on the following map. 165

CITY COUNCIL AGENDA REPORT
MEETING DATE: October 19, 2022 ITEM # 13
SUBJECT:

CONSIDERATION OF RESOLUTION 22-95 APPROVING A PURCHASE AND SALE

AGREEMENT FOR THE SALE OF CITY-OWNED PROPERTY, A HOME LOAN

AGREEMENT, AND A CITY LOAN AGREEMENT FOR CONSTRUCTION AND LAND

ACQUISITION COSTS FOR THE PROPOSED WEST GATEWAY PLACE PHASE II PROJECT; AND RESOLUTION 22-96 AUTHORIZING AN APPROPRIATION OF HOME

INVESTMENT PARTNERSHIP PROGRAM FUNDS, AN APPROPRIATION OF HOUSING

TRUST FUNDS AND AN INTERFUND LOAN FROM THE GENERAL FUND TO FUND THE

DEVELOPMENT OF THE WEST GATEWAY PLACE PHASE II PROJECT

INITIATED OR REQUESTED BY: REPORT COORDINATED OR PREPARED BY:
[ ] Council [X] Staff
[ ] Other
Raul Huerta, Housing Manager
Economic Development & Housing
ATTACHMENT [X] Yes [ ] No [ ] Information [ ] Direction [X] Action

OBJECTIVE
The objective of this report is to facilitate the City Council’s consideration of Resolution 22-95 and Resolution 22-96 related to the development of the 60-unit West Gateway Place Phase II affordable housing development on city-owned property at 802 Delta Lane.

RECOMMENDED ACTION
Staff respectfully recommends that the City Council:

1. Adopt Resolution 22-95 (Attachment 1) approving a Purchase and Sale Agreement for the sale of city-owned property, a Home Loan Agreement, and a City Loan Agreement for construction and land acquisition costs for the proposed West Gateway Place Phase II Project; and

2. Adopt Resolution 22-96 (Attachment 2) authorizing an appropriation of HOME Investment Partnership Program funds, an appropriation of Housing Trust Funds and an Interfund Loan from the General Fund to fund the development of the West Gateway Place Phase II Project.

BACKGROUND
On July 18, 2018, the Council approved an Option Agreement with JHC-Acquisitions LLC (JHC) for the sale of a vacant City-owned site at 802/810 Delta Lane (WGP II Property; see Attachment 3 for location map) for the development of Phase II of West Gateway Place (WGP II). JHC has since transferred the option to Delta Lane Housing Partners II LP (DLHP II). The WGP II project will include 60 affordable housing units, including six family units that would specifically target families experiencing, or at risk of experiencing, homelessness (see Attachment 4 for design renderings). As with most affordable housing developments, several partners will be involved in coordinating the construction and operation of the WGP II project including, but not limited to, the State Department of Housing and Community Development’s (HCD) Multifamily Housing Program (MHP), HCD’s California Housing Accelerator (CHA) Program, and private lender CHASE.

The first phase of the affordable housing development on 820 Delta Lane was completed in January 2017 and provides 76 affordable units with 4,000 square feet of ground floor retail. The development contains a mix of one, two, and three bedrooms, and one unrestricted manager's unit. The first phase, named West Gateway Place, fulfilled a portion of the City's housing production obligation under the terms of the $23 million Prop 1C grant. To receive the Prop 1C grant, the City was required to commit itself to developing new high-density housing with an affordable component. The Prop 1C grant for the Bridge District is based on the commitment of the City and Bridge District property owners to develop 731 total units, including 531 market-rate units and 200 affordable units. The terms of the Prop 1C grant required the City to produce additional affordable housing on the remaining Delta Lane parcel. The WGP II project will complete the City’s remaining affordable housing obligations from the Prop 1C grant.

ANALYSIS
On December 11, 2019, the City committed $2,694,626 in local funds for the development of the WGP II project.

Additionally, the City committed a seller purchase money promissory note for JHC’s acquisition of the WGP II Property in the amount of $2,160,000 (based on a 2019 appraisal). The Property is now valued at $3,344,500 based on an appraiser’s estimate of value; a final appraisal will be received prior to close of escrow. Other major financing for the WGP II project include a 2019 award of MHP funds in the amount of $11,174,145, a 2022 award of CHA funds in the amount of $22,719,291, and deferred developer fee of $413,579. 166 Resolutions 22-96 and 22-96 for WGP II Project
October 19, 2022

Page 2 ends

Construction costs and funding needs for the WGP II were originally estimated prior to the COVID-19 pandemic.

Unfortunately, construction cost estimates were adversely impacted by cost inflation brought on by the pandemic.

The cost of construction materials normally increases annually due to inflation (an issue that contractors faced even prior to the pandemic). However, the inflation that accompanied the pandemic has been significantly different and has largely impacted construction costs. Furthermore, to bring down inflation running near its highest levels since the early 1980s, the Federal Reserve has increased interest rates since March 2022, the most recent in a range of 3%-3.25%, the highest it has been since early 2008. As a result, the WGP II project is now in need of an additional $4.5 million to cover increased construction cost estimates and increased interest rate costs. Given the importance of the WGP II development to increase the affordable housing stock in the City and the need to fulfill the City’s Prop. 1C affordable housing obligation, staff is recommending an additional City commitment of $4.5 million to ensure the development of WGP II.

The following is a breakdown of the funding sources for the WGP II project with the increased City commitment:

Source Amount
California Housing Accelerator Program $22,719,291
Multifamily Housing Program $11,174,145
Deferred Developer Fee $413,579
City Construction Funds (Housing Trust Fund & HOME PI) $7,194,626 City Land Carryback Loan $3,344,500
The exhibits to Resolution 22-95 include the Purchase and Sale Agreement related to the WGP II Property transaction and City loan documents for the development of WGP II. Additional exhibits to Resolution 22-95 include legal descriptions or other technical exhibits, but the following list of documents deal with the “business” terms of the project. The table below provides a summary of these documents.

Document Location Summary
Purchase & Sale
Agreement (PSA)
Resolution
Exhibit A
The PSA stipulates the terms of DLHP II’s purchase of the City-owned property and development of the WGP II project. DLHP II’s purchase price for the property is $3,344,500, which was based on an appraisal.

Mercy Housing will be required to close escrow at or before construction financing. The PSA requires that DLHP II construct the project according to the City’s approved design and includes other obligations of the parties related to property disposition/acquisition and project construction. The PSA requires DLHP II to commence construction within thirty (30) days of close of escrow and complete construction within 24 months of commencement of construction.

HOME Loan
Agreement
PSA
Exhibit K
HOME Program Income funds in the amount of $2,000,000 are being committed for WGP II. The HOME Loan has a 55-year term with a simple interest rate of three percent with repayment based on residual receipts. A Promissory Note and Deed of Trust for the HOME Loan are attached to the HOME Loan Agreement. Due to the nature of the WGP II Project serving extremely low to low-income households (30% to 60% Area Median Income), the probability of the project generating residual cash flow will be low.
167
Resolutions 22-96 and 22-96 for WGP II Project
October 19, 2022

Page 3 ends

Construction and
Land Loan
Agreement
PSA
Exhibit J
The Loan Agreement will cover the remaining City loan commitment for the development of WGP II, which includes $5,194,626 in construction funds and $3,344,500 as a land carryback loan. The Loan is in the amount of $8,539,126 and has a 55-year term with a simple interest rate of three percent with repayment based on residual receipts. A Promissory Note and Deed of Trust for the Loan are attached to the Loan Agreement. Due to the nature of the WGP II Project serving extremely low to low-income households (30% to 60% Area Median Income), the probability of the project generating residual cash flow will be low.

HOME Regulatory
Agreement
PSA
Exhibit K
The HOME Regulatory Agreement contains the HOME Program-specific provisions related to property management, maintenance, security, and ongoing operations of the project. It also includes a provision that requires the WGP II project to comply with the City’s Local Preference and Priority System Policy. The agreement places an affordable rent restriction on 10 of the units for 55 years, with rents ranging from 50-60 percent of Area Median Income.

Regulatory
Agreement
PSA
Exhibit J
The Regulatory Agreement contains the City’s standard provisions related to property management, maintenance, security, and ongoing operations of the project. It also includes a provision that requires the WGP II Project to comply with the City’s Local Preference and Priority System Policy. The Regulatory Agreement also includes unique provisions related to supportive services that will be provided to the six PSH families. The agreement places an affordable rent restriction on 59 of the 60 units for 55 years, with rents ranging from 30-60 percent of Area Median Income.

Parking Easement PSA
Exhibit E
The zoning administrator has determined that a total of 30 parking spaces are required for the WGP II project. The Parking Easement allows DLHP II to construct 21 of the 30 required parking spaces on property that will continue to be city-owned and is adjacent to the WGP II project.

The Parking Easement is for a 55-year term. The remaining 9 parking spaces will be on-street parking along Delta Lane.

Grant of Public
Utility Easement
PSA
Exhibit D
This Public Utility Easement grants the City access to certain area of property that will be sold to DLHP II for the WGP II project. The Public Utility Easement is for the purpose of construction, repair and maintenance of public utilities.
168
Resolutions 22-96 and 22-96 for WGP II Project
October 19, 2022

Page 4 ends

Easement for
Storm Drainage
PSA
Exhibit C
The Easement for Strom Drainage grants the City access to certain area of property that will be sold to DLHP II for the WGP II project. The Easement for Storm Drainage is for storm water and drainage purposes, allowing for digging, constructing, reconstructing, repairing, operating, upgrading, and forever maintaining a storm drainage pipeline.

Slope Easement
Agreement
PSA
Exhibit F
The Slope Easement Agreement grants DLHP II a perpetual, nonexclusive grading and slope easement for the construction of slopes, cuts and fills. The Slope Easement Agreement grants DLHP II the right to construct, reconstruct, repair, alter, change, patrol and maintain such slopes, cuts and files, including the right to construct or install retaining walls or plant shrubbery or vegetation to maintain the stability or such slopes and control erosion, and the right to remove any trees or vegetation which threaten slope stability, impair or obstruct sight lines from adjacent streets or highways, or produce or deposit debris onto the roadway or otherwise obstruct or threaten to obstruct the roadway.

CHASE
Subordination
Agreement
Resolution
Exhibit B
This agreement between the City and the project’s senior lender, CHASE Bank, provides for the subordination of the City’s gap financing loans to the bank loan.

Environmental Considerations
On July 18, 2018, the City Council made a finding that the WGP II development is consistent with the Bridge District Specific Plan Supplemental Environmental Impact Report (BDSP SEIR). The project is an implementation of a previous action and as a result, no further California Environmental Quality Act (CEQA) review is required pursuant to Public Resources Code, Section 21166 and CEQA Guidelines Section 15162.

Additionally, Environmental Assessment/Finding of No Significant Impact was prepared by the City as lead agency (delegated by HUD) pursuant to the National Environmental Policy Act.

Commission Recommendation
The development of affordable units on the Delta Lane site in two phases was presented to the Economic Development and Housing Commission during the planning for West Gateway Place Phase I and was supported by the Commission.

Strategic Plan Integration
This item is in support of the Council’s 2022 Strategic Plan goal to “Provide housing options for everyone and services for the most vulnerable members of society.”
Alternatives
The Council’s primary alternative to the recommended action is to not approve 22-95 and/or Resolution 22-96.

This alternative is not recommended because the WGP II project will not be able to proceed without approval of the purchase and sale agreement for the vacant City-owned site and loan documents. Additionally, the City continues to have a Prop 1C affordable housing obligation that will be met with the development of WGP II.

Coordination and Review
This report and the property transaction agreements were prepared in coordination with Planning Division staff, Finance Division staff and the City Attorney’s Office.
169
Resolutions 22-96 and 22-96 for WGP II Project
October 19, 2022

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Budget/Cost Impact
The City construction funds of $7,194,626 will be funded with an appropriation of unencumbered HOME Program Income funds of $2 million and unencumbered Housing Trust Funds in the amount of $5,194,626. Staff is requesting an interfund loan from the General Fund in an amount up to $364,653 to complete the Housing Trust Fund loan of $5,194,626. Additional revenues are expected from several developments that will be available to repay the loan, and depending on timing of those revenues and when funds are needed for this project, a loan may not be needed, or the final loan amount may be less than the amount authorized. Any loan from the onetime General Fund will be paid back as revenues are received in the Housing Trust Fund, at the LAIF (Local Agency Investment Fund) rate, essentially replacing lost interest (the interest the General Fund would have received if not for the loan). The interfund loan will be repaid from future in-lieu fee payments into the Housing Trust Fund from approved Affordable Housing Agreements which amount to $1.8 million. Additionally, the City will provide a carryback loan in the amount of $3,344,500 for the sale of the city-owned property for the WGP II development. These appropriations are more fully described in Resolution 22-96 included in this report as Attachment 2.

ATTACHMENT(S)

1. Resolution 22-95

2. Resolution 22-96

3. WGP II Location Map

4. WGP II Design Renderings
170
Attachment 1
RESOLUTION 22-95

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST SACRAMENTO

APPROVING A PURCHASE AND SALE AGREEMENT FOR THE SALE OF CITY-OWNED

PROPERTY, A HOME LOAN AGREEMENT, AND A CITY LOAN AGREEMENT FOR

CONSTRUCTION AND LAND ACQUISITION COSTS FOR THE PROPOSED WEST

GATEWAY PLACE PHASE II PROJECT
WHEREAS, the City is the owner of approximately 1.86 acres of vacant real property (the “City-owned Property”) located at 802 & 810 Delta Lane in the City of West Sacramento, County of Yolo, State of California, identified as APN 067-330-030; and WHEREAS, Delta Lane Housing Partners II LP, a California limited partnership (DLHP II), proposes to construct sixty (60) units of affordable housing targeting low-income households, including six units for households experiencing homelessness, chronic homelessness, or at risk of experiencing homelessness, (the “WGP II Project”) on a portion of the City-owned Property; and
WHEREAS, the City and JHC-Acquisitions LLC entered into an Option Agreement, dated July 18, 2018, to allow JHC-Acquisitions LLC to acquire the exclusive right to purchase a portion of the City-owned Property for the WGP II Project. JHC-Acquisitions LLC has since assigned the Option Agreement to DLHP II; and
WHEREAS, in accordance with the terms of the Option Agreement, the City and DLHP II wish to approve the form of the Purchase and Sale Agreement to effectuate DLHP II’s acquisition of a portion of the City-owned Property; and
WHEREAS, the City desires to lend DLHP II, and DLHP II desires to borrow from City, a loan of HOME Investment Partnerships Program (“HOME”) funds in the amount of $2,000,0000 to be used exclusively for the development of WGP II; and WHEREAS, the City and DLHP II wish to approve the HOME Loan Agreement and all its exhibits; and
WHEREAS, the City desires to lend DLHP II, and DLHP II desires to borrow from City, a second loan in the amount of $8,539,126, funded by Housing Trust Funds and a Land Carryback Loan; and
WHEREAS, the City and DLHP II wish to approve the City Loan Agreement for the second loan, and all its exhibits, to effectuate DLHP II’s acquisition of City-owned Property and development of WGP II; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of City of West Sacramento as the City, as follows:
1) The City Council hereby authorizes the City Manager, for, in the name of and on behalf of the City to do the following:
a. Execute Exhibit A, the Purchase and Sale Agreement and its exhibits substantially in the form as attached, with changes approved by the City Attorney.
b. Execute Exhibit B, the CHASE Subordination Agreement and its exhibits substantially in the form as attached, with changes approved by the City Attorney.
c. Execute any extinguishments, relinquishments, quitclaims, revisions, or modifications to the existing covenants or easements on the WGP II Property 171
Resolution 22-95

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that may be necessary or advisable, in his discretion, to implement the development of the WGP II project.
d. Execute any extinguishments, relinquishments, quitclaims, revisions, or modifications to existing covenants or easements related to Phase I of West Gateway Place that may be necessary or advisable, in his discretion, to implement the development of the WGP II project.
e. Execute and deliver any and all documents, do any and all things, and take any and all actions that may be necessary or advisable, in his discretion, in order to complete the transactions described herein.

PASSED AND ADOPTED by the City Council of City of West Sacramento as the City on this 19th day of October in the year 2022 by the following vote:

AYES:

NOES:

ABSENT:

Martha Guerrero, Mayor
ATTEST:
_
Jennifer Cusmir, City Clerk
172
Attachment 2
RESOLUTION 22-96

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST SACRAMENTO

AUTHORIZING AN APPROPRIATION OF HOME INVESTMENT PARTNERSHIP PROGRAM

FUNDS, AN APPROPRIATION OF HOUSING TRUST FUNDS AND AN INTERFUND LOAN

FROM THE GENERAL FUND TO FUND THE DEVELOPMENT OF THE WEST GATEWAY

PLACE PHASE II PROJECT
WHEREAS, the City is the owner of approximately 1.86 acres of vacant real property (the “City-owned Property”) located at 802 & 810 Delta Lane in the City of West Sacramento, County of Yolo, State of California, identified as APN 067-330-030; and WHEREAS, Delta Lane Housing Partners II LP, a California limited partnership (DLHP II), proposes to construct sixty (60) units of affordable housing targeting low-income households, including six units for households experiencing homelessness, chronic homelessness, or at risk of experiencing homelessness (the “WGP II Project”) on a portion of the City-owned Property; and
WHEREAS, the City and JHC-Acquisitions LLC entered into an Option Agreement, dated July 18, 2018, to allow JHC-Acquisitions LLC to acquire the exclusive right to purchase a portion of the City-owned Property for the WGP II Project. JHC-Acquisitions LLC has since assigned the Option Agreement to DLHP II; and
WHEREAS, in accordance with the terms of the Option Agreement, the City and DLHP II wish to approve the form of the Purchase and Sale Agreement to effectuate DLHP II’s acquisition of a portion of the City-owned Property; and WHEREAS, the City desires to lend DLHP II, and DLHP II desires to borrow from City, a loan of HOME Investment Partnerships Program (“HOME”) funds in the amount of $2,000,0000 to be used exclusively for the development of WGP II; and WHEREAS, the City desires to lend DLHP II, and DLHP II desires to borrow from City, a second loan in the amount of $8,539,126, of which $5,194,626 will be funded by Housing Trust (HT) Funds and $3,344,500 will be in the form of a land carryback loan; and WHEREAS, the available balance of HOME Program Income is sufficient to cover the HOME funds; and
WHEREAS, the available balance in the Housing Trust Funds are insufficient to cover the HT Funds; and
WHEREAS, an Interfund Loan from the General Fund in the amount up to $364,653 is needed to complete the $5,194,626 Housing Trust Funds, which will be paid from future inlieu payments into the Housing Trust Fund; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of West Sacramento as follows:

1. The City Council hereby approves an appropriation from the following funds:

SOURCES
$2,000,000 HOME Program Income (260-9805)
$4,829,973 Housing Trust Funds (261-9385)
$ 364,653 Interfund Loan from General Fund (107-9910)
$3,344,500 Land Carryback Loan
$10,539,126 Total Sources
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Resolution 22-96

Page 2 ends

USES
$2,000,000 HOME Loan (260-9805)
$8,539,126 HT Fund Loan & Land Carryback Loan (261-9385) $10,539,126 Total Uses

2. The interfund loan from the One-Time General Fund to the Housing Trust Fund shall be made in increments, when funds are required and unavailable in the Housing Trust Fund, in an amount up to $364,653. The loan shall be repaid as future revenues are received in the Housing Trust Fund, at the LAIF interest rate.

3. The City Council hereby finds that the facts set forth in the recitals to this Resolution are true and correct and establish the factual basis for the City Council’s adoption of this Resolution.

4. This Resolution shall take effect immediately upon its adoption.

PASSED AND ADOPTED by the West Sacramento City Council this 20th day of March, 2019, by the following vote:

AYES:

NOES:

ABSENT:

ATTEST:

Jennifer Cusmir, City
Clerk
Martha Guerrero, Mayor
174
Attachment 3
Site Location Map
175
Attachment 4
Approved Design Renderings
Front (along Tower Bridge Gateway)
Front (along Tower Bridge Gateway)
176
Attachment 4
Approved Design Renderings
Rear (along Delta Lane)
Rear (along Delta Lane)
177
1 2207916.10 7203.496

PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS
This Purchase and Sale Agreement and Joint Escrow Instructions (“Agreement”) is made ______________, 2022 (“Effective Date”), by the City of West Sacramento, a California municipal corporation (“City”), and Delta Lane Housing Partners II LP, a California limited partnership(“Developer”). City and Developer are referred to herein individually as a “Party” and collectively as “Parties.”

RECITALS
A. The City of West Sacramento as housing successor to the Redevelopment Agency of the City of West Sacramento currently owns fee title to certain parcels of real property consisting of approximately 1.86 acres located in the City of West Sacramento, County of Yolo (“County”), State of California (the “City Property”).

B. On July 18, 2018, the City and Developer entered into an Option to Purchase Real Property providing Developer an option to purchase a 0.975-acre portion of the City Property, as legally described in Exhibit A, attached hereto and incorporated herein (the “Property”), pursuant to the terms set forth therein, as amended by that certain Amendment to Option to Purchase Real Property dated December 11, 2019, a Second Amendment to Option to Purchase Real Property dated December 9, 2020, and a Third Amendment to Option to Purchase Real Property dated January 19, 2022 (collectively, the “Option”), for the purpose of developing an affordable housing project with a minimum of sixty (60) multifamily units targeting families earning between 30% of Area Median Income (“AMI”) to 60% AMI (the "Project").

C. In 2015, an affiliate of Developer, Delta Lane Housing Partners LP (“DLHP”), constructed the West Gateway Phase I project on adjacent real property. In connection therewith, on May 8, 2015, the City and DLHP entered into a Parking Easement Agreement (the “DLHP Easement”) for DLHP’s use of a portion of the City Property as a parking lot for its Phase I project parking, which easement was recorded on May 8, 2015, as Document No. 2015-0012371, in the Official Records of the Yolo County Recorder’s Office.

D. Developer has exercised its option to purchase the Property pursuant to the terms of the letter dated June 27, 2022, and as a result, the City intends to sell all of its rights, title and interest in the Property to Developer, and Developer intends to purchase from the City all of the City’s rights, title and interest in the Property, pursuant to the terms and conditions of the Option and this Agreement.

E. City and Developer acknowledge that development of the Project will fulfill a portion of the City's housing production obligation under the terms of a Proposition 1C infrastructure grant (the "Grant"). .

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein contained, and for other good and valuable consideration moving between the Parties, the City and Developer agree as follows:
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AGREEMENT

1. Sale of Property and Other Rights. The City agrees to sell and convey the Property to Developer and Developer agrees to purchase the Property from the City, subject to the terms and conditions set forth in this Agreement. For purposes hereof, the “Property” shall mean and include all buildings, structures, improvements, and fixtures located on the Property, all appurtenances thereto and all other intangible personal property owned by City in connection with the Property including, but not limited to, licenses, use, occupancy and operating permits, warranties and guarantees, development rights, plans, specifications, approvals, reports and studies relating to the Property. In addition, the parties will enter into the following easement transactions to occur concurrently with Close of Escrow:

1.1 DLHP Quitclaim Deed. Developer shall cause DLHP to record a quitclaim deed to remove the DLHP Easement from title as part of this transaction (the “DLHP Quitclaim Deed”), in the form attached hereto as Exhibit B, provided that the City complies with the terms of the DLHP Easement, including providing replacement parking under the terms contained therein.

1.2 Storm Drainage Easement. Developer shall grant to the City a storm drainage easement approximately 42,475 square feet in size, in the form attached hereto as Exhibit C (“Storm Drainage Easement”).

1.3 Lighting Utility Easement. Developer shall grant to the City a lighting utility easement in the form attached hereto as Exhibit D (“Utility Easement”).

1.4 Parking Easement. The City shall grant to Developer a parking easement for the use of twenty-one (21) parking spaces for the Project on City-owned adjacent property (the “OnSite Spaces”), in the form attached hereto as Exhibit E (“Parking Easement”).

1.5 Slope Easement. City shall grant to the Developer a slope easement in the form attached hereto as Exhibit F (“Slope Easement”).

2. Purchase Price. The purchase price to be paid by Developer to the City in connection with the sale of the Property and the above-described easement transactions is ______________________ Dollars ($___________________) (the “Purchase Price”), broken down as follows: $________________ for fee title to the Property, plus $_________________ for the Parking Easement and $__________________ for the Slope Easement provided to the Developer, less $_______________ for the Storm Drainage Easement provided to the City, less $_________________ for the Utility Easement to the City. The Purchase Price shall be financed by the City through a residual receipt note in accordance with the terms set forth in Section 11.2 herein.

3. Escrow. Escrow has been opened with First American Title Insurance Company (“Escrow Holder”). This Agreement shall, to the extent possible, act as escrow instructions. The Parties agree to execute all further escrow instructions required by Escrow Holder, which further instructions shall be consistent with this Agreement. In the event of any conflict or inconsistency between this Agreement and any further escrow instructions, the terms of this Agreement shall control.

4. Closing. “Close of Escrow” is the date the Grant Deed, attached hereto and incorporated herein as Exhibit G, conveying the Property from the City to Developer, is recorded in the Office 179
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of the Yolo County Recorder, which shall occur on or before November 9, 2022, or other date mutually agreed by the parties in writing.

5. Title. The City has provided Developer with a preliminary title report covering the legal parcel(s) containing the Property issued by Escrow Holder (the “Preliminary Report”), along with legible copies or links thereto of all recorded documents shown as exceptions to title in the Preliminary Report and a map containing any easement, rights-of-way, license, or other real property rights encumbering the Property to the extent available. Developer shall approve or disapprove any exceptions to title shown on the Preliminary Report in writing within fifteen (15) days after the Effective Date. The City shall notify Developer in writing of whether the City is willing to remove the items disapproved by Developer within thirty (30) days after receipt of Developer's title objections; provided, however, that the City shall remove, by or at the Closing, all monetary liens, if any (excluding only the lien for non-delinquent real property taxes and assessments). If the City does not agree to remove any one or more of such disapproved exceptions prior to the expiration of the 15-day period, Developer shall have the choice of: (i) terminating this Agreement and the Escrow, in which event Developer's Initial Deposit shall be returned and neither the City nor Developer shall have any further rights or obligations under this Agreement except for those expressly surviving such termination; or (ii) waiving such objection and completing the purchase called for in this Agreement with such disapproved exception(s) listed as exceptions on the title policy to be issued to Developer at Closing. If after expiration of the Feasibility Period any additional items appear which would show as exceptions to title insurance in the title policy, and the City fails to agree to remove the same within (5) days after Developer's notification to the City of the same, Developer may terminate this Agreement, upon which: (i) the City and Developer shall execute and deliver to Escrow Holder cancellation instructions and all other documents that are reasonably required by Escrow Holder and/or the City in order to cancel this Escrow and release any interest of Developer in and to the Property; (ii) the Escrow Holder shall release any Deposits to Developer; (iii) Escrow Holder shall return all documents to the applicable party, and (iv) neither party shall have any rights or obligations arising out of this Agreement, except as otherwise set forth in this Agreement.

6. As-Is Property Condition.

6.1 Developer acknowledges and agrees that except as otherwise expressly provided in this Agreement, to the maximum extent permitted by law, the sale of the Property is made on an "As Is," "Where Is" condition and basis with all faults and that the City has no obligation to make repairs, replacements, or improvements thereto. The Purchase Price and the terms and conditions set forth herein are the result of arms-length bargaining between entities familiar with transactions of this kind. Developer further acknowledges and agrees that, except as otherwise expressly provided in this Agreement, the City has not made, does not make, and specifically negates and disclaims, any representations, warranties, promises, covenants, agreements, or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present or future, of, as to, concerning, or with respect to (a) the value of the Property; (b) the income to be derived from the Property; (c) the suitability of the Property for any and all activities and uses which Developer may conduct thereon, including the possibilities for future development of the Property; (d) the habitability, merchantability, marketability, profitability or fitness for a particular purpose of the Property; (e) the manner, quality, state of repair or lack of repair of the Property; (f) the nature, quality or condition of the Property, including, without limitation, the water, soil and geology; (g) the compliance of or by the Property or its operation with any laws, rules, ordinances or regulations of any applicable governmental authority or body; (h) the manner or quality of the construction or materials, if any, incorporated into the Property; (i) compliance with any environmental protection, pollution or land use laws, rules, regulations, orders or 180
4 2207916.10 7203.496
requirements; (j) the presence or absence of Hazardous Materials, as defined in Section 15.4 below, at, on, under or adjacent to the Property; (k) the content, completeness or accuracy of any materials obtained by Developer in its investigation of the Property, including, without limitation, any title report issued by the Escrow Holder; (l) the conformity of any improvements on the Property, if any, to any plans or specifications of the Property, including any plans and specifications that may have been or may be provided to Developer; (m) the conformity of the Property to past, current or future applicable zoning or building requirements; (n) deficiency of any drainage; (o) the fact that all or a portion of the Property may be located on or near an earthquake fault line; (p) the land use status of the Property, zoning status, subdivision status under the California Subdivision Map Act or the subdivision ordinances of the City or the status of any other governmental entitlement; (q) any documents pertaining to the Property provided by the City to Developer, except for the completeness of such Property documents; or (r) with respect to any other matter.

6.2 Developer acknowledges that Developer is conducting its own investigation of the Property, and Developer is relying solely on such investigations, inspections and evaluations of such Property in making its decision to consummate the transaction contemplated by this Agreement, and not on any information provided or to be provided by the City, other than that the City has delivered true, correct and complete copies of the Property Documents. Developer hereby expressly acknowledges that Developer shall be solely responsible for determining the status and condition of the Property, including land use, zoning, building and other governmental regulations, and the physical, geological and environmental conditions. Except as expressly provided for in this Agreement or any written amendment or supplement hereto executed and delivered by the City, the City shall not be liable or bound in any manner by any oral or written statements, representations or information pertaining to the Property, or the operation thereof, furnished by any real estate broker, agent, employee or any other person.

6.3 Release. Except for City’s fraud or a breach of any representation, warranty or covenant contained herein, Developer, on behalf of itself and its agents, heirs, successors and assigns, hereby waives, releases, acquits and forever discharges and releases the City of and from any and all claims, actions, causes of actions, demands, rights, damages, costs, expenses or compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, which Developer or any of Developer’s heirs, successors, or assigns now has or which may arise in the future on account of or in any way related to or in connection with any past, present or future aspect, feature, characteristic, circumstance or condition arising out of or in connection with the Property (including, without limitation, the items listed in Section 6.1 and 6.2 above), and Developer specifically waives the provisions of California Civil Code section 1542 which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,

AND THAT, IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY

AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
____________________
Developer’s Initials

7. Property Inspection and Feasibility Period.

7.1 Property Documents. The City has provided Developer copies of all documents relating to the Property that are in its possession or under its control, including, without limitation, 181
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the following: (i) relevant studies, documents, land surveys, soils reports, licenses, permits, maintenance contracts, utility contracts, management contracts, service contracts, warranties, ADA compliance, Field Act compliance, approvals, and other documents and/or contracts pertaining to the Property, together with any amendments or modifications; (ii) any and all information that the City has regarding environmental matters affecting the Property and regarding the condition of the Property, including, but not limited to, Phase I and/or Phase II Environmental Assessments, wetlands, structural, mechanical and soils conditions, the presence and location of asbestos, PCB transformers, other toxic, hazardous or contaminated substances, and underground storage tanks in, on, or about the Property; (iii) copies of leases and relative correspondence; (iv) copies of all building plans, including any “as-built” drawings; (v) copies of all building permits, licenses and inspections issued by governmental agencies; and (vi) any other documents materially relative to the condition and/or value of the Property and the Parties' rights and duties under the Agreement (collectively, “Property Documents”). Notwithstanding the foregoing, the City shall have no obligation to cause any of the Property Documents to be created or produced if such document does not already exist.

7.2 Feasibility Period. From the Effective Date through September 31, 2022 (the “Feasibility Period”), Developer may undertake at Developer’s expense inspection and review of the Property, including, but not limited to, reasonable non-destructive inspections, investigations, tests, copies, verifications, assessments, surveys and studies as Developer considers reasonably necessary or desirable under the circumstances regarding the Property and its condition, which may include, without limitation, inspections regarding zoning, building codes and other governmental regulations; imposition of governmental obligations and assessments; architectural inspections; engineering tests; economic feasibility and marketing studies; availability of sewer, water, storm drain and other utilities; availability of roads, access and services; soils, seismic, engineering and geologic reports; environmental assessments (including, but not limited to, soil borings during a Phase II environmental assessment), studies, tests and reports; structural and mechanical systems inspections; and availability of permits, land use entitlements, development rights and approvals and other governmental approvals. All inspections shall be made at Developer’s sole cost and expense and shall not unreasonably interfere with the City’s use of the Property.

7.3 Access. Access to the Property from the Effective Date through the Close of Escrow shall be given to Developer, its agents, employees, consultants, or contractors during normal business hours at reasonable times upon at least one (1) business days' notice to the City, at Developer’s own cost and risk, for the purpose of conducting its due diligence investigation of the Property as set forth in Section 7.2. Developer shall restore the Property as a result of such investigations, and return the affected portion of the Property to its condition immediately prior to such investigation. Developer shall repair any damage to the Property caused by any of its inspections. Developer shall indemnify and defend the City against and hold the City harmless from all losses, costs, damages, liabilities, and expenses arising out of negligent or willful acts by Developer or its agents, employees, consultants, or contractors on the Property in connection with Developer’s entry onto the Property or any activity thereon prior to the Close of Escrow except to the extent any such losses, costs, damages, liabilities, and expenses arise out of any negligent or willful act of the City or the City’s agents, employees or contractors; provided however, Developer’s discovery of or impact on an adverse condition or defect on or affecting the Property shall not trigger Developer’s indemnification obligations. Developer’s obligation to indemnify and defend the City shall survive closing or any other termination of this Agreement.

7.4 Insurance. Prior to its first entry onto the Property and at all times thereafter until Close of Escrow, Developer shall maintain commercial general liability insurance covering the 182
6 2207916.10 7203.496
activities of Developer on the Property. Such insurance shall have a per occurrence limit of at least One Million Dollars ($1,000,000) and an aggregate limit of at least Two Million Dollars ($2,000,000), shall name the City as additional insured, shall be primary and noncontributing with any other insurance available to Developer, and shall be issued on an occurrence basis. Prior to any entry on to the Property by Developer or its agents, employees, consultants, or contractors, Developer shall furnish the City with a certificate of such insurance in form and substance reasonably acceptable to the City.

7.5 Termination. Developer may either give the City written notice that Developer (i) approves the condition and suitability of the Property, or (ii) disapproves the condition or suitability of the Property for any reason or no reason, which notice must be received by the City no later than 5:00 p.m. on the first business day after the expiration of the Feasibility Period. In the event that Developer fails to timely approve the condition and suitability of the Property pursuant to (i) above, such failure shall be deemed to be a disapproval of the condition and suitability of the Property in accordance with (ii) above. In the event Developer disapproves or is deemed to have disapproved the condition and suitability of the Property pursuant to this Section 7.5, this Agreement shall terminate automatically, and: (i) the City and Developer shall execute and deliver to Escrow Holder cancellation instructions and all other documents that are reasonably required by Escrow Holder and/or the City in order to cancel this Escrow and release any interest of Developer in and to the Property; and (ii) Escrow Holder shall return all documents to the applicable Party. If this Agreement is terminated or deemed terminated pursuant to this Section

7.5, then neither Party shall have any rights or obligations arising out of this Agreement, except as otherwise set forth in this Agreement.

8. City Approvals.

8.1 Effectiveness and CEQA and NEPA Compliance. In approving the Option Agreement, the City Council determined that the environmental impacts of the Project were fully analyzed in the Bridge District Supplemental Environmental Impact Report previously certified by the City Council, and that further environmental review under the California Environmental Quality Act ("CEQA") is not required. An environmental assessment was completed on September 21, 2022, to comply with the requirements of National Environmental Policy Act ("NEPA").

8.2 Design Plans. Developer provided preliminary plans for the Project to the City on December 17, 2021. Thereafter, Developer provided the City, for the City’s approval, final Project design plans, which included all construction plans, drawings, specifications and other documents required to obtain all required building permits and any other government approvals for the construction of the improvements (the "Design Plans"). The Design Plans shall be approved by the City by the date shown in the Schedule of Performance attached as Exhibit H. Developer's site utilities and grading plans shall be submitted for City approval by the date shown in the Schedule of Performance. The Design Plans shall at all times conform, in all material aspects, with the approved preliminary plans and the Project scope, and incorporate all related mitigation measures required for compliance with CEQA and NEPA approvals. Any changes to the Design Plans shall be submitted for approval to the City, and the City shall either approve or disapprove the submitted revised Design Plans within thirty (30) days of the date received by the City. This sequence shall continue until such time as the Design Plans are approved by the City, prior to Close of Escrow.

8.3 Property Management Plan. Developer shall provide the City with an initial property management plan for the City’s approval ("Property Management Plan") by the date shown in the Schedule of Performance, which approval shall not be unreasonably withheld. If the 183
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City requires modifications to the Property Management Plan, the City shall notify Developer of the desired revisions within thirty (30) days thereafter. Developer shall submit a revised Property Management Plan to the City, and the City shall either approve or disapprove the submitted revised Property Management Plan within thirty (30) days of the date received by the City, which approval shall not be unreasonably withheld. This sequence shall continue until such time as the Property Management Plan is approved by the City.

8.4 Financing Plan. Developer shall provide, for the City's approval, a financing plan for the Project identifying all financing sources for design and construction of the Project ("Financing Plan") by the date shown in the Schedule of Performance. The Financing Plan shall include a budget/proforma showing sources and uses of funds, and shall include adequate reserves. If the City requires modifications to the Financing Plan, the City shall notify Developer of the desired revisions within thirty (30) days thereafter. Developer shall submit a revised Financing Plan to the City, and the City shall either approve or disapprove the submitted revised Financing Plan within thirty (30) days of the date received by the City, which approval shall not be unreasonably withheld. This sequence shall continue until such time as the Financing Plan is approved by the City, prior to Close of Escrow.

8.5 Parking Management and Maintenance Plan. Developer shall provide the City with an initial parking management and maintenance plan for the City’s approval ("Parking Management Plan") by the date shown in the Schedule of Performance, which approval shall not be unreasonably withheld. The plan shall contain details of Developer's plan for the management of the twenty-one (21) On-Site Spaces located on adjacent City-owned property and nine (9) offsite parking spaces located within the Delta Lane right-of-way (the “Off-Site Spaces”)for the Project. In addition, the plan shall contain details of Developer's plan for maintenance of the offsite parking area. If the City requires modifications to the Parking Management Plan, the City shall notify Developer of the desired revisions within thirty (30) days thereafter. Developer shall submit a revised Parking Management Plan to the City, and the City shall either approve or disapprove the submitted revised Parking Management Plan within thirty (30) days of the date received by the City, which approval shall not be unreasonably withheld. This sequence shall continue until such time as the Parking Management Plan is approved by the City, which shall occur no later than by issuance of a certificate of occupancy. .

8.6 Design and Construction Contracts. Developer shall provide the City contract(s) for the general contractor and architect for the City’s approval ("Contracts") as soon as practicable after the Effective Date, which approval shall not be unreasonably withheld. If the City requires modifications to the Contract(s), the City shall notify Developer of the desired revisions within thirty (30) days thereafter. Developer shall submit revised Contract(s) to the City, and the City shall either approve or disapprove the submitted revised Contract(s) within thirty (30) days of the date received by the City, which approval shall not be unreasonably withheld. This sequence shall continue until such time as the revised Contract(s) are approved by the City, prior to Close of Escrow.

8.7 Senior Loan Documents and Other Financing Documents. Developer shall provide the City all senior lender construction loan documents and any other financing documents from other lenders or investors for the Project as soon as practicable after the Effective Date. The financing documents shall be reasonably approved by the City Manager and shall comply in all material respects with this Agreement.
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9. Insurance.

9.1 Developer shall maintain a general liability insurance policy in the minimum amount of One Million Dollars ($1,000,000) to cover any claims arising out of Developer’s performance under this Agreement. The insurance policy shall: (i) name the City as additional insured, (ii) provide that the insurance carrier shall not cancel or terminate said policy except upon thirty (30) days’ prior written notice (ten (10) days for nonpayment of premium) to the City, and (iii) be evidenced by an original Certificate of Insurance accompanied by an original endorsement, approved as to form and sufficiency by the City. If Developer employs any person, it shall carry workers compensation insurance and shall provide a Certificate of Insurance to the City. Said insurance shall provide that the insurance carrier shall not cancel or terminate said insurance except upon thirty (30) days’ prior written notice to the City (ten (10) days for nonpayment of premium). General liability and workers compensation insurance shall be maintained for the full term of this Agreement.

9.2 Developer shall procure and maintain, for the duration of the Construction Contract, Course of Construction or Builder’s Risk insurance providing coverage for “all risks” of loss in the amount of the completed value of the Project. Said insurance policy shall name the City as a loss payee and the insurer shall waive all rights of subrogation against the City.

9.3 Developer shall ensure that the General Contractor purchases and continuously maintains statutory workers’ compensation insurance, comprehensive general liability, and automobile liability insurance which policies shall name the City as an additional insured.

9.4 Upon completion of the Project, Developer shall procure and maintain for the full term of the City's Construction Loan, property insurance against the perils of fire and extended coverage perils for the full replacement cost of the Project. Said policy shall name the City as loss payee.

10. Completion Guaranty. Concurrently with the Close of Escrow, Developer shall cause the Completion Guaranty, in the form attached as Exhibit I, to be executed and delivered to City by Jamboree Housing Corporation to guaranty the construction and completion of the Project.

11. Financing of the Project.

11.1 Developer Financing. Except as otherwise set forth herein, Developer shall be responsible for, and pay, all costs of developing the Project and constructing all Project improvements. Developer intends to finance the Project through a combination of a construction loan, City financial support, a Multifamily Housing Program (MHP) award of $11,174,145 and a California Housing Accelerator (CHA) Program award of $22,719,291, which shall be set forth in the Financing Plan.

11.2 City Loans. City shall provide Developer with two loans in the total amount of ______________________________ Dollars ($_____________) (the "City Loans") through two promissory notes (the "City Notes") in the amounts set forth below, secured by deeds of trust recorded against the Property (the "City Deeds of Trust"). The City Notes and City Deeds of Trust are to be executed by Developer and submitted to Escrow Holder prior to Close of Escrow. The various City Loans and City Notes are set forth as follows:

11.2.1 City Construction/Property Loan. A loan in the amount of ______________________ Dollars ($________________) (the "Construction Loan") evidenced 185
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by a loan agreement ("Construction Loan Agreement"), with a residual receipts promissory note for a term of fifty-five (55) years at simple three percent (3%) annual interest (the "Construction Note"), secured by a deed of trust (the "Construction Deed of Trust"). The Construction Loan is also subject to a Regulatory Agreement ("City Regulatory Agreement"). The form of Construction Loan Agreement with attached Construction Note, Development Deed of Trust, and Regulatory Agreement are attached hereto as Exhibit J. The Construction Loan consists of Four Million Three Hundred Ninety-Four Thousand Six Hundred Twenty-Six Dollars ($4,394,626) in City housing funds, and the value of the Purchase Price.

11.2.2 HOME Loan. A loan (the "HOME Loan") in the amount of One Million Eight Hundred Thousand Dollars ($1,800,000) funded from the HOME investment Partnerships Program (“HOME Program”) evidenced by a loan agreement ("HOME Loan Agreement"), with a residual receipts promissory note for a term of fifty-five (55) years at simple three percent (3%) annual interest (the "HOME Note"), secured by a deed of trust (the "HOME Deed of Trust"). The HOME Program also requires a Regulatory Agreement ("HOME Regulatory Agreement"). The form of HOME Loan Agreement with attached HOME Note, HOME Deed of Trust, and HOME Regulatory Agreement are attached hereto as Exhibit K. The City Regulatory Agreement and the HOME Regulatory Agreement are collectively referred to herein as the “Regulatory Agreements.”

12. Project Development.

12.1 Minimum Project Requirements. The Project will be comprised of two buildings connected by a central courtyard and walkway and includes approximately 69,537 square feet, which includes a mix of 27 one-bedroom units, 18 two-bedroom units and 15 three-bedroom units, and up to 30 parking spaces. Other spaces include a lobby‐reception and teen lounge area, multi‐ purpose room with a kitchen, several offices for property management and supportive service providers, fitness room, bike storage, laundry facility, men’s and women’s restrooms, mechanical and electrical rooms, maintenance room, trash room, stairs and elevators. There are up to 30 total parking spaces serving the Project.

12.2 Project Timeline for Construction and Completion. Developer shall close on its financing and pull building permits for the Project no later than the date shown on the Schedule of Performance. Developer shall begin Project construction immediately upon Close of Escrow, and shall substantially complete the construction of the Project and obtain a Certificate of Occupancy in accordance with the Schedule of Performance.

12.3 Development of Project. Developer shall construct the Project according to the requirements established in this Agreement, including, but not limited to, the Schedule of Performance and the final plans, as well as all other City of West Sacramento project application review and approval procedures including, but not limited to, as applicable, review and approval by the City Planning Commission and the City Council.

12.4 Diligence. Upon the satisfaction of the City’s Closing Conditions set forth in Section 13.1 below and Developer's receipt of building permits for the Project, Developer shall commence and diligently prosecute to completion the construction of the Project. Developer shall at all times provide such fences, warning devices, barricades and other protective devices as necessary to protect the public from death, physical injury, or property damage arising out of, or in any way connected with, Developer’s construction on the Property. Developer shall prosecute such construction work in accordance with all applicable laws and regulations and any reasonable 186
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requirement of the City. Developer shall comply with all grant requirements relating to funding sources for the Project.

12.5 Right to Observe and Inspect. During the period of construction, the City or its agent may enter upon the Property for the purpose of observing the Property and the construction of the Project. Said entry and observation shall not unreasonably interfere with the course of construction. City shall have no responsibility to Developer or users of the Property for the quality or durability of construction materials and techniques, or for the design or construction techniques employed by Developer.

12.6 Taxes and Assessments. Subject to the availability of any statutory exemptions, including the welfare exemption pursuant to Section 214g of the California Revenue and Taxation Code, Developer shall pay all required property taxes and assessments, including, but not limited to, flood assessment, and Developer agrees that such taxes are the sole responsibility of Developer and the subsequent owners of the Project. Developer shall pay all such taxes and assessments when due.

12.7 Prevailing Wages. Developer acknowledges that the Infrastructure Work is subject to the payment of prevailing wages pursuant to either California's prevailing wage laws (Labor Code sections 1720, et seq.) or federal prevailing wage laws under the Davis Bacon Act ,as amended (40 U.S.C. 276a-5), and agrees that it shall cause all work performed in connection with the Infrastructure work to be performed in compliance with any applicable state or federal prevailing wage laws. Developer also acknowledges that the rest of the Project is subject to the payment of prevailing wages pursuant to California’s prevailing wage laws (Labor Code sections 1720, et seq.), and agrees that it shall cause all work performed in connection with the Project to be performed in compliance with any applicable state prevailing wage laws pursuant to Labor Code sections 1720, et seq. and the regulations pursuant thereto. In the event Developer fails to comply with applicable prevailing wage laws, Developer shall be liable for the payment of all penalties, wages and/or damages resulting therefrom, and shall defend, indemnify and hold the City harmless for any violations or alleged violations of prevailing wage laws.

12.8 Offsite Public Improvements. Developer, shall at Developer’s expense, undertake and complete any modification, construction, relocation or improvement of public facilities, improvements and utilities on or for the development of the Property, which shall include, but not be limited to, the installation of curbs, gutters and sidewalks, landscaping, utility connections, and the undergrounding of the existing utility boxes within the existing sidewalk area, per the Bridge District Specific Plan and the City's zoning code and the conditions of the May 17, 2021 design review approval letter development standards. Developer shall also be responsible for demolition of any structures, grading, and relocation of the force main.

12.9 Permits and Fees. Developer shall be responsible for payment of all required City, County and State permits and fees.

12.10 Sustainable Design and Construction. Developer will use its commercially reasonable efforts to incorporate sustainable design and construction practices into the Project, in accordance with LEED ND Silver certification levels and will be required to follow the California Building Code (CBC) CALGreen standards.

12.11 Mitigation Under CEQA and NEPA. Developer, at Developer’s cost, shall comply with all measures, if any, required under the environmental document prepared to satisfy the CEQA and NEPA requirements to mitigate negative impacts of the Project. 187
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12.12 Mechanic's liens. Developer shall not suffer or permit any mechanic’s lien, lis pendens, or other lien to be filed against the Property, nor against Developer’s interest in the Property, nor against the improvements on the Property. If any such lien is filed, Developer shall cause the same to be removed, or post a bond or other security, within thirty (30) days of notice of said lien, in a manner satisfactory to the City. The obligation and the right to defend these matters shall be with Developer in the first instance.

12.13 Execution, Delivery and Recordation of Development Regulatory Agreement.

12.13.1 Covenants Regarding Use and Nondiscrimination. Developer shall execute, in recordable form, the Regulatory Agreements, which contains covenants regarding use and maintenance of the Property for Project and prohibiting discrimination on the Property.

12.13.2 Recordation of Regulatory Agreement. At Close of Escrow, the Regulatory Agreements shall be recorded and shall be subject only to encumbrances existing on the Property as of the Effective Date of this Agreement as well as all senior construction loan documents. The City agrees to execute, and record at Developer’s cost, subordination agreements to subordinate the Regulatory Agreements to Developer’s construction and/or permanent loans for the Project if (a) such construction and/or permanent financing is provided by (i) the Department of Housing and Community Development (“HCD”), the California Housing Financing Agency (“CalHFA”), HUD, or other public senior lender which requires by statute or regulation that regulatory agreements with subordinate or local public entities be subordinated, or (ii) subordination of the Regulatory Agreement is required for the HOME Program, or (b) Developer demonstrates to the City that, compared to financing available to Developer if the Regulatory Agreement is subordinated, financing without such subordination will be offered on less favorable terms. In all cases, the City shall be entitled to notice and cure rights customary in affordable housing projects financed by these methods.

12.14 Bonds or Letter of Credit.

12.14.1 Prior to the commencement of construction of the improvements, Developer's general contractor shall furnish the City with documentation of either payment and performance bonds as described below (the "Bonds") or a letter of credit (“Letter of Credit”). The Bonds shall be issued by a corporate surety meeting all of the following criteria: (i) the surety shall be admitted in California; (ii) the surety shall be listed by the Financial Management Service of the United States Treasury on Circular 570; and (iii) that the surety be rated at least "A" by A.M.

Best Company. The Bonds shall be secured in an amount not less than the cost of the construction of the improvements and shall remain in effect until the entire cost of developing the improvements shall have been paid in full and the improvements shall have been completed in accordance with this Agreement, and a Certificate of Occupancy issued by the City of Yolo. The Bonds shall name Developer and the City as dual obligees.

12.14.2 The Bonds shall be in a form satisfactory to the City and shall state the following:
(a) That it is issued to secure the completion of the construction of the improvements on the Property, free from all liens and claims of contractors, subcontractors, mechanics, laborers, and suppliers;
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(b) That the payment bond shall be in a sum not less than one hundred percent (100%) of the total amount payable under the terms of the contract between Developer and its general contractor;
(c) That the improvements shall be completed by the general contractor or, on its default, by the surety;
(d) That the surety will defend and indemnify the City, State and City of Sacramento against all loss, cost, damage, expense, and liability arising out of or connected with the construction of the improvements on the Property;
(e) That the surety waives timely notice of any default of any provision of this Agreement and of any extension of time for performance, or any change of scope of performance, under this Agreement; and
(f) The City may, but shall not unreasonably, disapprove the form of the Bond. A Bond meeting all of the criteria above shall be deemed approved unless written notice of disapproval is given within thirty (30) days after receipt of the proposed bond.

12.14.3 The Letter of Credit shall be issued by a state or federally chartered bank for the benefit of the first lien construction lender in an amount not less than 10% of the amount of the construction contract and be in a form and content approved by the City, which approval will not be unreasonably withheld.

12.15 Certificate of Compliance. After the City has determined that Developer has completed the Project improvements in accordance with Developer's obligations under this Agreement and the construction documents, the City will furnish Developer with a “Certificate of Compliance” certifying such completion. Such certification shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement, with respect to the obligations of Developer to construct the Project improvements. Such certification is not a "Certificate of Occupancy", and shall not constitute evidence of compliance with or satisfaction of any governmental requirements, or any obligation of Developer to any lender or any insurer of a lender mortgage.

13. Conditions of Closing.

13.1 City’s Conditions of Closing. The obligations of the City under this Agreement to close the sale and convey the Property to Developer are subject to satisfaction of all of the conditions set forth in this Section 13.1. City may waive any or all of such conditions in whole or in part, but any such waiver shall be effective only if made in writing. No such waiver shall constitute a waiver by the City of any of its rights or remedies if Developer defaults in the performance of any covenant or agreement to be performed by Developer under this Agreement or if Developer breaches any representation or warranty made by Developer in this Agreement.

If any condition set forth in this Section 13.1 is not fully satisfied or waived in writing by the City, then the City shall be released from all obligations to Developer under this Agreement.

13.1.1 City’s approval of all items in Sections 8.1, 8.2, 8.4, 8.6, and 8.7 of this Agreement;

13.1.2 City’s approval of Developer's loan documents with senior lenders; 189
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13.1.3 Developer's delivery into Escrow the executed original City Notes, City Deeds of Trust, Regulatory Agreements, Completion Guaranty, Parking Easement Agreement, and the other easements described in Section 12.11 herein;

13.1.4 Developer's delivery into Escrow all other documents or instruments required by this Agreement, including but not limited to any documents required by the HOME Program;

13.1.5 Developer's delivery into Escrow all escrow and title costs and fees apportioned to Developer;

13.1.6 Developer’s delivery to the City and the City’s approval of evidence of insurance in accordance with Section 9 herein;

13.1.7 Developer’s delivery of copies, or written evidence satisfactory to the City, of the receipt of all approvals, entitlements and permits necessary for the development of the Property and Project;

13.1.8 Developer’s delivery of copies, or written evidence satisfactory to the City, of all funding commitments necessary for the development of the Project;

13.1.9 Developer’s representations and warranties are correct in all material respects as of the date of this Agreement and as of the Close of Escrow;

13.1.10 Developer has exercised its option to purchase the Property in conformance with the Option;

13.1.11 Developer performs all obligations under this Agreement and the related documents executed or to be executed by Developer; and

13.1.12 Developer shall not be in default of any provision of this Agreement or of any other agreement between the Parties.

13.2 Developer’s Conditions of Closing. The obligations of Developer under this Agreement to purchase the Property and accept title from the City are subject to satisfaction of all of the conditions set forth in this Section 13.2. Developer may waive any or all of such conditions in whole or in part, but any such waiver shall be effective only if made in writing. No such waiver shall constitute a waiver by Developer of any of its rights or remedies if the City defaults in the performance of any covenant or agreement to be performed by the City under this Agreement or if the City breaches any representation or warranty made by the City in this Agreement. If any condition set forth in this Section 13.2 is not fully satisfied or waived in writing by Developer, then Developer shall be released from all obligations to the City under this Agreement and Developer's Deposits shall be returned.

13.2.1 At Close of Escrow, Developer is conveyed good and marketable title to the Property, subject only to the exceptions previously approved by Developer in accordance with Section 5 herein;

13.2.2 City's delivery into Escrow funds in the amount of the Construction Loan and the HOME Loan;
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13.2.3 City's delivery into Escrow all escrow and title costs and fees apportioned to the City;

13.2.4 City's delivery into Escrow all documents or instruments required by this Agreement;

13.2.5 City’s representations and warranties are correct as of the date of this Agreement and as of the Close of Escrow;

13.2.6 City performs all obligations under this Agreement and the related documents executed or to be executed by the City;

13.2.7 Prior to Close of Escrow, Developer shall have received evidence that Escrow Holder’s title insurer (“Title Company”) has irrevocably committed to issue, upon payment of Title Company's regularly scheduled premium, an ALTA extended coverage owner's policy of title insurance (“Title Policy”) in the face amount of the Purchase Price with the endorsements Developer may require, showing title to the Property (including the Right-of-Way Areas) vested in Developer, subject only to the Permitted Exceptions and such other exceptions as may be approved in writing by Developer; and

13.2.8 Developer’s receipt of all approvals, entitlements and permits necessary for the development of the Property and Project based upon Developer's timely applications and requests for same.

14. Close of Escrow.

14.1 Costs and Fees. Charges and expenses incurred in this transaction are to be borne by the Parties as follows:

14.1.1 The Parties shall equally divide the Escrow Holder’s fees.

14.1.2 City shall pay the cost of the CLTA Title Policy and Developer shall pay the cost of any endorsements and any additional costs for an ALTA Title Policy and any ALTA survey.

14.1.3 City shall pay any city and county transfer taxes applicable to the transfer of title at Close of Escrow.

14.1.4 Any miscellaneous costs shall be borne by the Parties according to custom in Yolo County.

14.1.5 All other income and expenses related to the Property, including nondelinquent real property taxes and assessments shall be prorated to the Closing Date.

14.1.6 In the event of any termination of this Agreement or the failure of Escrow to close due to a default of a party, as provided herein, then the defaulting party shall pay any cancellation costs imposed by the Escrow Holder.

14.2 At Close of Escrow, Escrow Holder shall:

14.2.1 Record the grant deed from the City, as housing successor, to the City, with the Yolo County Recorder;
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14.2.2 Record the DLHP Quiclaim Deed;

14.2.3 Record the Grant Deed with the Yolo County Recorder;

14.2.4 Record the Storm Drainage Easement;

14.2.5 Record the Utility Easement;

14.2.6 Record the Parking Easement Agreement;

14.2.7 Record the Regulatory Agreements;

14.2.8 Record the City Deeds of Trust;

14.2.9 Issue the Title Policy; and

14.2.10 Disburse funds.

15. Representations and Warranties of the City. City hereby represents and warrants to Developer that as of the date of this Agreement and as of the Close of Escrow:

15.1 Authority of the City. City is a municipal corporation duly organized and validly existing and in good standing under the laws of the State of California and has the authority to own and convey the Property. This Agreement and all documents executed by the City which are to be delivered to Developer at the Close of Escrow are, or at the time of Close of Escrow, will be duly authorized, executed and delivered by the City. City has the legal right, power and authority to enter into this Agreement and to consummate this transaction.

15.2 Enforceability. This Agreement and all documents required to be executed by the City are and shall be valid, legally binding obligations of and enforceable against the City in accordance with their terms.

15.3 No Violation of Law. To the City’s knowledge, there are no uncured notices which have been served upon the City from any governmental entity notifying the City of any violations of law, ordinance, rule or regulation affecting the Property or any portion thereof.

15.4 No Hazardous Materials. To the best of the City’s actual knowledge, (i) except as otherwise as may be disclosed by the Property Documents, there has been no production, storage or disposal at the Property of any Hazardous Materials (as defined below) by the City or by any previous owner or tenant of the Property; (ii) Hazardous Materials have not been dumped, buried, leaked, or otherwise released upon, in, or under the Property or allowed to pass on, under or through the Property at any time during or prior to the City’s ownership of the Property; (iii) the City has not violated any laws, regulations, and ordinances relating to the use of all Hazardous Materials used on the Property; (iv) there is no proceeding or inquiry by any federal, state or local governmental agency with respect to any Hazardous Materials on the Property ; and (v) there are no underground storage tanks, pipelines or clarifiers located on the Property. “Hazardous Materials” means any hazardous or toxic substance, material or waste that is (i) regulated by any local governmental authority, the State of California or the United States Government; (ii) defined as an “acutely hazardous waste,” “extremely hazardous waste,” “hazardous waste,” or “waste” under Sections 25110.02, 25115, 25117 or 25124 or listed 192
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pursuant to Sections 25141 and 25141.5 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control); (iii) defined as a “hazardous material,” “hazardous substance,” or “hazardous waste” under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory); (iv) defined as a “hazardous substance” under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); (v) petroleum; (vi) asbestos; (vii) listed under Chapter 10 of Division 4.5 of Title 22 or defined as “hazardous” or “extremely hazardous” pursuant to Division 21.5 of Title 26 of the California Code of Regulations; (viii) designated as a “hazardous waste” pursuant to Section 6903 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. sections 6901, et seq.; (ix) defined as a “hazardous substance” pursuant to Section 9601 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. sections 9601, et seq.; (x) any flammable substances or explosive; or (xi) any radioactive material.

15.5 There are no unrecorded purchase agreements, option agreements, rights of first refusal, conditional sales contracts or other title retention agreements which would prevent City from conveying the Property to Developer pursuant to the terms of the Agreement.

15.6 To the City’s knowledge, there is no existing, proposed or contemplated plan to widen, modify, or realign any street or highway adjoining the Property which would affect access to any existing or proposed or contemplated eminent domain proceeding that would affect the Property, except for construction of a cul-de-sac.

15.7 To the City’s knowledge, there is no pending or threatened claims, allegations or lawsuits of any kind related to the Property. To the City’s actual knowledge, there are no pending claims or lawsuits that, if adversely determined, could materially adversely affect the sale of the Property to Developer, the development of operation of the Project as contemplated by this Agreement or the transactions contemplated by this Agreement. For purposes of this Section

15.7, the actual knowledge of the City shall mean the current actual knowledge of Aaron Laurel.

15.8 To City’s knowledge, the Property is not located within either a designated earthquake fault zone pursuant to California Public Resources Code Section 2621.9 or designated area that is particularly susceptible to ground shaking, liquefaction, landslides or other ground failure during an earthquake pursuant to California Public Resources Code Section 2694.

15.9 City has not received any written notices from any governmental authority of any current zoning, building, environmental protection, clear air, pollution, fire or health code violations with respect to the Property or current violations pertaining to the use and occupancy of the Property.

If City becomes aware of any fact or circumstance which would materially change or render materially incorrect, in whole or in part, any representation or warranty made by City under this Agreement, whether as of the date given or at any time thereafter through the Close of Escrow (whether or not the representation or warranty was based on knowledge as of a particular date), City will get prompt written notice of such changed fact or circumstance to Developer and Developer may, as its sole remedy, terminate this Agreement by written notice to City. Subject to the foregoing, all representations or warranties herein shall survive the Close of Escrow. 193
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16. Representations and Warranties of Developer. Developer hereby represents and warrants to the City that as of the date of this Agreement and as of the Close of Escrow:

16.1 Developer’s Authority. Developer is a limited partnership duly organized and validly existing and in good standing under the laws of the State of California and has the authority to purchase and accept the Property. This Agreement and all documents executed by Developer which are to be delivered to the City at the Close of Escrow are, or at the time of Close of Escrow, will be duly authorized, executed and delivered by Developer. Developer has the legal right, power and authority to enter into this Agreement and to consummate this transaction.

16.2 Enforceability. This Agreement and all documents required to be executed by Developer are and shall be valid, legally binding obligations of and enforceable against Developer in accordance with their terms.

17. Indemnity.

17.1 By Developer. Developer shall protect, defend (with legal counsel acceptable to the City), indemnify and hold harmless the City and its directors, officers, agents, and employees from any and all claims, damages, losses, costs, expenses (including reasonable attorney’s fees and all other defense costs), injuries, or liabilities of every kind on account of damage to property or injury to person (including death), which directly or indirectly arise from or relate to a breach of any representation or warranty by Developer contained in this Agreement or which arise from or relate to the Project or the Property, caused in whole or in part, by any negligent act or omission of the Developer, any subcontractor, anyone directly or indirectly employed by any of them, or anyone for whose acts any of them may be liable, except to the extent caused by the gross negligence or willful misconduct of the City or its directors, officers, agents and employees.

Acceptance by the City of the insurance required by this Agreement shall not relieve Developer from liability under this Section 17.1.

17.2 By City. City shall protect, defend (with legal counsel acceptable to the Developer), indemnify and hold harmless the Developer and its directors, officers, agents, and employees from any and all claims, damages, losses, costs, expenses (including reasonable attorney’s fees and all other defense costs), injuries, or liabilities of every kind on account of damage to property or injury to person (including death), which directly or indirectly arise from or relate to (i) a breach of any representation or warranty by City contained in this Agreement or (ii) which arise from or relate to the Property prior to the Close of Escrow, caused in whole or in part, by the acts or omissions of the City, any subcontractor, anyone directly or indirectly employed by any of them, or anyone for whose acts any of them may be liable, except to the extent caused by the gross negligence or willful misconduct of the Developer or its directors, officers, agents and employees.

18. Assignment.

18.1 Transfer or Assignment of Interests in this Agreement. Except as expressly set forth in Sections 18.3 and 18.5, Developer shall not, prior to issuance of the Certificate of Compliance, make any total or partial sale, assignment or transfer of any interest in this Agreement without the prior written approval of the City, which approval shall not be unreasonably withheld.

18.2 Transfer or Assignment of Interests in the Property. Except as expressly set forth in Section 18.3 and 18.5, Developer shall not, prior to issuance of the Certificate of Compliance, 194
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make any total or partial sale, assignment or transfer of any interest in the Property without the prior written approval of City, which approval shall not be unreasonably withheld.

18.3 Conditions of Approval. City shall be entitled to require the following as conditions to any approval of any assignment or transfer of any interest in the Property, this Agreement, or the Developer:

18.3.1 Qualifications and Financial Responsibility. Any proposed transferee shall have the qualifications and financial responsibility, as determined by City, necessary and adequate to fulfill Developer’s obligations under this Agreement and to successfully maintain and manage the Project (or, in the event of transfer of a part of the Property, such obligations to the extent that they relate to such part).

18.3.2 Assumption of Obligations. Any proposed transferee shall, for itself and its successors and assigns, expressly assume all of Developer’s obligations under this Agreement and shall agree to be subject to all the conditions and restrictions to which Developer is subject (or, in the event the transfer is of or relates to part of the Property, such obligations, conditions and restrictions to the extent that they relate to such part). Said assumption of obligations shall be in writing in recordable form approved by City and shall expressly be for the benefit of City.

The fact that any such transferee shall not have assumed such obligations or so agreed, shall not relieve such transferee from such obligations, conditions, or restrictions, or deprive the City of any rights or remedies or controls with respect to all or any part of the Property or this Agreement that City would have had, had there been no such transfer or change.

18.3.3 Review of Documents. Developer shall submit to City for review all legal documents involved in effecting such transfer. Such documents shall be subject to City’s prior written approval.

18.3.4 Other Conditions. Developer and such transferee shall comply with such other conditions of transfer and assignment as City may reasonably find necessary in order to achieve and safeguard the purposes of this Agreement.

18.4 Information as to Partners.

18.4.1 Statement of Ownership Interests. Developer shall, at such times as City may request, furnish City with a complete statement, setting forth the names of all of the partners of Developer all as indicated by the records of Developer.

18.5 Additional Permitted Transfers. Notwithstanding anything to the contrary set forth herein, the transfers contained in Section 16.3 of the Deeds of Trust, are hereby permitted by the City and shall not require any additional approvals.

19. Default, Remedies and Termination.

19.1 Default – General. Subject to the provisions of this Section 19 and extensions of time set forth herein, failure or delay by either Party to timely perform any term or provision of this Agreement or any other agreement between the Parties related to the Project or the Property, constitutes a default under this Agreement.

19.2 Cure Period. Neither Party shall be in default under this Agreement unless the other Party first provides written notice of default and the Party in default thereafter fails within 195
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thirty (30) days after receipt of such notice of default to either cure such default or, if such default cannot reasonably be cured within said thirty (30)-day period, diligently commence such actions reasonably necessary to cure such default within such thirty (30)-day period, and thereafter, cures such default within a time period reasonably necessary to cure said default, not to exceed ninety (90) days after receipt of such notice of default.

19.3 Institution of Judicial Action. In addition to any other rights or remedies, either Party may institute judicial action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy by law or equity, including the right of specific performance.

19.4 No Waiver. The failure or delay by either Party in asserting its rights or remedies as to any default, shall not operate as a waiver of any default or of any rights or remedies under this Agreement or deprive either Party of its right to institute and maintain any action or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies.

19.5 Right and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times of any other rights or remedies for the same default or any other default by the other Party.

20. Risk of Physical Loss. Prior to City’s delivery of possession of the Property to Developer, the risk of loss or damage to the Property shall remain upon the City. If the Property suffers a material loss or damage, then City shall give prompt written notice thereof to Developer and Developer shall have the right to terminate this Agreement upon written notice to the City given prior to the Close of Escrow.

21. Condemnation. In the event that, prior to the Close of Escrow, any governmental entity shall commence any action of eminent domain or similar type proceedings to take any portion of the Property, the City shall give prompt notice thereof to Developer and Developer shall have the option either to (i) elect not to acquire the Property, in which event this Agreement shall terminate or (ii) complete the acquisition of the Property, in which case Developer shall be entitled to all proceeds of such taking. City hereby agrees that it shall not settle or compromise the proceedings without Developer’s prior written consent which will not be unreasonably withheld.

22. Enforced Delay: Extension of Times of Performance. In addition to the specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in default where delays or defaults are due to war; act of terrorism; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; unusually severe weather; or inability to secure necessary labor, materials or tools; acts or the failure to act of any public or governmental agency or entity ("Excusable Delay"). An extension of time for any such cause shall only be for the period of the Excusable Delay.

Developer shall give the City notice of any Excusable Delay within fourteen (14) days following the date such delay commences. An extension of time for any such cause shall only be for the period of the Excusable Delay, which period shall commence to run from the time of the commencement of the cause, provided that if Developer fails to give written notice to the City of the Excusable Delay within said fourteen (14) day period, then the period of Excusable Delay shall commence to run upon the giving of such notice. Notwithstanding anything in this Agreement 196
20 2207916.10 7203.496
to the contrary, in order for an Excusable Delay to be effective, the delay shall have been caused by no fault of the Developer and Developer has used all reasonable efforts and has diligently prosecuted its obligations under this Agreement. An Excusable Delay shall not excuse any monetary payments due under any Loan Documents or other payments due to the non-affected party.

23. Brokers’ Fees. The Parties each hereby warrant to the other that no person or entity can properly claim a right to a commission, finder's fee or other compensation based upon contacts or understandings between such claimant and Developer or the City with respect to the transaction contemplated by this Agreement. If any broker or finder makes any claim for a commission or finder’s fee, the Party through which the broker or finder makes such claim shall indemnify, defend and hold the other Party harmless from all liabilities, expenses, losses, damages or claims (including the indemnified Party’s reasonable attorneys’ fees) arising out of such broker’s or finder’s claims.

24. Attorneys’ Fees. Should any litigation be commenced between the Parties hereto concerning the Property, this Agreement, or the rights and duties of either in relation thereto, the prevailing Party in such litigation shall be entitled, in addition to such other relief as may be granted, to its costs, including attorneys’ fees, and costs for such litigation and for executing upon or appealing any judgment.

25. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California. In the event of litigation arising under this Agreement, venue shall reside exclusively in the Superior Court of the County of Yolo.

26. Notices. All notices, demands, consents, requests or other communications required to or permitted to be given pursuant to this Agreement shall be in writing, shall be given only in accordance with the provisions of this Section 26, shall be addressed to the Parties in the manner set forth below, and shall be conclusively deemed to have been properly delivered and received by the receiving Party (a) upon receipt when hand delivered, (b) upon receipt when sent by facsimile to the number set forth below (with written confirmation of receipt from the sender) or upon delivery when sent to the Parties email address, so long as a copy is also sent by one of the other acceptable methods in this paragraph within twenty-four (24) hours thereafter, (c) upon the day of delivery if the notice has been deposited in an authorized receptacle of the United States Postal Service as first-class, registered or certified mail, postage prepaid, with a return receipt requested (provided that, the sender has in its possession the return receipt to prove actual delivery), or (d) upon actual delivery if deposited with any commercially-recognized overnight carrier that routinely issues receipts (provided that, the sending Party receives a confirmation of actual delivery from the courier). The addresses of the Parties to receive notices are as follows:

If to City: City of West Sacramento
1110 West Capitol Avenue
West Sacramento, CA 95691
Attention: City Manager
Fax No. (916) 372-8765
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21 2207916.10 7203.496
With a copy to: Kronick, Moskovitz, Tiedemann & Girard
1331 Garden Hwy., 2nd Floor
Sacramento, CA 95833
Attention: Jeffrey A. Mitchell
Fax No.: (916) 321-4555
If to Developer: Delta Lane Housing Partners II LP
c/o Jamboree Housing Corporation
17701 Cowan Ave., Suite 200
Irvine, CA 92614
Attention: Marcy V. Finamore
Fax No. (949) 263-8676
With a copy to: Rutan & Tucker, LLP
611 Anton Blvd., Suite 1400
Costa Mesa, CA 92626
Attention: Patrick D. McCalla
Fax No. (714) 546-9035
If any notice is refused, the notice shall be deemed to have been delivered upon such refusal.

Any notice delivered after 5:00 p.m. (recipient's time) or on a non-business day shall be deemed delivered on the next business day. A Party may change or supplement the addresses given above, or designate additional addressees, for purposes of this Section 26 by delivering to the other Party written notice in the manner set forth above.

27. Entire Agreement. This Agreement and the documents referenced herein contain the entire agreement between the Parties and this Agreement shall not be modified in any manner except by an instrument in writing executed by the Parties or their respective successors in interest.

28. Severability. If any provision of this Agreement is held invalid or unenforceable by any court of final jurisdiction, it is the intent of the Parties that all the other provisions of this Agreement be construed to remain fully valid, enforceable and binding on the Parties.

29. Waivers. A waiver or breach of covenant or provision in this Agreement shall not be deemed a waiver of any other covenant or provision in this Agreement, and no waiver shall be valid unless in writing and executed by the waiving Party. An extension of time for performance of any obligation or act shall not be deemed an extension of the time for performance of any other obligation or act.

30. Construction. The section headings and captions of this Agreement are, and the arrangement of this instrument is, for the sole convenience of the Parties to this Agreement. The section headings, captions, and arrangement of this instrument do not in any way affect, limit, amplify, or modify the terms and provisions of this Agreement. The singular form shall include plural, and vice versa. All exhibits referred to in this Agreement are attached to it and incorporated in it by this reference.

31. Merger. All of the terms, provisions, representations, warranties, and covenants of the Parties under this Agreement shall survive the Close of Escrow and shall not be merged in the Grant Deed or other documents.
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32. Time of the Essence. Time is of the essence in this Agreement.

33. Successors. This Agreement shall inure to the benefit of and shall be binding upon the Parties to this Agreement and their respective heirs and successors.

34. Third-Party Rights. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the Parties and their respective successors and assigns, any rights or remedies.

35. Further Assurances. City and Developer agree to execute such additional documents and take such additional actions which are consistent with, and as may be reasonable and necessary to carry out the provisions of this Agreement.

36. Joint Drafting. Developer and the City acknowledge that this Agreement was negotiated at arm’s-length, that independent counsel has represented each Party and that this Agreement has been drafted by both Parties and no one Party shall be construed as the draftsperson.

37. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same Agreement.

38. Consents and Amendments by City Manager. The City Manager shall have the authority to approve or grant, on behalf of the City, any approval, consent or waiver required under this Agreement by the City (and make any determination to be made by City under this Agreement).

The City Manager shall have the authority to enter into amendments on behalf of the City that materially amend the terms of the this Agreement, or any Exhibits hereto, only upon approval of the City Council.

39. Exhibits.

A. Legal Description of the Property
B. Form of DLHP Quitclaim Deed
C. Form of Storm Drainage Easement
D. Form of Utility Easement
E. Form of Parking Easement
F. Form of Slope Easement
G. Grant Deed
H. Schedule of Performance
I. Completion Guaranty
J. Construction Loan Documents
K. HOME Loan Documents

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

CITY:

City of West Sacramento,
a California municipal corporation
By:

Aaron Laurel, City Manager
ATTEST:

By:

Jennifer Cusmir, City Clerk
APPROVED AS TO FORM:

By:

Jeffrey A. Mitchell, City Attorney
DEVELOPER:

By: _________________
Michael Massie
Chief Development Officer
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2207916.10 7203.496
Exhibit A
(Legal Description of Property)
202
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MEL

Page 1 of 2 ends

EXHIBIT ‘A’

DELTA LANE

LEGAL DESCRIPTION FOR

NEW PARCEL
Being a portion Parcel B of that certain Grant Deed recorded as Document No. 2015- 0012193, Yolo County Recorder, being located in the City of West Sacramento, County of Yolo, State of California, described as follows:

BEGINNING at a point being the northwesterly corner of said Parcel B; thence along the northwesterly line of said Parcel B, also being the southeasterly right-of-way line of Tower Bridge Parkway, along a non-tangent curve concave to the southeast, having a radius of 1433.50 feet, and to which a radial line bears North 28°31’04” West, northeasterly 22.98 feet, along said curve through a central angle of 00°55’06”; thence leaving said northwesterly line, and proceeding into said Parcel B, the following seven (7) arcs, courses and distances:

1. Along a non-tangent curve concave to the northwest, having a radius of 117.06 feet, and to which a radial line bears South 07°09’28” East, northeasterly 38.66 feet, along said curve through a central angle of 18°55’26” to the beginning of a reverse curve;

2. Along a reverse curve concave to the southeast, having a radius of 1426.67 feet, northeasterly 44.68 feet, along said curve through a central angle of 01°47’40”;

3. South 24°17’14” East, a distance of 7.42 feet to the beginning of a non-tangent curve;

4. Along said non-tangent curve concave to the southeast, having a radius of 1419.25 feet, and to which a radial line bears North 24°17’14” West, easterly

20.00 feet, along said curve through a central angle of 00°48’27”;

5. North 23°28’47” West, a distance of 7.42 feet to the beginning of a non-tangent curve;

6. Along said non-tangent curve concave to the southeast, having a radius of 1426.67 feet, and to which a radial line bears North 23°28’47” West, easterly

13.36 feet, along said curve through a central angle of 00°32’11” to the beginning of a reverse curve;

7. Along said reverse curve concave to the northwest, having a radius of 117.06 feet, easterly 38.66 feet, along said curve through a central angle of 18°55’26” to a point of intersection with said northwesterly line;
Thence along said northwesterly line, the following three (3) arcs, courses and distances:

1. Along a non-tangent curve concave to the southeast, having a radius of 1433.50 feet, and to which a radial line bears North 21°25’33” West, easterly

22.24 feet, along said curve through a central angle of 00°53’20”;

2. North 69°27’47” East, a distance of 67.27 feet;
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Page 2 of 2 ends

3. Along a curve concave to the south, having a radius of 958.50 feet, easterly

77.11 feet, along said curve through a central angle of 04°36’35”; Thence leaving said northwesterly line and proceeding through said Parcel B, the following two (2) courses and distances:

1. South 18°40’09” East, a distance of 132.31 feet;

2. South 71°19’51” West, a distance of 342.81 feet to a point of intersection with the westerly line of said Parcel B;
Thence along said westerly line, North 18°40’09” West, a distance of 110.34 feet to the POINT OF BEGINNING.

Containing 0.975 acres, more or less.

See Exhibit “A-1”, plat to accompany description, attached hereto and made a part hereof.

The Basis of Bearings for these descriptions is identical with that shown on that certain Record of Survey of the City of West Sacramento Geodetic Control Network, recorded in Book 13 of Maps and Surveys, at Pages 61-69, Official Records of Yolo County.

August 23, 2022

END OF DESCRIPTION
PREPARED BY WOOD-RODGERS, INC.

SACRAMENTO, CALIFORNIA
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205
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2207916.10 7203.496
Exhibit B
(See Attached Form of DLHP Quitclaim Deed)
207
2239392.1 1

NO FEE DOCUMENT
Government Code § 6103 & § 27383
Recording Requested By and
When Recorded Mail To:

City of West Sacramento
1110 West Capitol Avenue
West Sacramento, CA 95691
Attn: City Clerk
(THE ABOVE SPACE FOR RECORDER’S USE ONLY)

QUITCLAIM DEED

THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11922 OF THE CALIFORNIA REVENUE AND TAXATION CODE.

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Delta Lane Housing Partners LP, a California limited partnership, as Grantor, hereby remises, releases and forever quitclaims to:

City of West Sacramento, a California municipal corporation, as Grantee, all of its rights, title, and interest contained in the Parking Easement Agreement dated May 8, 2015, recorded on May 8, 2015, as Document Number 2015-0012371-00, in the Official Records of the Yolo County Recorder, located in the County of Yolo, State of California.

GRANTOR: DATED: ____________________, 20___

DELTA LANE HOUSING PARTNERS II LP,
a California limited partnership
By: JHC-Tower Bridge LLC,
a California limited liability company,
its Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
its Manager
By:  __________________________
Michael Massie

208
2239392.1
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.

ACKNOWLEDGEMENT
State of California )
County of _____________________ )
On ____________________, before me, ____________________________, Notary Public, personally appeared _______________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity 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.

Notary Public (Notary Seal)
209
2207916.10 7203.496
Exhibit C
(See Attached Form of Storm Drainage Easement)
210
2184732.3 1

NO FEE DOCUMENT
Government Code § 6103 & § 27383

Recording Requested By and
When Recorded Mail To:

City of West Sacramento
1110 West Capitol Ave., 3rd Floor
West Sacramento, CA 95691
Attn: City Clerk (The Above Space For Recorder's Use Only)

EASEMENT FOR STORM DRAINAGE
This Easement for Drainage (the “Agreement”) is made this day of _____________, 2022 by Delta Lane Housing Partners II LP, a California limited partnership ("Grantor") and the City of West Sacramento, a California municipal corporation (“City”).

FOR VALUABLE CONSIDERATION, receipt and sufficiency of which is hereby acknowledged,

1. Grant. Grantor as the owner of that certain real property located in the City of West Sacramento, County of Yolo, State of California, as set forth in Exhibit A, attached hereto and made a part hereof, hereby grants to the City, a non-exclusive easement, on, over and under the area of Grantor’s property as legally described and depicted in Exhibit B-1 and Exhibit B-2, attached hereto and incorporated herein, for storm water and drainage purposes, inclusive of digging, constructing, reconstructing, repairing, operating, upgrading, and forever maintaining thereon, a storm drainage pipeline, together with all necessary appurtenances thereto.

2. Grantor's Right of Use. Grantor retains the right to use the easement in any lawful manner that does not unreasonably interfere with the City's rights hereunder; provided, however, that Grantor shall not erect or construct any building or other structure in the easement area, or cut and/or fill over any City pipeline or appurtenant facilities in the easement area, or drill or operate any well, or drill any holes, or construct any other obstruction in the easement area.

3. Access. The City shall provide Grantor at least 48-hours advance written notice before entering the easement area except in the case of emergency (as determined by the City in its sole discretion), in which case no advance notice shall be required.

4. Repair and Maintenance. The City shall have the right to access its public utilities through Grantor’s improvements in the easement area if necessary, however, the City shall promptly repair any and all damage caused to Grantor’s improvements.

5. Indemnity. The City shall indemnify, defend, and hold Grantor harmless from and against any and all costs, claims, damages, losses, or liabilities (including, without limitation, court costs and reasonable attorney’s fees) arising out of or connected in any manner with the use of the easement area by the City and its agents, employees, and contractors, except to the extent such loss or damage which was caused by the gross negligence or willful misconduct of the Grantor.

6. Miscellaneous. This Agreement contains the entire understanding of the parties with respect to its subject matter. This Agreement shall bind and inure to the benefit of the respective heirs, personal representatives, successors, and assigns of the parties hereto. The invalidity or 211
2184732.3 2
unenforceability of any part of this Agreement shall not affect any other provision. This Agreement may only be amended or terminated with the written consent of the parties or their lawful successors in interest. Any waiver must be in writing to be valid, and the failure of any party to declare a default shall not act as a waiver of rights.

7. Attorneys' Fees. In the event of any controversy, claim or dispute relating to or arising out of this Agreement, or the breach thereof, the prevailing party in such litigation shall be entitled, in addition to such other relief as may be granted, to its costs, including attorneys’ fees, and costs for such litigation and for executing upon or appealing any judgment.

8. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California. In the event of litigation arising under this Agreement, venue shall reside exclusively in the Superior Court of the County of Yolo.

9. Counterparts. This instrument may be executed in several counterparts, and may be delivered by facsimile or other means of electronic transmission, each of which shall be deemed an original.
(Signatures on Next Page)
212
2184732.3 3
IN WITNESS WHEREOF, the undersigned parties have read and duly executed this Agreement as of the date set forth above.

GRANTOR:

City of West Sacramento,
a California municipal corporation
By:

Aaron Laurel, City Manager
ATTEST:

By:

Jennifer Cusmir, City Clerk
APPROVED AS TO FORM:

By:

Jeffrey A. Mitchell, City Attorney
213
2184732.3
Exhibit A
(See Legal Description of Grantor Property)
214
2184732.3
Exhibit B-1
(See Attached Easement Legal Description)
215
2184732.3
Exhibit B-2
(See Attached Easement Depiction)
216
2184732.3
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.

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

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

WITNESS my hand and official seal.

Signature (Seal)
217
2184732.3
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.

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)
218
2207916.10 7203.496
Exhibit D
(See Attached Form of Utility Easement)
219
2184823.3 1

NO FEE DOCUMENT
GOVERNMENT CODE § 6103 & § 27383
Recording Requested By and
When Recorded Mail To:

City of West Sacramento
1110 West Capitol Ave., 3rd Floor
West Sacramento, CA 95691
Attn: City Clerk The Above Space For Recorder’s Use Only

GRANT OF PUBLIC UTILITY EASEMENT
This Grant of Public Utility Easement is made this day of _____________, 2022 by Delta Lane Housing Partners II LP, a California limited partnership ("Grantor") and the City of West Sacramento, a California municipal corporation (“City”).

FOR VALUABLE CONSIDERATION, receipt and sufficiency of which is hereby acknowledged,

1. Grant. Grantor, as owner of that certain real property located in the City of West Sacramento, County of Yolo, State of California, as set forth in Exhibit A, attached hereto and made a part hereof (“Grantor’s Property”), hereby grants to the City, public utility easements (collectively, the "Easement"), on, over and under the area of Grantor’s Property as legally described and depicted in Exhibit B-1 and Exhibit B-2, attached hereto and incorporated herein, for the purposes of construction, repair and maintenance of public utilities, together with any and all appurtenant structures, including lighting improvements.

2. Grantor’s Rights Of Use. Grantor retains the right to use the Easement in any lawful manner that does not unreasonably interfere with City’s rights hereunder.

3. Access. For access to all public utilities except for the lighting improvements, the City shall provide Grantor at least 48-hours advance notice before entering the easement area except in the case of emergency (as determined by the City in its sole discretion), in which case no advance notice shall be required. No notice shall be required for access to the lighting improvements.

4. Repair and Maintenance. The City shall have the right to access its public utilities through Grantor’s improvements in the Easement if necessary, however, the City shall repair any and all damage caused to Grantor’s improvements.

6. Miscellaneous. This instrument contains the entire understanding of the parties with respect to its subject matter. This instrument shall bind and inure to the benefit of the respective heirs, personal representatives, successors, and assigns of the parties hereto. The invalidity or unenforceability of any part of this instrument shall not affect any other provision. This instrument 220
2184823.3 2
may only be amended or terminated with the written consent of the parties or their lawful successors in interest. Any waiver must be in writing to be valid, and the failure of any party to declare a default shall not act as a waiver of rights.

7. Attorneys' Fees. In the event of any controversy, claim or dispute relating to or arising out of this instrument, or the breach thereof, the prevailing party in such litigation shall be entitled, in addition to such other relief as may be granted, to its costs, including attorneys’ fees, and costs for such litigation and for executing upon or appealing any judgment.

8. Governing Law. This instrument be construed in accordance with and governed by the laws of the State of California. In the event of litigation arising under this Deed, venue shall reside exclusively in the Superior Court of the County of Yolo.

9. Counterparts. This instrument may be executed in several counterparts, and may be delivered by facsimile or other means of electronic transmission, each of which shall be deemed an original.
(Signatures on Next Page)
221
2184823.3 3
IN WITNESS WHEREOF, the undersigned parties have read and duly executed this Agreement as of the date set forth above.

GRANTOR:

DELTA LANE HOUSING PARTNERS II LP,
a California limited partnership
By:       JHC-Tower Bridge LLC,
a California limited liability company,
its Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
its Manager
By:   __________________________
Michael Massie
Chief Development Officer
CITY:

City of West Sacramento,
a California municipal corporation
By:

Aaron Laurel, City Manager
ATTEST:

By:

Jennifer Cusmir, City Clerk
APPROVED AS TO FORM:

By:

Jeffrey A. Mitchell, City Attorney
222
2184823.3
Exhibit A
(See Attached Property Legal Description)
223
2184823.3
Exhibit B-1
(See Attached Easement Legal Description)
224
2184823.3
Exhibit B-2
(See Attached Easement Depiction)
225
2184823.3
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.

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)
226
2184823.3
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.

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)
227
2207916.10 7203.496
Exhibit E
(See Attached Form of Parking Easement)
228
2184737.5 1

NO FEE DOCUMENT
Government Code § 6103 & § 27383
Recording Requested By and
When Recorded Mail To:

Delta Lane Housing
Partners II LP
c/o Jamboree Housing Corporation
17701 Cowan Ave., Suite 200
Irvine, CA 92614
Attention: Marcy V. Finamore (THE ABOVE SPACE FOR RECORDER’S USE ONLY)

PARKING EASEMENT AGREEMENT
This Parking Easement Agreement (“Agreement”) is made ________________, 2022 ("Effective Date"), by and between the City of West Sacramento, a California municipal corporation ("City"), and DELTA LANE HOUSING PARTNERS II LP, a California limited partnership (“Grantee”), for a right of easement over, upon and across a portion of certain real property in the City of West Sacramento, State of California, as described herein. The City and Grantee are hereafter referred to, individually, as a “Party,” or collectively, as the “Parties.”

RECITALS
.

A. On or about July 18, 2018, the City and Grantee entered into an Option, whereby the City provided Grantee with an option to purchase fee title to certain parcels of real property consisting of approximately .975 acres located in the City of West Sacramento, County of Yolo (“County”), State of California, as more particularly described on Exhibit A, and depicted on Exhibit B, attached hereto and incorporated herein (the “Property”) in order for Grantee to construct a project with a minimum of sixty (60) units of multifamily affordable rental housing, targeting families earning between 30% of Area Median Income ("AMI") to 60% AMI, as the Phase II of the original Delta Lane Affordable Housing Project (the "Project").

B. The City and Grantee entered into an Amendment to Option to Purchase Real Property on December 11, 2019, to extend the Option Term for twelve (12) months ("First Amendment"), entered into a Second Amendment to Option to Purchase Real Property on December 9, 2020, to again extend the Option Term ("Second Amendment"), and entered into a Third Amendment to Option to Purchase Real Property on January 19, 2022 ("Third Amendment") to again extend the Option Term for another twelve (12) months (collectively, the "Option").

C. Grantee thereafter exercised its Option, and on or about ________________, 2022, the City and Grantee entered into a Purchase and Sale Agreement and Joint Escrow Instructions ("Purchase Agreement") for Grantee's purchase of the Property, and Grantee is closing on the Property concurrently herewith. The Purchase Agreement requires Grantee to prepare a Parking Management and Maintenance Plan for the Project, to be approved by the City.

D. The City zoning administrator has determined that the minimum parking requirements for the Project are thirty (30) spaces, including six (6) guest parking spaces, for the residential portion of the Project. The total residential parking requirement will be met with twenty229 2184737.5 2
one (21) on-site residential parking spaces on adjacent real property owned by the City, as more particularly described on Exhibit C, and depicted on Exhibit D, attached hereto and incorporated herein (“City Property”), pursuant to the terms of this Agreement, and nine (9) on-street signed parking spaces, of which six (6) will be marked for guests and three (3) will be signed with a preferential parking permit exception.

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

AGREEMENT

1. Grant of Easement. Subject to the terms and conditions set forth herein, the City hereby grants to Grantee, a parking easement appurtenant to the Property on, over, and across the City Property for the purpose of (a) providing the above-described twenty-one (21) parking spaces for the Project in the areas specifically labeled for parking to be used by the Project's residential tenants or retail employees or any other users permitted pursuant to Grantee's approved Parking Management and Maintenance Plan, (b) installation, maintenance and repair of related landscaping and lighting, and (c) installation of an underground cistern in the area labeled on the map (the “Easement Area”).

2. Use Restriction.

2.1 The Easement Area shall be used solely for the purposes identified in Section 1 above. Grantee shall not place, or allow to be placed, any personal property, fixtures, structures, or other aboveground improvements on the Easement Area without the prior written consent of the City. Grantee's use of the Easement Area shall not unreasonably interfere with the City's use of the pump station that is adjacent to the Easement Area prior to construction of the parking lot improvements ("Pump Station") in the area shown on Exhibit E.

2.2 This Agreement shall be subject to the City's right to access, service, and maintain the City's Pump Station, City utilities and other improvements, and other City easements. The City shall be responsible for maintaining all structures and appurtenances associated with the Pump Station and other City easements; however, Grantee may install screening or beautification measures related to the pump station with the prior written approval of the City after the City's review and approval of the design plans. All such screening and beautification measures shall be constructed and maintained by Grantee at its own cost.

3. Term. The term of this Agreement shall commence on the Effective Date and shall continue for fifty-five (55) years and for so long thereafter as the Project is being developed, or is located on the Property, unless sooner terminated pursuant to this Agreement (the “Term”). 230
2184737.5 3

4. Improvements.

4.1 Improvements and Governmental Approvals. Grantee has provided the City with design plans for the landscaping, the cistern, and the surface parking lot improvements (“Improvements”) and City has approved the design plans. Grantee shall, at its sole cost and expense, apply for and obtain all licenses, permits, approvals, required by any local, state or federal governmental authorities for construction of the interim parking lot (collectively, the "Governmental Approvals"). The City shall make reasonable efforts to cooperate with Grantee in connection with obtaining such Governmental Approvals. The Improvements must include lighting for safety and security and must be ADA compliant.

4.2 Time of Construction and Certificate of Substantial Completion. Grantee shall substantially complete the construction of the Improvements on or before the completion of construction of the Project. Upon the substantial completion of the Improvements in accordance with the construction documents, Grantee shall submit a written request to the City for a certificate that the improvements are substantially complete (the “Certificate of Substantial Completion”).

The Certificate of Substantial Completion shall be conclusive evidence as between the City and Grantee that the improvements have been completed in accordance with the terms and conditions of this Agreement. The Certificate of Substantial Completion shall not constitute evidence of compliance with, or satisfaction of, any obligations of Grantee to any lender or any insurer of a lender mortgage. The Certificate of Substantial Completion is not notice of completion as referred to in California Civil Code section 3093. Grantee shall not record, or cause the recording of, a notice of completion until the City has issued the Certificate of Substantial Completion to Grantee.

4.3 Work. All work to be performed for the Improvements shall be performed diligently and in a first-class, workmanlike manner by a licensed contractor after obtaining the Governmental Approvals in accordance with all applicable laws. Grantee shall assume full responsibility for any notices, violations, fines and other regulatory actions taken against the City Property as a result of any of its construction activities.

4.4 Ownership. The parking lot Improvements shall be the property of Grantee. Upon termination of this Agreement, whether by expiration of the Term or otherwise, ownership of the Improvements shall transfer to the City, Grantee shall not be required to demolish the surface parking lot and any improvements constructed on the Easement Area, and Grantee shall not be required to pay for the demolition, removal, or disposal of the material or debris in connection therewith. All personal property not affixed to the Easement Area shall remain the property of Grantee and may be removed by Grantee at any time during the Easement Term and shall be promptly removed by Grantee prior to or upon the termination of this Agreement.

4.5 Alterations or Additions. Grantee shall not make any alterations or additional improvements to the Easement Area without first obtaining the prior written consent of the City, which consent shall not be unreasonably withheld. Approval, however, may be conditioned upon the receipt by the City of a set of plans and specifications for the alterations or additions no later than thirty (30) days prior to the scheduled construction of the alterations.

4.6 Liens. Grantee shall keep the Easement Area and City Property free from any and all liens arising out of any work performed or materials furnished or incurred by or for Grantee. If any mechanic’s liens are filed in connection with work undertaken by Grantee, Grantee shall promptly discharge such lien within twenty (20) days of the date of filing, provided, however, that if Grantee determines in good faith that a lien should be contested, it shall post any bond as may be required to prevent the commencement of foreclosure proceedings against the City Property. 231
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If Grantee fails to cause the lien or encumbrance to be removed, then the City will be entitled, but not obligated to, discharge or bond the same and bill the cost thereof to Grantee to be immediately payable. Grantee will indemnify and hold the City harmless from any and all liabilities and costs to the extent resulting from Grantee’s failure to timely secure the same.

4.7 Prevailing Wage. Construction of the Project and the Improvements is a public work within the meaning of California’s prevailing wage laws (Lab. Code §§ 1720, et seq.).

Grantee agrees that it shall cause all work performed shall be performed as a “public work” using the applicable general prevailing rate of wages in West Sacramento as determined by the Director of the Department of Industrial Relations pursuant to Section 1770 and 1773 of the California Labor Code. In the event Grantee fails to comply with applicable prevailing wage laws, Grantee shall be liable for the payment of all penalties, wages and/or damages resulting therefrom, and shall defend, indemnify and hold the City harmless for any violations or alleged violations of prevailing wage laws.

5. City Property As-Is. Grantee acknowledges that it has been given the opportunity to study the suitability of the Easement Area and City Property, and has concluded in its sole discretion that it shall accept the Easement Area in condition, with all faults and conditions. The City makes no representations as to the suitability of the Easement Area or City Property for the use proposed by Grantee. The City’s approval and execution of this Agreement in no way constitutes a governmental approval of Grantee’s use. Other than permits to construct the Improvements by the City, Grantee is solely responsible for obtaining any required governmental permits for Grantee’s intended use. Grantee shall not commit any waste or any public or private nuisance upon the Easement Area. Grantee shall comply with all laws, rules, and orders of all federal, state, and municipal governments or agencies that may be applicable to use of the Easement Area. Grantee acknowledges that as of the date Grantee takes possession of the Easement Area, Grantee has had full opportunity to investigate and inspect the Easement Area, is fully familiar with the condition of the Easement Area, and is satisfied that the Easement Area is suitable for Grantee’s intended use.

6. Utilities. Grantee shall, at its sole cost and expense, arrange for electricity, water, gas, and other utilities necessary for Grantee’s operations to be provided to the Easement Area directly from such providers. The City shall ensure that all easements or permits necessary for utility connections are either in place at the time of the Effective Date or will be issued in a timely manner to so as not to delay start-up and operation of the parking lot. During the Term, Grantee shall pay, before delinquency, all charges or assessments for telephone, water, sewer, gas, heat, electricity, garbage collection, and all other utilities and services of any kind that may be used on or in connection with the Easement Area. Grantee shall pay the cost of separately metering any utilities serving the Easement Area.

7. Taxes. A possessory interest subject to taxation and assessments may be created by this Agreement. Notice is hereby given, pursuant to Revenue and Taxation Code Section 107.6 and Government Code Section 53340.1, that such property interest may be subject to taxation and special assessments, if created, and that the party in whom the possessory interest accrues may be subject to the payment of taxes and assessments levied on such interest. Grantee shall pay all such real property possessory interest taxes attributable to the Easement Area (but subject to any applicable exemption) prior to delinquency. Grantee shall also promptly pay when due all personal property taxes on any Improvements and personal property, and any other taxes payable by Grantee. The City shall pay all real property taxes, including any community facility district ("CFD") assessments.
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8. Repair and Maintenance. The improvements to the Easement Area shall be maintained, repaired, and replaced by Grantee according to City standards and all applicable federal, state and local laws. Grantee shall be solely responsible for all operation, maintenance, repair, and replacement costs, including utility charges (collectively, “Maintenance Costs”) associated with all installed surface and aboveground improvements located in the Easement Area. If Grantee fails to keep the Easement Area in good condition, then, immediately following written notification to Grantee (except in the case of an emergency, in which case no prior notification shall be required), the City shall have the right to enter the Easement Area and to do such acts and expend such funds (at the expense of Grantee) as are required to place the Easement Area in good condition and repair. Any amount so expended by the City shall be paid by Grantee within ten (10) days after the City demands such amount from Grantee.

9. Insurance. At all times during the Term, Grantee will carry and maintain, at Grantee’s sole cost and expense, the following insurance, in the amounts specified below, subject to approval by the City:

9.1 Commercial General Liability coverage including bodily injury, personal injury and property damage, including vandalism and malicious mischief, based upon, involving or arising out of the ownership, use, occupancy or maintenance of the City Property and all areas appurtenant thereto, with combined single limits of not less than One Million Dollars ($1,000,000.00) per occurrence, Two Million Dollars ($2,000,000.00) in the aggregate, including One Million Dollars ($1,000,000.00) for fire damage legal liability.

9.2 Insurance covering all of Grantee's personal property owned and used in Grantee's business and found in, on or about the City Property, and any improvements to the City Property, in an amount not less than the full replacement cost.

9.3 At all times during the Term, Grantee agrees to keep and maintain, or cause Grantee’s agents, contractors, or subcontractors to keep and maintain worker’s compensation insurance (as required by California law) and other forms of insurance as may from time-to-time be required by law, or may otherwise be necessary to protect the City and the City Property from claims of any person who may, at any time, work on the City Property, whether as a servant, agent, or employee of Grantee.

9.4 If Grantee operates owned, hired or nonowned vehicles on the City Property, comprehensive automobile liability will be carried at a limit of liability not less than One Million Dollars ($1,000,000.00) combined bodily injury and property damage.

9.5 Grantee shall not commence any construction or operations on the City Property before obtaining, and shall maintain in force at all times during the duration and performance of this Agreement, the policies of insurance specified in this section. Such insurance shall be issued by an insurance company with a rating of no less than “A” in the current A.M. Best’s Insurance Guide. Each insurance policy shall name City as an additional insured, and shall provide that a thirty (30)-day notice of cancellation of coverage (ten (10) days for nonpayment of premium) shall be given to the City.

10. Indemnification. Grantee shall defend, pay, indemnify and hold harmless the City, its directors, officers, officials, employees, agents, invitees, and volunteers from all claims, suits, actions, damages, demands, costs or expenses, of any kind or nature, by or in favor of anyone whomsoever, and from and against any and all costs and expenses, including, without limitation, court costs and reasonable attorneys’ fees resulting from or in connection with: (a) any breach by 233
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Grantee of its obligations under this Agreement; and/or (b) loss of life, bodily or personal injury or property damage arising directly or indirectly out of or from or on account of (i) any occurrence upon the Easement Area, or (ii) entry, use or presence upon the Easement Area or the City Property by Grantee, its officers, directors, agents, contractors, consultants, employees, invitees, guests or patrons, except to the extent such loss or damage which was caused by the negligence or willful misconduct of the City.

11. Default and Remedies.

11.1 Default. Upon any material breach of any provision of this Agreement by Grantee, the City may serve written notice describing such breach to Grantee. If such breach is not cured within thirty (30) days after such written notice, Grantee shall be in default of this Agreement. If, however, by its nature the breach cannot be cured within thirty (30) days, Grantee may have a longer period as is necessary to cure the failure, but this is conditioned upon Grantee's prompt commencement of the cure within the thirty (30) day period and thereafter diligently completing the cure thereafter.

11.2 Remedies. A breach of this Agreement shall not entitle the City to cancel, rescind, or otherwise terminate this Agreement, however, such provision shall not affect in any manner any of the other rights or remedies which the City may have under law or in this Agreement by reason of any breach of this Agreement.

11.3 Failure to Enforce Not a Waiver. The failure of the City to insist upon the strict performance of any covenant, condition, or restriction in this Agreement shall not be construed as a waiver of any future breach of such provisions.

12. Notices. All notices, demands, consents, requests or other communications required to or permitted to be given pursuant to this Agreement shall be in writing, shall be given only in accordance with the provisions of this section, shall be addressed to the Parties in the manner set forth below, and shall be conclusively deemed to have been properly delivered and received by the receiving Party (a) upon receipt when hand delivered, (b) upon receipt when sent by facsimile to the number set forth below (with written confirmation of receipt from the sender), (c) upon the day of delivery if the notice has been deposited in an authorized receptacle of the United States Postal Service as first-class, registered or certified mail, postage prepaid, with a return receipt requested (provided that, the sender has in its possession the return receipt to prove actual delivery), or (d) upon actual delivery if deposited with any commercially-recognized overnight carrier that routinely issues receipts (provided that, the sending Party receives a confirmation of actual delivery from the courier). The addresses of the Parties to receive notices are as follows:

If to City: City of West Sacramento
1110 West Capitol Avenue
West Sacramento, CA 95691
Attn: City Manager
Facsimile: (916) 372-8765
With copy to: Kronick, Moskovitz, Tiedemann & Girard
1331 Garden Hwy., 2nd Floor
Sacramento, CA 95833
Attn: Jeffrey A. Mitchell
Facsimile: (916) 321-4555
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If to Developer: Delta Lane Housing Partners II LP
c/o Jamboree Housing Corporation
17701 Cowan Ave., Suite 200
Irvine, CA 92614
Attention: Marcy V. Finamore
Fax No. (949) 263-8676
With a copies to: Rutan & Tucker, LLP
611 Anton Blvd., Suite 1400
Costa Mesa, CA 92626
Attention: Patrick D. McCalla
Fax No. (714) 664-5100
If any notice is refused, the notice shall be deemed to have been delivered upon such refusal. Any notice delivered after 5:00 p.m. (recipient's time) or on a non-business day shall be deemed delivered on the next business day. A Party may change or supplement the addresses given above, or designate additional addressees, for purposes of this section, by delivering to the other Party written notice in the manner set forth above.

13. Attorneys’ Fees. Should any litigation be commenced between the Parties hereto concerning the City Property, this Agreement, or the rights and duties of either in relation thereto, the prevailing Party in such litigation shall be entitled, in addition to such other relief as may be granted, to its costs, including attorneys’ fees, and costs for such litigation and for executing upon or appealing any judgment.

14. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California. In the event of litigation arising under this Agreement, venue shall reside exclusively in the Superior Court of the County of Yolo.

15. Entire Agreement. This Agreement and the documents referenced herein contain the entire agreement between the Parties, and this Agreement shall not be modified in any manner except by an instrument in writing executed by the Parties or their respective successors-ininterest.

16. Mortgagee Protection. No portion of this Agreement or any amendment thereof shall operate to defeat or render invalid, in whole or in part, the rights of the beneficiary, insurer, guarantor or holder of a mortgage or deed of trust encumbering any portion of the Properties; provided that after foreclosure of any mortgage or deed of trust, the foreclosed property shall remain subject to this Agreement.

17. Successors and Assigns. The covenants, obligations and agreements contained in this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns, successors in interest, as the case may be, and both the burden and benefit of all of the covenants and obligations set forth in this Agreement with respect to the Property are intended to and shall run with the land.

18. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same agreement.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date set forth above.

GRANTEE:

City of West Sacramento,
a California municipal corporation
By:

Aaron Laurel, City Manager
ATTEST:

By:

Jennifer Cusmir, City Clerk
APPROVED AS TO FORM:

By:

Jeffrey A. Mitchell, City Attorney
237
2184737.5 Exhibit A
Exhibit A
(Legal Description of the Property)
238
2184737.5 Exhibit B
Exhibit B
(See Attached Legal Description of the City Property)
239
2184737.5 Exhibit C
Exhibit C
(See Attached Legal Description of the Easement Area)
240
2184737.5 Exhibit D
Exhibit D
(See Attached Depiction of the Easement Area)
241
2184737.5
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.

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.

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

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

WITNESS my hand and official seal.

Signature (Seal)
242
2207916.10 7203.496
Exhibit F
(See Attached Form of Slope Easement)
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2244320.2 1

NO FEE DOCUMENT
Government Code § 6103 & § 27383

Recording Requested By and
When Recorded Mail To:

Delta Lane Housing Partners II LP
c/o Jamboree Housing Corporation
17701 Cowan Ave., Suite 200
Irvine, CA 92614
Attention: Marcy V. Finamore (The Above Space For Recorder's Use Only)

SLOPE EASEMENT AGREEMENT
This Slope Easement Agreement (the “Agreement”) is made this day of _____________, 2022 by the City of West Sacramento, a California municipal corporation ("Grantor") and Delta Lane Housing Partners II LP, a California limited partnership and (“Grantee”).

FOR VALUABLE CONSIDERATION, receipt and sufficiency of which is hereby acknowledged,

1. Grant. Grantor as the owner of that certain real property located in the City of West Sacramento, County of Yolo, State of California, as set forth in Exhibit A, attached hereto and made a part hereof (“Grantor’s Property”), hereby grants to the Grantee, a perpetual, nonexclusive grading and slope easement (the "Slope Easement") for the construction of slopes, cuts and fills over, under, through, across, in and upon a portion of Grantor’s Property, as more particularly described and depicted in Exhibit B-1 and Exhibit B-2, attached hereto and incorporated herein (the "Slope Easement Area"), together with the right of ingress to and egress from Grantor’s Property for the purpose of constructing, reconstructing, repairing, altering, changing, patrolling and maintaining such slopes, cuts and files, including the right to construct or install retaining walls or plant shrubbery or vegetation (collectively, the "Slope Improvements"), or to take such other actions as may be required to maintain the stability or such slopes and control erosion, and the right to remove any trees or vegetation which threaten slope stability, impair or obstruct sight lines from adjacent streets or highways, or produce or deposit debris onto the roadway or otherwise obstruct or threaten to obstruct the roadway. Grantor, its heirs, successors, assigns, agents, contractors or employees, or any other party acting through or on their behalf, shall not remove any trees, shrubbery or other vegetation from the Slope Easement Area without the Grantee’s prior written consent.

2. Grantor's Right of Use. Grantor retains the right to use the Slope Easement Area in any lawful manner that does not unreasonably interfere with the Grantee's rights hereunder; provided, however, that Grantor shall not erect or construct any building or other structure in the Slope Easement Area, or add or remove any trees, shrubbery or other vegetation from the Slope Easement Area, or drill or operate any well, or drill any holes, or construct any other obstruction in the Slope Easement Area.

3. Access. Grantee shall provide Grantor at least 48-hours advance written notice before entering the Slope Easement Area except in the case of emergency (as determined by Grantee in its sole discretion), in which case no advance notice shall be required. 244
2244320.2 2

4. Repair and Maintenance. Grantee shall have the right to access the Slope Easement Area through Grantor’s improvements in the easement area if necessary, however, Grantee shall promptly repair any and all damage caused to Grantor’s improvements.

5. Indemnity. Grantee shall indemnify, defend, and hold Grantor harmless from and against any and all costs, claims, damages, losses, or liabilities (including, without limitation, court costs and reasonable attorney’s fees) arising out of or connected in any manner with the use of the Slope Easement Area by Grantee and its agents, employees, and contractors, except to the extent such loss or damage which was caused by the gross negligence or willful misconduct of the Grantor.

6. Miscellaneous. This Agreement contains the entire understanding of the parties with respect to its subject matter. This Agreement shall bind and inure to the benefit of the respective heirs, personal representatives, successors, and assigns of the parties hereto. The invalidity or unenforceability of any part of this Agreement shall not affect any other provision. This Agreement may only be amended or terminated with the written consent of the parties or their lawful successors in interest. Any waiver must be in writing to be valid, and the failure of any party to declare a default shall not act as a waiver of rights.

9. Counterparts. This instrument may be executed in several counterparts, and may be delivered by facsimile or other means of electronic transmission, each of which shall be deemed an original.
(Signatures on Next Page)
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2244320.2 3
IN WITNESS WHEREOF, the undersigned parties have read and duly executed this Agreement as of the date set forth above.

GRANTOR:

City of West Sacramento,
a California municipal corporation
By:

Aaron Laurel, City Manager
ATTEST:

By:

Jennifer Cusmir, City Clerk
APPROVED AS TO FORM:

By:

Jeffrey A. Mitchell, City Attorney
GRANTEE:

Delta Lane Housing Partners II LP,
a California limited partnership
By: JHC-Tower Bridge LLC,
a California limited liability company,
its Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
its Manager
By:  __________________________
Michael Massie
Chief Development Officer
246
2244320.2
Exhibit A
(See Legal Description of Grantor Property)
247
2244320.2
Exhibit B-1
(See Attached Easement Legal Description)
248
2244320.2
Exhibit B-2
(See Attached Easement Depiction)
249
2244320.2
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.

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)
250
2244320.2
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.

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)
251
2207916.10 7203.496
Exhibit G
(See Attached Grant Deed)
252
2207916.10 7203.496

NO FEE DOCUMENT
Government Code § 6103 & § 27383
Recording Requested By and
When Recorded, Mail This Document
and Tax Statements To:

Delta Lane Housing Partners L.P.
c/o Jamboree Housing Corporation
17701 Cowan Ave., Suite 200
Irvine, CA 92614
Attention: Marcy V. Torres
(SPACE ABOVE THIS LINE FOR RECORDER’S USE)

GRANT DEED
The undersigned Grantor(s) declare(s):

Documentary transfer tax is: _______
( x ) computed on full value of property conveyed, or
( ) computed on full value less value of liens and encumbrances remaining at time of sale.
( ) Unincorporated area ( x ) City of West Sacramento.

FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the City of West Sacramento, a California municipal corporation, the Grantor hereby GRANT(s) to
Delta Lane Housing Partners II LP, the Grantee,
the following described real property located in the City of West Sacramento, County of Yolo, State of California:
[See Exhibit A attached hereto]
Dated: _____________, 2022.

GRANTOR:

City of West Sacramento,
a California municipal corporation
By: __________________________
Aaron Laurel, City Manager
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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

ACKNOWLEDGEMENT

STATE OF CALIFORNIA )
)ss

COUNTY OF YOLO )
On ________________, 2022, before me, ___________________________________, a Notary Public, personally appeared _____________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature (Seal)
254
2207916.10 7203.496
Exhibit A to Grant Deed
(See Attached Legal Description of Property)
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2207916.10 7203.496
Exhibit H
Schedule of Performance

ACTION DATE

1. Submission of Project Plans. Developer shall
prepare and submit to the City for review and
approval Project Plans and related documents
containing the overall plan for the rehabilitation
and improvement of the site. (Section 8.2)
Complete.

2. Approval of Project Plans. The City shall approve
or disapprove the Developer’s Project Plans and
related documents (Section 8.2)
No later than November 4,
2022.

3. Submission of Grading, Site Utilities, and
Frontage Improvement . Developer shall
prepare and submit to the City for review and
approval plans for grading, site utilities, and
frontage improvements.

Complete.

4. Submission of Working Drawings and
Construction Documents. Developer shall
prepare and submit to the City for review and
approval working drawings and construction
documents.

Complete.

5. Submission of Financing Plan – Evidence of
Developer’s Other Financing. The Developer
shall submit to the City for review and approval
evidence of Other Financing, and any other
financing necessary for construction and
improvement of the Site. (Section 8.4)
Not later than October 1, 2022.

6. Approval – Evidence of Developer's Other
Financing. The City shall approve or disapprove
the Developer’s evidence of Other Financing.
(Section 8.4)
Not later than October 1, 2022.

7. City Approval of Construction Documents.

Developer has obtained City approval of the
Developer’s Construction Documents.

Not later than October 31, 2022.

8. Deposit into Escrow of Executed City Promissory
Notes, Deeds of Trust, Regulatory Agreements
and Other Required Documents. The Developer
shall deposit the required executed documents
with the Title Company. (Section 13.1)
Prior to close of escrow.
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2207916.10 7203.496

9. Close of Escrow and Acquisition of Property. The
Developer shall close escrow to acquire the
property from the City (Section 4)
Not later than November 9,
2022.

10. Commencement of Construction of Developer’s
Improvements. The Developer shall commence
construction of the improvements to be
constructed on the Site.

Within 60 days of pulling
building permits.

11. Submission of Property Management Plan.
(Section 8.3)
Not later than 60 days prior to
completion of construction and
submission of an application for
a certificate of occupancy.

12. City's Notification of Approval or Disapproval of
Property Management Plan.
(Section 8.3)
Within 30 days after receipt
thereof by the City.

13. Submission of Parking Management Plan.
(Section 8.5)
Within 6 months of pulling
building permits.

14. City's Notification of Approval or Disapproval of
Parking Management Plan.
(Section 8.5)
Within 30 days after receipt
thereof by the City.

15. Completion of Construction and Receipt of
Certificate of Occupancy. Developer shall
complete construction of the improvements to be
constructed on the Site. (Section 12.2)
Within 24 months after pulling
building permits.
257
2207916.10 7203.496
Exhibit I
(See Attached Form of Completion Guaranty)
258
2298840.1 1

GUARANTY OF COMPLETION
FOR VALUABLE CONSIDERATION, the adequacy and receipt of which is hereby acknowledged, Jamboree Housing Corporation, a California nonprofit public benefit corporation (the “Guarantor”), is executing this Guaranty of Completion (this “Guaranty”) to induce the City of West Sacramento, a California municipal corporation (“City”), to approve a Purchase and Sale Agreement and Joint Escrow Instructions dated ___________________, 2022 (the “Agreement”) between the City and Delta Lane Housing Partners II, LP, a California limited partnership ("Developer"), of which Guarantor is an affiliate. The Agreement and any and all related or supplemental instruments and agreements between Developer and City attached as an exhibit to the Purchase Agreement are collectively referred to herein as the “Project Documents.” Guarantor acknowledges that Guarantor has copies of and is fully familiar with the Agreement, all of its amendments, and the other Project Documents, all of which by this reference are incorporated herein as though set forth herein at length. Any term used herein, but not defined herein, shall have the meaning given to it in the Purchase Agreement.

AGREEMENT

1. Guarantor hereby guarantees to City, its successors and assigns, Developer’s diligent construction and full and final completion of the construction of the Project in accordance with the Purchase Agreement on or before the date required to be completed pursuant to the Purchase Agreement, in all material respects and any and all changes, additions, modifications, supplements, and amendments thereto, all free and clear of all mechanic’s and materialmen’s liens and stop notices in connection with or arising from the construction of the Project. Without limiting the generality of the foregoing, Guarantor agrees to (a) cause any and all costs of making, constructing and completing the Project, including but not limited to the costs of all labor, materials and equipment related thereto, to be paid and satisfied as the same shall become due, (b) cause any and all cost and expense overruns to be funded, paid and satisfied from Guarantor’s own resources as the same may occur, and (c) cause the completion, by using Guarantor’s own resources, in a timely, good, workmanlike, and lien-free manner of the construction of the Project, in accordance with the terms of the Purchase Agreement. Notwithstanding the foregoing, in the event City demands that Guarantor perform its obligations under this Guaranty, Guarantor shall be entitled to receive, on and subject to all of the terms and conditions of the City Loan Agreement and the HOME Loan Agreement, disbursement of remaining proceeds of the City Loan and HOME Loan to finance Guarantor’s completion of the Project, as though Guarantor was Borrower.

By way of clarification only without limiting the foregoing, as a condition precedent to Guarantor’s receipt of any proceeds of the City Loan or the HOME Loan pursuant to this Guaranty, Guarantor shall have first cured all defaults (other than the event of default caused by Borrower’s failure to timely complete the Project in accordance with the City Loan Agreement or HOME Loan Agreement (as applicable) (other than any default waived in writing by City). In the event Guarantor fails or refuses (a) to commence completion of the construction as provided hereunder within thirty (30) days after City’s written demand therefor or (b) otherwise to perform any of its obligations under this Guaranty for a period of thirty (30) days after written notice by City, then City may, at its sole discretion, complete the Project and expend such sums to complete the Project as reasonably necessary. The amount of any and all such expenditures made by City shall be immediately due and payable by Guarantor to City upon demand. Nothing contained in this Section shall be or be construed to constitute a right of subrogation on the part of Guarantor.

The foregoing obligations to be paid and/or performed by Guarantor in connection with this Guaranty, shall hereinafter be collectively referred to as the “Obligations”. 259
2298840.1 2

2. This Guaranty shall remain effective until the completion of the Project in accordance with the Developer’s obligations under the Purchase Agreement as evidence by the issuance by the City of a Certificate of Compliance as contemplated in Section 12.15 of the Purchase Agreement.

3. Guarantor agrees that Guarantor is directly and primarily liable to City, that the obligations of Guarantor hereunder are independent of the Obligations and that a separate action or actions may be brought and prosecuted against Guarantor, whether or not action is brought against Developer or whether or not Developer is joined in any such action or actions. Guarantor agrees that any releases which may be given by City to Developer or any other guarantor or endorser shall not release Guarantor from this Guaranty. In the event that any bankruptcy, insolvency, receivership or similar proceeding is instituted by or against Guarantor and/or Developer or in the event that either Guarantor or Developer becomes insolvent, makes an assignment for the benefit of creditors, or attempts to effect a composition with creditors, or if there be any default under the Agreement (whether declared or not), then, at City’s election, without notice or demand, the obligations of Guarantor created hereunder shall become due, payable and enforceable against Guarantor whether or not the Obligations are then due and payable. As a condition to payment or performance by Guarantor under this Guaranty, City shall not be required to, and Guarantor hereby waives any and all rights to require City to: prosecute or seek to enforce any remedies against Developer or any other party liable to City on account of the Obligations and/or require City to seek to enforce or resort to any remedies with respect to any security interests, liens or encumbrances granted to City by Developer or any other party on account of the Obligations.

4. Guarantor hereby agrees to indemnify City and hold City harmless against all obligations, demands and liabilities, by whomsoever asserted, and against all losses in any way suffered, incurred, or paid by City as a result of or in any way arising out of, following or consequential to transactions with Developer under the Agreement, and also hereby agrees that this Guaranty shall not be impaired by any modification, supplement, extension, or amendment of any contract or agreement to which City and Developer may hereafter agree, respecting the Agreement, nor by any modifications, release, or other alteration of any of the Obligations hereby guaranteed or of any security therefor, nor by any agreements or arrangements whatever with Developer or anyone else.

5. Guarantor hereby authorizes City, without notice or demand and without affecting Guarantor’s liability hereunder, from time to time to: (a) renew, compromise, extend, accelerate, or otherwise change the terms of any of the Obligations, or any part thereof, (b) take and hold security for the performance of the Obligations guaranteed hereby, and exchange, enforce, waive, and release any such security; (c) apply such security and direct the order or manner of sale thereof as City in its discretion may determine; (d) release or substitute any one or more endorser(s) or guarantor(s); (e) assign, without notice, this Guaranty in whole or in part and/or City’s rights hereunder to anyone at any time; and (f) subordinate any security interest in any security or any portion thereof to the rights of any other creditor or condition. Guarantor hereby agrees that City may do any or all of the foregoing in such manner, upon such terms, and at such times as City, in its discretion, deems advisable, without in any way or respect impairing, affecting, reducing or releasing Guarantor from Guarantor’s undertakings hereunder, and Guarantor hereby consents to each and all of the foregoing acts, events and/or occurrences.

6. Guarantor hereby waives any right to assert against City as a defense, counter-claim, setoff or cross-claim, any defense (legal or equitable), set-off, counter-claim, cross-claim and/or other claim which Guarantor may now or at any time hereafter have against Developer and/or any other party liable to City in any way or manner. Guarantor hereby waives all defenses, counter-claims and offsets of any kind or nature, arising directly or indirectly from the present or future lack of 260
2298840.1 3
perfection, sufficiency, validity and/or enforceability of the Agreement, or any security interest, and Guarantor hereby waives the benefit of Code of Civil Procedure section 431.70 and any similar provision of law.

7. Guarantor hereby waives the benefits of any statute of limitations affecting the Obligations or Guarantor’s liabilities hereunder or the enforcement thereof, and any act which extends said statute with respect to the Obligations shall similarly extend any statute of limitations applicable hereunder.

8. Guarantor hereby waives any claim, estoppel or defense arising by reason of any course of action by City which in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s subrogation rights, rights to proceed against Developer for reimbursement, and/or any other rights of the Guarantor to proceed against Developer or against any other person or security. Until the obligations have been satisfied, Guarantor shall not have any right of subrogation, and Guarantor waives any benefit of and any right to participate in the use of collateral.

9. Guarantor hereby authorizes and empowers City, at its sole discretion and without any notice to Guarantor whatsoever, to exercise any right or remedy which City may have (including, but not limited to, judicial foreclosure, public or private sale, combined or several sales, exercise of rights of power of sale, or taking a deed or an assignment in lieu of foreclosure), as to any collateral in real, personal or intangible property which City may hold for the Obligations.

Guarantor specifically waives all rights and defenses that Guarantor may have because the Obligations are secured by real property. This means, among other things, (1) City may collect from Guarantor without first foreclosing on any real or personal property collateral pledged by the Developer; and (2) if City forecloses on any real property collateral pledged by Developer:
(A) The amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price; and (B) City may collect from Guarantor even if City, by foreclosing on the real property collateral, has destroyed any right Guarantor may have to collect from Developer. This is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have because the Developer’s debt is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Sections 580a, 580b, 580d, or 726 of the Code of Civil Procedure.

10. Guarantor waives all rights and defenses arising out of an election of remedies by the creditor, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed the Guarantor’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the Code of Civil Procedure or otherwise. With full knowledge of such defenses, Guarantor waives all such defenses intentionally and to the maximum extent permitted by law. Guarantor shall be liable to City, in the full amount of the Obligations, including any deficiency resulting from the exercise by City of any such remedy, even though (a) any and all rights which Guarantor may have against others might be destroyed or dismissed by the exercise of any such remedy and, without limiting the foregoing, (b) City or Guarantor, or both, might be barred by Sections 580a, 580b, 580d or 726 of the California Code of Civil Procedure from recovering any or all amounts from Developer as a result of the exercise of any such remedy or for any other reason, and (c) City would, in the absence of such waiver, be subject to defenses of Guarantor against liability for a deficiency under Sections 580a, 580b, 580d or 726 of the California Code of Civil Procedure.

11. Guarantor hereby expressly waives the benefit, whether direct or indirect, of all of said provisions of law and any amendments and replacements thereof to the fullest extent permitted 261
2298840.1 4
by law, and of any or all claims, defenses and estoppels which Guarantor may have arising from or in any way related to said provisions. Guarantor specifically waives any defense of fair value relating to the use of any such remedy, including, without limitation, the fair value provisions of Code of Civil Procedure Sections 580a and 726, and expressly agrees to be liable for the full amount of any deficiency resulting from the exercise by City of any such remedy, regardless of the extent to which such deficiency differs from the fair value of such property.

12. Guarantor hereby waives, to the fullest extent permitted by law, (a) any defense arising as a result of City’s election, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, (b) any defense based on any borrowing or granting of a security interest under Section 364 of the Bankruptcy Code, (c) any defense based upon Section 9504 of the California Commercial Code, and (d) without limiting the generality of the foregoing or any other provision hereof, all rights and benefits which might otherwise be available to Guarantor as suretyship defenses.

13. Guarantor hereby waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of default notice of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or additional indebtedness, and all other notices or formalities to which a guarantor or surety may otherwise be entitled, including, but not limited to, all defenses and rights which would exist by virtue of any insufficiency of or failure to give notice under Section 9504 of the California Commercial Code. Guarantor hereby waives any right of subrogation Guarantor may have or assert, or any other right of reimbursement, contribution, indemnity or other suretyship rights and claims from Developer or any other party, unless City expressly consents, in writing, to Guarantor’s assertion of such rights. Guarantor hereby agrees that, in light of the above waivers, Guarantor shall not be deemed a “creditor” of Developer for any purpose, including, but not limited to, Sections 547 and 550 of the Bankruptcy Code.

14. WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER

PROVISION OF THIS GUARANTY, GUARANTOR HEREBY WAIVES, TO THE MAXIMUM

EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND ALL RIGHTS OF SUBROGATION,

REIMBURSEMENT, INDEMNIFICATION AND CONTRIBUTION AND ANY OTHER RIGHTS

AND/OR DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE SECTIONS 2787 TO 2844, INCLUSIVE, AND CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 580a, 580b, 580c, 580d AND 726.

15. All monies or other property of Guarantor at any time in City’s possession may be held by City as security for any and all obligations of Guarantor to City, no matter how or when arising, whether absolute or contingent, whether due or to become due, and whether under this Guaranty or otherwise, and City is hereby granted a security interest in all such property. Guarantor also agrees that City’s books and records showing the account between City and Developer shall be admissible in any action or proceeding and shall be binding upon Guarantor for the purpose of establishing the terms set forth therein and shall constitute prima facie proof thereof.

16. Guarantor is presently informed of the financial condition of Developer and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonperformance of the Obligations. Guarantor is not concerned with Developer’s financial condition or with the condition or value of any collateral and Guarantor waives its right, if any, to require City to disclose to Guarantor any information it may have or hereafter acquire concerning Developer’s past, present or future character, credit, collateral or financial condition. Guarantor assumes the responsibility for being and keeping informed of the financial condition of Developer 262
2298840.1 5
and of all circumstances bearing upon the risk of non-payment of the Obligations, and the collateral and security therefor, which diligent inquiry would reveal. If Developer is a corporation, partnership or limited liability company, City need not inquire into the power of Developer or the authority of its officers, directors, partners or agents acting or purporting to act in its behalf. All of City’s extensions of credit to Developer shall be deemed to have been made at Guarantor’s special instance and request and in consideration of and in reliance upon this Guaranty.

17. During any period that an event of default has occurred and is continuing under this Guaranty, any and all present and future debts and obligations of Developer to Guarantor shall be postponed in favor of and subordinated to the full payment and performance of all present and future Obligations. Without the prior consent of City, such subordinate indebtedness shall not be paid in whole or in part nor will Guarantor accept any payment of or on account of any such indebtedness so long as such event of default is continuing. At the request of City, Developer shall pay to City all or any part of any such subordinated indebtedness and any amount so paid to City at its request shall be applied to the Obligations. Each payment on any indebtedness of Developer to Guarantor received in violation of any of the provisions of this Guaranty shall be deemed to have been received by Guarantor as trustee for City and shall be paid over to City immediately on account of the Obligations but without otherwise affecting in any manner Guarantor’s liability under any of the provisions of this Guaranty.

18. In the event that this Guaranty is secured by real or personal property, any default under the terms of the agreement granting City rights in the collateral shall be a default hereunder. The preceding sentence notwithstanding, however, this Guaranty shall not be deemed secured by real or personal property unless City expressly, in writing, accepts such real or personal property security, except as otherwise provided in Section 15, above. Any sale or transfer of collateral securing this Guaranty that is not expressly consented to, in writing, by City prior to such transfer, shall also constitute a default hereunder.

19. Without affecting Guarantor’s obligations created hereby or hereunder, City is hereby granted full power and authority, in its uncontrolled discretion, at any time, and from time to time, either before or after any notice of revocation hereof, and in such manner and upon such terms as it deems fit, with or without notice to Guarantor:

19.1 To apply any one or more payments or recoveries from Developer or from Guarantor, or any sums realized from collateral, to any indebtedness or obligation of Developer to City in such manner and in such order of priority as City deems fit, whether or not such indebtedness or obligation upon which application is made is guaranteed hereby or is otherwise secured or is due at the time of such application;

19.2 To apply any payment or recoveries from any other guarantor or sums realized from collateral furnished by any other guarantor upon any indebtedness or obligation of such guarantor to City in such manner and in such order of priority as City deems fit, whether or not such indebtedness or obligation relates to the Obligations or is secured or is due at the time of such application;

19.3 To refund to Developer at any time, with or without notice and at the sole discretion of City, any payment received by City upon the Obligations, and payment to City of the amount so refunded to Developer shall be fully guaranteed by this Guaranty even though prior hereto this Guaranty may have been cancelled or surrendered by City; 263
2298840.1 6

19.4 To create new Obligations of Developer or renew, compromise, extend, increase, accelerate and otherwise change the time for payment of, or otherwise change the terms of, the Obligations of Developer, or any part thereof, including increasing or decreasing the rate of interest thereon;

19.5 To take and hold security for the payment of this Guaranty or the Obligations, perfect such security or refrain from perfecting such security, whether or not such security is required under the Agreement, and exchange, enforce, waive or release (whether intentionally or unintentionally) any such security or any part thereof, purchase such security and direct the order or manner of sale thereof as City in its sole discretion may determine; and

19.6 To settle, release, compromise with, or substitute any one or more endorsers, guarantors and/or other obligors of this Guaranty or the Obligations.

20. This Guaranty shall continue in full force and effect until the Obligations are fully paid, performed and discharged and City gives the Guarantor written notice of that fact. The Obligations shall not be considered fully paid unless and until all payments with respect to the Obligations are no longer subject to any right on the part of any person whomsoever, including, but not limited to, Developer, Developer as a debtor-in-possession, and/or any trustee in bankruptcy, or receiver or assignee, to set aside such payments or seek to recoup the amount of such payments, or any part thereof. The foregoing shall include, by way of example and not by way of limitation, all rights to recover preferences voidable under Title 11 of the United States Code. In the event that any such payments to City are set aside after the making thereof, in whole or in part, or settled without litigation, to the extent of such settlement, all of which is within City’s discretion. Guarantor shall be liable for the full amount City is required to repay plus costs, interest, attorneys’ fees and any and all expenses which City paid or incurred in connection therewith.

21. This Guaranty shall be binding upon the successors and assigns of the Guarantor and shall inure to the benefit of City’s successors and assigns. The death or disability of Guarantor shall not terminate this Guaranty.

22. Guarantor’s liability shall continue notwithstanding the incapacity, lack of authority, death or disability of any other or others, including without limitation Developer and any co-guarantors or sureties, and the failure by City or its transferee to file or enforce a claim against the estate (either in administration, bankruptcy or other proceeding) of any other or others, including without limitation Developer and any co-guarantors or sureties, or to seek any relief from any stay, restraining order, injunction, or other restraint on exercise of any remedy or recourse with respect to any other or others, including without limitation Developer and any co-guarantors or sureties or collateral, shall not operate to release Guarantor from liability hereunder. Guarantor shall not be released from liability hereunder if recovery from Developer or from any other guarantor or surety is or hereafter becomes barred by any statute of limitations or if such liability is or becomes otherwise unenforceable.

23. Notwithstanding any modification, discharge or extension of the Obligations or any amendment, modification, stay or cure of City’s rights which may occur in any bankruptcy or reorganization case or proceeding concerning Developer, whether permanent or temporary, and whether assented to by City, Guarantor hereby agrees that Guarantor shall be obligated hereunder to discharge Guarantor’s obligations in accordance with the terms of the Obligations and the terms of this Guaranty in effect on the date hereof. Guarantor understands and acknowledges that by virtue of this Guaranty, Guarantor has specifically assumed any and all 264
2298840.1 7
risks of a bankruptcy or reorganization case or proceeding with respect to Developer. As an example and not in any way of limitation, a subsequent modification of the Obligations in any reorganization case concerning Developer shall not affect the obligation of Guarantor to perform the Obligations in accordance with their original terms.

24. All rights, powers and remedies of the City hereunder and under any other agreement now or at any time hereafter in force between City and Guarantor shall be cumulative and not alternative and shall be in addition to all rights, powers and remedies given to City by law.

25. If Guarantor at any time or times shall fail to do any act or things required by this Guaranty or to perform or comply with any agreement, provision or condition of the Agreement, City at its election may, but shall not be required to, do such act or thing or cause the same to be done or cause such agreement, provision or condition to be performed or complied with and shall promptly thereafter notify Guarantor in writing. Guarantor shall reimburse City upon demand for all expenditures City may make and all expenses City may incur by reason of Guarantor’s failure to do or perform or comply, together with interest thereon from the date of incurring such expense at the highest rate provided in the Agreement, not to exceed, however, the maximum, if any, permitted by any applicable law. “Expenses” shall not be limited to direct expenses of doing or performing or complying with anything required by this Guaranty, but shall include, without limitation, all reasonable costs and expenses of investigating the failure to do or perform or comply, and the events and conditions surrounding the same or relating thereto, reasonable fees charged by and expenses of professional consultants and advisors including attorneys, accountants, architects, surveyors and engineers (including reasonable costs and expenses of such professional services and advice with respect to examination and analysis of rights and remedies, negotiations with Developer and with any other parties in interest such as guarantors, other encumbrancers, receivers, trustees and the like, and reasonable professional fees and expenses with respect to any action or proceeding which City may commence or in which City may appear or participate, whether for the purpose of protecting City’s rights or interest or otherwise, and all professional fees and expenses in or in connection with any review of or appeal from any proceeding or action), costs of title search and premiums for title reports and all other reasonable costs and expenses.

26. If any party constituting Guarantor is a corporation, partnership, limited liability company, trust, or other legal entity, each individual executing this Guaranty on behalf of such entity, and the entity, each represents and warrants that he, she or it is duly authorized to execute and deliver this Guaranty on behalf of the entity in accordance with the terms of the organizational documents of such entity and that all requisite action or consents have been obtained pursuant thereto.

27. Guarantor further represents and warrants that: (a) this Guaranty is a valid and legally binding obligation of Guarantor enforceable in accordance with its terms; (b) the execution and delivery of this Guaranty are not, and the performance of this Guaranty will not be, in contravention of, or in conflict with, any agreement, indenture or undertaking to which Guarantor is a party or by which Guarantor or any of the property of Guarantor is or may be bound or affected and do not, and will not, cause any security interest, lien or other encumbrance to be created or imposed upon any such property; (c) except as disclosed to City in writing prior to the date of this Guaranty, there is no litigation or other proceeding pending, or threatened against, or affecting, Guarantor or Guarantor's properties which, if determined adversely to Guarantor would have a materially adverse effect on the financial condition, properties, businesses or operations of Guarantor; (d) Guarantor is not in default with respect to any order, writ, injunction, decree or demand of any court or other governmental or regulatory authority; (e) Guarantor has derived or expects to derive a financial advantage from each and every relinquishment of legal rights made or granted, 265
2298840.1 8
or to be made or granted, by City to Developer in connection with the Obligations; (h) all representations of Developer in the Agreement are true and correct in all material respects and do not omit to state matters that would have a material adverse effect upon the completeness and accuracy of all of the express representations therein; and (j) Guarantor has copies of and is fully familiar with the Agreement, and represents and warrants that all necessary action has been taken by Developer to authorize Developer’s execution of the Agreement and to engage in the transactions thereby contemplated.

28. Any notice to be given or other document to be delivered by any party to the other or others hereunder, may be delivered in person, or may be deposited in the United States mail, duly certified or registered, return receipt requested, with postage prepaid, or by a recognized overnight delivery service, or by facsimile machine if concurrently delivered by another permissible method set forth in this section, and addressed to the party for whom intended, at the following address:

If to Guarantor: Jamboree Housing Corporation
17701 Cowan Ave., Suite 200
Irvine, CA 92614
Attention: Marcy V. Finamore
Fax No. (949) 263-8676
If to City: City of West Sacramento
1110 West Capitol Avenue
West Sacramento, CA 95691
Attention: City Manager
Fax No. (916) 372-8765
Any party hereto may from time-to-time, by written notice to the other, designate a different address which shall be substituted for the one specified above. Unless otherwise specifically provided for herein, all notices, payments, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly given and received (i) upon personal delivery, or (ii) as of the third business day after mailing by United States registered or certified mail, return receipt requested, postage prepaid, addressed as set forth above, or (iii) the immediately succeeding business day after deposit with a recognized overnight delivery system, or (iv) upon confirmation of receipt if delivered by facsimile machine.

29. Receipt of a true copy of this Guaranty is hereby acknowledged by Guarantor.

30. This Guaranty cannot be modified orally. No modification of this Guaranty shall be effective for any purpose unless it is in writing and executed by City. All prior agreements, understandings, representations and negotiations, if any, are merged into this Guaranty.

31. Guarantor agrees to pay all reasonable attorneys’ fees and all other costs and out-of-pocket expenses which may be incurred by City in the enforcement of this Guaranty or in any way arising out of, following, or consequential to the enforcement of the Obligations, whether under this Guaranty, the Agreement, or otherwise.

32. In all cases where the word “Guarantor” is used in this Guaranty, it shall mean and apply equally to each of and all of the individuals and/or entities which have executed this Guaranty. 266
2298840.1 9

33. All acts and transactions hereunder and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California. Guarantor agrees that all actions or proceedings arising in connection with this Guaranty shall be tried and litigated only in Yolo County state court or the federal court located in the Eastern District of California.

IN WITNESS WHEREOF, the undersigned has executed this Guaranty this ____ day of ____________, 2022.

GUARANTOR:

Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
By:

Michael Massie
Chief Development Officer
267
2207916.10 7203.496
Exhibit J
(See Attached Form of Construction Loan Documents)
268
2220094.8 1
Error! No document variable supplied.

CITY LOAN AGREEMENT
THIS CITY LOAN AGREEMENT (“Loan Agreement”) is made and entered into ______________, 2022, by and between the City of West Sacramento, a California municipal corporation (the “Lender”) and Delta Lane Housing Partners II LP, a California limited partnership (“Borrower”), and collectively referred to herein as “the Parties”.

RECITALS
A. On or about _____________, 2022, Lender and Borrower entered into a Purchase and Sale Agreement and Joint Escrow Instructions (“Purchase Agreement”) for the purchase of certain real property consisting of approximately .99 acres located in the City of West Sacramento, County of Yolo (“County”), State of California, as more particularly described on Exhibit A, attached hereto (the “Property”).

B. Borrower intends to purchase and develop the Property with a project that contains at least 59 affordable unit apartments in a four-story building with community space on the ground floor with at-grade parking (the "Project").

C. Borrower has requested this loan from Lender to finance the purchase of the Property and the construction of the Project.

D. Borrower has also applied to Lender for a loan funded from the HOME investment Partnerships Program (“HOME Loan”), which is governed by other loan documents.

E. Lender is willing to make the Loan to the Borrower for such purposes on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties hereto agree as follows:

AGREEMENT

1. THE LOAN. Subject to the terms and conditions of this Loan Agreement, the Lender hereby agrees to lend the Borrower, and the Borrower hereby agrees to borrow from Lender the amount of __________________________ Dollars ($_______________.00) (the "Loan"). The Loan consists of Four Million Three Hundred Ninety-Four Thousand Six Hundred Twenty Six Dollars ($4,394,626.00) in Lender housing funds, for construction costs (the “Construction Funds”), and the value of the Property (taking into account the various easements set forth in the Purchase Agreement), which is __________________ Dollars ($______________.00).

1.1 Promissory Note. The loan shall be evidenced by a residual receipts Promissory Note (the “Note”).

1.2 Security. The Loan shall be secured by a deed of trust (“Deed of Trust”), to be recorded against the Property upon close of escrow on the Property. Upon close of escrow, Lender will receive an ALTA Lender’s Policy of Title Insurance (2006), together with such 269
2220094.8 2
Error! No document variable supplied.
endorsements as Lender may reasonably request, showing the Deed of Trust to be senior in priority to all liens and encumbrances, except the approved lien by senior lender to secure its loan to Borrower in connection with this transaction, other loans from the City of West Sacramento, the lien of current taxes not yet due and payable, and all other items shown on Schedule B1 to the policy issued to Lender at the closing of the Loan. Borrower shall be responsible for all escrow fees and, costs, including the cost of the premium for the title insurance policy.

Borrower shall from time to time execute and deliver to Lender all security documents and instruments or amendments thereto which Lender may deem necessary in order to create and perfect any liens of security interests in favor of Lender, and notices to creditors in connection with purchase money security interests. Borrower shall cooperate with Lender in providing Lender with such information as may be necessary to create such documents or instruments.

1.3 Regulatory Agreement. Borrower shall execute, in recordable form, a regulatory agreement (“Regulatory Agreement”), which contains affordable housing covenants and prohibits discrimination on the Property, and which shall be recorded against the Property at close of escrow for a term of fifty-five (55) years.

1.4 Purpose and Use of Funds. The purpose of the Loan is to finance the construction of the Project, and the Loan funds shall not be used for any other purposes.

2. REPRESENTATIONS AND WARRANTIES. The Borrower represents and covenants the following:

2.1 Duly Authorized: The making and performance by the Borrower of this Loan Agreement, and the execution and delivery of the Note, and any Deed of Trust and Instruments have been duly authorized by all necessary parties and shall not violate any law, rule, regulation, order, writ, judgment, decree or determination, presently in effect; or result in a breach of or constitute a default under any bank loan or any other agreement or instrument to which the Borrower is a party or by which it or its property may be bound or affected.

2.2 Valid, Binding Enforcement Obligations: This Loan Agreement, and each of the agreements, documents, or instruments required to be executed by Borrower in connection with this Loan Agreement, are valid, binding, and enforceable obligations of Borrower in accordance with their terms.

2.3 No Legal Actions: There are no legal actions, suits, or proceedings pending, or to the knowledge of the Borrower, threatened against the Borrower before any court or administrative agency, which if determined adversely to the Borrower, would have a material adverse affect on the financial condition or business of the Borrower.

2.4 Not in Default: To the knowledge of the Borrower, the Borrower is not in default of any obligation, covenant, or condition contained in any bond, debenture, note or other evidence of indebtedness or any mortgage or collateral instrument securing the same.

2.5 Taxes Are Paid: To the knowledge of the Borrower, Borrower has paid in full all taxes and assessments levied by any, federal, state or local taxing agency against Borrower or its personal or real property.
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2.6 No Adverse Change: There has been no material adverse change since the date of Loan application in the financial condition, organization, operation, business prospects, fixed properties, or personnel of the Borrower.

2.7 Evidence of Project Funding: The Borrower has or will submit to the Lender prior to the date escrow closes on the Property pursuant to the Purchase Agreement (the “Closing Date”) all material documents or evidence relating to the balance of any project financed by this Loan.

As used in this Section 2, the phrase “to the knowledge of the Borrower” shall mean the actual knowledge of Michael Massie, without duty of inquiry or investigation.

3. COMPLIANCE. Borrower shall comply with the Affirmative Obligations, attached hereto and incorporated herein as Exhibit B, and the Negative Obligations, attached hereto and incorporated herein as Exhibit C.

4. COMPLETION OF CONSTRUCTION. Construction shall be completed and one hundred percent (100%) occupied by October 31, 2024. [NOTE: date should match the HOME loan documents and be later than Chase’s required completion and occupancy date.]

5. CONDITIONS OF LENDING. The obligation of the Lender to make the Loan shall be subject to the fulfillment on the Closing Date of each of the following conditions:

5.1 Loan Documents. The Borrower shall have executed and delivered to the Lender this Loan Agreement, the Note, the Deed of Trust, and the Regulatory Agreement in forms approved by Lender.

5.2 Governmental Approval. The Borrower shall have secured all necessary approvals or consents, if required, of governmental bodies having jurisdiction with respect to any construction contemplated in accordance with the use of proceeds of the Loan. The Borrower shall comply with the applicable provisions of the City of West Sacramento Zoning Ordinance throughout the development and use of the Property.

5.3 Approval of Others. The Borrower shall have secured all necessary approvals or consents required with respect to this transaction by any mortgagor, creditor, or other party having any financial interest in the Borrower.

5.4 Disbursement Conditions. The Borrower shall have satisfied all disbursement conditions required under the terms of this Loan Agreement. The Loan proceeds shall be made available for use prior to the senior construction lender funds, and shall be disbursed as follows:

5.4.1 Lender shall authorize disbursements for Construction Funds for the Project improvements in the amount payable to the general contractor or applicable subcontractor or supplier, or to Borrower, as provided in this Section 5.4.1 and in accordance with the disbursement process set forth in Sections 5.4.2 and 5.4.3; provided, however, that ten percent (10%) of the aggregate remaining cash funds held by Lender (e.g., $_________________) (“Retention”) shall be withheld by Lender and disbursed in accordance with Section 5.4.3 below (provided, however, that if Borrower’s construction loan permits release of retainage thereunder attributable to contractors for early trades such as excavation and foundation, or permits retainage 271
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to be released for any other contractors whose portion of the Project has been completed, Lender may authorize the early release of retainage on such early trades (the “Early Trades”) so long as Borrower has provided Lender with a final lien waiver from the applicable Contractor). Borrower shall submit a disbursement request to Lender for disbursement of the costs invoiced for the authorized development costs, as described in the line items of the final budget ("Disbursement Request"), and shall set forth the share of the development costs to be funded by Lender, the senior construction lender and any other financial sources with respect to such request.

5.4.2 Invoices. Together with the Disbursement Request, Borrower shall provide Lender the following: (i) an invoice from the general contractor, contractor, supplier, vendor, consultant or other authorized person for work performed, materials supplied, services rendered, or authorized costs incurred (no advanced billings will be paid), and (ii) a statement verified under penalty of perjury by the applicable party that all items covered by the Disbursement Request have been completed or provided in accordance with the applicable contract or agreement and should now be paid, that there are no outstanding liens, claims, or disputes concerning the Project or Property, the total contract amount, if applicable, the percentage of the work completed, if applicable, and the percentage of the contract amount billed, if applicable. Upon receipt of the Disbursement Request and supporting documents, Lender shall have the absolute right to inspect and verify the work performed, materials or services provided, or other authorized costs incurred and invoiced.

5.4.3 Disbursement. Upon the provision of conditional lien releases related to such Disbursement Requests (and unconditional lien releases related to previously paid Disbursement Requests), Lender's verification of the information contained in the Disbursement Request, the work performed, materials supplied, services rendered, or authorized costs incurred and invoiced and its satisfaction, in its reasonable discretion, that the Lender's funds are solely being expended for costs of construction of the Project improvements and approved costs, Lender shall disburse directly to the Borrower for payment by Borrower to the general contractor, contractor, supplier, vendor, consultant or other authorized person. Lender will make such disbursements on the date requested by Borrower or as close to the requested date as is commercially reasonable (provided that the requested date is not less than ten (10) business days from delivery to Lender of the Disbursement Request and all items required pursuant to this Section). Notwithstanding anything to the contrary in this Agreement, Lender shall be under no obligation to disburse any of Lender's funds for costs that are not in compliance with this Section

5.4.3. Except with respect to the Early Trades, Lender shall hold the Retention until such time as Lender issues a certificate of occupancy for the Project, at which time Lender shall disburse the Retention to Borrower.

5.5 No Defaults. The Borrower shall not be in default under this Loan Agreement.

6. EVENTS OF DEFAULT. The entire unpaid principal of the Note, and the interest then accrued thereon, shall become and be immediately due and payable upon the written demand of the Lender, without any other notice or demand of any kind or any presentment or protest, if any one of the following events (an “Event of Default”) shall occur and be continuing at the time of such demand, whether voluntarily or involuntarily, without limitation, occurring or brought about by operation of law or pursuant to or in compliance with any judgment, decree or other of any court or any order, rules or regulations of any administrative or governmental body:
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6.1 Failure to Make Payment. A failure by the Borrower to make any payment due under the Note within ten (10) days after written notice from Lender.

6.2 Non-Payment of Other Secured Indebtedness. A failure by the Borrower to make any payment due of any other indebtedness of Borrower which is secured by any collateral which additionally secures the obligations of Borrower under this Loan and the acceleration of such indebtedness by such other lender.

6.3 Incorrect Representation or Warranty. If any representation or warranty contained in or made in connection with the execution and delivery of this Loan Agreement, or in any certificate furnished pursuant hereto, shall prove to be incorrect or to have been incorrect when made in any material respect.

6.4 Default in Obligations. If the Borrower shall default in the performance of any other term, obligation, covenant, or agreement contained in this Loan Agreement, including, without limitation, those contained in Exhibits B and C of this Loan Agreement, and such default shall continue unresolved for thirty (30) days after the City demands in writing that Borrower cure the failure. If, however, by its nature the failure cannot be cured within thirty (30) days, Borrower may have a longer period as is necessary to cure the failure, but this is conditioned upon Borrower's prompt commencement of the cure within the thirty (30) day period and thereafter diligently completing the cure thereafter within ninety (90) days thereafter.

6.5 Default Under Other Documents. A breach by Borrower of any provision of the Purchase Agreement, Note, Deed of Trust, Regulatory Agreement, HOME Loan documents, or any other agreement between Borrower and Lender in connection with the Project not cured in conformance with the respective agreement.

6.6 Insolvency.

6.6.1 If the Borrower shall become insolvent or shall cease to pay its debts as payments become due or shall voluntarily file a petition seeking reorganization of, or the appointment of a receiver, trustee, or liquidation for it or a substantial portion of its assets, or to effect a plan or other arrangement with creditors, or shall be adjudicated bankrupt, or shall make a voluntary assignment for the benefit of creditors.

6.6.2 If an insolvency petition shall be filed by or against the Borrower under any bankruptcy, insolvency, or similar law or seeking the reorganization of the Borrower, or the appointment of a receiver, trustee, or liquidator for the Borrower, or for a substantial portion of the property of the Borrower, and such petition shall not be dismissed, or such writ or warrant of attachment or similar process shall not be released or bonded within ninety (90) days after filing of levy.

6.7 Judgments. If any final judgment for the payment of money that is not fully covered by liability insurance shall be rendered against the Borrower, and within ninety (90) days said judgment shall not be discharged, or an appeal therefrom taken and execution thereon effectively stayed pending such appeal, and if such judgment be affirmed on such appeal, the same shall not be discharged within sixty (60) days.
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7. RIGHT UPON DEFAULT. Upon default by Borrower, Lender shall have all the rights and remedies available to it under state law in enforcing this Loan Agreement and Lender shall have all the rights to the collateral mentioned herein including, but not limited to, the following:

7.1 Accelerate and declare the full balance immediately due on the Note;

7.2 Specifically enforce the terms of this Loan Agreement;

7.3 Foreclose on any real property subject to the Deed of Trust; and

7.4 Pursue any and all other remedies available under law to enforce the terms of this Loan Agreement and Lender’s rights to the real and personal property identified herein, and in the Deed of Trust of the Lender.

8. OTHER DOCUMENTS. Lender may require and Borrower agrees to execute such other documents as may be required by the Lender in its sole discretion in order to comply with state and federal regulations governing the Loan proceeds and prudent lending practices, so long as such additional documents do not materially alter Borrower’s rights and obligations hereunder.

9. COLLECTION AGENT. Borrower hereby appoints the Lender as its agent to appoint a loan collection agent (the “Agent”) to provide loan servicing in accordance with this Loan Agreement and any exhibits to this Loan Agreement (“Loan Documents”). Lender may remove or replace the Agent at its sole discretion. Lender shall provide or cause to be provided to Borrower a notice of change in the Agent.

10. WAIVER. No failure or delay on the part of the Lender in exercising any right, power or remedy hereunder shall operate as a waiver thereof.

11. ATTORNEYS’ FEES. If either party commences an action against the other party arising out of or in connection with this Loan, the prevailing party shall be entitled to have and recover from the losing party its costs, including reasonable attorneys’ fees, expert witness fees, and costs of suit, both at the trial level and on appeal.

12. NOTICES. Any notices given under this Loan Agreement shall be in writing and shall be served either:

12.1 personally;

12.2 delivered by first class or express U.S. mail with postage prepaid, return receipt requested pursuant to registered or certified mail;

12.3 by nationally recognized overnight commercial courier service which provides a receipt with the date and time of delivery, with charges prepaid, or

12.4 by transmittal over electronic transmitting devices if the party to whom the notice is being sent has a receiving device in its office, and provided a complete copy of the notice shall also be served either personally or by first class mail. 274
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Notices shall be deemed received at the earliest actual receipt, three (3) days following deposit in U.S. mail with postage prepaid, or twenty-four (24) hours after deposit with a nationally recognized overnight commercial courier service with charges prepaid. Notices shall be directed as follows:

If to Lender: If to Borrower:

City of West Sacramento Delta Lane Housing Partners II, L.P. 1110 West Capitol Avenue c/o Jamboree Housing Corporation West Sacramento, CA 95691 17701 Cowan Ave., Suite 200
Attn: Aaron Laurel Irvine, CA 92614
Fax No. (916) 373-5848 Attention: Michael Massie
Fax No. (949) 263-8676
Copy to:

Kronick, Moskovitz, Tiedemann & Girard
1331 Garden Hwy., 2nd Floor
Sacramento, California 95833
Attn: Jeffrey A. Mitchell
Fax No. (916) 321-4555

13. MISCELLANEOUS.

13.1 Waiver of Notice. No failure or delay on the part of the Lender in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy hereunder. No modification or waiver or any provision of this Loan Agreement or of the Note, nor any consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances.

13.2 Amendments - Writing Required. The Lender hereby expressly reserves all rights to amend any provisions of this Loan Agreement, to consent to or waive any departure from the provisions of this Loan Agreement, to amend or consent to, or waive departure from the provisions of the Note, and to release or otherwise deal with any collateral security for payment of the Note provided, however, that all such amendments shall be in writing and executed by the Lender and the Borrower.

13.3 Payments. The Borrower shall make payments to the Lender in accordance with the terms and conditions and instructions contained in this Loan Agreement and the Note.

13.4 Survival of Representations and Warranties. All agreements, representations and warranties made by the Borrower herein or any other document or certificate delivered to the Lender in this transaction survive the delivery of this Loan Agreement, the Note and the Deed of Trust hereunder, and shall continue in full force and effect so long as the Note is outstanding.

13.5 Successors and Assigns. This Loan Agreement shall be binding upon the Borrower, its successors and assigns, except that the Borrower may not assign or transfer its 275
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rights without the prior written consent of the Lender. This Loan Agreement shall inure to the benefit of the Lender and, except as otherwise expressly provided in particular provisions hereof, all subsequent holders of the Note. Borrower acknowledges that Lender contemplates and may assign the Note and this Loan Agreement and consents to such assignments.

13.6 Counterparts. This Loan Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

13.7 Governing Law. This Loan Agreement shall be interpreted under and governed by the laws of the State of California, except for those provisions preempted by federal law.

However, the laws of the State of California shall not be applied to the extent that they would require or allow the court to use the laws of another state or jurisdiction. All Parties to the Loan Agreement agree that all actions or proceedings arising in connection with this Loan Agreement shall be tried and litigated only in the County of Yolo or the United States District Court for the Eastern District of California.

13.8 Attorney’s Fees. In the event of any Event of Default, or any legal action is commenced to interpret or to enforce the terms of this Agreement, the prevailing party in any such action shall be entitled to recover all reasonable attorneys’ fees and costs and any expert witness fees incurred in such action.

13.9 Waiver. Failure by Lender at any time to require performance by Borrower of any of the provisions of this Loan Agreement shall in no way affect Lender’s rights hereunder to enforce the same, nor shall any waiver by Lender of any breach hereof be held to be a waiver of any succeeding breaches or a waiver of this clause.

13.10 Successor and Assigns: This Loan Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors. The Parties agree to execute such further documents and instruments as shall be necessary to carry out the terms of this Loan Agreement, and such documents and instruments shall likewise be binding upon the Parties and their successors.
(Signatures on Next Page)
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IN WITNESS WHEREOF, the Parties hereto have each caused this Loan Agreement to be duly executed as of the date first written above.

CITY:

The City of West Sacramento,
a California municipal corporation
By:

Aaron Laurel, City Manager

ATTEST:
_____________________
City Clerk
OWNER:

Michael Massie
Chief Development Officer
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List of Exhibits:

A: Legal Description
B: Affirmative Obligations of the Borrower
C: Negative Obligations of the Borrower
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EXHIBIT A
Legal Description
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EXHIBIT B

AFFIRMATIVE OBLIGATIONS OF THE BORROWER
The Borrower agrees to comply with the following obligations from the date hereof until the Lender has been fully repaid with interest, unless the Lender shall otherwise consent in writing:

1. Payment of the Loan: To pay punctually the principal and interest on the Note according to its terms and conditions and to pay punctually any other amounts that may become due and payable to the Lender pursuant to the terms of the Loan Agreement or Note.

2. Payment of Other Indebtedness: To pay punctually the principal and interest due on any other indebtedness now or hereafter owed by the Borrower to the Lender or any other lender with a loan secured by the Property.

3. Insurance: To obtain at its sole cost and keep in full force and effect during the term of the Loan Agreement:

3.1 Broad form extended coverage property damage insurance covering fire and vandalism in an amount at least equal to the fair market value of the Property naming the City of West Sacramento as a loss payee;

3.2 Comprehensive general liability insurance in the amount of one million dollars ($1,000,000) per occurrence naming the City of West Sacramento, its officers, agents, and employees as additional insureds under the policy, and such policies shall stipulate that they shall operate as primary insurance, and that no other insurance effected by the City of West Sacramento or other named insured shall be called upon to cover a loss covered thereunder.

Evidence of coverage shall be submitted to the City of West Sacramento within fifteen (15) days of the execution of the Loan Agreement naming the City of West Sacramento as a loss payee under such policy. Such evidence shall be acceptable to Lender at its discretion, which shall not be unreasonably withheld if the insurance complies with this Section.

4. Certificates of Insurance: To file with the City of West Sacramento within fifteen (15) days of the execution of the Loan Agreement, a certificate of insurance and an endorsement which shall provide that no cancellation, major change in coverage, or expiration shall be made during the term of the Loan Agreement, without thirty (30) days’ written notice to the City of West Sacramento prior to the effective date of such cancellation, or change in coverage.

5. Pay All Taxes: To pay and discharge all personal property taxes, assessments, and governmental charges upon it or against its properties prior to the date on which the penalties attached thereto apply, except that the Borrower shall not be required to pay any such tax, assessment, or governmental charge which is being contested in good faith and by appropriate proceedings. If so required by Lender, Borrower shall provide a bond guaranteeing payment of such taxes or assessments in any case in which Borrower contests any tax and refuses to pay under this section.
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6. Provide Additional Equity: To provide additional equity funds to cover additional Project costs incurred as a result of overruns or unanticipated expenses or changes in work orders in the Project as specified in the Loan Agreement.

7. Maintain Existence: To maintain its existence, rights, privilege, and franchises within the State of California and qualify and remain qualified in each jurisdiction in which its present or future operations or its ownership of property requires such qualifications.

8. Provide Financial and Job Information: To (a) maintain adequate records and books of account in which all of its business and financial transactions shall be entered in accordance with generally accepted accounting principles, and (b) deliver to the Lender financial statements certified by an authorized officer of the Borrower to be true and accurate copies, within thirty (30) days of the close of the accounting period, and annual financial statements, prepared by an independent accountant and certified by an authorized officer of the Borrower to be true and accurate copies, within ninety (90) days of the close of the fiscal year. The Lender retains the right to request audited statements from the Borrower, to be obtained at the Borrower’s expense.

9. Recordkeeping. All records concerning construction, including invoices, receipts and contracts shall be kept for a period of not less than three (3) years from the closing of the Loan or completion of any funded construction, whichever is later. All relevant records pertaining to the project shall be accessible and available for inspection or audit by Lender for the same period of time. If so directed by the Lender, Borrower shall deliver to the Lender all records, accounts, documentation, and other relevant materials relating to the receipt and disbursement of Loan funds.

10. Notice of Public Proceedings: Provide written notice to the Lender of any public hearing or meeting before any administrative or other public agency which may in any manner affect the chattel, personal property, or real estate securing the Loan.

11. Right to Inspection: To grant the Lender, until the Note has been fully repaid with interest, the right at all reasonable hours, and upon not less than seven (7) days prior written notice for inspection of individual units and the interior of buildings, to inspect the chattel, personal property, and real estate used to secure the Loan, and to provide the Lender free access to the Borrower’s premises for the purpose of such inspection; provided, however, that if Lender desires to inspect any individual units, Lender acknowledges that Borrower cannot guaranty access, but will require all renters to provide such access in its rental documents and shall use reasonable commercial efforts to assist Lender in obtaining access.

12. Notice of Default: To give written notice to the Lender of any event within five (5) days of the event that constitutes an Event of Default as described in Paragraph 6 of the Loan Agreement or that would, with notice or lapse of time or both, constitute an Event of Default under this Loan Agreement.

13. Indemnify and Hold Harmless: Borrower shall indemnify, protect, defend, and hold harmless the City of West Sacramento, its officers, agents, employees, consultants and representatives from all claims, suits, damages, liabilities or costs of every name, kind and description, arising out of or relating in any way to the Loan Agreement or the Loan, or any agreement, document or instrument required to be executed or agreed to by Borrower in 281
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connection with the Loan, except to the extent caused by the wilfull misconduct or gross negligence of the City of West Sacramento, its officers, agents or employees. It is understood that the duty of Borrower to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. Acceptance by Lender of insurance certificates and endorsements required under the Loan Agreement does not relieve Borrower from liability under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply whether or not such insurance policies shall have been determined to be applicable to any of such damages or claims for damages.

14. Expenses of Collection or Enforcement: To pay the Lender, if the Borrower defaults on any provision of the Loan Agreement, in addition to any other amounts that may be due, an amount equal to the costs and expenses of collection, enforcement, or correction or waiver of the default incurred by the Lender’s rights under the Note and the Loan Agreement. The prevailing party shall be entitled to its reasonable attorneys’ fees.

15. Null and Void Covenants: In the event that any provision of the Loan Agreement or any other instrument executed on the Closing Date, or the application thereof, to any person or circumstances shall be declared null and void, invalid, or held for any reason to be relating to the Loan Agreement, or the Project, unenforceable by a court of competent jurisdiction, the remainder of the Loan Agreement shall nevertheless remain in full force and effect, and to this end, all obligations, covenants, conditions, and agreements described herein are deemed separate.

16. Neither Borrower nor any tenant of space in the Project shall generate, sell, treat, store, handle, dispose of or otherwise deal with Hazardous Materials (term defined in Section 24.3 of the Deed of Trust) on the Property. The Borrower shall comply with all applicable laws, rules, regulations, ordinances, licenses, permits, and other codes pertaining to Hazardous Materials.

The Borrower shall indemnify, defend, protect, and hold harmless Lender from all liability, claims, penalties, fines, losses, damages, and expenses of any kind, including, without limitation, cleanup costs and reasonable attorneys’ fees, incurred by Lender as a result of Borrower’s breach of the provisions of the Loan Agreement or the Deed of Trust, or breach of warranty regarding Hazardous Materials, or as a result of the presence of Hazardous Substances on the Property.

17. Annual tax returns on the Borrower and Jamboree Housing Corporation to be provided by April 30th of each year for the first three (3) years of the Loan, and at the request of Lender thereafter.

18. Quarterly interim business financial statements for the first twenty-four (24) months of the term of the loan (or longer if deemed necessary by Lender), due within thirty (30) days of each quarter end.

19. Borrower’s general contractor to provide project performance bond or letter of credit to ensure completion of construction of the project improvements.

20. All obligations of Borrower in this Exhibit E shall survive until all of Borrower’s indebtedness to Lender is fully repaid; except that any obligations relating to hazardous materials or substances shall survive indefinitely.
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EXHIBIT C

NEGATIVE OBLIGATIONS OF THE BORROWER
The Borrower agrees that, from the date hereof until payment in full of the Note, unless the Lender shall otherwise consent in writing, the Borrower shall not enter into any agreement or other commitment, the performance of which would constitute a breach of the terms and conditions contained in the Loan Agreement including, but not limited to, the following obligations. Any breach of these obligations would constitute an Event of Default, and the rights of default by the Lender may be executed.

1. Encumbrance of Borrower’s Assets: The Borrower shall not further encumber its assets or incur indebtedness in addition to that now existing and that provided for in the Loan Agreement, except the construction loan to be provided to the Project by JPMorgan Chase Bank, N.A., and that permanent loan to be provided by the California Department of Housing and Community Development, any refinancing of either such loans, the HOME Loan, and any other indebtedness incurred in the ordinary course of business.

2. Sell the Borrower’s Assets: The Borrower shall not sell or transfer all or any substantial part of its assets except those usually sold in the ordinary course of business.

3. Lease or Sublease Property: The Borrower shall not lease or sublease all or any portion of the Property acquired, constructed, or rehabilitated with the proceeds of this Loan except as contemplated pursuant to the Regulatory Agreement.

4. Change Ownership: Except as permitted in Section 16.3 of the Deed of Trust, the principals of the Borrower shall not permit, without the written permission of the Lender, any material change in the ownership structure, control, or operation of the Borrower including, but not limited to:

4.1 Merger into or consolidation with any other person, firm, or corporation;

4.2 Changing the nature of its business as carried on at the date hereof; and

4.3 Substantial distribution, liquidation, or other disposal of the Borrower’s assets to the stockholders or any other party.

5. Change the Project: The Borrower shall neither permit nor suffer to exist, without prior written consent by the Lender, any material change in the project’s plans and/or specifications submitted to the Lender as part of the Loan application. Material changes shall include any significant variance in the accepted plans and specifications, increases in contract prices, and/or additional financial obligations with respect to the construction and acquisition of assets.

6. Ineligible Use of Funds: The Borrower shall not expend or use the Loan funds for any costs that are deemed ineligible by the Loan program.
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CITY RESIDUAL RECEIPTS PROMISSORY NOTE
(West Gateway II)
$____________________.00 __________, 2022
FOR VALUE RECEIVED, Delta Lane Housing Partners II LP, a California limited partnership, with its principal office at 17701 Cowan Ave., Suite 200, Irvine, CA 92614 (“Borrower”), hereby promises to pay to the order of the City of West Sacramento, a California general law city, whose address is 1110 West Capitol Avenue, West Sacramento, California 95691 (“Lender”), a principal amount equal to ___________________________ Dollars ($______________.00), or so much, not to exceed this amount, as may be advanced by Lender to Borrower pursuant to that certain City Loan Agreement dated the same date herewith ("Loan Agreement"). The obligation of Borrower and Lender with respect to all such advances is subject to the terms of: (a) the Loan Agreement; (b) this Note; (c) the City Deed of Trust, Assignment of Rents, and Security Agreement and Fixture Filing recorded against the real property consisting of approximately ___ acres located in the County of Yolo (“County”), West Sacramento, California (the “Property”) by Borrower as Trustor, for the benefit of Lender, as beneficiary, which secures payment of this loan (the “Deed of Trust”) (the above documents are collectively referred to as the “Loan Documents”); (d) that certain Regulatory Agreement by and between Borrower and Lender to be recorded against the Property (the “Regulatory Agreement”); and (e) that certain Purchase and Sale Agreement and Joint Escrow Instructions dated _____________, 2022 (the “Purchase Agreement”). Borrower also promises to pay to the order of Lender accrued simple interest on the principal balance at the simple rate of three percent (3%) per annum in accordance with the payment terms stipulated below.

3. BORROWER’S OBLIGATION. This Note evidences the obligation of Borrower to Lender for the repayment of funds loaned to Borrower by Lender to finance, in part, the development of sixty (60) units of rental housing in the City of West Sacramento, fifty-nine (59) of which are rent restricted (the “Regulated Units”) in a four-story building, as described in the Regulatory Agreement (the “Project”).

4. AMOUNT AND TIME OF PAYMENT. If there is a Deferred Developer Fee at the date upon which the Project’s construction loan converts to a permanent loan (the “Conversion Date”), annual payments of principal and interest shall be made on April 1st of each year commencing in the first year after the Deferred Developer Fee is paid in full, in an amount equal to fifty percent (50%) of Residual Cash Flow (as defined below) for the preceding calendar year, and will be made annually thereafter until the “Maturity Date” (as that term is defined in Section 3) at which time all principal and accrued interest will be due. If there is no Deferred Developer Fee at the Conversion Date, annual payments of principal and interest shall be made on April 1st of each year commencing in the first (1st) year after the Conversion Date, in an amount equal to seventy-five percent (75%) of Residual Cash Flow for the preceding calendar year, and will be made annually thereafter until the Maturity Date, at which time all principal and accrued interest will be due. The payments made to Lender by Borrower shall be credited first against accrued and unpaid interest and then against outstanding principal, and shall be accompanied by the Borrower’s report of Residual Cash Flow. Borrower shall also provide to Lender within one hundred twenty (120) days of fiscal year-end, audited financial statements indicating the development costs, Residual Cash Flow, cash flow, cash receipts, Gross Revenue, Annual Operating Expenses and senior loan obligations, together with such other documents as Lender may reasonably require.
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a. “Deferred Developer Fee” shall mean the portion of the Developer Fee which is not payable from tax credit capital contributions, if applicable, or permanent loan proceeds.
b. “Developer Fee” shall mean the $2,200,000 developer fee payable by the Borrower to Jamboree Housing Corporation, a California nonprofit public benefit corporation, pursuant to that certain Development Services Agreement. c. “Residual Cash Flow” shall mean the difference between Gross Revenue for the calendar year and Annual Operating Expenses for such period. d. “Gross Revenue,” with respect to a particular calendar year, shall mean all revenue, income, receipts, and other cash consideration actually received from operation or leasing of the Project. Gross Revenue shall include, but is not limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and other rental adjustment to leases or rental agreements; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project; and net condemnation awards for a taking of part of or all of the Project (proceeds remaining after (i) the balance of loans to the Project made by the partners of the Borrower for development or operating deficits, to maintain compliance with Borrower’s tax credit regulatory agreement, or for contributions for capital expenditures in excess of available Project revenues, if any, including interest at the applicable federal rate; (ii) the return of capital contributions, if any, to the Project made by the Borrower that were used to pay the Deferred Developer Fee; (iii) payment of unpaid Tax Credit adjustment amounts or reimbursement of Tax Credit adjustment amounts paid by the administrative and/or managing general partners and/or the guarantors to the Project pursuant to the approved Partnership Agreement, if any; (iv) any unpaid Annual Operating Expenses; (v) the amount of proceeds required to be reserved for the construction of the Project; (vi) the amount of proceeds required for necessary repairs or rehabilitation to the Project as a result of the condemnation, as reasonably approved by the City Manager; (vii) and (viii) the payment of any unpaid general partner fee and/or tax credit investor asset management/monitoring fee, if applicable, and (ix) the balance, if any, of any Deferred Developer Fee). Gross Revenue shall not include current tenants’ security deposits, loan proceeds, capital contributions, funds received from any source actually and directly used for, and/or in the, initial development of the Project, receipt by an affiliate of the Borrower of management fees, or similar advances or payments for reasonable and necessary Annual Operating Expenses associated with the Project.
e. “Annual Operating Expenses,” with respect to particular calendar year, shall mean the following costs, reasonably and actually incurred, for operation and maintenance of the Project to the extent that they are consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles: property and other taxes and assessments imposed on the Project; premiums for property damage and liability insurance; utility services not paid for directly by tenants, including, but not limited to, water, sewer, trash collection, gas and electricity; maintenance and repair including, but not limited to, pest control, landscaping, parking, and grounds maintenance, painting and decorating, cleaning, common systems repairs, general repairs, janitorial, supplies, and others; any annual license or certificate of occupancy fees required for operation of the Project; general administrative expenses including, but not limited to, advertising and marketing, security services and systems, professional fees for legal, audit, accounting and tax returns and others; property management fees not to exceed $50.00 per unit per month, escalating by three percent (3%) annually, and 285
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reimbursements including on-site manager expenses, not to exceed fees and reimbursements which are standard in the industry and pursuant to a management contract approved by the Lender; cash deposited into a reserve for capital replacements of Project Improvements and an operating reserve in such reasonable amounts as are required by the Project lenders, and approved by the Lender; and nonprofit managing general partner fee in the maximum beginning amount of $10,000 for each fee, and escalating for inflation no more than two and one-half percent (2 1/2 %) annually for each fee; costs for providing social services to the tenants at the Project in an amount not to exceed Sixty-Six Thousand Dollars ($66,000) per year, and escalating at three percent (3%) annually; interest on loans from limited partners at the Applicable Federal Rate at the time of the loan, not to exceed three percent (3%), to fund reasonable and necessary obligations of the partnership; debt service payments (excluding debt service due from residual receipts or surplus cash of the Project) on senior loan obligations associated with the Project, and approved by Lender.
f. Notwithstanding the generality of the foregoing, the following items are not expenses or deductible in computing Residual Cash Flow: (i) payment of any fees or expenses or of any portion of the Residual Cash Flow to Borrower or any affiliate of Borrower other than those listed above, or previously approved by Lender; (ii) interest payments under this Note; (iii) payment of interest on any indebtedness of Borrower to any affiliate of Borrower (individual or entity) or to any other third-party lenders, or partners not otherwise approved by Lender; (iv) payment of any fees due to any lenders not otherwise approved by Lender; and (v) depreciation, cost recovery, amortization or similar items which do not involve the expenditure of cash.

5. MATURITY DATE. The full amount of the outstanding principal advanced under this Note, together with all accrued, but unpaid interest thereon, shall be due and payable in full on the “Maturity Date,” which is the earliest of:
a. Fifty-five (55) years after the date on which the City issues a Certificate of Occupancy for the Project;
b. The date the Project is sold or the Borrower’s interest in the Property is transferred or conveyed, except for transfers permitted by the terms of the Deed of Trust; or c. An Event of Default:
(i) by Borrower as defined in the Loan Agreement; or
(ii) by Owner as defined under the Regulatory Agreement; which has not been cured in the manner and time provided in the Loan Agreement or Regulatory Agreement, as applicable.

6. PLACE AND MANNER OF PAYMENT. All amounts due and payable under this Note and any Loan Document are payable at the office of Lender as set forth above, or at such other place as Lender may designate to Borrower in writing from time-to-time, in any currency of the United States which on the date of payment is legal tender for the payment of public and private debts.

7. PREPAYMENT OF LOAN. No prepayment penalty will be charged to Borrower for payment of any portion of this Note prior to the end of the loan term. 286
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8. REFINANCING OF OTHER LOANS. In the event that Borrower refinances any permanent, construction, or other loan associated with the purchase of the Property or construction of the improvements on the Property, Lender shall receive fifty percent (50%) of the net refinance proceeds (proceeds remaining after (i) repayment of the refinanced loan; (ii) payment of all third-party escrow and closing costs; (iii) the balance of loans to the Project made by the partners of the Borrower for development or operating deficits, or for contributions for capital expenditures in excess of available Project revenues, if any, including interest at the applicable federal rate; (iv) the return of capital contributions, if any, to the Project made by the Borrower that were used to pay the Deferred Developer Fee; (v) the payment to the administrative general partner of Borrower’s limited partnership entity of a refinancing fee, as set forth in the Partnership Agreement; (vi) any unpaid Annual Operating Expenses; (vii) the amount of proceeds required to be reserved for the construction of the Project; (viii) the amount of proceeds required for necessary repairs or rehabilitation to the Project as reasonably approved by the City Manager; and (ix) the payment of any unpaid general partner fee applied to this Note and/or any other Note between Borrower and Lender relating to the Property.

9. WAIVERS BY BORROWER. Presentment, notice of dishonor, and protest are waived by all makers, sureties, guarantors, and endorsers of this Note.

10. DEFAULT AND ACCELERATION. This Note is secured by the Deed of Trust. All provisions in the Deed of Trust and the Loan Agreement are hereby made a part of this Note.

Borrower agrees that the unpaid balance of the principal amount of this Note, together with all accrued interest thereon, and charges owing, shall, at the option of Lender, become immediately due and payable upon any Event of Default as defined in the Loan Agreement or the Regulatory Agreement which has not been cured pursuant to the terms of the respective agreement, including, without limitation, the failure of Borrower to make any payment when due. Upon any Event of Default, Lender may exercise any other right or remedy permitted under the Loan Documents.

11. NONRECOURSE. This loan is a nonrecourse obligation of Borrower. Neither Borrower nor any of its officers, directors or general and limited partners, or members, shall have any personal liability for repaying the principal or interest of the loan. The sole recourse of Lender for repayment of the principal and interest shall be the exercise of Lender’s rights against the Project under the Deed of Trust. The foregoing limitation shall not apply to any loss, damage, liability, action, cause of action, cost or expense incurred by Lender as a result, and to the extent of: (i) fraud or material gross misrepresentation under the Loan Agreement; (ii) intentional bad faith waste of the Property; (iii) losses resulting from Borrower’s failure to properly maintain insurance as required under the Loan Agreement; or (iv) gross misappropriation of any rents, security deposits, insurance proceeds, condemnation awards or any other proceeds derived from the collateral security. In the event of any of the foregoing events (i) through (iv) occurs, Lender shall have the right to proceed directly against Borrower to recover any loss, damage, liability, action, cause of action, cost or expense (including, without limitation, reasonable attorneys’ fees and expenses) incurred by Lender to the extent directly caused by events (i) through (iv).

12. CONSENTS AND APPROVALS. Any consent or approval required under this Note shall not be unreasonably withheld by Lender or Borrower.

13. NOTICES. Any notice, communications, or demands shall be in writing and may be communicated to Lender or Borrower at the addresses set forth in the Loan Agreement. 287
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14. BINDING UPON SUCCESSORS. All provisions of this Note shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors-in-interest, transferees and assigns of Borrower and Lender; provided, however, that this section does not waive any prohibitions in the Loan Agreement on assignment of the loan by Borrower without Lender’s consent, which shall not be unreasonably withheld.

15. ASSIGNMENT AND ASSUMPTION. Borrower shall not assign any of its interests under this Note to any other party, except as specifically permitted under the terms of the Loan Documents, without the prior written consent of Lender, which shall not be unreasonably withheld.

16. DEFINITIONS. Capitalized terms not defined in this Note shall have the same meaning as defined in the Loan Agreement.

17. GOVERNING LAW. The Loan Documents shall be interpreted under and governed by the laws of the State of California, except for those provisions preempted by federal law. However, the laws of the State of California shall not be applied to the extent that they would require or allow the court to use the laws of another state or jurisdiction. Borrower agrees that all actions or proceedings arising in connection with the Loan Documents shall be tried and litigated only in the state and federal courts located in the State of California, except that Lender, in its sole discretion, may elect that all such actions or proceedings be tried and litigated in the County of Yolo or the United States District Court for the Eastern District of California.

18. AGREEMENT CONTROLS. In the event that any provisions of this Note and the Loan Agreement conflict, the terms of the Loan Agreement shall control.

19. SEVERABILITY. Every provision of this Note is intended to be severable. If any provision of this Note is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired.

20. TIME. Time is of the essence in this Note.

21. ATTORNEYS’ FEES AND COSTS. In the event of any Event of Default, or any legal action is commenced to interpret or to enforce the terms of this Note, the prevailing party in any such action shall be entitled to recover all reasonable attorneys’ fees and costs and any expert witness fees incurred in such action. In addition, Borrower agrees to pay Lender all reasonable costs incurred in collection of amounts due under this Note which are not paid by the due date as specified herein, whether or not a legal action has been filed.

22. WAIVER. Any waiver by Lender of any obligation in this Note must be in writing.

No waiver shall be implied from any delay or failure by Lender to take action on any breach or default by Borrower, or to pursue any remedy allowed under this Note or applicable law. Any extension of time granted to Borrower to perform any obligation under this Note must be in writing signed by Lender and shall not operate as a waiver or release from any of Borrower’s obligations under the Note. Consent by Lender to any act or omission by Borrower shall not be construed to be a consent to any other act or omission, or to waive the requirement for Lender’s written consent to future waivers.

23. AMENDMENTS AND MODIFICATIONS. Any amendments or modifications to this Note must be in writing, and shall be effective only if executed by both Borrower and Lender. 288
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BORROWER:

Delta Lane HOUSING PARTNERS II LP,
a California limited partnership
By: JHC-Tower Bridge LLC,
a California limited liability company,
its Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
its Manager
By:  __________________________
Michael Massie, Chief Development Officer
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1 No Recording Fee Required Pursuant to
Government Code Section 27383
Recording Requested by and
When Recorded Return to:

City of West Sacramento
1110 West Capitol Avenue
West Sacramento, CA 95691
Attn: City Clerk

[SPACE ABOVE THIS LINE FOR RECORDER’S USE]

CONSTRUCTION DEED OF TRUST

ASSIGNMENT OF RENTS, SECURITY AGREEMENT

AND FIXTURE FILING

THIS CONSTRUCTION DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING (“Deed of Trust”) is made _______________, 2022, between Delta Lane Housing Partners II LP, a California limited partnership (“Trustor”), First American Title Insurance Company (“Trustee”), and the City of West Sacramento, a California general law city (“Beneficiary”).

Trustor is granting this Deed of Trust pursuant to that certain Loan Agreement dated the same date herewith ("Loan Agreement") and that certain Purchase and Sale Agreement and Joint Escrow Instructions dated as of __________________, 2022 between Trustor and Beneficiary (“Purchase Agreement”) to provide collateral for, among other things, credit being extended by Beneficiary to Trustor in connection with the development of a 60-unit apartment community containing 59 affordable units (the “Project”) constructed on the Property. This Deed of Trust is being executed in order to secure Beneficiary’s interest as a governmental agency in ensuring both that public funds loaned for the development at the Project are repaid, and that housing projects assisted by public funds are developed and operated in a manner that is consistent with the public interest. The Project shall be subject to the terms of a regulatory agreement dated the same date herewith ("Development Regulatory Agreement").

W I T N E S S E T H
A. Grant. That Trustor hereby GRANTS, TRANSFERS AND ASSIGNS to TRUSTEE, IN TRUST, WITH POWER OF SALE, all of Trustor’s right, title and interest in and to that certain real property consisting of approximately .99 acres located in the City of West Sacramento, County of Yolo (“County”), State of California, as more particularly described on Exhibit A, attached hereto (the “Real Property”),
TOGETHER WITH:
(a) all right, title and interest (including any claim or demand in law or equity) which Trustor now has or may hereafter acquire in or to such property; all development rights or credits and air rights; all water and water rights (whether or not appurtenant to such property) and shares of stock pertaining to such water or water rights, ownership of 290
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2 which affects such property; Trustor’s interest in all minerals, oil, gas, and other hydrocarbon substances and rights thereto in, on, under, or upon such property and all royalties and profits from any such rights or shares of stock; and all adjacent lands within enclosures or occupied by buildings partly situated on such property; (b) all buildings, structures, improvements, fixtures and appurtenances now and hereafter placed on such property, including, without limitation, all apparatus and equipment, whether or not physically affixed to the land or any building, used to provide or supply air-cooling, air conditioning, heat, gas, water, light, power, refrigeration, ventilation, laundry, drying, dish washing, garbage disposal or other services; and all elevators, escalators and related machinery and equipment, fire prevention and extinguishing apparatus, security and access control apparatus, partitions, ducts, compressors, plumbing, ovens, refrigerators, dishwashers, disposals, washers, dryers, awnings, storm windows, storm doors, screens, blinds, shades, curtains and curtain rods, mirrors, cabinets, paneling, rugs, attached floor coverings, furniture, pictures, antennas, pools and spas and pool and spa operation and maintenance equipment and apparatus, trees and plants located on such property, all of which, including replacements and additions thereto, shall conclusively be deemed to be affixed to and be part of the real property conveyed to Trustee hereunder.
(c) all intangible property and rights related to the aforesaid property or the operation thereof or used in connection therewith including, without limitation, permits, licenses, plans, specifications, construction contracts, subcontracts, bids, deposits for utility services installations, refunds due Trustor, trade names, trademarks and service marks.
(d) all rents, issues, profits and other income from the property, including, but not limited to, all proceeds of sale or lease of the property. (e) the personal property collateral described in Exhibit B.

All property, both real and personal, conveyed to Trustee hereunder shall be referred to herein as the “Property”.

Trustor agrees to execute and deliver, from time to time, such further instruments, including but not limited to, Security Agreements, Assignments, and UCC Financing Statements, as may be requested by Beneficiary to confirm the lien of this Deed of Trust on any of the aforementioned property.

B. Obligations Secured. This Deed of Trust secures the following obligations:
(a) Promissory Note entered into by Trustor, as Borrower, of even date herewith (and any and all renewals or extensions thereof) in the amount of __________________ Dollars ($______________.00), with interest thereon according to the terms of said note (“Note”), which Trustor covenants and agrees to pay. (b) Payment and performance of every obligation, covenant, promise and/or agreement contained in this Deed of Trust.
(c) Performance of every obligation, covenant and promise contained in the Loan Agreement, the Purchase Agreement, and the Development Regulatory Agreement. 291
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3 (e) Payment and performance of every obligation, covenant, promise and agreement contained in any other written instrument executed by Trustor in favor of Beneficiary if, but only if, the written instrument expressly states that the instrument is secured by this Deed of Trust.
(f) For the purposes of this Deed of Trust, any reference to a Note contained herein shall be deemed to refer to each and every note secured by this Deed of Trust, and any default under any note secured by this Deed of Trust shall constitute a default under every other note so secured, and shall additionally constitute a default under this Deed of Trust.

C. For the purpose of protecting and preserving the security of this Deed of Trust, Trustor promises and agrees:

1. Obligations of Trustor. Trustor shall promptly pay when prior to delinquency, all installments, payments, charges or other obligations due under the Note; and all other monetary obligations secured by this Deed of Trust.

2. Repair and Maintenance of the Property. Trustor will: (a) keep the Property in good condition and repair (reasonable wear and tear excepted); (b) not substantially alter, remove or demolish the Property or any building or other improvements thereon, except (i) when permitted by the Purchase Agreement; or (ii) when incident to the replacement of fixtures, equipment, machinery or appliances with items of like kind; (c) restore and repair to the equivalent of its original condition, all or any part of the Property which may be damaged or destroyed, including, but not limited to, damage from termites and dry rot, soil subsidence and construction defects, to the extent insurance proceeds are available to cover any part of the cost of such restoration and repair, unless Trustor has failed to acquire or maintain the required insurance under this Deed of Trust in which case Trustor shall restore or repair whether or not insurance proceeds are available; (d) pay when due all claims for labor performed and materials furnished in connection with the Property and not permit any mechanic’s or materialman’s lien to arise against the Property or furnish loss or liability under such mechanic’s lien claims; (e) comply with all laws affecting the Property or requiring that any alterations, repairs, replacements, or improvements be made thereon; (f) not commit or permit waste on or to the Property, or commit, suffer or permit any act or violation of law to occur upon the Property; (g) not abandon the Property; (h) cultivate, irrigate, fertilize, fumigate and prune, as necessary, any landscaped areas within the Property; (i) if required by Beneficiary, provide for the management satisfactory to Beneficiary under a management contract approved by Beneficiary; (j) notify the Beneficiary in writing of any condition at or on the Property which may have a significant and measurable effect on its market value, taking into consideration the operating requirements of the Development Regulatory Agreement; and (k) if the Property is rental Property, generally operate and maintain the Property in such manner as to realize the maximum rental potential thereof, taking into consideration the operating requirements of the Development Regulatory Agreement and do all other things which the character or use of the Property may reasonably render necessary to maintain the Property in the same condition (reasonable wear and tear expected) as it was at the date of this Deed of Trust.

3. Insurance.

3.1 Property Insurance. Trustor shall provide and maintain insurance as required below covering all buildings, structures and improvements now situated or which hereafter may be erected or placed upon said Property, against loss or damage by fire 292
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4 and other casualties (special broad-form perils) with the valuation clause reflecting replacement costs basis and to carry such and, in the event said Property or any part thereof now lies or hereafter lies in an area designated by the Federal Emergency Management Agency as located within a flood insurance rate map or flood hazard boundary map, or which is designated by the Department of Housing and Urban Development as a flood zone, to carry flood insurance; all as required below or as the Beneficiary may from time to time require. All such insurance shall be in forms, and with companies and in sums (not less than sufficient to avoid any claim on the part of the insurers for co-insurance or other penalties for insufficient limits) satisfactory to the Beneficiary. All insurance policies shall be held by and be for the benefit of Beneficiary, and shall name Beneficiary as loss payee. Beneficiary shall accept as satisfying the requirements of this Section 3.1 any insurance policy in the amount of the replacement cost of buildings, structures, and improvements located on said Property. At least fifteen (15) days before the expiration of each such policy, Trustor shall deliver to the Beneficiary a new and sufficient policy to take the place of the one so expiring. In the event of a loss, the amount collected, under any policy of insurance on said Property shall be used in replacing or restoring the improvements partially or totally destroyed to a condition satisfactory to said Beneficiary. In any of the foregoing events neither the Trustee nor the Beneficiary shall be obligated to see to the prior application thereof, nor shall the amount so released be deemed a payment on any indebtedness secured hereby. Such application, use, and/or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. The Trustor hereby irrevocably appoints the Beneficiary as its attorney in fact to assign each such policy in the event of the foreclosure of this Deed of Trust or other transfer of the title to the granted Property in extinguishment, in whole or in part, of the debt secured hereby. No insurance shall be required hereunder in excess of that allowed by Civil Code Section 2955.5.

Such insurance shall have an endorsement stating that for any claims related to this Property, the Trustor’s insurance shall be primary insurance as respects the Beneficiary to the extent the Beneficiary is an additional insured. Such insurance shall also state that any insurance or self-insurance maintained by the Beneficiary shall be in excess of the Trustor’s insurance and shall not contribute with it. The Trustor’s insurance shall also provide that the Beneficiary shall receive at least thirty (30) days’ written notice prior to cancellation, non-renewal, or modification thereof during this Deed of Trust term. Such insurance policies as are required by this Section 3.2 shall be approved and held by Beneficiary.

4. Defense of Deed of Trust; Litigation. Trustor will give Beneficiary prompt written notice of any action or judicial proceeding (including, without limitation, any judicial or nonjudicial proceeding to foreclose the lien of a junior or senior mortgage or deed of trust) affecting or purporting to affect the Property, this Deed of Trust, Beneficiary’s security for the performance of Trustor’s obligations under the Note, or the rights or powers of Beneficiary or Trustee under the Note or this Deed of Trust. Notwithstanding any other provision of this Deed of Trust, but subject to the rights of any senior lender, Trustor hereby agrees that Beneficiary or Trustee may (but neither is obligated to) commence, appear in, prosecute, defend, compromise and settle, in Beneficiary’s or Trustor’s name, and as 293
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5 attorney-in-fact for Trustor, any action or proceeding, whether judicial or non-judicial, reasonably necessary to preserve or protect, or affecting or purporting to affect, the Property, this Deed of Trust, Beneficiary’s security for the performance of Trustor’s obligations under the Note, or this Deed of Trust. If neither Beneficiary nor Trustee elects to do so, then subject to the rights of any senior lender, Trustor will commence, appear in, prosecute and defend any such action or proceeding. Beneficiary may incur necessary costs and expenses including attorneys’ fees, in any such action. Trustor will pay all costs and expenses of Beneficiary and Trustee, including costs of evidence of title and reasonable attorneys’ fees, in any such action or proceeding in which Beneficiary or Trustee may appear or for which legal counsel is sought, whether by virtue of being made a party defendant or otherwise, including without limitation, any action of the condemnation or partition of all or any portion of the Property and any action brought by Beneficiary to foreclose this Deed of Trust or to enforce any of its terms or provisions.

5. Use of Property. Unless otherwise required by applicable law or unless Beneficiary otherwise consents in writing, Trustor will not allow changes in the use of the Property from that which is contemplated by Trustor and Beneficiary at the time of execution of this Deed of Trust, as specified in the Purchase Agreement, the Development Regulatory Agreement and other documents executed by Trustor in connection with obtaining the loan secured hereby (collectively, the “Loan Documents”). Trustor will not initiate or acquiesce in a change in the zoning classification of the Property without Beneficiary’s prior written consent.

6. Taxes and Assessments. Trustor agrees (a) to pay all taxes and assessments affecting the Property, including assessments on appurtenant water stock, and any accrued interest, cost and/or penalty thereon, at least ten (10) days before default or delinquency; (b) to pay when due all encumbrances (including any debt secured by deed of trust recorded ), ground rents, liens, and/or charges, with interest, on said Property or any part thereof which appear to be prior or superior hereto, and to pay immediately and in full all such encumbrances, liens and/or charges, if any, which may now be due or payable; (c) to pay when due all costs, fees and expenses of this trust, including cost of evidence of title and Trustee’s fees in connection with sale, whether completed or not, which amounts shall become due upon delivery to Trustee of a declaration of default.

7. Assessment Bonds. Trustor agrees to pay any and all assessments against said Property at least ten (10) days before any bond or bonds could or would be issued in connection therewith, unless Beneficiary determines in its reasonable discretion that its security would not be impaired if the assessments were not paid in full.

8. Assessments on Water Bonds. Trustor agrees to pay before delinquency all assessments upon the stock of any water company which stock may be used in connection with said Property, and all rents, assessments or charges for water appurtenant to or used in connection with said Property and/or for the flumes, ditches, pipes or aqueducts in which such water may be furnished or delivered; and all such stock is hereby expressly made a part of the security hereof. 294
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6 9. Reimbursement of Lender’s Expenses. Trustor agrees to pay within thirty (30) days upon demand after expenditure, all sums expended or expense incurred by Trustee and/or Beneficiary, including reasonable attorney’s fees, under any of the terms of this Deed of Trust, with interest from date of demand at the rate of ten per cent (10%) per annum. Without in any way limiting the foregoing, Trustor shall pay to or reimburse Beneficiary for any reasonable costs, fees and expenses (including without limitation reasonable attorneys’ fees and any administrative fees or overhead or other indirect costs and expenses) incurred or charged by Beneficiary in protecting its security hereunder or the Property or Beneficiary’s interest under this instrument, or in responding, processing, or reviewing or otherwise dealing with the demands or claims or requests of Trustor or third parties who claim an interest in the Property or an interest adverse to Beneficiary’s interests under this instrument.

10. Beneficiary Statement. Trustor agrees to pay to the Beneficiary any reasonable amount charged by the Beneficiary, not to exceed the maximum allowed by law, for any statement regarding the obligation secured hereby furnished by the Beneficiary upon demand by the Trustor, the charge for each such statement to be payable immediately upon furnishing of the statement.

11. Assignment of Rents and Leases.

11.1 Trustor does hereby immediately and absolutely assign, transfer and set over to the Beneficiary all the rents, issues, proceeds and profits which may be or may become due or to which the Trustor may now or hereafter become entitled, arising or issuing out of, under or by virtue of any and all leases and/or rental agreements, and any and all extensions or renewals thereof, now or hereafter entered into for any improvements located thereon, and all other rents, issues, proceeds and profits due or accruing from the Property or any part thereof or the improvements located thereon. Trustor hereby gives to and confers upon Beneficiary the right, power and authority to collect such rents, issues, proceeds and profits. The assignment herein contained, and all rights provided to Beneficiary by this Section are granted without regard to the adequacy of the Property as security for payment of the indebtedness secured by this Deed of Trust. This assignment is delivered as a present, immediate and absolute assignment of the rights contained herein; provided, however, that so long as no default shall exist under this Deed of Trust or the indebtedness secured hereby, the Trustor shall have the right to manage and operate the Property and all improvements thereon, and to collect, receive and apply for its own account all rents, issues and proceeds accruing by virtue of any lease or rental agreement and to execute and deliver proper receipts thereof. Immediately upon the occurrence of any default under this Deed of Trust or the indebtedness secured hereby, and until such default shall have been cured, the right of the Trustor to manage and operate the Property and to collect and receive rents shall cease and terminate and in such event the Beneficiary is hereby expressly and irrevocably authorized to enter into and take possession of the Property and the improvements located thereon by actual physical possession, or by appointment of a receiver or by a competent court or by written notice served personally upon or sent by registered mail to the Trustor, as the Beneficiary may elect, or by any other legal means, and to exclude the Trustor and all other persons therefrom. Following such entry and taking of possession the Beneficiary may operate and manage the Property and rent and lease the same and collect any and all rents, issues, income and profits therefrom, and from time to time apply same or accumulate same for application, in such order and manner as Beneficiary, in its sole discretion shall consider advisable. Beneficiary may apply such amounts to (i) the necessary and proper 295
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7 costs of upkeep, maintenance, repair and/or operation of the Property; (ii) the repayment of any sums theretofore or thereafter advanced pursuant to the terms of this Deed of Trust; (iii) the interest then due or next to become due upon said indebtedness; (iv) the taxes and assessments upon the Property then due or next to become due; (v) the unpaid principal of said indebtedness; and (vi) any other obligations secured by this Deed of Trust.

The collection and/or receipt of rents, issues, income and/or profits from the Property by Beneficiary after declaration of default and election to cause the Property to be sold pursuant to the terms of this Deed of Trust shall not affect or impair such default or declaration of default or election to cause the Property to be sold or any sale proceeding predicated thereon, but such proceedings may be conducted and sale effected notwithstanding the receipt and/or collection of any such rents, issues, income and/or profits. Any such rents, issues, income and/or profits in the possession of said Beneficiary at the time of sale and not theretofore applied as herein provided, shall be applied in the same manner and for the same purposes as the proceeds of the sale. In addition to Beneficiary’s rights under this Section, Beneficiary shall have all of the rights and remedies to which Beneficiary is entitled under California Civil Code Section 2938, and nothing contained in this Section 11 shall be construed as a limitation or waiver of any such rights or remedies.

11.2 Trustor agrees to assign to the Beneficiary, upon request, as security for the indebtedness secured hereby, the Trustor’s interests in any or all leases, and the Trustor’s interests in all agreements, contracts, licenses and permits affecting said property, such assignments to be made by instruments in form reasonably satisfactory to the Beneficiary; but no such assignment shall be construed as a consent by the Beneficiary to any lease, agreement, contract, license or permit so assigned, or to impose upon the Beneficiary any obligations with respect thereto.

12. Modification and Termination of Leases and Rent Pre-payment. Except in the ordinary course of business, Trustor agrees not to cancel any of the leases assigned or subject to assignment to Beneficiary pursuant to Section 11.2 hereof, nor terminate or accept a surrender thereof (except in accordance with the terms of the assignment) or reduce the payment of the rent thereunder or modify any of said leases (except in accordance with the terms of the assignment) or accept any prepayment of rent therein without first obtaining, on each occasion, the written approval of the Beneficiary.

13. Performance of Leases. Trustor agrees to faithfully keep and perform all of the obligations of the landlord under all of the leases assigned or subject to assignment to the Beneficiary pursuant to Section 11 above and not to permit to accrue to any tenant under any such lease any right to prepaid rent pursuant to the terms of any lease other than the usual prepayment of rent as would result from the acceptance by the landlord on the first day of each month for the rent for the ensuing month, according to the terms of the various leases.

14. Rent Roll. Trustor agrees to deliver to Beneficiary within ninety (90) days after the expiration of each calendar year, a rent roll of the Property showing the name and street address of all tenants in occupancy, the rent currently owed, the respective lease commencement and expiration dates, the amount of common area or expense contribution, if any, for each tenant, as well as whether there are any concessions, free rent periods or rebates.
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8 15. Use. Trustor agrees to operate such Property at all times in the manner permitted by the Loan Agreement and Development Regulatory Agreement.

16. Prohibition of Sale or Encumbrance.

16.1 Trustor shall not, without the prior written consent of Beneficiary, which consent may be given or withheld by Beneficiary in its reasonable discretion, sell, convey, encumber or transfer the herein described Property, or any part of it, or any interest in it, by the operation of law or otherwise. If Trustor is a corporation, limited liability company, partnership or joint venture, any change in the ownership, control or management of, or interest (other than interests of limited partners) in, Trustor shall be deemed to be a transfer of the Property.

16.2 Upon the occurrence of any such transaction with Beneficiary’s consent, if such consent is required, or without Beneficiary’s consent if such consent is required but not obtained, and Beneficiary elects not to exercise its rights and remedies in the event of default (including, but not limited to, acceleration of the indebtedness secured hereby), Beneficiary (i) may charge a processing fee pursuant to Section 9 in connection with the change, and (ii) shall not be obligated to release Trustor from any liability hereunder or under the Notes or under any of the other documents evidencing or securing the Notes secured hereby. Consent to any such transaction shall not be deemed to be consent, or a waiver of the requirement of consent, to any other transaction.

16.3 Notwithstanding the foregoing, none of the following actions shall require the consent of Beneficiary or constitute a default under the Loan Documents, and any such actions shall not accelerate the maturity of the Loan:

16.3.1 The withdrawal, removal, replacement, and/or addition of a general partner of the Trustor pursuant to the terms of Trustor's First Amended and Restated Agreement of Limited Partnership dated as of January 1, 2020, as amended by that certain First Amendment to Limited Partnership Agreement dated July 7, 2021, and that certain Assignment and Substitution Agreement and Second Amendment to Agreement of Limited Partnership dated September 9, 2022 (collectively, the “Partnership Agreement”), provided that any required substitute general partner is reasonably acceptable to Beneficiary and is selected with reasonable promptness.

16.3.2 The withdrawal, replacement, and/or addition of any of Trustor’s limited partners or its limited partner’s general partners or members pursuant to the terms of the Partnership Agreement.

16.3.3 The conveyance or dedication of any portion of the Property to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Project.

16.3.4 Any mortgage, deed of trust, sale and leaseback, or other form of assignment required for any reasonable method of financing or refinancing the acquisition of the Property and development of the Project.

16.3.5 Leasing of individual housing units to qualified tenants in accordance with the Regulatory Agreement.
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9 16.3.6 The transfer of all or any part of the Property or the Project to Jamboree Housing Corporation (“Jamboree”), or an entity controlled by Jamboree (collectively “Jamboree Affiliate Entity”), or an entity or entities in which a Jamboree Affiliate Entity is a general partner or managing member, provided that the proper documentation is executed and amendment recorded.

16.3.7 The pledge by the general partner of Borrower to the senior lender of the general partner’s interest in Borrower, as security for the performance of all of Borrower’s obligations under the senior loan documents (or any refinancing thereof).

16.3.8 The sale, transfer, or conveyance of the general partner’s interest in Borrower to Jamboree or to a Jamboree Affiliate Entity.

16.3.9 A foreclosure, deed in lieu of foreclosure, exercise of a power of sale or similar action and the subsequent purchase at a foreclosure sale.

17. Licenses. As of the date of this Deed of Trust and at all times thereafter during the term of the loan, Trustor shall have and maintain in full force and effect such certificates, consents, licenses, approvals and permits from the proper authorities as are required to operate the Property for the purpose(s) set forth in Section 15 above. A failure on the part of the Trustor or any subsequent owner to maintain any such required certificate, consent, license, approval, or permit in effect or a failure to obtain renewal thereof prior to expiration, shall constitute a default under the terms of this Deed of Trust for which the Beneficiary shall have the right, as its option, upon the expiration of any cure periods, to declare the entire indebtedness evidenced by said Note and hereby secured to be immediately due and payable.

18. Security Interest in Personal Property. Trustor hereby grants to Beneficiary a security interest in and to all personal Property described as the Collateral in Exhibit B.

This Deed of Trust constitutes a security agreement with respect to all of the Collateral, and Beneficiary shall have all of the rights and remedies of a secured party under the California Uniform Commercial Code as well as all other rights and remedies available at law or in equity. Trustor hereby agrees to execute, acknowledge and deliver on demand, and hereby irrevocably appoints Beneficiary as its attorney-in-fact, with full power of substitution, to execute, acknowledge, deliver and, if appropriate file with the appropriate filing officer or office, such security agreements, financing statements, continuation statements or other instruments as Beneficiary may reasonably require in order to impose, perfect or continue the perfection of, the lien or security interest created hereby. The above power of attorney is coupled with an interest and shall survive the death or incapacity of Trustor. Trustor shall pay all costs and expenses in connection with any such documents or of any record searches for financing statements that Beneficiary may reasonably require.

19. Fixture Filing. This Deed of Trust constitutes a financing statement filed as a fixture filing in the real estate records of the county in which the Real Property is located with respect to any and all fixtures now or hereafter owned by Trustor and used in connection with the operation, occupancy and maintenance of the Property described in this Deed of Trust and with respect to any goods or other personal property owned by Trustor that may now be or hereafter become such fixtures.
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10 20. Foreclosure on Collateral. Without limiting any other rights or remedies which Beneficiary or Trustee may have hereunder or under applicable law, including the right to conduct a unified foreclosure sale of real and personal Property, upon any default not cured within applicable cure periods Beneficiary or Trustee may conduct a public or private sale of the Collateral under the California Uniform Commercial Code pursuant to this Deed of Trust, and Trustor, upon demand by Beneficiary, shall assemble (if applicable) and make the Collateral available to Beneficiary at the Property, a place which is hereby deemed to be reasonably convenient to Beneficiary and Trustor. Beneficiary shall give Trustor at least twenty (20) days prior written notice of the time and place of any public sale or other disposition of the Collateral, or of the time of or after which any private sale or other disposition of the Collateral is to be made; if such notice is sent to Trustor in accordance with the procedures for the mailing of notices set forth in the last Section of this instrument, it is hereby deemed that such notice shall be and is reasonable notice to Trustor.

21. Maintenance of Fixtures and Collateral. At all times during the term hereof Trustor shall maintain a sufficient level of fixtures and Collateral to properly operate the said Property, which shall in any event not be materially less than that existing on the date hereof. Notwithstanding anything to the contrary in this Deed of Trust, during any time when not in default hereunder, Trustor shall have the right, subject to the prior concurrent satisfaction of the conditions set forth in the next sentence, to substitute and replace Collateral and fixtures in the ordinary course of business. To the extent the replacement Collateral and fixtures are of the same general type and are of at least the same value and upon acquisition of the substitute Collateral and fixtures by Trustor and placement thereof on the said real Property, the replaced Collateral and fixtures shall be deemed released from the lien hereof.

22. Maps and Restrictions. Trustor agrees that it will not without the consent of Beneficiary after the date hereof file or cause to be filed any subdivision or condominium map or plan, or any deed, plan or agreement for cooperative ownership of the Property, or any other covenants or restrictions affecting the Property.

23. Environmental Covenants. Trustor will at all times comply with the following requirements:

23.1 No Use, Disposal or Storage. Trustor shall not cause, permit or suffer any Hazardous Material (as defined in Section 24.3 to be brought upon, treated, kept, stored, disposed of, discharged, released, produced, manufactured, generated, refined or used upon, about or beneath the Property or any portion thereof by Trustor, its agents, employees, contractors, invitees, tenants, or any other person, except to the extent commonly used in the day to day operation of the Property and then only so long as in compliance with all Environmental Requirements (as defined in Section 24.2).

23.2 Compliance with Environmental Requirements. Trustor shall not cause, permit or suffer the existence or the commission by Trustor, its agents, employees, or contractors of a violation of any Environmental Requirements upon, about or beneath the Property or any portion thereof and Trustor shall use its reasonable commercial efforts to prevent any such violation of any Environmental Requirements by any invitees, tenants or any other person. Trustor shall notify Beneficiary in writing of any release of Hazardous Materials at, on, under or within the Property in violation of any Environmental 299
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11 Requirements, or of the presence of Hazardous Materials at the Property in violation of any Environmental Requirements, promptly upon discovery of such release or presence.

23.3 Environmental Liens. Trustor shall not create or suffer to exist with respect to the Property, or permit any of its agents to create or suffer to exist any lien, security interest or other charge or encumbrance of any kind, including without limitation, any lien imposed pursuant to Section 107(f) of the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. Section 9607(1)) or any similar state statute, and Trustor shall use its reasonable commercial efforts to prevent the creation of any such lien, security interest, charge or encumbrance by any of its tenants and shall not permit any of such tenants to suffer to exist any of such items.

23.4 Mitigation. Notwithstanding the obligation of Trustor to indemnify pursuant to Section 25, Trustor shall, at its sole cost and expense, promptly take all actions required by any federal, state or local governmental agency or political subdivision or which are otherwise reasonably necessary in the reasonable discretion of Beneficiary to mitigate Environmental Damages (as defined in Section 24.1) arising from the presence upon, about or beneath the Property of a Hazardous Material, or from a violation of Environmental Requirements. Such actions shall include, but not be limited to, the investigation of the environmental condition of the Property, the preparation of any feasibility studies, reports or remedial plans, and the performance of any cleanup, remediation, containment, operation, maintenance, monitoring or restoration work, whether on or off of the Property. Trustor shall take all actions necessary to restore the Property to the condition existing prior to the introduction of Hazardous Material upon, about or beneath the Property, notwithstanding any lesser standard of remediation allowable under applicable law or governmental policies. Trustor shall proceed continuously and diligently with such investigatory and remedial actions, provided that in all cases such actions shall be in accordance with all applicable requirements of governmental entities. Any such actions shall be performed in a good, safe and workmanlike manner and shall minimize any impact on the business conducted at the Property. Trustor shall pay all costs in connection with such investigatory and remedial activities, including but not limited to all power and utility costs, and any and all taxes or fees that may be applicable to such activities. Trustor shall promptly provide to Beneficiary copies of testing results and reports that are generated in connection with the above activities. Promptly upon completion of such investigation and remediation, Trustor shall permanently seal or cap all monitoring wells and test holes to industrial standards in compliance with applicable federal, state and local laws and regulations, remove all associated equipment, and restore the Property to the maximum extent possible, which shall include, without limitation, the repair of any surface damage, including paving, caused by such investigation or remediation hereunder.

23.5 Notice of Environmental Risks. If Trustor shall become aware of or receive notice or other communication concerning any actual, alleged, suspected or threatened violation of Environmental Requirements, or liability of Trustor for Environmental Damages in connection with the Property or past or present activities of any person thereon, including but not limited to notice or other communication concerning any actual or threatened investigation, inquiry, lawsuit, claim, citation, directive, summons, proceeding, complaint, notice, order, writ, or injunction, relating to same, and including without limitation any notice or other communication from any tenant, then Trustor shall deliver to Beneficiary, within ten (10) days of the receipt of such notice of communication by Trustor, a written description of said violation, liability, correcting information or actual or 300
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12 threatened event or condition, together with copies of any documents evidencing same.

Receipt of such notice shall not be deemed to create any obligation on the part of Beneficiary to defend or otherwise respond to any such notification.

23.6 Notice of Test Results. Trustor shall promptly provide to Beneficiary the results of any tests and copies of all registration permits regarding any underground storage tanks located on the Property and Trustor shall comply with the same.

23.7 Right to Enter and Inspect. In the event Beneficiary reasonably believes that there has been a release or threatened release of a Hazardous Material on the Property or a breach of an Environmental Requirement or in the event of any default under this Deed of Trust or under the Note, Beneficiary shall have the right in its sole and absolute discretion, but not the duty, to enter upon the Property at any reasonable time, at the expense of Trustor, to conduct an inspection of the Property, including invasive tests, to determine compliance with all Environmental Requirements and the existence of any Environmental Damages as a result of the condition of the Property or any surrounding properties and activities thereon. Trustor hereby grants to Beneficiary, and the agents, employees, consultants and contractors of Beneficiary, the right to enter upon the Property and to perform such tests on the Property as are necessary to conduct such reviews and investigations in accordance with the preceding sentence. Beneficiary shall use its commercially reasonable efforts to minimize interference with the business of Trustor and to restore the condition of the Property. Beneficiary shall reimburse Trustor for the cost of repair of any physical injury to the Property caused by the entry and inspection to the extent required by Civil Code Section 2929.5(c).

23.8 Reimbursement of Lender. In the event of any default under this Deed of Trust or under the Note, Trustor shall promptly reimburse Beneficiary for any environmental studies or tests which Beneficiary deems necessary to ascertain the presence and/or level of any Hazardous Materials on the Property.

24. Definitions of Environmental Terms. For the purposes of this Deed of Trust, the following terms shall have the following meanings:

24.1.1 damages for personal injury, or injury to Property or natural resources occurring upon or off the Property, foreseeable or unforeseeable, including, without limitation, lost profits, consequential damages, the cost of demolition and rebuilding of any improvements on real property, interest and penalties including but not limited to claims brought by or on behalf of employees of Trustor, with respect to which 301
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13 Trustor waives, for the benefit of Beneficiary only, any immunity to which it may be entitled under any industrial or worker’s compensation laws;

24.1.2 fees incurred for the services of attorneys, consultants, contractors, experts, laboratories and all other costs incurred in connection with the investigation, cleanup or remediation of such Hazardous Materials or violation of Environmental Requirements including but not limited to, the preparation of any feasibility studies or reports or the performance of any cleanup, remedial, removal, abatement, containment, closure, restoration or monitoring work required by any federal state or local governmental agency or political subdivision, or reasonably necessary to make full economic use of the Property or any other Property or otherwise expended in connection with such conditions, and including without limitation any attorneys’ fees, costs and expenses incurred in enforcing this Deed of Trust or collecting any sums due hereunder; and

24.1.3 liability to any person or entity to indemnify such person or entity for costs expended in connection with the items referenced in the sub-sections of Section 24 hereof.

24.2 “Environmental Requirements” means all applicable present and future statutes, regulations, rules, ordinances, codes, licenses, permits, orders, approvals, plans, authorizations, concessions, franchises and similar items, of all governmental agencies, departments, commissions, boards, bureaus or instrumentalities of the United States, states and political subdivisions thereof and all applicable judicial and administrative and regulatory decrees, judgments and orders relating to the protection of human health or the environment, including, without limitation:

24.2.1 all requirements, including but not limited to those pertaining to reporting, licensing, permitting, investigation and remediation of emissions, discharges, releases or threatened releases of Hazardous Materials, chemical substances, pollutants, contaminants or hazardous or toxic substances, materials or wastes whether solid, liquid or gaseous in nature, into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, pollutants, contaminants or hazardous or toxic substances, materials, or wastes, whether solid, liquid or gaseous in nature; and

24.2.2 all requirements pertaining to the protection of the health and safety of employees or the public.

24.3 “Hazardous Materials” means any substance:

24.3.1 the presence of which requires investigation or remediation under any federal, state or local statute, regulation, rule, ordinance, order, action or policy; or

24.3.2 which is or becomes defined as a “hazardous waste” or “hazardous substance” or “pollutant” or “contaminant” under any federal, state or local statute, regulation, rule, or ordinance or amendments thereto including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. section 9601 et seq.) or the Resource Conservation and Recovery Act (42 U.S.C. section 6901 et seq.); or
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14 24.3.3 which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, board, agency or instrumentality of the United States, any State of the United States, or any political subdivision thereof; or

24.3.4 the presence of which on the Property causes or threatens to cause a nuisance upon the Property or to adjacent properties or poses or threatens to pose a hazard to the Property or to the health or safety of persons on or about the Property; or

24.3.5 which contains volatile organic compounds such as gasoline, diesel fuel or other petroleum hydrocarbons; or

24.3.6 which contains polychlorinated biphenyls (PCBs) or asbestos or asbestos-containing materials or urea formaldehyde foam insulation; or

24.3.7 radon gas.

25. Environmental Indemnity. Trustor agrees to indemnify, reimburse, defend, exonerate, pay and hold harmless (a) Beneficiary, its affiliates and their respective successors and assigns who acquire all or any portion of the loan secured by this Deed of Trust or the Property in any manner, including but not limited to, purchase at a foreclosure sale, acceptance of a deed in lieu thereof or otherwise through the exercise of the rights and remedies of Beneficiary under this Deed of trust and (b) the directors, officers, shareholders, employees, successors, assigns, agents, contractors, subcontractors, experts, licensees, affiliates, lessees, mortgagees, trustees, and invitees of Beneficiary and such other persons or entities, from and against any and all Environmental Damages arising from the presence of Hazardous Materials upon, about or beneath the Property or migrating to or from the Property, or arising in any manner whatsoever out of the violation of any Environmental Requirements pertaining to the Property and the activities thereon, or the breach of any warranty or covenant or the inaccuracy of any representation of Trustor contained in this Deed of Trust except to the extent such Environmental Damages exist as a result of the active negligence or willful misconduct of Beneficiary. This obligation shall include, but not be limited to, the burden and expense of defending all claims, suits and administrative proceedings (with counsel chosen by Trustor and reasonably approved by the indemnified parties), even if such claims, suits or proceedings are groundless, false or fraudulent, and conducting all negotiations of any description, and paying and discharging, when and as the same become due, any and all judgments, penalties or other sums due against such indemnified persons. Trustor’s obligations hereunder shall not apply with respect to Environmental Damages caused after Beneficiary has purchased the Property at a foreclosure sale or acquired title by deed in lieu of foreclosure unless caused by Trustor, either solely or jointly with others, including Beneficiary.

26. Environmental Remedies. Notwithstanding anything to the contrary in this Deed of Trust, the rights of Beneficiary and the obligations of Trustor created under the foregoing Sections 23, 24, and 25 shall be in addition to those other rights and obligations, respectively, created or imposed by statutory, common or case law.

27. Provisional Remedies on Default. Should Trustor fail or refuse to make any payment or do any act which it is obligated hereunder to make or do, at the time and in 303
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15 the manner herein provided, or if any representation of Trustor in this Deed of Trust, or other document referred to herein is incorrect, then, subject to the rights of any senior lender, Trustee and/or Beneficiary, each in its sole discretion, may, without notice to or demand upon Trustor, and without releasing Trustor from any obligation hereof:

27.1 Make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, either Trustee or Beneficiary being authorized to enter upon and take possession of said Property for such purposes;

27.2 Commence, appear in and/or defend any action or proceedings purporting to affect the security hereof, and/or any additional or other security therefor, the interest, rights, powers and/or duties of Trustee and/or Beneficiary hereunder, whether brought by or against Trustor, Trustee or Beneficiary;

27.3 Pay, purchase, contest or compromise any claim, debt, lien, charge or encumbrance which in the judgment of either may affect or appear to affect the security of this Deed of Trust, the interest of Beneficiary or the rights, powers and/or duties of Trustee and/or Beneficiary hereunder;

27.4 Enter into and upon and take and hold possession of any or all Property covered hereby and exclude the Trustor and all other persons therefrom;

27.5 Operate, and manage the said Property and rent and lease the same and collect any and all rents, issues, income and profits therefrom, the same being hereby assigned and transferred to Beneficiary, and from time to time apply same and/or accumulate same for application, in such order and manner as Beneficiary in its sole discretion shall consider advisable, to or upon the following: The necessary and proper costs of upkeep, maintenance, repair, and/or operation of said Property, the repayment of any sums theretofore or thereafter advanced pursuant to the terms of this Deed of Trust, the interest then due or next to become due upon said indebtedness, the taxes and assessments upon said Property then due or next to become due, the unpaid principal of said indebtedness, or any other obligation secured by this Deed of Trust.

27.5.1 The collection and/or receipt of rents, issues, income and/or profits from said Property by Beneficiary after declaration of default and election to cause said Property to be sold under and pursuant to the terms of this Deed of Trust shall not affect or impair such default or declaration of default or election to cause said Property to be sold or any sale proceedings predicated thereon, but such proceedings may be conducted and sale effected notwithstanding the receipt and/or collection of any such rents, issues, income and/or profits. Any such rents, issues, income and/or profits in the possession of said Beneficiary at the time of sale and not theretofore applied as herein provided, shall be applied in the same manner and for the same purposes as the proceeds of the sale.

27.5.2 Neither Trustee nor Beneficiary shall be under any obligation to make any of the payments or do any of the acts above mentioned, but, upon election of either or both so to do, employment of an attorney is authorized and payment of such reasonable attorneys’ fees and of all other necessary expenditures is hereby secured.

28. Condemnation. Subject to the rights of any senior lender, all moneys and awards payable as damages and/or compensation for the taking of title to or possession of, or for damage to, any portion of the Property subject to this Deed of Trust by reason of any 304
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16 condemnation, eminent domain or other similar proceeding shall be paid to Beneficiary, and such moneys and awards are hereby assigned to Beneficiary, and judgment therefor shall be entered in favor of Beneficiary, and when paid, may, at the option of the Beneficiary, (a) be applied, in whole or in part, by Beneficiary upon any indebtedness or obligation secured hereby, whether the same be matured or unmatured, and in such order as Beneficiary may determine, (b) be used in whole or in part to replace or restore the Property to a condition satisfactory to the Beneficiary, (c) be used in whole or in part to fulfill any of the covenants contained herein as the Beneficiary may determine, or (d) be released to the Trustor; and the Trustor hereby covenants and agrees, upon request by the Beneficiary, to make, execute and deliver any and all assignments and other instruments sufficient for the purpose of assigning the aforesaid moneys and awards to the Beneficiary free, clear and discharged of any and all encumbrances of any kind or nature whatsoever.

Notwithstanding the foregoing, in the event of any fire or other casualty to the Property or eminent domain proceedings resulting in condemnation of the Property or any part thereof, Trustor shall have the right to rebuild the Property, and to use all available insurance or condemnation proceeds therefor, provided that (a) such proceeds are sufficient to keep the Loan in balance and rebuild the Property in a manner that provides adequate security to Beneficiary for repayment of the Loan or if such proceeds are insufficient then Trustor shall have funded any deficiency, (b) Beneficiary shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no material default then exists under the Loan Documents. If the casualty or condemnation affects only part of the Property and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the Loan in a manner that provides adequate security to Beneficiary for repayment of the remaining balance of the Loan.

29. Acceptance of Late Payments. By accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its rights either to require prompt payment when due of all other sums so secured or to declare default as herein provided for failure so to pay.

30. Waivers and Authorizations. At any time, or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note or Notes secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby or the effect of this Deed of Trust upon the remainder of said Property, Trustee may reconvey any part of said Property; consent in writing to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. Trustor, for itself and its successors and assigns (including without limitation any subsequent or other junior creditor of any part or all of the Property), waives any right to object to such reconveyance, mapping, easement or agreement with respect to such Property and waives any right to require that the value of such Property be applied upon the debt secured hereby (other than the amount, if any, actually received by Beneficiary in connection with any such transaction).

31. Release, Modification and Reconveyance, Waiver of Marshalling. Without affecting the liability of any other person liable for the payment of any obligation herein 305
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17 mentioned, and without affecting the lien or charge of this Deed of Trust upon any property not then or theretofore released as security, for the full amount of all unpaid obligations, Beneficiary may from time to time, and without notice release any person so liable, extend the maturity or alter any of the terms of any such obligation, or grant other indulgences, release or reconvey, or cause to be released or reconveyed at any time at Beneficiary’s option any parcel or portion or all of the Real Property described herein, take or release any other or additional security for any obligation herein mentioned, and/or make composition or other arrangements with debtors in relation thereto. Trustor waives any right to object to the release or reconveyance of such Property and waives any right to require that the value of any Property so released or reconveyed be applied upon the debt secured hereby (other than the amount, if any, actually received by Beneficiary in connection with any such release). Trustor agrees that if the Beneficiary at any time holds any additional security for any obligations secured hereby, it may enforce the sale thereof or otherwise realize upon the same at its option, either before or concurrently therewith or after a sale is made hereunder.

32. Substitution of Trustee. Beneficiary hereunder may, from time to time, appoint another trustee or trustees to execute the trusts hereby created; and upon the recordation of such appointment in the Office of the County Recorder of the County where such Property is situated, the new trustee or trustees shall be vested with all the title, interest, powers, duties, and trusts in the premises hereby vested in the Trustee first above named.

33. Reconveyance by Trustee. Upon written request of Beneficiary stating that all sums secured hereby have been paid and upon surrender to Trustee of this Deed of Trust and the Note or Notes secured hereby for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder.

The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as “the person or persons legally entitled hereto.”

34. Right of Entry. The Beneficiary is authorized by itself, its agents or workmen, to enter at any time upon any part of said Property and the improvements thereon situated for the purpose of inspecting the same, and for the purpose of performing any of the acts it is authorized to perform under the terms of this Deed of Trust. Beneficiary shall reimburse Trustor for the cost of repair of any physical injury to the Property caused by Beneficiary’s negligence or willful misconduct during the entry, inspection, and acting on the Property pursuant to this Section, and shall defend, indemnify, and hold harmless Trustor from and against all claims, liabilities, or damages, including expert witness fees and reasonable attorneys’ fees and costs, caused by or arising out of such entry and inspection of the Property by Beneficiary.

35. Default, Acceleration and Private Sale.

35.1 Notice of Default. Should breach or default be made by Trustor in payment of any indebtedness secured hereby or in performance of any obligations, covenant, promise or agreement hereunder which breach or default is not cured within any applicable cure periods set forth below, or any representation of Trustor in this Deed of Trust, or other document referred to herein is incorrect, Beneficiary may declare all sums secured hereby immediately due and payable, and in such case, shall execute and deliver to Trustee a written declaration of default and demand for sale and written notice of default and election to cause to be sold said Property, and shall surrender to Trustee this Deed 306
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18 of Trust, the Note or Notes secured hereby and all documents evidencing any expenditures hereunder. Thereafter such notice of default and election to cause said Property to be sold to satisfy the obligations hereof shall be duly filed for recordation.

35.2 Cure Periods.

35.2.1 If a monetary event of default occurs under the terms of any of the Loan Documents, prior to exercising any remedies thereunder Lender shall give Trustor and each of the general and limited partners of the Trustor simultaneous written notice of such default at the addresses set forth below in the Request for Notice of Default section.

Trustor shall have a period of ten (10) days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary under the Loan Documents.

35.2.2 If a non-monetary event of default occurs under the terms of any of the Loan Documents, prior to exercising any remedies thereunder Beneficiary shall give Trustor and each of the general and limited partners of the Trustor simultaneous written notice of such default at the addresses set forth below in the Request for Notice of Default section. If the default is reasonably capable of being cured within sixty (60) days, Trustor shall have such period to effect a cure prior to exercise of remedies by Beneficiary under the Loan Documents. If the default is such that it is not reasonably capable of being cured within sixty (60) days, Trustor shall cure the default within sixty (60) days following receipt of notice of default from Beneficiary; provided, that if the default cannot reasonably be cured within said sixty (60) day period, Trustor shall commence curing the default within said period and complete curing the default within the time period reasonably necessary to cure said default, not to exceed ninety (90) days, unless extended by Beneficiary in its sole discretion; provided, further, that if the limited partner determines that is must remove the general partner in order to cure such default, then the limited partner shall have up to ninety (90) days following the removal of the general partner to cure such default.

35.3 Right to Rescind. Beneficiary, from time to time before Trustee’s sale, may rescind any such notice of breach or default and of election to cause to be sold said Property by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiary of such right of rescission shall not constitute a waiver of any breach or default then existing or subsequently occurring, or impair the right of Beneficiary to execute and deliver to Trustee, as above provided, other declarations of default and demand for sale, and notices of breach or default, and of election to cause to be sold said Property to satisfy the obligations hereof, nor otherwise affect any provision, covenant or condition of said Note or Notes and/or of this Deed of Trust or any of the rights, obligations, or remedies of the parties thereunder.

35.4 Private Sale. At least three (3) months having elapsed after recordation of notice of default, without demand on Trustor, said Trustee, having first given notice of sale as then required by law, shall sell said Property at the time and place of sale fixed by it in the notice of sale at public auction to the highest bidder for cash, payable at time of sale.

The whole of the trust estate shall be sold in a single lot or parcel and as an entirety unless the Beneficiary shall, in writing, direct the Trustee to sell said trust estate in separate parcels and shall direct the Trustee as to the parcels into which the trust estate shall be divided for purposes of sale and the order in which said parcels shall be offered for sale.

Trustor, for itself and its successors and assigns (including without limitation any subsequent or other junior creditor of any part or all of the Property), waives any right to 307
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19 marshalling of assets or any right to require any part of the Property to be sold prior to any other part of the Property or any right to require the Property to be sold in parcels rather than as a whole. Trustee may postpone sale of all or any portion of said Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Without further notice Trustee may make such sale at the time to which same shall be so postponed. Trustee shall deliver to such purchaser its deed conveying the Property so sold, but without any covenant or warranty, express or implied, and the recitals in such deed or deeds of any matters or facts affecting the regularity or validity of said sale shall be conclusive (except as against the parties hereto) proof of the truthfulness thereof; also such deed or deeds shall be conclusive (except as against the parties hereto) against all persons as to all matters or facts therein recited. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.

35.5 Application of Sale Proceeds. Trustee shall apply the proceeds of any such sale to payment of:

35.5.1 All reasonable costs, fees, charges and expenses of Trustee and of this trust, reasonable fees of any attorneys employed by Trustee and/or Beneficiary pursuant to the provisions hereof, Trustee’s reasonable fees in connection with sale, and all reasonable expenses of sale, including cost of procuring guarantee or evidence of title in connection with the sale proceedings and other costs associated with the Trustee’s Deed;

35.5.2 All other sums then secured hereby, including indebtedness described herein, all sums advanced or expended under the terms hereof and not then repaid, the interest on each of the foregoing items, all in such manner and order of priority or preference as the Beneficiary may in its sole and absolute discretion determine;

35.5.3 The remainder, if any, to the person or persons legally entitled thereto, upon proof satisfactory to the Trustee of such right.

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

37. Severability. If any provision hereof should be held unenforceable or void, then such provision shall be deemed separable from the remaining provisions and shall in no way affect the validity of this Deed of Trust.

38. Acceptance by Trustee. Trustee accepts this trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law.

39. No Notice by Trustee. Trustee shall be under no obligation to notify any party hereto of any action or proceeding of any kind in which Trustor, Beneficiary and/or Trustee shall be a party, unless brought by Trustee, or of any pending sale under any other Deed of Trust.
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20 40. Number and Gender. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.

41. Waiver of Statute of Limitations. The right to plead any and all statutes of limitations as a defense to any demand secured by this Deed of Trust is hereby waived to the full extent permissible by law.

42. Trust Irrevocable. The Trust created hereby is irrevocable by the Trustor.

43. Interpretation. The term “and/or” as used herein means one or the other or both, or any one or all, of the things or persons in connection with which the words are used.

Section headings are for reference only and shall not be considered in the interpretation of this Deed of Trust.

44. Maximum Interest Rate. Notwithstanding any provision herein or in said Note, the total liability for payments in the nature of interest shall not exceed the limits now imposed by the usury laws of the State of California.

45. Request for Notice of Default. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to Trustor at the following address:

If to Trustor: Delta Lane Housing Partners II, LP
c/o Jamboree Housing Corporation
17701 Cowan Ave., Suite 200
Irvine, CA 92614
Attention: Michael Massie
Fax No. (949) 263-8676
Trustor’s limited partner may change its address for receipt of copies of notices by giving notice in writing stating its new address to Beneficiary. Commencing on the tenth (10th) day after the giving of such notice, such newly designated address shall be effective for purposes of all such copies of notices required to be sent by Beneficiary to Trustor’s limited partner.

46. Governing Law. This Deed of Trust shall be interpreted under and governed by the laws of the State of California, except for those provisions preempted by federal law.

However, the laws of the State of California shall not be applied to the extent that they would require or allow the court to use the laws of another state or jurisdiction. Trustor agrees that all actions or proceedings arising in connection with this Deed of Trust shall be tried and litigated only in the state and federal courts located in the State of California, except that Beneficiary, in its sole discretion, may elect that all such actions or proceedings be tried and litigated in the County of Yolo or the United States District Court for the Eastern District of California.

TRUSTOR:

DELTA LANE HOUSING PARTNERS II LP,
a California limited partnership
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21 By: JHC-Tower Bridge LLC,
a California limited liability company,
its Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
its Manager
By:

Michael Massie
Chief Development Officer
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EXHIBIT A
Legal Description of the Property
Real property in the City of West Sacramento, County of Yolo, State of California, described as follows:
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2220095.7 Exhibit B

EXHIBIT B

PERSONAL PROPERTY COLLATERAL
PAGE 1 OF 2
The Property which is covered by this Deed of Trust specified in Exhibit “A” and the Collateral are together sometimes referred to in this instrument as the “Property”.

The Collateral shall consist of:

1. All Trustor’s interest in and to all existing and future goods located on or about the real property described above in Exhibit “A” (the “Real Property”) which are used in the operation or occupancy of the Real Property or in any development of or construction on the Real Property, including but not limited to all apparatus, fixtures and articles of personal property now or any time hereafter attached to, placed in or upon or used in any way in connection with the Real Property, and including but not limited to all furniture, refrigerators, freezers, stoves, ovens, ranges, hoods, vents and fans, disposals, dishwashers, washing machines, dryers, air conditioners, cabinets, carpeting, drapes, screens, awnings, storm windows and doors, window shades, blinds, floor coverings, boilers, tanks, furnaces, radiators, fire alarm and other security systems, music systems, machinery, motors, compressors, and all heating lighting, plumbing, gas electric, ventilating refrigerating, air-conditioning, sprinkler and incinerating equipment, transformers, water wells, storage tanks, landscaping, pool equipment and furniture, dumpsters (or, to the extent leased, Trustor’s leasehold interest therein) and parking lot and other common area sweeping and cleaning equipment, and equipment and furnishings in or for the recreation room, halls, entry rooms and all other common areas; and including inventory, construction tools and equipment, appliances, furniture and furnishings, building service equipment, and building materials, supplies and equipment of any kind.

2. All general intangibles, chattel paper, instruments, documents and accounts owned by Trustor and relating to the development, use or occupancy of or construction on the Real Property, including but not limited to all governmental licenses, map rights, approvals and permits, all materials prepared for filing or filed with any public or quasi-public governmental entities or any public utilities and all of Trustor’s rights under any contract whether or not otherwise specifically assigned to Beneficiary.

3. All of the right, title and interest of Trustor in and to (i) all sales contracts applicable to any portion of the Real Property, together with any and all modifications thereof, and also together with all deposits or other payments made in connection therewith; (ii) all refundable or returnable fees, bonds, securities or other Property held by any public or quasi-public governmental entities, utility companies or others; (iii) all leases of any part or all of the Real Property now or hereafter entered into and all right, title and interest of Trustor thereunder, including (to the extent permitted by law) but not limited to cash or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether said cash or securities are to be held until the expiration of the terms of said leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of said terms; (iv) all advance payments of insurance premiums made by Trustor with respect to any part of the Real Property and 312

EXHIBIT B
PAGE 2 OF 2
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claims or demands relating to insurance; (v) all advance payments by Trustor of any kind for the benefit of the Real Property, including but not limited to, those under maintenance or service contracts property taxes, advertising expenses and commissions; (vi) all funds deposited by Trustor with Beneficiary under this Note and the Purchase Agreement; and (vii) all take out or similar agreements or commitments in connection with the loan to Trustor or the Real Property.

4. All rights of Trustor in and to all furniture, furnishings, fixtures and equipment now or hereafter located upon or used in connection with the above-described Real Property.

5. All refunds, proceeds of financing and other payments, and all rights thereto, received by Trustor or to which it is entitled as a result of any assessment bonds issued in connection with the secured Property or property adjacent thereto.

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

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)
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NO FEE DOCUMENT

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of West Sacramento
c/o City Clerk
1110 West Capitol Avenue
West Sacramento, CA 95691
(Space Above Line For Recorder’s Use Only)

REGULATORY AGREEMENT
(West Gateway II)
This Regulatory Agreement (“Agreement”) is made ___________________, 2022, by the CITY OF WEST SACRAMENTO, a municipal corporation (“City” or “Lender”), and Delta Lane Housing Partners II LP, a California limited partnership (“Owner”), (collectively, the “Parties”).

RECITALS
A. Owner proposes to construct sixty (60) units of multifamily rental housing, commonly referred to as “Gateway Place Phase II” (the “Project”), consisting of approximately .99 acres and located in the City of West Sacramento, County of Yolo, California, as legally described in Exhibit A, attached hereto and incorporated herein (the “Property”). Fifty-nine (59) of the units shall be rented at rents affordable to Qualified Households according to the schedule contained in Exhibit B, attached hereto and incorporated herein (the “Regulated Units”).

B. The Project involves the construction of the Regulated Units and is intended to create decent, safe, and sanitary housing for households who would otherwise be unable to afford such housing.

C. Lender has agreed to provide Owner with financial assistance for construction of the Project in the form of a loan in the amount not to exceed the amount of __________________________ Dollars ($_______________.00) (the "City Loan"), which consists of a combination of City housing funds and the value of the Property. A City Loan Agreement (the "Loan Agreement"), and a City Residual Receipts Promissory Note (“Note”), secured by a Construction Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”) for the City Loan has been executed by Owner securing and regulating certain aspects of the City Loan. In addition, a Deed of Trust for each Loan has been recorded against the Property, These documents and this Agreement are collectively referred to as the “Loan Documents.” Lender has also agreed to provide Owner with financial assistance from the HUD HOME investment Partnerships Program (“HOME Program”), in the amount of One Million Eight Hundred Thousand Dollars ($1,800,000.00) (the “HOME Loan”).

D. As further consideration for this funding and to further the public interests of the City in seeing the Project maintained as affordable housing, Owner has agreed to enter into and record this Agreement. The purpose of this Agreement is to regulate and restrict the occupancy, rents, operation, ownership, and management of the Project for the benefit of the Project occupants and the people of the City. The covenants in this Agreement are intended to run with 315
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the land and be binding on Owner and Owner’s successors-in-interest to the land for the full term of this Agreement.

NOW, THEREFORE, Owner and the City hereby agree as follows:

AGREEMENT

1. DEFINITIONS
The following terms have the meanings set forth in this section wherever used in this Agreement or the attached exhibits. Capitalized terms not defined in this Agreement shall have the same meaning as defined in the Loan Documents.

1.1 “AFFORDABLE RENTS” shall mean the following:

1.1.1 For sixteen (16) of the Regulated Units, the monthly charge paid by tenants for occupancy and use of the units shall not exceed the product of thirty percent (30%) times thirty percent (30%) of the Area Median Income, adjusted for family size appropriate for the Unit; for twenty-one (21) of the Regulated Units, the monthly charge paid by tenants for occupancy and use of the units shall not exceed the product of thirty percent (30%) times fifty percent (50%) of the Area Median Income, adjusted for family size appropriate for the Unit; and for twenty-two (22) of the Regulated Units, the monthly charge paid by tenants for occupancy and use of the units shall not exceed the product of thirty percent (30%) times sixty percent (60%) of the Area Median Income, adjusted for family size appropriate for the Unit. Notwithstanding anything herein to the foregoing, “Affordable Rent” shall be calculated in the manner provided under Section 42 of the Internal Revenue Code.

1.1.1.1 If tenants are responsible for direct payment of utilities, the tenants of those units shall receive a utility allowance based on the then-current allowance established by the Yolo County Housing Authority (or its successor) for units of a comparable size.

1.1.1.2 For purposes of this definition, “adjusted for family size appropriate to the Unit” shall have the same meaning used by the California Tax Credit Allocation Committee, as that definition may change from time to time.

1.2 “AREA MEDIAN INCOME” (referred to herein as “AMI”) means the area median income for Yolo County, with adjustments for household size, as determined from time-to-time and published by the California Tax Credit Allocation Committee. If the California Tax Credit Allocation Committee should cease making such determination, City may designate another fair method of calculation of area median income used by any federal or state agency and applicable to City consistent with then applicable tax credit rents.

1.3 “CITY” means the City of West Sacramento.

1.4 “OWNER” means Delta Lane Housing Partners II LP, a California limited partnership.

1.5 “PROJECT” means the development and operation of the Property for residential use according to the terms of this Agreement.
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1.6 “PROPERTY” means the real property described in the attached Exhibit A, which is hereby incorporated into this Agreement by this reference, and any buildings or improvements now or hereafter situated on such real property.

1.7 “QUALIFIED HOUSEHOLD” means a household in which household income does not exceed the percentage of Area Median Income prescribed for the applicable housing unit by Exhibit B to this Agreement.

1.8 “REGULATED UNITS” means fifty-nine (59) of sixty (60) rental dwelling units constructed for the Project, having the composition as shown in the attached Exhibit B, which is hereby incorporated into this Agreement by this reference.

2. OWNER’S GENERAL OBLIGATIONS

2.1 COMPLIANCE WITH LOAN DOCUMENTS. Owner’s actions with respect to the Property and the use of Loan funds shall at all times be in full conformity with the requirements of the Loan Documents in all material respects.

2.2 TERM OF AGREEMENT. This Agreement shall remain in full force and effect until fifty-five (55) years after the date on which the City issues a Certificate of Occupancy for the Project. The obligations in this Agreement shall remain effective and fully binding on Owner for this full term regardless of any expiration of the term of any Loan, any payment, or prepayment of any Loan, any assignment of any Promissory Note, any reconveyance of any Deed of Trust, or any sale, assignment, transfer, or conveyance of the Property.

2.3 CONSTRUCTION OF PROJECT. All of the Regulated Units in the Project shall be built and maintained to a similar standard and shall contain separate and complete facilities for living, sleeping, eating, cooking, and sanitation for a single person or family, including sleeping area, bathing and sanitation facilities and cooking facilities equipped with a cooking range, refrigerator and sink. None of the Regulated Units shall at any time be utilized on a transient basis or as a hotel, dormitory, fraternity house, sorority house, rooming house, hospital, nursing home, sanitarium, rest home or trailer park.

3. PROJECT OCCUPANCY AND RENTS.

3.1 OCCUPANCY OF REGULATED UNITS. Except as otherwise provided in this Agreement, for the full term of this Agreement, Regulated Units shall be made available to and occupied by Qualified Households at Affordable Rents according to the schedule contained in Exhibit B herein and the following requirements:

3.1.1 Tenants in Occupancy. Notwithstanding the general requirement that Regulated Units be occupied solely by Qualified Households, Owner shall not be required to terminate the tenancy of tenants solely because their income exceeds that permitted for a Qualified Household, and for so long as an over-income tenant remains in occupancy of its original unit, Owner may continue to charge the over-income tenant the greater of: i) the same rent the tenant was paying at the beginning of the tenancy of the tenant; or ii) the Affordable Rent.

3.1.2 Initial Occupancy of Regulated Units. The income levels and other qualifications of applicants required by this Regulatory Agreement shall be confirmed by Owner or its manager prior to such person's initial occupancy in conformance with Owner's management procedures manual and all applicable laws and regulations. 317
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3.1.3 Homekey Program Units. On November 24, 2020, the City and the Department of Housing and Community Development ("Department") entered into a Standard Agreement No. 20-HK-00060 ("Standard Agreement"), which contains the terms and conditions of certain grant funds that were provided to the City for the Homekey Program pursuant to Health and Safety Code section 50675.1.1 (Assem. Bill No. 83 (2019-2020 Reg. Sess.), § 21.). The City used the grant funds in connection with the purchase of certain real property in December 2020, to be used for interim housing, and which contains forty (40) restricted units. A Declaration of Restricted Use was recorded against the property, which allows the City to designate replacement property for the forty (40) units. The City has designated forty (40) of the Regulated Units hereunder as Homekey Program replacement units.

3.2 RENTS FOR REGULATED UNITS. Except as otherwise provided in Section

3.1.1, rents charged to and paid by tenants for Regulated Units shall not exceed Affordable Rents.

3.3 CONVERSION OF PROJECT FROM RENTAL UNITS TO CONDOMINIUM.

Owner shall not convert Regulated Units to condominium or cooperative ownership or sell condominium or cooperative conversion rights to the Regulated Units during the term of this Regulatory Agreement.

3.4 NONDISCRIMINATION. Owner shall not discriminate or segregate in the use, enjoyment, occupancy, conveyance, lease, sublease, or rental of Project units on the basis of race, color, ancestry, national origin, religion, sex, sexual preference, age, marital status, family status, source of income, physical or mental disability, Acquired Immune Deficiency Syndrome (AIDS) or AIDS-related conditions (ARC), or any other arbitrary basis. Owner shall include a statement in all advertisements, notices, and signs for the availability of Project units for rent to the effect that Owner is an Equal Housing Opportunity Provider.

3.4.1 All deeds, leases, or contracts entered into by the Owner as to any portion of the Property shall contain the nondiscrimination provisions as provided in California Health and Safety Code section 33436.

3.5 MANAGEMENT RESPONSIBILITIES. Owner is specifically responsible, subject to its obligations herein, for all management functions with respect to the Property, 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. City shall have no responsibility over management of the Property.

3.6 MANAGEMENT ENTITY. City shall have the right to review and approve the management entity chosen by Owner for the Property and the right to require a change in the management entity for reasonable cause at any time during the term of this Agreement. Any contracting of management services by Owner shall not relieve Owner of its primary responsibilities for proper performance of management duties. City approves The John Stewart Company as the initial management entity. City shall have the right to review and approve any proposed amendments to Owner’s contract with its management firm, any new management contracts, and any substantive changes in the Plan during the term of this Agreement. City may also require the Owner to update the Management Plan not more than once every three (3) years.

All approvals required of City pursuant to this Section 3.6 shall be made in City’s reasonable discretion.
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3.7 FINAL MANAGEMENT PLAN. At least sixty (60) calendar days prior to the anticipated completion of construction of the Project, Owner shall submit to City for review and approval a draft management plan for marketing and managing the Property. Prior to issuance of the final Certificate of Occupancy for the Project, Owner shall submit a final management plan (“Final Management Plan” or “Plan”) to City for its review and approval, which shall not be unreasonably withheld. The Plan shall include, but is not limited to, provisions as set forth directly below:

3.7.1 A major maintenance schedule, prepared by Owner and the management entity, which specifies maintenance work to be performed on a periodic basis over the estimated lifetime of the housing units on the Property;

3.7.2 A replacement reserve budget identifying the manner in which the maintenance schedule described above in Section 3.7.1 and projected replacement activities will be funded from monthly project income;

3.7.3 Annual inspections of individual units to ensure continued compliance with state and local housing codes. Results of the inspections must be documented in a report, and copies shall be provided to the Lender within thirty (30) days following completion of any report.

The Lender may also independently schedule during a calendar year, one or more property inspections;

3.7.4 Annual reporting to the Lender regarding compliance with the deferred maintenance schedule and the results, findings, and any corrective measures taken or to be undertaken arising from the annual inspections of units;

3.7.5 Audited annual financial statements prepared by an independent certified public accountant, approved in advance, in writing, by Lender, which reflect the status of the reserve fund for maintenance and replacement activities. Lender hereby approves Novogradac as an independent certified public accountant. Copies of audited annual financial statements must be provided to the Lender within one hundred twenty (120) days of the fiscal year-end date.

Copies of quarterly financial statements must be provided to the Lender within thirty (30) days of the quarter-end date;

3.7.6 Maintenance of outdoor landscaping, outdoor lighting, parking area paving, stops/curbs, striping, laundry room facilities, garbage and recycling receptacles, community building, as well as overall cleanliness of Property;

3.7.7 A schedule for when interior of units must be repainted, carpets and draperies shampooed and replaced, and kitchen and laundry room appliances replaced;

3.7.8 A marketing plan to be used to achieve full and continuing lease up of the affordable housing units on the Property. Owner acknowledges that the City is in the process of adopting and implementing a local preference policy for low income housing projects within its jurisdiction, which will include a local preference for the housing of City homeless in housing projects. Borrower agrees that Borrower shall comply with, and apply to the Project, any such preference policy adopted by the City Council unless such policy is explicitly prohibited by a governmental funding source previously approved by the City for the Project, or such policy is otherwise explicitly prohibited by state or federal law. Borrower will conduct sufficient marketing and advertisement of the housing program and other forms of outreach to ensure that enough eligible applicants from the target local population participate in the program to meet the housing 319
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goal of providing low-income housing units for all unit applicants. Borrower shall at all times coordinate and consult with the City's homeless coordinator in the outreach and placement of all applicants for the six (6) permanent supportive housing units within the project.

3.7.9 A strategy to outline methods to be used to achieve full and continuing lease up of the housing units on the Property and conformance with Section 3.4 of this Agreement and any applicable state and federal affirmative fair housing marketing guidelines;

3.7.10 A plan for certifying the eligibility of the households, including annual verification of tenant income and measures to take in the event a tenant exceeds the maximum income;

3.7.11 A tenant selection process that includes, but is not limited to, the following:

3.7.11.1 Review of the following criteria in tenant selection:

3.7.11.1.1 history of habitual rent delinquencies or evictions; and

3.7.11.1.2 history of criminal or drug-related offenses, including, but not limited to, assault, battery, abuse, destructive or violent behavior;

3.7.11.2 Agreement that prospective tenants complete an application form, verify income/employment, attend a private interview with Owner or a management entity, consent to a credit check and agree to abide by property management rules for Property;

3.7.11.3 Agreement that selected tenants be given a set of the property management rules; and

3.7.11.4 Agreement that leases with tenants provide that noncompliance with building rules shall be an Event of Default on the lease and grounds for eviction;

3.7.12 On-site management of the Project;

3.7.13 The duties of the manager regarding operation of the Project;

3.7.14 Property Management Rules; and

3.7.15 A sample lease form.

4. PROJECT OPERATIONS

4.1 MAINTENANCE AND SECURITY.

4.1.1 Owner shall, at its own expense, maintain the Property in good condition, in good repair (reasonable wear and tear excepted), and in decent, safe, sanitary, habitable, and tenantable living conditions for the benefit of Project occupants. Owner shall not commit or permit any waste on or to the Property, and shall prevent and/or rectify any physical deterioration of the Property. Owner shall maintain the Property in conformance with all applicable state, federal, and local laws, ordinances, codes, and regulations, and the Final Management Plan; but Owner’s maintenance obligations shall not be limited only to the standards contained in these laws or the Plan.
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4.1.2 Owner shall, at its own expense, provide, at a minimum, the following security measures in order to limit the threat to occupants posed by third-party criminal conduct:

4.1.2.1 All Interior common areas shall be locked and accessible only by residents;

4.1.2.2 Site lighting shall be located to maximize illumination throughout the site to prevent insufficiently lit areas; and

4.1.3 In the event Owner fails to maintain or secure the Property in accordance with the above standards and after thirty (30) days’ prior written notice to Owner, City or its agent may, but shall be under no obligation to, enter upon the Property, make such alterations, repairs or replacements as are deemed necessary in City’s reasonable discretion, and provide for payment thereof. Any amount advanced by City to make such alterations or repairs, together with interest thereon from the date of such advance at the same rate of interest as specified in the Note for the Project (unless payment of such an interest rate would be contrary to applicable law, in which case interest shall accrue at the rate then allowed by applicable law), shall become an additional obligation of Owner to City and shall be secured by the Deed of Trust for the Construction Loan.

4.1.4 Nothing contained in this Section 4.1 or elsewhere in the Loan Documents shall be interpreted to place any restriction or limitation on City’s right to take such actions, as it deems necessary or proper to protect the health and safety of the public in the proper exercise of City’s authority under federal, state, and local laws.

4.2 REFUSE AND RECYCLING. Owner or its designated management entity shall be responsible for moving refuse and recycling containers to and from the designated trash enclosure and the curb for scheduled pickups.

4.3 PARKING MANAGEMENT PLAN. Developer is required to complete a parking management and maintenance plan for the Project to be approved by the City prior to completion of the Project ("Parking Management Plan"), which approval by City shall not be unreasonably withheld. The Parking Management Plan shall provide for the management of all on-site parking on the adjacent property pursuant to the Parking Lot Easement entered into between the parties on the same date herewith, and off-site parking located in the Delta Lane right of way, (including the as well as maintenance for the off-site parking. Developer covenants and agrees to adhere to the terms of the Parking Management Plan and agrees to update it annually upon request of the City.

4.4 AFFIRMATIVE MARKETING. Developer and Property Manager will exclusively direct market the available units in the Project to lower-income West Sacramento residents for the first two (2) weeks of its initial lease up period. Developer is required to complete a marketing plan describing its marketing campaign for the Project, to be approved by the City prior to completion of the Project.

4.5 UNIT VACANCIES. Owner shall use its reasonable commercial efforts to fill vacancies in the Regulated Units as quickly as possible with Qualified Households.

4.6 INSPECTION AND RECORDS. Owner shall maintain records which clearly document Owner’s performance of its obligations to operate the Property under the terms of this Agreement. Owner shall submit any of such records to City within thirty (30) business days of City’s written request. Owner shall permit City to enter and inspect the Property for compliance 321
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with obligations under this Agreement upon seven (7) days’ advance written notice of such visit by City to Owner or Owner’s management agent and to tenants of any inspected Project units, subject to the provisions of the lease regarding inspection and entry rights.

4.7 ANNUAL REPORT.

4.7.1 By April 1st of each calendar year, Owner shall submit an annual report to City, which shall include, at a minimum for each Regulated Unit, the initial and current rental rates and the income and household size of the occupants at the time such occupants initially take occupancy. The income information required under this report shall be supplied by the tenant in a certified statement on a form provided by City. City may require additional information be included in the annual report as reasonably necessary to evidence Owner’s compliance with the terms of this Agreement.

4.7.2 Owner shall pay to City a lump sum affordable housing monitoring fee of $81,125.00 consistent with the City’s adopted Affordable Housing Monitoring Program in the Book of Imposts (the “Monitoring Fee”) due upon the issuance of a Certificate of Occupancy for the Project.

4.8 FEES, TAXES, AND OTHER LEVIES. Without limiting its right to require the same to be reimbursed by tenants (but subject to Owner’s obligation to provide tenants of Regulated Units the utility allowance referred to in Section 1.1.1.1), Owner shall be responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property, and shall pay such charges prior to delinquency. However, Owner shall not be required to pay any such charge so long as (a) the legality thereof is being contested in good faith and by appropriate proceedings, and (b) Owner maintains reserves adequate to pay any contested liabilities.

4.9 INSURANCE COVERAGE. Owner shall cause to have in full force and effect during the term of this Agreement insurance coverage as required in Exhibit E of the Loan Agreements except for the Builder’s “All Risk” Insurance.

5. GENERAL PROVISIONS

5.1 RESTRICTIONS ON TRANSFER.

5.1.1 As used in this Agreement, the term “Transfer” means:

5.1.1.1 Any total or partial sale, lease, assignment, or other conveyance, or any trust or power, or any transfer in any other mode or form, of or with respect to this Agreement or of any part of or interest in the Property or Project, or any agreement to do any of the foregoing; or

5.1.1.2 Any total or partial sale, assignment, or other conveyance, or any addition, or any trust or power, or any transfer in any other mode or form, of a partial or entire interest of the general partners of the Owner, or any agreement to do any of the foregoing.

5.1.2 The transfers contained in Section 16.3 of the Deed of Trust shall not be deemed a “Transfer” for the purposes of this Agreement or any other Loan Document. 322
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5.1.3 This Agreement is entered into in connection with the Owner's Construction and operation of the Project in accordance with the terms of this Agreement. The qualifications and identity of the Owner are of particular concern to City, in view of:

5.1.3.1 The importance of the development of the Property to the general welfare of the community;

5.1.3.2 The public aids that have been made available by law and by the government for the purpose of making such development possible;

5.1.3.3 The reliance by City upon the unique qualifications and ability of the Owner to serve as the catalyst for development of the Property and upon the continuing interest which the Owner will have in the Property to assure the quality of the use, operation, and maintenance deemed critical by City in the development of the Property;

5.1.3.4 The fact that a change in ownership or control of the owner of the Property, or of a substantial part thereof, or any other act or transaction involving or resulting in a significant change in ownership or with respect to the identity of the Parties in control of the Owner or the degree thereof, is for practical purposes a transfer or disposition of the Property; and

5.1.3.5 The importance to City of the standards of use, operation, and maintenance of the Property.

5.1.4 It is because of the qualifications and identity of the Owner that City is entering into this Agreement and that Transfers are permitted only as provided in this Agreement.

5.1.5 The limitations on Transfers set forth in this Section 5.1 shall apply throughout the term of this Agreement. Except as expressly permitted in this Agreement, the Owner represents that it has not made or created, and agrees that it will not make or create or suffer to be made or created, any transfer, either voluntarily or by operation of law, without the prior written approval of City.

5.1.6 Any transfer made in contravention of this Section 5.1 shall, at City's discretion, be void and shall be deemed to be a default under this Agreement, whether or not the Owner knew of or participated in such Transfer.

5.1.7 The only Transfers permitted at any time without the prior approval of City are the Transfers permitted pursuant to Section 5.1.2 and the rental of a unit by the Owner.

5.1.8 Except as permitted under Section 5.1.2, above, any Transfer shall be permitted only after (a) City, in its sole discretion, has delivered to Owner its prior written approval of such Transfer, and (b) the transferee has assumed the Owner's obligations under this Agreement by signing this Agreement of such other reasonable documentation as City may require.

Notwithstanding anything in this Agreement to the contrary, a transfer resulting from a foreclosure, deed in lieu of foreclosure, power of sale or similar action, and any subsequent transfer to a purchaser at a foreclosure sale, shall be a Transfer hereunder and shall not require the prior written approval of the City.
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5.2 DEFAULT AND REMEDIES. Except as otherwise provided in section 4.1.3, in the event of any breach or violation of any agreement, obligation, or warranty under this Agreement, City shall give written notice to Owner by specifying: (a) the nature of the breach or violation, (b) the action required to cure the breach or violation, if an action to cure is possible, and (c) a date, which shall not be less than ninety (90) calendar days from the mailing of the notice, by which such action to cure must be taken (or otherwise resolved to Lender’s reasonable satisfaction), if an action to cure is possible. If Owner fails to cure the breach or violation within the time frame specified in the notice, or if a cure is not possible, City may proceed with any of the following remedies:

5.2.1 Bring an action for equitable relief seeking the specific performance by Owner of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of said terms and conditions, and/or seeking declaratory relief; or

5.2.2 Enter upon, take possession of, and manage the Property, either in person, by agent, or by a receiver appointed by a court, and collect any rents, income, deposits, or reserves and apply them to operate the Property, and continue in possession until such time as City determines, in its reasonable discretion, that Owner is in a position to operate the Property in compliance with this Agreement; or

5.2.3 For violations of Owner’s obligations with respect to Project rents, obligate Owner to reimburse the Qualified Household for any amounts Owner has collected that are in excess of the Affordable Rent; or

5.2.4 Pursue any other remedy allowed at law or in equity.

Notwithstanding anything to the contrary contained herein, the notice and cure rights granted to Owner’s limited partner in the Loan Agreements are incorporated herein by reference.

5.3 NON-LIABILITY OF OFFICIALS, EMPLOYEES, AND AGENTS. No member, official, director, employee, or agent of City shall be personally liable to Owner or third party beneficiaries for any obligation created under the terms of this Agreement.

5.4 INDEMNITY. Notwithstanding the insurance coverage required herein, Owner shall indemnify and hold City, their members, officials, directors, employees, and agents, harmless against any losses, damages, liabilities, claims, demands, judgments, actions, court costs, and legal or other expenses (including reasonable attorneys’ fees) which City may incur as a result of: (a) Owner’s failure to reasonably perform any material obligations as required by this Agreement; (b) a failure of any of Owner’s representations or warranties under this Agreement to be true and complete in any material respect as of the date made; or c) any material breach, act or omission by Owner, management agent, Owner’s contractors, subcontractors, or suppliers with respect to the Project or the Property, except to the extent the loss is caused by the active negligence or willful misconduct of City. Owner shall pay immediately upon City’s demand any amounts owing under this indemnity. The duty of the Owner to indemnify includes the duty to defend City in any court action, administrative action, or other proceeding brought by any third party arising from the Project or the Property. Owner’s duty to indemnify City shall survive the term of this Agreement.

5.5 GOVERNING LAW. This Agreement shall be interpreted under and governed by the laws of the State of California, except for those provisions preempted by federal law.

However, the laws of the State of California shall not be applied to the extent that they would require or allow the court to use the laws of another state or jurisdiction. Owner agrees that all 324
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actions or proceedings arising in connection with this Agreement shall be tried and litigated only in the state and federal courts located in the State of California, except that Lender, in its sole discretion, may elect that all such actions or proceedings be tried and litigated in the County of Yolo or the United States District Court for the Eastern District of California.

5.6 REGULATORY AGREEMENT CONTROLS. In the event that any provisions of this Agreement and the Loan Agreements conflict, the terms of this Agreement shall control. The nonrecourse provisions in the Note and Deed of Trust are incorporated herein by reference.

5.7 ATTORNEYS’ FEES AND COSTS. In the event that a legal or administrative action is brought to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover all reasonable attorneys’ fees and costs, including expert witness fees, incurred in such action.

5.8 TIME. Time is of the essence in this Agreement.

5.9 CONSENTS AND APPROVALS. Any consent or approval required under this Agreement shall not be unreasonably withheld. Owner hereby consents to having any information contained in this Agreement or any information provided to the City as required by this Agreement included in a database that the City is required to maintain consistent with California Health and Safety Code section 33418.

5.10 NOTICES, DEMANDS, AND COMMUNICATIONS. Formal notices, demands, and communications between Owner and City shall be given by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, to the principal offices of Owner and City as follows, or if any such office is relocated, to the new address specified by the relocated party:

If to Lender: If to Owner:

City of West Sacramento Delta Lane Housing Partners II, LP 1110 West Capitol Avenue c/o Jamboree Housing Corporation West Sacramento, CA 95691 17701 Cowan Ave., Suite 200
Attn: City Manager Irvine, CA 92614
Attention: Lida Andaleon

Copy to:

Kronick, Moskovitz, Tiedemann & Girard
1331 Garden Hwy., 2nd Floor
Sacramento, California 95833
Attn: Jeffrey A. Mitchell
Fax No. (916) 321-4555

5.11 BINDING UPON SUCCESSORS. All provisions of this Agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors-in-interest, transferees, and assigns of Owner and City, and shall run with the land for the full term of this Agreement, regardless of any assignment, payment, prepayment, expiration, extinguishment of the Loan or Note, any reconveyance of the Deed of Trust, or any conveyance or transfer of the Property. Any successor-in-interest to Owner and any purchaser or transferee of the Property shall be subject to all of the duties and obligations imposed on Owner under this Agreement for 325
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the full term of this Agreement. The term “Owner” as used in this Agreement shall include all such assigns, successors-in-interest, and transferees.

5.12 RELATIONSHIP OF PARTIES. The relationship of Owner and City for this Project during the term of this Agreement shall not be construed as a joint venture, equity venture, or partnership. City neither undertakes nor assumes any responsibility or duty to Owner or to any third party with respect to the operation of the Property or the actions of Owner. Except as City may specify in writing, Owner shall have no authority to act as an agent of City or to bind City to any obligation.

5.13 THIRD PARTY RIGHTS. Consistent with California Health and Safety Code section 33334.3, the following third parties may enforce the occupancy restrictions provided herein against the Owner or any subsequent owner of the Property:

5.13.1 A resident of a Regulated Unit;

5.13.2 A residents’ association that includes residents of Regulated Units;

5.13.3 A low or moderate income person who is qualified to live in a Regulated Unit but was denied occupancy due to a violation of the occupancy restrictions;

5.13.4 A low or moderate income person on an affordable housing waiting list; and

5.13.5 The most recent previous resident(s) of a Regulated Unit now subject to occupancy restrictions.

5.14 WAIVER. Any waiver by City of any obligation in this Agreement must be in writing.

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

5.15 OTHER AGREEMENTS. Owner represents that it has not entered into any agreements that would restrict or compromise its ability to comply with the terms of this Agreement. Owner shall not enter into any agreements that are inconsistent with the terms of this Agreement without a written waiver by City, which shall not be unreasonably withheld.

5.16 AMENDMENTS AND MODIFICATIONS. Any amendments or modifications to this Agreement must be in writing, and shall be effective only if executed by Owner and City.

5.17 SEVERABILITY. Every provision of this Agreement is intended to be severable.

If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired.

6. SPECIAL PROVISIONS

6.1 PARTICIPATION IN SECTION 8 PROGRAM. Subject to any applicable Fair Housing and/or Tax Credit Program requirements, during the term of this Agreement, Owner 326
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agrees to accept qualified tenants who qualify under the Housing Choice Voucher program, formerly referred to as the Section 8 program (the “HCV” or “Section 8”), administered by the Yolo County Housing Authority and satisfy Owner’s Management Plan requirements for available Regulated Units. Owner shall participate to the extent reasonably possible. In the event of a loss or reduction of Section 8 rental subsidies, the City agrees, to the extent necessary to achieve financial feasibility for the Project as reasonably determined by the Project’s senior lender, increase the affordability limitations for some or all of the Project’s units, and to the maximum extent permitted under the HOME Program regulations applicable for this Project, to initial income not to exceed 60% AMI, at monthly rents not to exceed 1/12th of 30% of 60% AMI, less a reasonable utility allowance, however, if rent increases up to 60% AMI are not necessary for financial feasibility, then the percentage AMI shall be increased to less than 60% AMI.

6.2 COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the Parties in separate counterparts (including copies sent to a Party by facsimile transmission or in portable document format (PDF), each of which when executed and delivered will be deemed an original and all of which counterparts taken together will constitute one and the same instrument.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the Parties hereto have each caused this Agreement to be duly executed as of the date first written above.

CITY:

The City of West Sacramento,
a California municipal corporation
By:

Aaron Laurel, City Manager
ATTEST:
_____________________
City Clerk
OWNER:

Michael Massie
Chief Development Officer
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Exhibit A
(See Attached Legal Description of Property)
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Exhibit B
(Occupancy and Rent Restrictions)

DELTA LANE PHASE II AFFORDABLE HOUSING PROJECT

QUALIFIED

HOUSEHOLD
INCOME
ONE

BEDROOM
No. of Units
TWO

BEDROOM
No. of Units
THREE

BEDROOM
No. of Units
TOTAL
30% of Area Median
Income or lower 10 3 3 16
50% of Area Median
Income or lower 8 10 3 21
60% of Area Median
Income or lower 9 4 9 22
Property Manager’s
Unit (Unrestricted) 0 0 0 1
TOTAL 27 17 15 60
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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

ACKNOWLEDGEMENT

STATE OF CALIFORNIA )
)ss

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)
331
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.

ACKNOWLEDGEMENT

STATE OF CALIFORNIA )
)ss

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)
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Exhibit K
(See Attached Form of HOME Loan Document
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CITY HOME LOAN AGREEMENT
THIS CITY HOME LOAN AGREEMENT (“Loan Agreement”) is made and entered into ______________, 2022, by and between the City of West Sacramento, a California municipal corporation (the “Lender”) and Delta Lane Housing Partners II LP, a California limited partnership (“Borrower”), and collectively referred to herein as “the Parties”.

B. Borrower intends to purchase and develop the Property with a project that contains at least 59 affordable unit apartments (10 of which are HOME-designated units) in a 60-unit affordable rental housing development with four-story building and community space on the ground floor with at-grade parking, to be occupied by low and very low income households (the "Project").

C. The City, as the state recipient of HOME Program Income funds, is responsible for the planning, administration, implementation, and evaluation of the HOME Program per 24 CFR Part 92 as amended.

D. Borrower has requested this loan from Lender to finance the purchase of the Property and the construction of the Project and the City desires to assist Borrower by providing HOME Program Income funds to assist with the gap financing on the terms provided for herein.

E. Borrower has also applied to Lender for a loan funded from City funds (“City Loan”), which is governed by other loan documents.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties hereto agree as follows:

AGREEMENT

1. THE LOAN. Subject to the terms and conditions of this Loan Agreement, the Lender hereby agrees to lend the Borrower, and the Borrower hereby agrees to borrow from Lender the amount of Two Million Dollars ($2,000,000.00) (the "HOME Loan"); provided, however, that in the event that any of the HOME Program Income funds for any reason are terminated or withheld from City or otherwise not forthcoming, City shall have the right to revoke this Agreement to the extent of any such shortfall.

1.1 Promissory Note. The loan shall be evidenced by a residual receipts Promissory Note (the “Note”).
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1.2 Security. The Loan shall be secured by a deed of trust (“Deed of Trust”), to be recorded against the Property upon close of escrow on the Property. Upon close of escrow, Lender will receive an ALTA Lender’s Policy of Title Insurance (2006), together with such endorsements as Lender may reasonably request, showing the Deed of Trust to be senior in priority to all liens and encumbrances, except the approved lien by senior lender to secure its loan to Borrower in connection with this transaction, other loans from the City of West Sacramento, the lien of current taxes not yet due and payable, and all other items shown on Schedule B1 to the policy issued to Lender at the closing of the Loan. Borrower shall be responsible for all escrow fees and costs, including the cost of the premium for the title insurance policy.

1.4 Purpose and Use of Funds. The purpose of the Loan is to finance the construction of the Project, and the Loan funds shall not be used for any other purposes.

2. REPRESENTATIONS AND WARRANTIES. The Borrower represents and covenants the following:

As used in this Section 2, the phrase “to the knowledge of the Borrower” shall mean the actual knowledge of Michael Massie, without duty of inquiry or investigation.

4. COMPLETION OF CONSTRUCTION. Construction shall be completed and one hundred percent (100%) occupied by [_________] [date to be confirmed with Chase upon review of the construction and lease up schedule].

5. CONDITIONS OF LENDING. The obligation of the Lender to make the Loan shall be subject to the fulfillment on the Closing Date of each of the following conditions:

5.1 Loan Documents. The Borrower shall have executed and delivered to the Lender this Loan Agreement, the Note, the Deed of Trust, and the Regulatory Agreement in forms approved by Lender.

5.4.1 Lender shall authorize disbursements for Construction Funds for the Project improvements in the amount payable to the general contractor or applicable subcontractor or supplier, or to Borrower, as provided in this Section 5.4.1 and in accordance with the disbursement process set forth in Sections 5.4.2 and 5.4.3; provided, however, that ten percent 336
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(10%) of the aggregate remaining cash funds held by Lender (e.g., $_________________) (“Retention”) shall be withheld by Lender and disbursed in accordance with Section 5.4.3 below (provided, however, that if Borrower’s construction loan permits release of retainage thereunder attributable to contractors for early trades such as excavation and foundation, or permits retainage to be released for any other contractors whose portion of the Project has been completed, Lender may authorize the early release of retainage on such early trades (the “Early Trades”) so long as Borrower has provided Lender with a final lien waiver from the applicable Contractor). Borrower shall submit a disbursement request to Lender for disbursement of the costs invoiced for the authorized development costs, as described in the line items of the final budget ("Disbursement Request"), and shall set forth the share of the development costs to be funded by Lender, the senior construction lender and any other financial sources with respect to such request.

5.5 No Defaults. The Borrower shall not be in default under this Loan Agreement.

6. FEDERAL GENERAL CONDITIONS.

6.1 Borrower shall comply with the following laws and directives:
a. Title VIII of the Civil Rights Act of 1968, Public Law 90-284. 337
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b. Section 109 of the Housing and Community Development Act of 1974. c. Title VI of the Civil Rights Act of 1974, Public Law 99-352, and the regulations of HUD with respect thereto, including 24 CFR, Parts 1 and 2. d. The Fair Housing Act, as amended.
e. Executive Order 11063, as amended.
f. The Age Discrimination Act of 1975.
g. Section 504 of the Rehabilitation Act of 1973.
h. Executive Order 11246, as amended, and the regulations which are issued pursuant thereto.
i. The Fair Labor Standards Act.
j. Section 202(a) of the Flood Disaster Protection Act of 1973. k. Sections 302 and 401(b) of the Lead-Based Paint Poisoning Prevention Act and implementing regulations in 24 CFR, Part 35.

6.2 No officer, employee or agent of City shall have any interest, direct or indirect, financial or otherwise, in any contract or subcontract or the proceeds thereof, for any of the work to be performed pursuant to the Development during the period of service of such officer, employee or agent, for one year after dismissal.

6.3 None of the personnel employed in the administration of the Development shall be in any way or to any extent engaged in the conduct of political activities in contravention of Chapter 15 Title 5, U.S. Code.

6.4 None of the HOME Program funds to be paid under this Agreement shall be used for any partisan political activity, or to support or defeat legislation pending before Congress.

6.5 Borrower shall carry out its activities in compliance with all Federal laws and regulations described in 24 CFR Part 92, which are applicable to Federal Fiscal Year HOME Program grants, except that Borrower will not assume City’s environmental responsibilities described in 24 CFR 92.352, nor the intergovernmental review process described in 24 CFR

92.359.

6.6 Borrower shall maintain records in accordance with 24 CFR 92 508.

6.7 Borrower in its discretion may request such other and further information, as from time to time required to ensure compliance with the mandates of the above listed Executive Orders.

6.8 At the discretion of City, any material breach of the terms of this Section II may, after thirty (30) day notice to Borrower and Borrower’s limited partners and failure to cure such material default thereby, result in forfeiture of all HOME Program funds received by Borrower pursuant to this Agreement, or any part thereof.

6.9 For a period of fifty-five (55) years (the “Period of Affordability”), as further defined in the Regulatory Agreement, or transfer of title, whichever is later, Borrower agrees to maintain the residential units of the Development as “affordable housing”, subject to termination prior to the expiration of such period as provided in Section 5 of the Regulatory Agreement. 338
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6.10 Borrower agrees to maintain the Development in compliance with Housing Quality Standards established by HUD for the Section 8 Program and local housing code requirements for the duration of this Agreement.

6.11 Borrower agrees that the duration of this Agreement is in effect for the Period of Affordability established in Section III. I., commencing from the date of “Project Completion” as specified at 24 CFR 92.2.

6.12 Borrower agrees that, for the duration of this Agreement, the Development will be operated in compliance with HOME Regulations, including without limitation those contained in 24 CFR 92.250-92.258, Subpart F.

6.13 All leases with tenants living in Assisted Units shall be made for not less than one (1) year, unless a shorter term is mutually agreed upon between Borrower and tenant. All such leases must comply with the requirements set forth in 24 CFR 92.253.

6.14 Borrower agrees to recertify tenant HOME Program eligibility at least annually as required by HUD regulations.

6.15 Borrower agrees that maximum rents charged shall not exceed those calculated per HOME Regulations, and that Borrower will supply tenants with written notice at least thirty (30) days before implementing any rent increase.

7. EVENTS OF DEFAULT. The entire unpaid principal of the Note, and the interest then accrued thereon, shall become and be immediately due and payable upon the written demand of the Lender, without any other notice or demand of any kind or any presentment or protest, if any one of the following events (an “Event of Default”) shall occur and be continuing at the time of such demand, whether voluntarily or involuntarily, without limitation, occurring or brought about by operation of law or pursuant to or in compliance with any judgment, decree or other of any court or any order, rules or regulations of any administrative or governmental body:

7.1 Failure to Make Payment. A failure by the Borrower to make any payment due under the Note within ten (10) days after written notice from Lender.

7.2 Non-Payment of Other Secured Indebtedness. A failure by the Borrower to make any payment due of any other indebtedness of Borrower which is secured by any collateral which additionally secures the obligations of Borrower under this Loan and the acceleration of such indebtedness by such other lender.

7.3 Incorrect Representation or Warranty. If any representation or warranty contained in or made in connection with the execution and delivery of this Loan Agreement, or in any certificate furnished pursuant hereto, shall prove to be incorrect or to have been incorrect when made in any material respect.

7.4 Default in Obligations. If the Borrower shall default in the performance of any other term, obligation, covenant, or agreement contained in this Loan Agreement, including, without limitation, those contained in Exhibits B and C of this Loan Agreement, and such default shall continue unresolved for thirty (30) days after the City demands in writing that Borrower cure the 339
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failure. If, however, by its nature the failure cannot be cured within thirty (30) days, Borrower may have a longer period as is necessary to cure the failure, but this is conditioned upon Borrower's prompt commencement of the cure within the thirty (30) day period and thereafter diligently completing the cure thereafter within ninety (90) days thereafter.

7.5 Default Under Other Documents. A breach by Borrower of any provision of the Purchase Agreement, Note, Deed of Trust, Regulatory Agreement, City Loan documents, or any other agreement between Borrower and Lender in connection with the Project not cured in conformance with the respective agreement.

7.6 Insolvency.

7.6.1 If the Borrower shall become insolvent or shall cease to pay its debts as payments become due or shall voluntarily file a petition seeking reorganization of, or the appointment of a receiver, trustee, or liquidation for it or a substantial portion of its assets, or to effect a plan or other arrangement with creditors, or shall be adjudicated bankrupt, or shall make a voluntary assignment for the benefit of creditors.

7.6.2 If an insolvency petition shall be filed by or against the Borrower under any bankruptcy, insolvency, or similar law or seeking the reorganization of the Borrower, or the appointment of a receiver, trustee, or liquidator for the Borrower, or for a substantial portion of the property of the Borrower, and such petition shall not be dismissed, or such writ or warrant of attachment or similar process shall not be released or bonded within ninety (90) days after filing of levy.

7.7 Judgments. If any final judgment for the payment of money that is not fully covered by liability insurance shall be rendered against the Borrower, and within ninety (90) days said judgment shall not be discharged, or an appeal therefrom taken and execution thereon effectively stayed pending such appeal, and if such judgment be affirmed on such appeal, the same shall not be discharged within sixty (60) days.

8. RIGHT UPON DEFAULT. Upon default by Borrower, Lender shall have all the rights and remedies available to it under state law in enforcing this Loan Agreement and Lender shall have all the rights to the collateral mentioned herein including, but not limited to, the following:

8.1 Accelerate and declare the full balance immediately due on the Note;

8.2 Specifically enforce the terms of this Loan Agreement;

8.3 Foreclose on any real property subject to the Deed of Trust; and

8.4 Pursue any and all other remedies available under law to enforce the terms of this Loan Agreement and Lender’s rights to the real and personal property identified herein, and in the Deed of Trust of the Lender.

9. OTHER DOCUMENTS. Lender may require and Borrower agrees to execute such other documents as may be required by the Lender in its sole discretion in order to comply with state and federal regulations governing the Loan proceeds and prudent lending practices, so long as such additional documents do not materially alter Borrower’s rights and obligations hereunder. 340
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10. COLLECTION AGENT. Borrower hereby appoints the Lender as its agent to appoint a loan collection agent (the “Agent”) to provide loan servicing in accordance with this Loan Agreement and any exhibits to this Loan Agreement (“Loan Documents”). Lender may remove or replace the Agent at its sole discretion. Lender shall provide or cause to be provided to Borrower a notice of change in the Agent.

11. WAIVER. No failure or delay on the part of the Lender in exercising any right, power or remedy hereunder shall operate as a waiver thereof.

12. ATTORNEYS’ FEES. If either party commences an action against the other party arising out of or in connection with this Loan, the prevailing party shall be entitled to have and recover from the losing party its costs, including reasonable attorneys’ fees, expert witness fees, and costs of suit, both at the trial level and on appeal.

13. NOTICES. Any notices given under this Loan Agreement shall be in writing and shall be served either:

12.1 personally;

12.2 delivered by first class or express U.S. mail with postage prepaid, return receipt requested pursuant to registered or certified mail;

12.3 by nationally recognized overnight commercial courier service which provides a receipt with the date and time of delivery, with charges prepaid, or

If to Lender: If to Borrower:

Kronick, Moskovitz, Tiedemann & Girard
1331 Garden Hwy., 2nd Floor
Sacramento, California 95833
Attn: Jeffrey A. Mitchell
Fax No. (916) 321-4555
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14. MISCELLANEOUS.

14.1 Waiver of Notice. No failure or delay on the part of the Lender in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy hereunder. No modification or waiver or any provision of this Loan Agreement or of the Note, nor any consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances.

14.2 Amendments - Writing Required. The Lender hereby expressly reserves all rights to amend any provisions of this Loan Agreement, to consent to or waive any departure from the provisions of this Loan Agreement, to amend or consent to, or waive departure from the provisions of the Note, and to release or otherwise deal with any collateral security for payment of the Note provided, however, that all such amendments shall be in writing and executed by the Lender and the Borrower. The City shall have the right to amend or otherwise revise this Agreement, should such modification be required by HUD or any applicable Federal statutes or regulations and Borrower shall approve any such regulated changes provided such changes do not materially change the economic terms described herein or expand Borrower’s liability hereunder.

14.3 Payments. The Borrower shall make payments to the Lender in accordance with the terms and conditions and instructions contained in this Loan Agreement and the Note.

14.4 Survival of Representations and Warranties. All agreements, representations and warranties made by the Borrower herein or any other document or certificate delivered to the Lender in this transaction survive the delivery of this Loan Agreement, the Note and the Deed of Trust hereunder, and shall continue in full force and effect so long as the Note is outstanding.

14.5 Successors and Assigns. This Loan Agreement shall be binding upon the Borrower, its successors and assigns, except that the Borrower may not assign or transfer its rights without the prior written consent of the Lender. This Loan Agreement shall inure to the benefit of the Lender and, except as otherwise expressly provided in particular provisions hereof, all subsequent holders of the Note. Borrower acknowledges that Lender contemplates and may assign the Note and this Loan Agreement and consents to such assignments.

14.6 Counterparts. This Loan Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

14.7 Governing Law. This Loan Agreement shall be interpreted under and governed by the laws of the State of California, except for those provisions preempted by federal law.

14.8 Attorney’s Fees. In the event of any Event of Default, or any legal action is commenced to interpret or to enforce the terms of this Agreement, the prevailing party in any such action shall be entitled to recover all reasonable attorneys’ fees and costs and any expert witness fees incurred in such action.

14.9 Waiver. Failure by Lender at any time to require performance by Borrower of any of the provisions of this Loan Agreement shall in no way affect Lender’s rights hereunder to enforce the same, nor shall any waiver by Lender of any breach hereof be held to be a waiver of any succeeding breaches or a waiver of this clause.

14.10 Successor and Assigns: This Loan Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors. The Parties agree to execute such further documents and instruments as shall be necessary to carry out the terms of this Loan Agreement, and such documents and instruments shall likewise be binding upon the Parties and their successors.
(Signatures on Next Page)
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IN WITNESS WHEREOF, the Parties hereto have each caused this Loan Agreement to be duly executed as of the date first written above.

CITY:

The City of West Sacramento,
a California municipal corporation
By:

Aaron Laurel, City Manager

ATTEST:
_____________________
City Clerk
OWNER:

Michael Massie
Chief Development Officer
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List of Exhibits:

A: Legal Description
B: Affirmative Obligations of the Borrower
C: Negative Obligations of the Borrower
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EXHIBIT A
Legal Description
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EXHIBIT B

3. Insurance: To obtain at its sole cost and keep in full force and effect during the term of the Loan Agreement:

5. Pay All Taxes: To pay and discharge all personal property taxes, assessments, and governmental charges upon it or against its properties prior to the date on which the penalties attached thereto apply, except that the Borrower shall not be required to pay any such tax, assessment, or governmental charge which is being contested in good faith and by appropriate proceedings. If so required by Lender, Borrower shall provide a bond guaranteeing payment of such taxes or assessments in any case in which Borrower contests any tax and refuses to pay under this section.
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13. Indemnify and Hold Harmless: Borrower shall indemnify, protect, defend, and hold harmless the City of West Sacramento, its officers, agents, employees, consultants and representatives from all claims, suits, damages, liabilities or costs of every name, kind and description, arising out of or relating in any way to the Loan Agreement or the Loan, or any agreement, document or instrument required to be executed or agreed to by Borrower in 348
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connection with the Loan, except to the extent caused by the wilfull misconduct or gross negligence of the City of West Sacramento, its officers, agents or employees. It is understood that the duty of Borrower to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. Acceptance by Lender of insurance certificates and endorsements required under the Loan Agreement does not relieve Borrower from liability under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply whether or not such insurance policies shall have been determined to be applicable to any of such damages or claims for damages.

16. Hazardous Substances: Neither Borrower nor any tenant of space in the Project shall generate, sell, treat, store, handle, dispose of or otherwise deal with Hazardous Materials (term defined in Section 24.3 of the Deed of Trust) on the Property. The Borrower shall comply with all applicable laws, rules, regulations, ordinances, licenses, permits, and other codes pertaining to Hazardous Materials. The Borrower shall indemnify, defend, protect, and hold harmless Lender from all liability, claims, penalties, fines, losses, damages, and expenses of any kind, including, without limitation, clean-up costs and reasonable attorneys’ fees, incurred by Lender as a result of Borrower’s breach of the provisions of the Loan Agreement or the Deed of Trust, or breach of warranty regarding Hazardous Materials, or as a result of the presence of Hazardous Materials on the Property.

17. Annual tax returns on the Borrower and Jamboree Housing Corporation to be provided by April 30th of each year for the first three (3) years of the Loan, and at the request of Lender thereafter.

19. Borrower’s general contractor to provide project performance bond or letter of credit to ensure completion of construction of the project improvements.

EXHIBIT C

2. Sell the Borrower’s Assets: The Borrower shall not sell or transfer all or any substantial part of its assets except those usually sold in the ordinary course of business.

4.1 Merger into or consolidation with any other person, firm, or corporation;

4.2 Changing the nature of its business as carried on at the date hereof; and

4.3 Substantial distribution, liquidation, or other disposal of the Borrower’s assets to the stockholders or any other party.

6. Ineligible Use of Funds: The Borrower shall not expend or use the Loan funds for any costs that are deemed ineligible by the Loan program.
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CITY OF WEST SACRAMENTO

WEST GATEWAY PLACE II

HOME INVESTMENT PARTNERSHIP PROGRAM (HOME)

SECURED PROMISSORY NOTE
$2,000,000.00 __________, 2022
FOR VALUE RECEIVED, Delta Lane Housing Partners II LP, a California limited partnership, with its principal office at 17701 Cowan Ave., Suite 200, Irvine, CA 92614 (“Borrower”), hereby promises to pay to the order of the City of West Sacramento, a California general law city, whose address is 1110 West Capitol Avenue, West Sacramento, California 95691 (“Lender”), a principal amount equal to Two Million Dollars ($2,000,000.00), or so much, not to exceed this amount, as may be advanced by Lender to Borrower pursuant to that certain HOME Loan Agreement dated the same date herewith ("HOME Loan Agreement"). The obligation of Borrower and Lender with respect to all such advances is subject to the terms of: (a) the HOME Loan Agreement; (b) this Note; (c) the HOME Deed of Trust, Assignment of Rents, and Security Agreement and Fixture Filing recorded against the real property consisting of approximately .9 acres located in the County of Yolo (“County”), West Sacramento, California (the “Property”) by Borrower as Trustor, for the benefit of Lender, as beneficiary, which secures payment of this loan (the “HOME Deed of Trust”) (the above documents are collectively referred to as the “Loan Documents”); (d) that certain Regulatory Agreement by and between Borrower and Lender to be recorded against the Property (the “HOME Regulatory Agreement”); and (e) that certain Purchase and Sale Agreement and Joint Escrow Instructions dated _____________, 2022 (the “Purchase Agreement”). Borrower also promises to pay to the order of Lender accrued simple interest on the principal balance at the simple rate of three percent (3%) per annum in accordance with the payment terms stipulated below.

3. BORROWER’S OBLIGATION. This Note evidences the obligation of Borrower to Lender for the repayment of funds loaned to Borrower by Lender to finance, in part, the development of sixty (60) units of rental housing in the City of West Sacramento, ten (10) of which are rent restricted (the “Regulated Units”) in a four-story building, as described in the HOME Regulatory Agreement (the “Project”).

4. AMOUNT AND TIME OF PAYMENT. If there is a Deferred Developer Fee at the date upon which the Project’s construction loan converts to a permanent loan (the “Conversion Date”), annual payments of principal and interest shall be made on April 1st of each year commencing in the first year after the Deferred Developer Fee is paid in full, in an amount equal to fifty percent (50%) of Residual Cash Flow (as defined below) for the preceding calendar year, and will be made annually thereafter until the “Maturity Date” (as that term is defined in Section 3) at which time all principal and accrued interest will be due. If there is no Deferred Developer Fee at the Conversion Date, annual payments of principal and interest shall be made on April 1st of each year commencing in the first (1st) year after the Conversion Date, in an amount equal to seventy-five percent (75%) of Residual Cash Flow for the preceding calendar year, and will be made annually thereafter until the Maturity Date, at which time all principal and accrued interest will be due. The payments made to Lender by Borrower shall be credited first against accrued and unpaid interest and then against outstanding principal, and shall be accompanied by the 351
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Borrower’s report of Residual Cash Flow. Borrower shall also provide to Lender within one hundred twenty (120) days of fiscal year-end, audited financial statements indicating the development costs, Residual Cash Flow, cash flow, cash receipts, Gross Revenue, Annual Operating Expenses and senior loan obligations, together with such other documents as Lender may reasonably require.
a. “Deferred Developer Fee” shall mean the portion of the Developer Fee which is not payable from tax credit capital contributions, if applicable, or permanent loan proceeds.
b. “Developer Fee” shall mean the $2,200,000 developer fee payable by the Borrower to Jamboree Housing Corporation, a California nonprofit public benefit corporation, pursuant to that certain Development Services Agreement. c. “Residual Cash Flow” shall mean the difference between Gross Revenue for the calendar year and Annual Operating Expenses for such period. d. “Gross Revenue,” with respect to a particular calendar year, shall mean all revenue, income, receipts, and other cash consideration actually received from operation or leasing of the Project. Gross Revenue shall include, but is not limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and other rental adjustment to leases or rental agreements; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Project; and net condemnation awards for a taking of part of or all of the Project (proceeds remaining after (i) the balance of loans to the Project made by the partners of the Borrower for development or operating deficits, to maintain compliance with Borrower’s tax credit regulatory agreement, or for contributions for capital expenditures in excess of available Project revenues, if any, including interest at the applicable federal rate; (ii) the return of capital contributions, if any, to the Project made by the Borrower that were used to pay the Deferred Developer Fee; (iii) any unpaid Annual Operating Expenses; (iv) the amount of proceeds required to be reserved for the construction of the Project; (v) the amount of proceeds required for necessary repairs or rehabilitation to the Project as a result of the condemnation, as reasonably approved by the City Manager; and (vi) the balance, if any, of any Deferred Developer Fee. Gross Revenue shall not include current tenants’ security deposits, loan proceeds, capital contributions, funds received from any source actually and directly used for, and/or in the, initial development of the Project, receipt by an affiliate of the Borrower of management fees, or similar advances or payments for reasonable and necessary Annual Operating Expenses associated with the Project.
e. “Annual Operating Expenses,” with respect to particular calendar year, shall mean the following costs, reasonably and actually incurred, for operation and maintenance of the Project to the extent that they are consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles: property and other taxes and assessments imposed on the Project; premiums for property damage and liability insurance; utility services not paid for directly by tenants, including, but not limited to, water, sewer, trash collection, gas and electricity; maintenance and repair including, but not limited to, pest control, landscaping, parking, and grounds maintenance, painting and decorating, cleaning, common systems repairs, general repairs, janitorial, supplies, and others; any annual license or certificate of occupancy fees required for operation of the Project; general administrative expenses including, but not limited to, advertising and marketing, security services and systems, 352
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professional fees for legal, audit, accounting and tax returns and others; property management fees not to exceed $50.00 per unit per month, escalating by three percent (3%) annually, and reimbursements including on-site manager expenses, not to exceed fees and reimbursements which are standard in the industry and pursuant to a management contract approved by the Lender; cash deposited into a reserve for capital replacements of Project Improvements and an operating reserve in such reasonable amounts as are required by the Project lenders, and approved by the Lender; and nonprofit managing general partner fee in the maximum beginning amount of $10,000 for each fee, and escalating for inflation no more than two and one-half percent (2 1/2 %) annually for each fee; costs for providing social services to the tenants at the Project in an amount not to exceed Sixty-Six Thousand Dollars ($66,000) per year, and escalating at three percent (3%) annually; interest on loans from limited partners at the Applicable Federal Rate at the time of the loan, not to exceed three percent (3%), to fund reasonable and necessary obligations of the partnership; debt service payments (excluding debt service due from residual receipts or surplus cash of the Project) on senior loan obligations associated with the Project, and approved by Lender.
f. Notwithstanding the generality of the foregoing, the following items are not expenses or deductible in computing Residual Cash Flow: (i) payment of any fees or expenses or of any portion of the Residual Cash Flow to Borrower or any affiliate of Borrower other than those listed above, or previously approved by Lender; (ii) interest payments under this Note; (iii) payment of interest on any indebtedness of Borrower to any affiliate of Borrower (individual or entity) or to any other third-party lenders, or partners not otherwise approved by Lender; (iv) payment of any fees due to any lenders not otherwise approved by Lender; and (v) depreciation, cost recovery, amortization or similar items which do not involve the expenditure of cash.

7. PREPAYMENT OF LOAN. No prepayment penalty will be charged to Borrower for payment of any portion of this Note prior to the end of the loan term.

8. REFINANCING OF OTHER LOANS. In the event that Borrower refinances any permanent, construction, or other loan associated with the purchase of the Property or construction of the improvements on the Property, Lender shall receive fifty percent (50%) of the net refinance proceeds (proceeds remaining after (i) repayment of the refinanced loan; (ii) payment of all third-party escrow and closing costs; (iii) the balance of loans to the Project made by the partners of the Borrower for development or operating deficits, to maintain compliance with Borrower’s tax credit regulatory agreement, or for contributions for capital expenditures in excess of available Project revenues, if any, including interest at the applicable federal rate; (iv) the return of capital contributions, if any, to the Project made by the Borrower that were used to pay the Deferred Developer Fee; (v) payment of unpaid Tax Credit adjustment amounts or reimbursement of Tax Credit adjustment amounts paid by the administrative and/or managing general partners and/or the guarantors to the Project pursuant to the approved Partnership Agreement, if any; (vi) the payment to the administrative general partner of Borrower’s limited partnership entity of a refinancing fee, as set forth in the Partnership Agreement; (vii) any unpaid Annual Operating Expenses; (viii) the amount of proceeds required to be reserved for the construction of the Project; (ix) the amount of proceeds required for necessary repairs or rehabilitation to the Project as reasonably approved by the City Manager; and (x) the payment of any unpaid general partner fee and/or tax credit investor asset management/monitoring fee) applied to this Note and/or any other Note between Borrower and Lender relating to the Property.

9. WAIVERS BY BORROWER. Presentment, notice of dishonor, and protest are waived by all makers, sureties, guarantors, and endorsers of this Note.

10. DEFAULT AND ACCELERATION. This Note is secured by the Deed of Trust. All provisions in the Deed of Trust and the Loan Agreement are hereby made a part of this Note.

12. CONSENTS AND APPROVALS. Any consent or approval required under this Note shall not be unreasonably withheld by Lender or Borrower.

13. NOTICES. Any notice, communications, or demands shall be in writing and may be communicated to Lender or Borrower at the addresses set forth in the Loan Agreement.

16. DEFINITIONS. Capitalized terms not defined in this Note shall have the same meaning as defined in the Loan Agreement.

18. AGREEMENT CONTROLS. In the event that any provisions of this Note and the Loan Agreement conflict, the terms of the Loan Agreement shall control.

20. TIME. Time is of the essence in this Note.

22. WAIVER. Any waiver by Lender of any obligation in this Note must be in writing.

No waiver shall be implied from any delay or failure by Lender to take action on any breach or default by Borrower, or to pursue any remedy allowed under this Note or applicable law. Any extension of time granted to Borrower to perform any obligation under this Note must be in writing signed by Lender and shall not operate as a waiver or release from any of Borrower’s obligations under the Note. Consent by Lender to any act or omission by Borrower shall not be construed to 355
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be a consent to any other act or omission, or to waive the requirement for Lender’s written consent to future waivers.

23. AMENDMENTS AND MODIFICATIONS. Any amendments or modifications to this Note must be in writing, and shall be effective only if executed by both Borrower and Lender.

BORROWER:

Delta Lane HOUSING PARTNERS II LP,
a California limited partnership
By: JHC-Tower Bridge LLC,
a California limited liability company,
its Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
its Manager
By:  __________________________
Michael Massie, Chief Development Officer
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No Recording Fee Required Pursuant to
Government Code Section 27383
Recording Requested by and
When Recorded Return to:

City of West Sacramento
1110 West Capitol Avenue
West Sacramento, CA 95691
Attn: City Clerk

[SPACE ABOVE THIS LINE FOR RECORDER’S USE]

CITY OF WEST SACRAMENTO

WEST GATEWAY PLACE II

HOME INVESTMENT PARTNERSHIPS PROGRAM (HOME)

CONSTRUCTION DEED OF TRUST

ASSIGNMENT OF RENTS, SECURITY AGREEMENT

AND FIXTURE FILING

Trustor is granting this Deed of Trust pursuant to that certain Loan Agreement dated the same date herewith ("Loan Agreement") and that certain Purchase and Sale Agreement and Joint Escrow Instructions dated as of __________________, 2022 between Trustor and Beneficiary (“Purchase Agreement”) to provide collateral for, among other things, credit being extended by Beneficiary to Trustor in connection with the development of a 60-unit apartment community containing 59 affordable units, ten (10) of which are HOME-restricted units, (the “Project”) constructed on the Property. This Deed of Trust is being executed in order to secure Beneficiary’s interest as a governmental agency in ensuring both that public funds loaned for the development at the Project are repaid, and that housing projects assisted by public funds are developed and operated in a manner that is consistent with the public interest. The Project shall be subject to the terms of a regulatory agreement dated the same date herewith ("HOME Regulatory Agreement").

W I T N E S S E T H
A. Grant. That Trustor hereby GRANTS, TRANSFERS AND ASSIGNS to TRUSTEE, IN TRUST, WITH POWER OF SALE, all of Trustor’s right, title and interest in and to that certain real property consisting of approximately .99 acres located in the City of West Sacramento, County of Yolo (“County”), State of California, as more particularly described on Exhibit A, attached hereto (the “Real Property”),
TOGETHER WITH:
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(a) all right, title and interest (including any claim or demand in law or equity) which Trustor now has or may hereafter acquire in or to such property; all development rights or credits and air rights; all water and water rights (whether or not appurtenant to such property) and shares of stock pertaining to such water or water rights, ownership of which affects such property; Trustor’s interest in all minerals, oil, gas, and other hydrocarbon substances and rights thereto in, on, under, or upon such property and all royalties and profits from any such rights or shares of stock; and all adjacent lands within enclosures or occupied by buildings partly situated on such property; (b) all buildings, structures, improvements, fixtures and appurtenances now and hereafter placed on such property, including, without limitation, all apparatus and equipment, whether or not physically affixed to the land or any building, used to provide or supply air-cooling, air conditioning, heat, gas, water, light, power, refrigeration, ventilation, laundry, drying, dish washing, garbage disposal or other services; and all elevators, escalators and related machinery and equipment, fire prevention and extinguishing apparatus, security and access control apparatus, partitions, ducts, compressors, plumbing, ovens, refrigerators, dishwashers, disposals, washers, dryers, awnings, storm windows, storm doors, screens, blinds, shades, curtains and curtain rods, mirrors, cabinets, paneling, rugs, attached floor coverings, furniture, pictures, antennas, pools and spas and pool and spa operation and maintenance equipment and apparatus, trees and plants located on such property, all of which, including replacements and additions thereto, shall conclusively be deemed to be affixed to and be part of the real property conveyed to Trustee hereunder.
(c) all intangible property and rights related to the aforesaid property or the operation thereof or used in connection therewith including, without limitation, permits, licenses, plans, specifications, construction contracts, subcontracts, bids, deposits for utility services installations, refunds due Trustor, trade names, trademarks and service marks.
(d) all rents, issues, profits and other income from the property, including, but not limited to, all proceeds of sale or lease of the property. (e) the personal property collateral described in Exhibit B.

All property, both real and personal, conveyed to Trustee hereunder shall be referred to herein as the “Property”.

B. Obligations Secured. This Deed of Trust secures the following obligations:
(a) Promissory Note entered into by Trustor, as Borrower, of even date herewith (and any and all renewals or extensions thereof) in the amount of One Million Eight Hundred Thousand Dollars ($1,800,000.00), with interest thereon according to the terms of said note (“Note”), which Trustor covenants and agrees to pay. 358
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(b) Payment and performance of every obligation, covenant, promise and/or agreement contained in this Deed of Trust.
(c) Performance of every obligation, covenant and promise contained in the Loan Agreement, the Purchase Agreement, and the HOME Regulatory Agreement. (d) Payment of all other moneys herein agreed or provided to be paid by Trustor, including, without limitation, repayment of the HOME Loan balance, pursuant to 24 CFR 92.252, upon request of Beneficiary in the event that Trustor loses possession of the Property.
(e) Payment and performance of every obligation, covenant, promise and agreement contained in any other written instrument executed by Trustor in favor of Beneficiary if, but only if, the written instrument expressly states that the instrument is secured by this Deed of Trust.
(f) For the purposes of this Deed of Trust, any reference to a Note contained herein shall be deemed to refer to each and every note secured by this Deed of Trust, and any default under any note secured by this Deed of Trust shall constitute a default under every other note so secured, and shall additionally constitute a default under this Deed of Trust.

C. For the purpose of protecting and preserving the security of this Deed of Trust, Trustor promises and agrees:

1. Obligations of Trustor. Trustor shall promptly pay priror to delinquency, all installments, payments, charges or other obligations due under the Note; and all other monetary obligations secured by this Deed of Trust. Trustor shall comply with all laws, ordinances, regulations, covenants, conditions and restrictions affecting the Property, and not to suffer or permit any act to be done in or upon the Property in violation thereof, including, as applicable, but not limited to Sections 92.252 and 92.254 of the Code of Federal Regulations Title 24 (24 CFR Part 92), including, without limitation, the repayment of the HOME Loan balance upon request of Beneficiary in the event that Trustor loses possession of the Property.

2. Repair and Maintenance of the Property. Trustor will: (a) keep the Property in good condition and repair (reasonable wear and tear excepted); (b) not substantially alter, remove or demolish the Property or any building or other improvements thereon, except (i) when permitted by the Purchase Agreement; or (ii) when incident to the replacement of fixtures, equipment, machinery or appliances with items of like kind; (c) restore and repair to the equivalent of its original condition, all or any part of the Property which may be damaged or destroyed, including, but not limited to, damage from termites and dry rot, soil subsidence and construction defects, to the extent insurance proceeds are available to cover any part of the cost of such restoration and repair, unless Trustor has failed to acquire or maintain the required insurance under this Deed of Trust in which case Trustor shall restore or repair whether or not insurance proceeds are available; (d) pay when due all claims for labor performed and materials furnished in connection with the Property and not permit any mechanic’s or materialman’s lien to arise against the Property or furnish loss or liability under such mechanic’s lien claims; (e) comply with all laws affecting the Property or requiring that any alterations, repairs, replacements, or improvements be 359
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made thereon; (f) not commit or permit waste on or to the Property, or commit, suffer or permit any act or violation of law to occur upon the Property; (g) not abandon the Property; (h) cultivate, irrigate, fertilize, fumigate and prune, as necessary, any landscaped areas within the Property; (i) if required by Beneficiary, provide for the management satisfactory to Beneficiary under a management contract approved by Beneficiary; (j) notify the Beneficiary in writing of any condition at or on the Property which may have a significant and measurable effect on its market value, taking into consideration the operating requirements of the HOME Regulatory Agreement; and (k) if the Property is rental Property, generally operate and maintain the Property in such manner as to realize the maximum rental potential thereof, taking into consideration the operating requirements of the HOME Regulatory Agreement and do all other things which the character or use of the Property may reasonably render necessary to maintain the Property in the same condition (reasonable wear and tear expected) as it was at the date of this Deed of Trust.

3. Insurance.

3.1 Property Insurance. Trustor shall provide and maintain insurance as required below covering all buildings, structures and improvements now situated or which hereafter may be erected or placed upon said Property, against loss or damage by fire and other casualties (special broad-form perils) with the valuation clause reflecting replacement costs basis and to carry such and, in the event said Property or any part thereof now lies or hereafter lies in an area designated by the Federal Emergency Management Agency as located within a flood insurance rate map or flood hazard boundary map, or which is designated by the Department of Housing and Urban Development as a flood zone, to carry flood insurance; all as required below or as the Beneficiary may from time to time require. All such insurance shall be in forms, and with companies and in sums (not less than sufficient to avoid any claim on the part of the insurers for co-insurance or other penalties for insufficient limits) satisfactory to the Beneficiary. All insurance policies shall be held by and be for the benefit of Beneficiary, and shall name Beneficiary as loss payee. Beneficiary shall accept as satisfying the requirements of this Section 3.1 any insurance policy in the amount of the replacement cost of buildings, structures, and improvements located on said Property. At least fifteen (15) days before the expiration of each such policy, Trustor shall deliver to the Beneficiary a new and sufficient policy to take the place of the one so expiring. In the event of a loss, the amount collected, under any policy of insurance on said Property shall be used in replacing or restoring the improvements partially or totally destroyed to a condition satisfactory to said Beneficiary. In any of the foregoing events neither the Trustee nor the Beneficiary shall be obligated to see to the prior application thereof, nor shall the amount so released be deemed a payment on any indebtedness secured hereby. Such application, use, and/or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. The Trustor hereby irrevocably appoints the Beneficiary as its attorney in fact to assign each such policy in the event of the foreclosure of this Deed of Trust or other transfer of the title to the granted Property in extinguishment, in whole or in part, of the debt secured hereby. No insurance shall be required hereunder in excess of that allowed by Civil Code Section 2955.5.

3.2 General Liability Insurance. Trustor shall purchase and continuously maintain comprehensive general liability with terms and conditions that are at least as broad as the Insurance Service Office (ISO) Form 00 01 and with limits not less than $5,000,000 each occurrence. Such insurance shall include the Beneficiary as an additional insured arising out of the named insured’s ongoing and completed operations. 360
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Such insurance shall have an endorsement stating that for any claims related to this Property, the Trustor’s insurance shall be primary insurance as respects the Beneficiary to the extent the Beneficiary is an additional insured. Such insurance shall also state that any insurance or self-insurance maintained by the Beneficiary shall be in excess of the Trustor’s insurance and shall not contribute with it. The Trustor’s insurance shall also provide that the Beneficiary shall receive at least thirty (30) days’ written notice prior to cancellation, non-renewal, or modification thereof during this Deed of Trust term. Such insurance policies as are required by this Section 3.2 shall be approved and held by Beneficiary.Defense of Deed of Trust; Litigation. Trustor will give Beneficiary prompt written notice of any action or judicial proceeding (including, without limitation, any judicial or non-judicial proceeding to foreclose the lien of a junior or senior mortgage or deed of trust) affecting or purporting to affect the Property, this Deed of Trust, Beneficiary’s security for the performance of Trustor’s obligations under the Note, or the rights or powers of Beneficiary or Trustee under the Note or this Deed of Trust. Notwithstanding any other provision of this Deed of Trust, but subject to the rights of any senior lender, Trustor hereby agrees that Beneficiary or Trustee may (but neither is obligated to) commence, appear in, prosecute, defend, compromise and settle, in Beneficiary’s or Trustor’s name, and as attorney-in-fact for Trustor, any action or proceeding, whether judicial or non-judicial, reasonably necessary to preserve or protect, or affecting or purporting to affect, the Property, this Deed of Trust, Beneficiary’s security for the performance of Trustor’s obligations under the Note, or this Deed of Trust. If neither Beneficiary nor Trustee elects to do so, then subject to the rights of any senior lender, Trustor will commence, appear in, prosecute and defend any such action or proceeding. Beneficiary may incur necessary costs and expenses including attorneys’ fees, in any such action. Trustor will pay all costs and expenses of Beneficiary and Trustee, including costs of evidence of title and reasonable attorneys’ fees, in any such action or proceeding in which Beneficiary or Trustee may appear or for which legal counsel is sought, whether by virtue of being made a party defendant or otherwise, including without limitation, any action of the condemnation or partition of all or any portion of the Property and any action brought by Beneficiary to foreclose this Deed of Trust or to enforce any of its terms or provisions.Use of Property. Unless otherwise required by applicable law or unless Beneficiary otherwise consents in writing, Trustor will not allow changes in the use of the Property from that which is contemplated by Trustor and Beneficiary at the time of execution of this Deed of Trust, as specified in the Purchase Agreement, the Development Regulatory Agreement and other documents executed by Trustor in connection with obtaining the loan secured hereby (collectively, the “Loan Documents”). Trustor will not initiate or acquiesce in a change in the zoning classification of the Property without Beneficiary’s prior written consent.Taxes and Assessments. Trustor agrees (a) to pay all taxes and assessments affecting the Property, including assessments on appurtenant water stock, and any accrued interest, cost and/or penalty thereon, at least ten (10) days before default or delinquency; (b) to pay when due all encumbrances (including any debt secured by deed of trust recorded ), ground rents, liens, and/or charges, with interest, on said Property or any part thereof which appear to be prior or superior hereto, and to pay immediately and in full all such encumbrances, liens and/or charges, if any, which may now be due or payable; (c) to pay when due all costs, fees and expenses of this trust, including cost of evidence of title and Trustee’s fees in connection with sale, whether completed or not, which amounts shall become due upon delivery to Trustee of a declaration of default.

Notwithstanding the foregoing, Borrower shall not be required to pay any such taxes and assessments which are being contested in good faith and by appropriate proceedings. If so required by Beneficiary, Trustor shall provide a bond guaranteeing payment of such taxes or assessments in any case in which Trustor contests any tax and refuses to pay 361
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under this section.Assessment Bonds. Trustor agrees to pay any and all assessments against said Property at least ten (10) days before any bond or bonds could or would be issued in connection therewith, unless Beneficiary determines in its reasonable discretion that its security would not be impaired if the assessments were not paid in full.

9. Reimbursement of Lender’s Expenses. Trustor agrees to pay within thirty (30) days upon demand after expenditure, all sums expended or expense incurred by Trustee and/or Beneficiary, including reasonable attorney’s fees, under any of the terms of this Deed of Trust, with interest from date of demand at the rate of ten per cent (10%) per annum. Without in any way limiting the foregoing, Trustor shall pay to or reimburse Beneficiary for any reasonable costs, fees and expenses (including without limitation reasonable attorneys’ fees and any administrative fees or overhead or other indirect costs and expenses) incurred or charged by Beneficiary in protecting its security hereunder or the Property or Beneficiary’s interest under this instrument, or in responding, processing, or reviewing or otherwise dealing with the demands or claims or requests of Trustor or third parties who claim an interest in the Property or an interest adverse to Beneficiary’s interests under this instrument.

11. Assignment of Rents and Leases.

11.1 Trustor does hereby immediately and absolutely assign, transfer and set over to the Beneficiary all the rents, issues, proceeds and profits which may be or may become due or to which the Trustor may now or hereafter become entitled, arising or issuing out of, under or by virtue of any and all leases and/or rental agreements, and any and all extensions or renewals thereof, now or hereafter entered into for any improvements located thereon, and all other rents, issues, proceeds and profits due or accruing from the Property or any part thereof or the improvements located thereon. Trustor hereby gives to and confers upon Beneficiary the right, power and authority to collect such rents, issues, proceeds and profits. The assignment herein contained and all rights provided to Beneficiary by this Section are granted without regard to the adequacy of the Property as security for payment of the indebtedness secured by this Deed of Trust. This assignment is delivered as a present, immediate and absolute assignment of the rights contained herein; provided, however, that so long as no default shall exist under this Deed of Trust or the indebtedness secured hereby, the Trustor shall have the right to manage and operate the Property and all improvements thereon, and to collect, receive and apply for its own account all rents, issues and proceeds accruing by virtue of any lease or rental agreement and to execute and deliver proper receipts thereof. Immediately upon the occurrence of any default under this Deed of Trust or the indebtedness secured hereby, 362
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and until such default shall have been cured, the right of the Trustor to manage and operate the Property and to collect and receive rents shall cease and terminate and in such event the Beneficiary is hereby expressly and irrevocably authorized to enter into and take possession of the Property and the improvements located thereon by actual physical possession, or by appointment of a receiver or by a competent court or by written notice served personally upon or sent by registered mail to the Trustor, as the Beneficiary may elect, or by any other legal means, and to exclude the Trustor and all other persons therefrom. Following such entry and taking of possession the Beneficiary may operate and manage the Property and rent and lease the same and collect any and all rents, issues, income and profits therefrom, and from time to time apply same or accumulate same for application, in such order and manner as Beneficiary, in its sole discretion shall consider advisable. Beneficiary may apply such amounts to (i) the necessary and proper costs of upkeep, maintenance, repair and/or operation of the Property; (ii) the repayment of any sums theretofore or thereafter advanced pursuant to the terms of this Deed of Trust; (iii) the interest then due or next to become due upon said indebtedness; (iv) the taxes and assessments upon the Property then due or next to become due; (v) the unpaid principal of said indebtedness; and (vi) any other obligations secured by this Deed of Trust.

13. Performance of Leases. Trustor agrees to faithfully keep and perform all of the obligations of the landlord under all of the leases assigned or subject to assignment to the Beneficiary pursuant to Section 11 above and not to permit to accrue to any tenant under any such lease any right to prepaid rent pursuant to the terms of any lease other than the 363
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usual prepayment of rent as would result from the acceptance by the landlord on the first day of each month for the rent for the ensuing month, according to the terms of the various leases.

15. Use. Trustor agrees to operate such Property at all times in the manner permitted by the Purchase Agreement and the HOME Regulatory Agreement.

16. Prohibition of Sale or Encumbrance.

16.3.2 The withdrawal, replacement, and/or addition of any of Trustor’s limited partners or its limited partner’s general partners or members pursuant to the terms of the Partnership Agreement.
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16.3.5 Leasing of individual housing units to qualified tenants in accordance with the Regulatory Agreement.

16.3.6 The transfer of all or any part of the Property or the Project to Jamboree Housing Corporation (“Jamboree”), or an entity controlled by Jamboree (collectively “Jamboree Affiliate Entity”), or an entity or entities in which a Jamboree Affiliate Entity is a general partner or managing member, provided that the proper documentation is executed and amendment recorded.

16.3.8 The sale, transfer, or conveyance of the general partner’s interest in Borrower to Jamboree or to a Jamboree Affiliate Entity.

16.3.9 A foreclosure, deed in lieu of foreclosure, exercise of a power of sale or similar action and the subsequent purchase at a foreclosure sale.

18. Security Interest in Personal Property. Trustor hereby grants to Beneficiary a security interest in and to all personal Property described as the Collateral in Exhibit B.

This Deed of Trust constitutes a security agreement with respect to all of the Collateral, and Beneficiary shall have all of the rights and remedies of a secured party under the California Uniform Commercial Code as well as all other rights and remedies available at law or in equity. Trustor hereby agrees to execute, acknowledge and deliver on demand, and hereby irrevocably appoints Beneficiary as its attorney-in-fact, with full power of substitution, to execute, acknowledge, deliver and, if appropriate file with the appropriate filing officer or office, such security agreements, financing statements, continuation statements or other instruments as Beneficiary may reasonably require in order to impose, perfect or continue the perfection of, the lien or security interest created hereby. The above power of attorney is coupled with an interest and shall survive the death or incapacity of Trustor. Trustor shall pay all costs and expenses in connection with any 365
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such documents or of any record searches for financing statements that Beneficiary may reasonably require.

20. Foreclosure on Collateral. Without limiting any other rights or remedies which Beneficiary or Trustee may have hereunder or under applicable law, including the right to conduct a unified foreclosure sale of real and personal Property, upon any default not cured within applicable cure periods Beneficiary or Trustee may conduct a public or private sale of the Collateral under the California Uniform Commercial Code pursuant to this Deed of Trust, and Trustor, upon demand by Beneficiary, shall assemble (if applicable) and make the Collateral available to Beneficiary at the Property, a place which is hereby deemed to be reasonably convenient to Beneficiary and Trustor. Beneficiary shall give Trustor at least twenty (20) days prior written notice of the time and place of any public sale or other disposition of the Collateral, or of the time of or after which any private sale or other disposition of the Collateral is to be made; if such notice is sent to Trustor in accordance with the procedures for the mailing of notices set forth in the last Section of this instrument, it is hereby deemed that such notice shall be and is reasonable notice to Trustor.

23. Environmental Covenants. Trustor will at all times comply with the following requirements:

23.1 No Use, Disposal or Storage. Trustor shall not cause, permit or suffer any Hazardous Material (as defined in Section 24.3 to be brought upon, treated, kept, stored, disposed of, discharged, released, produced, manufactured, generated, refined or used upon, about or beneath the Property or any portion thereof by Trustor, its agents, employees, contractors, invitees, tenants, or any other person, except to the extent 366
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commonly used in the day to day operation of the Property and then only so long as in compliance with all Environmental Requirements (as defined in Section 24.2).

23.2 Compliance with Environmental Requirements. Trustor shall not cause, permit or suffer the existence or the commission by Trustor, its agents, employees, or contractors of a violation of any Environmental Requirements upon, about or beneath the Property or any portion thereof and Trustor shall use its reasonable commercial efforts to prevent any such violation of any Environmental Requirements by any invitees, tenants or any other person. Trustor shall notify Beneficiary in writing of any release of Hazardous Materials at, on, under or within the Property in violation of any Environmental Requirements, or of the presence of Hazardous Materials at the Property in violation of any Environmental Requirements, promptly upon discovery of such release or presence.

23.5 Notice of Environmental Risks. If Trustor shall become aware of or receive notice or other communication concerning any actual, alleged, suspected or threatened violation of Environmental Requirements, or liability of Trustor for Environmental Damages in connection with the Property or past or present activities of any person thereon, including but not limited to notice or other communication concerning any actual or threatened investigation, inquiry, lawsuit, claim, citation, directive, summons, proceeding, complaint, notice, order, writ, or injunction, relating to same, and including without limitation any notice or other communication from any tenant, then Trustor shall deliver to Beneficiary, within ten (10) days of the receipt of such notice of communication by Trustor, a written description of said violation, liability, correcting information or actual or threatened event or condition, together with copies of any documents evidencing same.

Receipt of such notice shall not be deemed to create any obligation on the part of Beneficiary to defend or otherwise respond to any such notification.

24. Definitions of Environmental Terms. For the purposes of this Deed of Trust, the following terms shall have the following meanings:

24.1 “Environmental Damages” means all claims, judgments, damages (including without limitation, punitive damages), losses, penalties, fines, liabilities (including strict liability), encumbrances, liens, costs and expenses of investigation and defense of any claim, whether or not such is ultimately defeated, and of any settlement or judgment, of whatever kind or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, including without limitation reasonable attorneys’ fees and disbursements and consultants’ fees, any of which are incurred at any time following Trustor’s acquisition of the Property as a result of the existence of Hazardous Material 368
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upon, about, beneath the Property or migrating or threatening to migrate to or from the Property, or the existence of a violation of Environmental Requirements pertaining to the Property arising after Trustor’s acquisition of the Property and including, without limitation:
damages for personal injury, or injury to Property or natural resources occurring upon or off the Property, foreseeable or unforeseeable, including, without limitation, lost profits, consequential damages, the cost of demolition and rebuilding of any improvements on real property, interest and penalties including but not limited to claims brought by or on behalf of employees of Trustor, with respect to which Trustor waives, for the benefit of Beneficiary only, any immunity to which it may be entitled under any industrial or worker’s compensation laws;

24.1.3 liability to any person or entity to indemnify such person or entity for costs expended in connection with the items referenced in the sub-sections of Section 24 hereof.

24.2.2 all requirements pertaining to the protection of the health and safety of employees or the public.

24.3 “Hazardous Materials” means any substance: the presence of which requires investigation or remediation under any federal, state or local statute, regulation, rule, ordinance, order, action or policy; or
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24.3.3 which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, board, agency or instrumentality of the United States, any State of the United States, or any political subdivision thereof; or

24.3.5 which contains volatile organic compounds such as gasoline, diesel fuel or other petroleum hydrocarbons; or

24.3.6 which contains polychlorinated biphenyls (PCBs) or asbestos or asbestos-containing materials or urea formaldehyde foam insulation; or

24.3.7 radon gas.

27. Provisional Remedies on Default. Should Trustor fail or refuse to make any payment or do any act which it is obligated hereunder to make or do, at the time and in the manner herein provided, or if any representation of Trustor in this Deed of Trust, or other document referred to herein is incorrect, then, subject to the rights of any senior lender, Trustee and/or Beneficiary, each in its sole discretion, may, without notice to or demand upon Trustor, and without releasing Trustor from any obligation hereof:

27.4 Enter into and upon and take and hold possession of any or all Property covered hereby and exclude the Trustor and all other persons therefrom;

28. Condemnation. Subject to the rights of any senior lender, all moneys and awards payable as damages and/or compensation for the taking of title to or possession of, or for damage to, any portion of the Property subject to this Deed of Trust by reason of any condemnation, eminent domain or other similar proceeding shall be paid to Beneficiary, and such moneys and awards are hereby assigned to Beneficiary, and judgment therefor shall be entered in favor of Beneficiary, and when paid, may, at the option of the Beneficiary, (a) be applied, in whole or in part, by Beneficiary upon any indebtedness or obligation secured hereby, whether the same be matured or unmatured, and in such order as Beneficiary may determine, (b) be used in whole or in part to replace or restore the Property to a condition satisfactory to the Beneficiary, (c) be used in whole or in part to fulfill any of the covenants contained herein as the Beneficiary may determine, or (d) be released to the Trustor; and the Trustor hereby covenants and agrees, upon request by the Beneficiary, to make, execute and deliver any and all assignments and other instruments sufficient for the purpose of assigning the aforesaid moneys and awards to the Beneficiary free, clear and discharged of any and all encumbrances of any kind or nature whatsoever.

30. Waivers and Authorizations. At any time, or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note or Notes secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby or the effect of this Deed of Trust upon the remainder of said Property, Trustee may reconvey any part of said Property; consent in writing to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. Trustor, for itself and its successors and assigns (including without limitation any subsequent or other junior 372
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creditor of any part or all of the Property), waives any right to object to such reconveyance, mapping, easement or agreement with respect to such Property and waives any right to require that the value of such Property be applied upon the debt secured hereby (other than the amount, if any, actually received by Beneficiary in connection with any such transaction).

31. Release, Modification and Reconveyance, Waiver of Marshalling. Without affecting the liability of any other person liable for the payment of any obligation herein mentioned, and without affecting the lien or charge of this Deed of Trust upon any property not then or theretofore released as security, for the full amount of all unpaid obligations, Beneficiary may from time to time, and without notice release any person so liable, extend the maturity or alter any of the terms of any such obligation, or grant other indulgences, release or reconvey, or cause to be released or reconveyed at any time at Beneficiary’s option any parcel or portion or all of the Real Property described herein, take or release any other or additional security for any obligation herein mentioned, and/or make composition or other arrangements with debtors in relation thereto. Trustor waives any right to object to the release or reconveyance of such Property and waives any right to require that the value of any Property so released or reconveyed be applied upon the debt secured hereby (other than the amount, if any, actually received by Beneficiary in connection with any such release). Trustor agrees that if the Beneficiary at any time holds any additional security for any obligations secured hereby, it may enforce the sale thereof or otherwise realize upon the same at its option, either before or concurrently therewith or after a sale is made hereunder.

35. Default, Acceleration and Private Sale.
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35.1 Notice of Default. Should breach or default be made by Trustor in payment of any indebtedness secured hereby or in performance of any obligations, covenant, promise or agreement hereunder which breach or default is not cured within any applicable cure periods set forth below, or any representation of Trustor in this Deed of Trust, or other document referred to herein is incorrect, Beneficiary may declare all sums secured hereby immediately due and payable, and in such case, shall execute and deliver to Trustee a written declaration of default and demand for sale and written notice of default and election to cause to be sold said Property, and shall surrender to Trustee this Deed of Trust, the Note or Notes secured hereby and all documents evidencing any expenditures hereunder. Thereafter such notice of default and election to cause said Property to be sold to satisfy the obligations hereof shall be duly filed for recordation.

35.2 Cure Periods.

Trustor shall have a period of ten (10) days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary under the Loan Documents.

35.4 Private Sale. At least three (3) months having elapsed after recordation of notice of default, without demand on Trustor, said Trustee, having first given notice of sale 374
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as then required by law, shall sell said Property at the time and place of sale fixed by it in the notice of sale at public auction to the highest bidder for cash, payable at time of sale.

Trustor, for itself and its successors and assigns (including without limitation any subsequent or other junior creditor of any part or all of the Property), waives any right to marshalling of assets or any right to require any part of the Property to be sold prior to any other part of the Property or any right to require the Property to be sold in parcels rather than as a whole. Trustee may postpone sale of all or any portion of said Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Without further notice Trustee may make such sale at the time to which same shall be so postponed. Trustee shall deliver to such purchaser its deed conveying the Property so sold, but without any covenant or warranty, express or implied, and the recitals in such deed or deeds of any matters or facts affecting the regularity or validity of said sale shall be conclusive (except as against the parties hereto) proof of the truthfulness thereof; also such deed or deeds shall be conclusive (except as against the parties hereto) against all persons as to all matters or facts therein recited. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.

35.5 Application of Sale Proceeds. Trustee shall apply the proceeds of any such sale to payment of:

35.5.3 The remainder, if any, to the person or persons legally entitled thereto, upon proof satisfactory to the Trustee of such right.

38. Acceptance by Trustee. Trustee accepts this trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law.

40. Number and Gender. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.

42. Trust Irrevocable. The Trust created hereby is irrevocable by the Trustor.

43. Interpretation. The term “and/or” as used herein means one or the other or both, or any one or all, of the things or persons in connection with which the words are used.

Section headings are for reference only and shall not be considered in the interpretation of this Deed of Trust.

45. Request for Notice of Default. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to Trustor at the following address:

46. Governing Law. This Deed of Trust shall be interpreted under and governed by the laws of the State of California, except for those provisions preempted by federal law.

However, the laws of the State of California shall not be applied to the extent that they would require or allow the court to use the laws of another state or jurisdiction. Trustor agrees that all actions or proceedings arising in connection with this Deed of Trust shall be tried and litigated only in the state and federal courts located in the State of California, except that Beneficiary, in its sole discretion, may elect that all such actions or proceedings 376
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be tried and litigated in the County of Yolo or the United States District Court for the Eastern District of California.

TRUSTOR:

Michael Massie
Chief Development Officer
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2226414.5 Exhibit A

EXHIBIT A
Legal Description of the Property
Real property in the City of West Sacramento, County of Yolo, State of California, described as follows:
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2226414.5 Exhibit B

EXHIBIT B

The Collateral shall consist of:

All Trustor’s interest in and to all existing and future goods located on or about the real property described above in Exhibit “A” (the “Real Property”) which are used in the operation or occupancy of the Real Property or in any development of or construction on the Real Property, including but not limited to all apparatus, fixtures and articles of personal property now or any time hereafter attached to, placed in or upon or used in any way in connection with the Real Property, and including but not limited to all furniture, refrigerators, freezers, stoves, ovens, ranges, hoods, vents and fans, disposals, dishwashers, washing machines, dryers, air conditioners, cabinets, carpeting, drapes, screens, awnings, storm windows and doors, window shades, blinds, floor coverings, boilers, tanks, furnaces, radiators, fire alarm and other security systems, music systems, machinery, motors, compressors, and all heating lighting, plumbing, gas electric, ventilating refrigerating, air-conditioning, sprinkler and incinerating equipment, transformers, water wells, storage tanks, landscaping, pool equipment and furniture, dumpsters (or, to the extent leased, Trustor’s leasehold interest therein) and parking lot and other common area sweeping and cleaning equipment, and equipment and furnishings in or for the recreation room, halls, entry rooms and all other common areas; and including inventory, construction tools and equipment, appliances, furniture and furnishings, building service equipment, and building materials, supplies and equipment of any kind.

All general intangibles, chattel paper, instruments, documents and accounts owned by Trustor and relating to the development, use or occupancy of or construction on the Real Property, including but not limited to all governmental licenses, map rights, approvals and permits, all materials prepared for filing or filed with any public or quasipublic governmental entities or any public utilities and all of Trustor’s rights under any contract whether or not otherwise specifically assigned to Beneficiary.

All of the right, title and interest of Trustor in and to (i) all sales contracts applicable to any portion of the Real Property, together with any and all modifications thereof, and also together with all deposits or other payments made in connection therewith; (ii) all refundable or returnable fees, bonds, securities or other Property held by any public or quasi-public governmental entities, utility companies or others; (iii) all leases of any part or all of the Real Property now or hereafter entered into and all right, title and interest of Trustor thereunder, including (to the extent permitted by law) but not limited to cash or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether said cash or securities are to be held until the expiration of the terms of said leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of said terms; (iv) all advance payments of insurance premiums made by Trustor with respect to any part of the Real Property and claims or demands 379

EXHIBIT B
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2226414.5 Exhibit B
relating to insurance; (v) all advance payments by Trustor of any kind for the benefit of the Real Property, including but not limited to, those under maintenance or service contracts property taxes, advertising expenses and commissions; (vi) all funds deposited by Trustor with Beneficiary under this Note and the Purchase Agreement; and (vii) all take out or similar agreements or commitments in connection with the loan to Trustor or the Real Property.

All rights of Trustor in and to all furniture, furnishings, fixtures and equipment now or hereafter located upon or used in connection with the above-described Real Property.

All refunds, proceeds of financing and other payments, and all rights thereto, received by Trustor or to which it is entitled as a result of any assessment bonds issued in connection with the secured Property or property adjacent thereto.

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

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)
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Error! No document variable supplied.

NO FEE DOCUMENT

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of West Sacramento
c/o City Clerk
1110 West Capitol Avenue
West Sacramento, CA 95691
(Space Above Line For Recorder’s Use Only)

CITY OF WEST SACRAMENTO

HOME INVESTMENT PARTNERSHIPS PROGRAM (HOME)

RECITALS
A. Owner proposes to construct sixty (60) units of multifamily rental housing, commonly referred to as “Gateway Place Phase II” (the “Project”), consisting of approximately .99 acres and located in the City of West Sacramento, County of Yolo, California, as legally described in Exhibit A, attached hereto and incorporated herein (the “Property”). Ten (10) of the units shall be rented at rents affordable to Qualified Households according to the schedule contained in Exhibit B, attached hereto and incorporated herein (the “Regulated Units”).

B. The Project involves the construction of the Regulated Units and is intended to create decent, safe, and sanitary housing for households who would otherwise be unable to afford such housing.

C. The Project will be financed in whole or in part and regulated by a permanent loan from the City in a principal amount of not to exceed Two Million Dollars ($2,000,000.00) (the “HOME Loan”) from the Home Investment Partnerships Program (the “HOME Program”). The HOME Loan will be provided to Owner by City in accordance with 42 USC 12741 et seq., 24 CFR Part 92, California Health and Safety Section 50896 and Title 25, California Code of Regulations, Sections 8200 through 8220, (together, the “HOME Regulations”). The HOME Loan will be funded from City HOME Program Income funds. The proceeds of the HOME Loan shall be disbursed, used and governed by the HOME Loan Agreement by and between City and Owner of even date herewith (“HOME Loan Agreement”).

D. The HOME Loan Agreement, including all exhibits and attachments hereto, are incorporated in full by reference into this Agreement. In the event of any inconsistencies between the terms set forth in the HOME Loan Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.
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E. Owner agrees to abide by all provisions of the HOME Loan Agreement with respect to the Development. Owner shall execute a promissory note evidencing its obligation to repay the HOME Loan (the “HOME Note”) and a deed of trust in favor of City to be recorded against Owner’s interest in the Property securing repayment of the HOME Note (the “HOME Deed of Trust”).

Owner agrees to be bound by all terms and conditions of the Note and Deed of Trust. The HOME Note, the HOME Deed of Trust, the HOME Loan Agreement, and this Agreement are collectively referred to herein as the “HOME Loan Documents”.

F. As further consideration for the HOME Loan and in furtherance of the purposes of the HOME Program, Owner has agreed to enter into this Agreement. The purpose of this Agreement is to regulate and restrict occupancy, rents, operations, ownership and management of the Project in compliance with the requirements of the HOME Program. The covenants in this Agreement are intended to run with the land and be binding on Owner and Owner’s successorsin-interest to the land for the full term of this Agreement.

G. Owner has agreed to pay an Annual Monitoring Fee and has included said fee in their HOME application and operating budget.

NOW, THEREFORE, Owner and the City hereby agree as follows:

AGREEMENT

1.1 “AFFORDABLE RENTS” shall mean the following:

1.1.1 For two (2) of the Regulated Units, the monthly charge paid by tenants for occupancy and use of the units shall not exceed the product of thirty percent (30%) times fifty percent (50%) of the Area Median Income, adjusted for family size appropriate for the Unit; and for eight (8) of the Regulated Units, the monthly charge paid by tenants for occupancy and use of the units shall not exceed the product of thirty percent (30%) times sixty percent (60%) of the Area Median Income, adjusted for family size appropriate for the Unit.

1.1.1.2 For purposes of this definition, “adjusted for family size appropriate to the Unit” shall mean a household of one person in the case of a studio unit, two person in the case of a one-bedroom unit, three persons in the case of a two-bedroom unit, four persons in the case of a three-bedroom unit, and five persons in the case of a four-bedroom unit.

1.2 “AREA MEDIAN INCOME” (referred to herein as “AMI”) means the area median income for Yolo County, with adjustments for household size, as determined from time-to-time by the United States Department of Housing and Urban Development (“HUD”) pursuant to Section 8(f)(3) of the United States Housing Act of 1937 as amended, or such other method of median income calculation applicable to the City that HUD may hereafter adopt in conneciton with said 383
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Act. If HUD should cease making such determination, the City may designate another fiar method of calculation of area median income used by any federal or state agency and appliable to the City.

1.3 “CITY” means the City of West Sacramento.

1.4 “OWNER” means Delta Lane Housing Partners II LP, a California limited partnership.

1.5 “PROJECT” means the development and operation of the Property for residential use according to the terms of this Agreement.

1.8 “REGULATED UNITS” means ten (10) of sixty (60) rental dwelling units constructed for the Project, having the composition as shown in the attached Exhibit B, which is hereby incorporated into this Agreement by this reference.

2. OWNER’S GENERAL OBLIGATIONS

2.2 COMPLIANCE WITH THE HOME PROGRAM REQUIREMENTS. The financial assistance provided under the HOME Program is governed by 24 CFR Part 92. Owner agrees that at all times its acts regarding the Project and the use of funds provided herein shall be in conformity with all provisions of the HOME Program, including the statutes, the HOME Regulations and such policies and procedures of City, the Department and HUD pertaining thereto (provided, however, only those units designated as HOME units shall be subject to the rent and occupancy limits set forth herein). Owner acknowledges that it is familiar with such applicable provisions and has been professionally advised to the extent necessary for the purpose of enabling Owner to fully comply with such provisions. Owner agrees to comply with all requirements and obligations as described in 24 CFR Part 92, as well as all provisions governing the use of HOME funds. Owner further agrees to comply with the directives of City as necessary to ensure compliance with the obligations of City as set forth in its agreements with HUD and/or the Department regarding the use of HOME funds.

2.3 TERM OF AGREEMENT. This Agreement shall remain in full force and effect until fifty-five (55) years after the date on which the City issues a Certificate of Occupancy for the Project. The obligations in this Agreement shall remain effective and fully binding on Owner for this full term regardless of any expiration of the term of any Loan, any payment, or prepayment of any Loan, any assignment of any Promissory Note, any reconveyance of any Deed of Trust, or any sale, assignment, transfer, or conveyance of the Property. 384
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2.4 CONSTRUCTION OF PROJECT. All of the Regulated Units in the Project shall be built and maintained to a similar standard and shall contain separate and complete facilities for living, sleeping, eating, cooking, and sanitation for a single person or family, including sleeping area, bathing and sanitation facilities and cooking facilities equipped with a cooking range, refrigerator and sink. None of the Regulated Units shall at any time be utilized on a transient basis or as a hotel, dormitory, fraternity house, sorority house, rooming house, hospital, nursing home, sanitarium, rest home or trailer park.

3. PROJECT OCCUPANCY AND RENTS.

3.2 RENTS FOR REGULATED UNITS. Except as otherwise provided in Section

3.1.1, rents charged to and paid by tenants for Regulated Units shall not exceed Affordable Rents.

3.3 RENTAL AGREEMENT AND GRIEVANCE PROCEDURES. Tenant rental agreement and grievance procedures shall be in accordance with California Code of Regulations, Title 25, Division 1, Chapter 7, Subchapter 19, Section 8307.

3.4 CONVERSION OF PROJECT FROM RENTAL UNITS TO CONDOMINIUM.

3.5 NONDISCRIMINATION. Owner shall not discriminate or segregate in the use, enjoyment, occupancy, conveyance, lease, sublease, or rental of Project units on the basis of race, color, ancestry, national origin, religion, sex, sexual preference, age, marital status, family status, source of income, physical or mental disability, Acquired Immune Deficiency Syndrome (AIDS) or AIDS-related conditions (ARC), or any other arbitrary basis. Owner shall include a statement in all advertisements, notices, and signs for the availability of Project units for rent to the effect that Owner is an Equal Housing Opportunity Provider.

3.5.1 All deeds, leases, or contracts entered into by the Owner as to any portion of the Property shall contain the nondiscrimination provisions as provided in California Health and Safety Code section 33436.

3.6 MANAGEMENT RESPONSIBILITIES. Owner is specifically responsible, subject to its obligations herein, for all management functions with respect to the Property, 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. City shall have no responsibility over management of the Property.

3.7 MANAGEMENT ENTITY. City shall have the right to review and approve the management entity chosen by Owner for the Property and the right to require a change in the management entity for reasonable cause at any time during the term of this Agreement. Any contracting of management services by Owner shall not relieve Owner of its primary responsibilities for proper performance of management duties. City approves The John Stewart Company as the initial management entity. City shall have the right to review and approve any proposed amendments to Owner’s contract with its management firm, any new management contracts, and any substantive changes in the Plan during the term of this Agreement. City may also require the Owner to update the Management Plan not more than once every three (3) years.

All approvals required of City pursuant to this Section 3.6 shall be made in City’s reasonable discretion.

3.8 FINAL MANAGEMENT PLAN. At least sixty (60) calendar days prior to the anticipated completion of construction of the Project, Owner shall submit to City for review and approval a draft management plan for marketing and managing the Property. Prior to issuance of the final Certificate of Occupancy for the Project, Owner shall submit a final management plan (“Final Management Plan” or “Plan”) to City for its review and approval, which shall not be unreasonably withheld. The Plan shall include, but is not limited to, provisions as set forth directly below:

West Sacramento City CouncilOctober 19, 2022

West Sacramento City Council
October 19, 2022