ALAMEDA COUNTY COMMUNITY DEVELOPMENT AGENCY

Transcription

1 ALAMEDA COUNTY COMMUNITY DEVELOPMENT AGENCY REDEVELOPMENT AGENCY Chris Bazar Agency Director Eileen Dalton Redevelopment Director 224 West Winton Avenue Room 11 Hayward California phone fax Honorable Board of Directors Alameda County Redevelopment Agency Administration Building 1221 Oak Street Oakland, CA Dear Board Members: AGENDA ITEM NO. January 27,29 January 13, 29 wwwacgov.org/cda Subject: ADOPT A RESOLUTION AND AUTHORIZE AND EXECUTE THE LOAN AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE COUNTY OF ALAMEDA AND EDEN HOUSING, INC. (principal, LINDA MANDOLINI, EXECUTIVE DIRECTOR, HAYWARD, CA) AN AFFILIATED PARTNERSHIP TO ASSIST IN THE ACQISITION, RENOVATION AND PRESERVATION OF THE 142 UNIT AFFORDABLE ASHLAND VILLAGE APARTMENT COMPLEX LOCATED AT 13 KENTWOOD LANE, IN THE COUNTY OF ALAMEDA - CITY OF SAN LEANDRO JOINT REDEVELOPMENT PROJECT AREA; AND APPROVE THE RELOCATION PLAN PREPARED IN CONNECTION WITH THE ACQUISTION OF THE ASHLAND VILLAGE APARTMENT COMPLEX RECOMMENDATION: That the Board of Directors 1. Adopt a resolution making findings, and authorize and execute a Loan Agreement between the Redevelopment Agency of the County of Alameda and Eden Housing Inc. (Eden) (Principal: Linda Mandolini, Executive Director, Location: Hayward), for $6.5 million dollars to assist Eden with the acquisition, renovation and preservation of the 142 unit affordable Ashland Village Apartment complex located within the unincorporated community of Ashland, in the County of Alameda - City of San Leandro Joint Redevelopment Project Area (Joint Project Area); 2. Authorize the Executive Director ofthe Redevelopment Agency, or his designee, to execute all ancillary documents necessary to implement the transaction as outlined in the Loan Agreement; and 3. Approve the Relocation Plan prepared in connection with the acquisition, renovation and preservation of the Ashland Village Apartment complex.

2 Board of Directors January 13, 29 Page 2 of3 BACKGROUND: On March 18, 28, by Resolution No. R-28-92, your Board approved an acquisition and rehabilitation loan in an amount of up to $6,5, (Agency Loan) to Eden Housing, Inc., (Developer) to assist the Developer in acquiring and rehabilitating a 142 unit apartment development known as Ashland Village Apartments, located at 13 Kentwood Lane in the Joint Project Area ("Ashland Village" or the "Property"). The Agency committed funds based on Eden's ability to secure all other necessary permanent financing. Eden has now secured the other sources of financing and the Agency Loan Agreement is now before your Board for authorization and execution. The Agency Loan terms are set forth in a Loan Agreement and Regulatory Agreement and will be evidenced by a Promissory Note secured by a Deed of Trust on the Ashland Village property in a subordinate lien position to other project financing. The terms of the Loan Agreement provide Eden with a 3-year $6.5 million dollar loan that will include $2 million in permanent (55-year) loan funds. The portion of the loan that does not convert to a permanent loan will be repaid at the time of permanent loan conversion (approximately six months after completion of all rehabilitation work and no later than three years from the date of disbursement offunds). The permanent loan funds of$2 million will be repaid through annual payments ofa portion of the project's residual receipts, in accordance with a formula required by the California Department of Housing and Community Development, which will also be providing funds for development, with all outstanding funds due approximately 55 years from the completion of rehabilitation. The outstanding principal balance of the loan will bear simple interest of 3% per annum. Eden in tum has agreed to restrict 14 units at affordable income levels for a minimum of 55 years (2 units will be maintained as manager units and will not be income restricted). Eden will restrict 13 units for very-low income occupancy at affordable rents and 1 units will be restricted at lower income occupancy at affordable rents. Ashland Village is a I42-unit, affordable multifamily apartment development located in the unincorporated community of Ashland. The Property consists of nine, 2-story apartment buildings and a property management office. With the purchase of Ashland Village, Eden proposes to provide renovations that will include accessibility improvements, new roof and gutters, new paint, and installation of new security improvements. Eden also plans to build a new community building that will be located on-site and will feature a computer room, a space for after-school programs, and a small kitchen. California Redevelopment Law (Redevelopment Law) requires that all redevelopment agencies set aside a minimum of 2 percent of all tax increment generated from the redevelopment project areas for the purpose of improving, increasing, or preserving the community's supply of affordable housing. Redevelopment Law also requires an agency to provide for a minimum number of affordable housing units to be substantially rehabilitated or built within the Project Area during the life of the Plan. Redevelopment agencies may satisfy a portion of this requirement through the acquisition ofaffordability covenants on existing units that are presently affordable but that are not reasonably expected to remain affordable. Due to the pending expiration of the Section 8 contract, Ashland Village is not reasonably expected to remain affordable; therefore, the acquisition of covenants by the Redevelopment Agency will qualify for affordable housing production credit under Redevelopment Law. The Joint Project Area does not have adequate affordable housing funds to provide for all ofthe funding being requested by Eden. To fund the entire request, the Agency will utilize funds from both the Joint Project Area and the Eden Area Redevelopment Project (Eden Project Area). Redevelopment Law allows for housing funds from one project area to be utilized in another project area, upon a finding that such expenditure will benefit the originating project area. In addition, the Eden Project Area may receive a portion of the affordable units as credit towards the Eden Project Area's as-yet unsatisfied affordable housing production requirement. The Agency may utilize affordable housing production credits from one project area

3 Board of Directors January Page 3 of3 in another project area upon a finding by the Agency that the aggregation of affordable units between project areas will not cause or exacerbate ethnic, racial, or economic segregation. Your Board adopted all of these necessary findings on March 18, 28 by Resolution No. R The affordable housing production credits will be credited to each of the project areas at the same ratio of the financial contribution. The Joint Project Area will be credited with 38 affordable housing production credits and the Eden Project Area will be credited with 12 affordable housing production credits. California Relocation Assistance Law (Government Code Section 726 et seq.) requires the preparation of a Relocation Plan whenever residents are required to vacate property acquired by a public entity, or because of a project, which receives assistance from a public entity. Although the Agency is not acquiring the property, the Project is subject to Relocation Assistance Law because the Agency is providing Eden with financial assistance for acquisition of the property. The ensuing rehabilitation of the Project will entail displacement and relocation of some of the existing residents of the property. The Relocation Plan sets forth the Assessment of Relocation Needs, Replacement Housing Sources, Program Assurances and Standards, the Relocation Assistance Program, Relocation Benefit Categories, Relocation Program Guidelines and Benefits, Payment of Relocation Benefits, Eviction Policy, and Projected Dates of Displacement. The Guidelines require that the Relocation Plan be made available to the occupants of the property, prior to submission to the Agency for approval. The plan was sent to the potentially displaced residents on November 12,28. There were no public comments received regarding the Relocation Plan. The Ashland, Castro Valley, Cherryland and San Lorenzo Redevelopment Citizen Advisory Committees (CAC) all reviewed the proposal and recommend that the Board authorize the Agency funding as proposed The CAC members recognize the project's value as a benefit to the local community regarding preservation of affordable housing. FINANCIAL CONSIDERATIONS; The total project cost is $34.7 million including property acquisition and rehabilitation. The other sources of funding for the project will include Multifamily Housing Program (MHP) funds from the California Department of Housing and Community Developm.;;nt, Housing Tax Credits from the California Tax Credit Allocation Committee (CTCAC), an award of HOME funds from the County and an allocation of multifamily housing revenue bonds from the California Debt Limit Allocation Committee (CDLAC) in Spring 28. The total commitment from the Redevelopment Agency of$6.5 million dollars will be funded with $2 million from the Joint Project Area housing set-aside funds and $4.5 million from the Eden Project Area housing set-aside funds ($1.5 million from each of the Castro Valley, Cherryland and San Lorenzo Sub-Areas). There will be no Net County Cost as a result of this action. Very truly yours, ~~ Chris Bazar, Executive Director Alameda County Redevelopment Agency Cc: Susan Muranishi, County Administrator Richard Winnie, Office of the County Counsel Patrick O'Connell, Auditor-Controller U. B. Singh, CDA Finance Director Eileen Dalton, Director, Redevelopment Agency

4 RESOLUTION NO. RESOLUTION OF THE GOVERNING BOARD OF THE REDEVELOPMENT AGENCY OF THE COUNTY OF ALAMEDA APPROVING EXECUTION OF LOAN DOCUMENTS TO ASSIST IN THE ACQUISITION, REHABILITATION, AND PRESERVATION AS AFFORDABLE HOUSING OF THE ASHLAND VILLAGE APARTMENTS WHEREAS, pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33 et seq.: the "Redevelopment Law"), the Board of Supervisors (the "Board of Supervisors") of the County of Alameda (the "County") has adopted, and the Redevelopment Agency of the County of Alameda (the "Agency") is responsible for implementing, the Redevelopment Plan for the Alameda County-City of San Leandro Joint Redevelopment Project Area, as amended (the "Joint Redevelopment Plan") and the Redevelopment Plan for the Eden Area Project Area, as amended (the "Eden Area Redevelopment Plan") ; and WHEREAS, the Joint Redevelopment Plan sets forth a redevelopment program for the Alameda County-City of San Leandro Joint Redevelopment Project Area (the "Joint Project Area"), including the provision of affordable housing for low and moderate income households and the Eden Area Redevelopment Plan sets forth a redevelopment program for the Eden Area Redevelopment Project Area (the "Eden Area Project Area"), including the provision of affordable housing for low and moderate income households; and WHEREAS, by Resolution No. R-28-92, adopted March 18,28 the Governing Board of the Agency approved an acquisition and rehabilitation loan in an amount of up to $6,5, (the "Agency Loan") to Eden Housing, Inc. or a limited partnership formed by Eden Housing, Inc., (the "Developer") to assist the Developer in acquiring and rehabilitating a 142 unit apartment development known as Ashland Village Apartments, located at 13 Kentwood Lane in the Joint Project Area ("Ashland Village" or the "Property"); and WHEREAS, the Agency will fund the Agency Loan with $4,5, in Housing Fund monies from the Eden Area Project Area (including $1,5, from the Castro Valley Sub-Area; $1,5, from the Cherryland Sub-Area; and $1,5, from the San Lorenzo Sub-Area) (collectively, the "Eden Area Funds"), and with $2,, in Housing Funds from the Joint Project Area (the "Joint Area Funds); and WHEREAS, the Developer intends to rehabilitate and preserve one-hundred and forty-two (142) units of existing federally-subsidized affordable housing one hundred and forty (14) units of which shall be made available to and occupied by very low income and lower income households at affordable housing costs; and 8 I9\ 13\ I

5 WHEREAS, the Agency special legal counsel has prepared loan documents to be entered into by the Agency and the Developer, including a loan agreement, promissory note, deed of trust, notice of affordability restrictions, and a regulatory agreement and declaration of restrictive covenants (collectively the "Agency Loan Documents"), copies of which in substantially the fonn to be executed by the Developer and the Agency have been filed with the Agency Secretary and the County Clerk; and WHEREAS, the rehabilitation of the of the Property will entail relocation of some of the existing residents of the Property; and WHEREAS, the Agency and the Developer and their consultants have prepared a draft relocation plan (the "Relocation Plan") in accordance with Section 638 of the California Department of Housing and Community Development Relocation Regulations (the "Relocation Regulations"); and WHEREAS, timely general notice of the Relocation Plan designed to reach the potentially displaced occupants of the property was made in accordance with the provisions of paragraph 646(a)(3) and subsection 646(b) of the Relocation Regulations, as required by Section 638(e)(2) ofthe Relocation Regulations; and WHEREAS, the Agency Board Letter attached to this resolution, and the above recitals (the "Recitals") (collectively, the "Supporting Documents") and testimony provided at the Public Hearing fonn the evidentiary basis and establish the analytical route for reaching the ultimate findings and conclusions contained in this Resolution. NOW, THEREFORE, BE IT RESOLVED, by the Governing Board of the Redevelopment Agency of the County of Alameda, as follows: Section 1. Recitals Correct. The Agency finds that the above Recitals are true and correct and have served, together with the other Supporting Documents and testimony provided at the Public Hearing, as the basis for the findings and approvals set forth below. Section 2. Approval of Execution of Agency Loan Documents. The Governing Board of the Agency hereby approves the execution of the Agency Loan Documents and authorizes and directs the Executive Director of the Agency, or the Director's designee, to execute the Agency Loan Documents on behalf of the Agency, substantially in the fonn on file with the Agency Secretary and the County Clerk, with such revisions as are reasonably detennined necessary by the Agency signatory in consultation with Agency special legal counsel, such detennination to be conclusively deemed to have been made by the execution of the Agreements by the Agency signatory. A copy of the Agreements when executed shall be placed on file in the office of the Agency Secretary. The Executive Director of the Agency, or the Director's designee, is authorized to implement the Agreements and take all further actions and execute all escrow documents and other documents which are necessary or appropriate to carry out the Loan Documents. 819\13\

6 Section 3. Relocation Plan Findings. Based on the information and analysis set forth in the above Recitals and contained in the Board Letter pursuant to Section 6 I of the Relocation Regulations, that: A. Fair and reasonable relocation payments will be provided to eligible persons as required by Article 3 of the Relocation Regulations; and B. A relocation assistance program offering the services described in Article 2 of the Relocation Regulations will be established; and C. Eligible persons will be adequately informed of the assistance, benefits, policies, practices and procedures, including grievance procedures, provided for in the Relocation Regulations; and D. Based upon recent survey and analysis of both the housing needs of persons who will be displaced and available replacement housing and considering competing demands for that housing, comparable dwellings will be available, or provided, if necessary, within a reasonable period of time prior to displacement sufficient in number, size, and cost for the eligible persons who require them. E. The Relocation Plan makes adequate provisions to provide orderly, timely, and efficient relocation of eligible persons to comparable replacement housing available without regard to race, color, religion, sex, marital status, or national origin with minimum hardship to affected households. F. The Relocation Plan meets the requirements of Section 638 of the Relocation Regulations. Section 4. Approval of Relocation Plan. The Agency hereby approves the Relocation Plan and authorizes the Executive Director of the Agency, or the Director's designee, to take such steps as they deem necessary to facilitate the implementation of the Relocation Plan. Section 5. Effective Date. This Resolution shall take immediate effect upon adoption. 819\13\

7 PASSED AND ADOPTED by the Governing Board of the Redevelopment Agency of the County of Alameda at a regular meeting of said Board on the 27th day of January, 29, by the following vote of said Board: AYES: NOES: EXCUSED: President, Board of Directors (SEAL) ATTEST: Secretary APPROVED AS TO FORM County Counsel 819\13\

8 REDEVELOPMENT AGENCY LOAN AGREEMENT by and between ALAMEDA COUNTY REDEVELOPMENT AGENCY and ASHLAND VILLAGE APARTMENTS, L.P. (Ashland Village Apartments) 819\13\

9 ARTICLE I. DEFfNITIONS AND EXHIBITS 5 Section 1.1 Definitions 5 Section 1.2 Exhibits 7 ARTICLE 2. LOAN PROVISIONS 8 Section 2.1 Loan 8 Section 2.2 Interest. 8 Section 2.3 Use of Loan Funds 8 Section 2.4 Security 8 Section 2.5 Loan Disbursement. 9 Section 2.6 'Repayment Schedule 1 Section 2.7 Reports and Accounting of Residual Receipts 12 Section 2.8 Non-Recourse 13 ARTICLE 3. REHABILITATION OF THE DEVELOPMENT 14 Section 3.1 Permits and Approvals 14 Section 3.2 Approved Scope of Rehabilitation and Community Building Construction Work 14 Section 3.3 Construction Contract. 14 Section 3.4 Construction Bonds 14 Section 3.5 Commencement ofrehabilitation 14 Section 3.6 Completion of Rehabilitation 14 Section 3.7 Rehabilitation Pursuant to Plans and Laws 15 Section 3.8 Income Certifications 16 Section 3.9 Management and Marketing Plan 16 Section 3.1 Relocation 16 Section 3.11 Equal Opportunity 16 Section 3.12 Progress Reports 17 Section 3.13 Rehabilitation Responsibilities 17 Section 3.14 Mechanics Liens, Stop Notices, and Notices of Completion 17 Section 3.15 Inspections 18 Section 3.16 Approved Development Budget; Revisions to Budget. 18 Section 3.17 Developer Fee 18 Section 3.18 Conversion of Bond Loan; Close of MHP Loan 18 Section 3.19 Section 8 HAP Contract. 18 ARTICLE 4. LOAN REQUIREMENTS 18 Section 4.1 Applicability 18 Section 4.2 Financial Accountings and Post-Completion Audits 19 Section 4.3 Information 19 Section 4.4 Records 19 Section 4.5 Audits 19 Section 4.6 Hazardous Materials 19 Section 4.7 Maintenance and Damage 21 Section 4.8 Fees and Taxes 21 Section 4.9 Notice of Litigation 22 Section 4.1 Operation of Development as Affordable Housing \13\

10 Section 4.11 Nondiscrimination 22 Section 4.12 Annual Operating Budget. 22 Section 4.13 Creation of Reserve Funds 22 Section 4.14 Approval of Use of Reserves 22 Section 4.15 Mandatory Language in all Subsequent Deeds, Leases and Contracts 23 Section 4.16 Insurance Requirements 24 ARTICLE 5. ASSIGNMENT AND TRANSFERS 25 Section 5.1 Definitions 25 Section 5.2 Purpose of Restrictions on Transfer. 26 Section 5.3 Prohibited Transfers 26 Section 5.4 Permitted Transfers Without Prior Agency Approval.. 26 Section 5.5 Permitted Transfers With Prior Approval. 26 ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF BORROWER 28 Section 6.1 Representations and Warranties 28 ARTICLE 7. DEFAULT AND REMEDIES 29 Section 7.1 Events of Default. 29 Section 7.2 Remedies 3 Section 7.3 Right of Contest. 31 Section 7.4 Remedies Cumulative 31 Section 7.5 Limited Partner Cure Rights 31 ARTICLE 8. GENERAL PROVISIONS 32 Section 8.1 Relationship ofparties 32 Section 8.2 No Claims 32 Section 8.3 Amendments 32 Section 8.4 Indemnification 32 Section 8.5 Non-Liability of Agency Officials, Employees and Agents 32 Section 8.6 No Third Party Beneficiaries 33 Section 8.7 Discretion Retained By County 33 Section 8.8 Notices, Demands and Communications 33 Section 8.9 Applicable Law 33 Section 8.1 Parties Bound 33 Section 8.11 Attorneys' Fees 34 Section 8.12 Severability 34 Section 8.13 Force Majeure 34 Section 8.14 Agency Approval. 34 Section 8.15 Waivers 34 Section 8.16 Title of Parts and Sections 35 Section 8.17 Entire Understanding of the Parties 35 Section 8.18 Multiple Originals; Counterpart 35 EXHIDIT A: Legal Description of the Property 819\13\

11 EXHIBITB: EXHIBITC: EXHIBIT D: EXHIBIT E: EXHIBIT F: EXHIBIT G: EXHIBITH: Approved Development Budget Approved Scope of Rehabilitation Work Approved Operating Budget Form of Deed oftrust Form of Promissory Note Form of Notice of Affordability Restriction on Transfer of Property Form of Regulatory Agreement 819\13\

12 REDEVELOPMENT AGENCY LOAN AGREEMENT (Ashland Village Apartments) This Redevelopment Agency Loan Agreement (the "Agreement") is entered into as of January 27, 29 (the "Agreement Date"), by and between the Redevelopment Agency of the County of Alameda, a public body, corporate and politic (the "Agency") and Ashland Village Apartments, L.P., a California limited partnership (the "Borrower") with reference to the following facts: RECITALS A. Pursuant to California Community Redevelopment Law (Health and Safety Code Section 33 et!g., the "Redevelopment Law"), the Board of Supervisors of the County of Alameda adopted, and the Agency is responsible for implementing: 1. The Redevelopment Plan for the County of Alameda-City of San Leandro Redevelopment Project adopted by the Alameda County Board of Supervisors by Ordinance No adopted on July 14, 1993, as amended by Ordinance No adopted on May 8, 21, as further amended by Ordinance No adopted on October 3,21, and as further amended by Ordinance No adopted on January 6, 24 (as amended from time to time, collectively the "Joint Redevelopment Plan"); and 2. The Redevelopment Plan for the Eden Area Redevelopment Project Area adopted by the Alameda County Board of Supervisors by Ordinance No adopted on July 11, 2, as amended by Ordinance No adopted on January 6,24 (as amended from time to time, the "Eden Area Redevelopment Plan"). B. The Joint Redevelopment Plan sets forth a redevelopment program for the County of Alameda-City of San Leandro Redevelopment Project Area (the "Joint Project Area"), including the provision ofaffordable housing for low and moderate income households; and the Eden Area Redevelopment Plan sets forth a redevelopment program for the Eden Area Redevelopment Project Area (the "Eden Area Project Area"), including the provision of affordable housing for low and moderate income households. C. The Borrower is in the process of acquiring certain real property located within the Joint Project Area and more particularly described in the attached Exhibit A (the "Property"). The Property is improved with one hundred forty-two (142) units of housing and the Borrower desires to rehabilitate the improvements located on the Property in order to provide affordable housing for low-income households. D. The Agency desires to provide financial assistance to Borrower for acquisition costs in the form of a construction period loan for a total amount not to exceed Six Million Five Hundred Thousand Dollars ($6,5,), reduced to a permanent loan of One Million Three Hundred Thousand Dollars ($1,3,) (the "Loan") from the Agency's Low and Moderate Income Housing Fund. The Loan consists of Four Million Five Hundred Thousand Dollars ($4,5,) in Housing Fund Monies from the Eden Area Project Area (including One Million Five Hundred Thousand Dollars ($1,5,) from the Castro ValIey Sub-Area; One Million Five Hundred Thousand DolIars ($1,5,)from the Cherryland Sub-Area; and One Million Five Hundred Thousand Dollars ($1,5,) from the San Lorenzo Sub Area) (collectively, the "Eden Area Funds"), and Two Million Dollars ($2,,) in Housing Fund Monies from the Joint Project Area. The Alameda County Board of Supervisors and the Agency have made the necessary findings to spend Eden Area Funds in the Joint Project Area, as evidenced, respectively, by Resolutions No. R and Resolution No. R adopted on March 18, \

13 E. Through this Agreement and accompanying documents the Agency is imposing occupancy and affordability restrictions on the Development in order to meet replacement housing requirements applicable to the Redevelopment Area pursuant to Health and Safety Code Section 334l3(a) and low and moderate income housing production requirements pursuant to Health and Safety Code Section 334 I3(b)(2)(B)(ii). Under Health and Safety Code Section 334 I3(b)(2)(A)(v) the Agency may aggregate dwelling units in the Joint Project Area with dwelling units in the Eden Area Project Area for purposes of meeting affordable housing production requirements of both project areas. F. Borrower intends to substantialiy rehabilitate the Property pursuant to Health and Safety Code Section 334 I3(b)(2)(A)(iv), and to construct a new community building on the Property. G. The California Environmental Quality Act (Public Resources Code Sections 21 et ~.) ("CEQA"), imposes no conditions on the Agency's consideration and approval of this Agreement, because the project undertaken pursuant to this Agreement is the rehabilitation of existing improvements, and such projects are exempt from CEQA requirements under class 2 categorical exemption. NOW, THEREFORE, the Agency and the Borrower (coliectively the "Parties") agree as follows: ARTICLE 1. DEFINITIONS AND EXHIBITS Section 1.1 Definitions. The following capitalized terms have the meanings set forth in this Section 1.1 wherever used in this Agreement, unless otherwise provided: (a) (a) (b) "Agency" shall mean the Redevelopment Agency of the County of Alameda. "Agreement" shali mean this Loan Agreement. "Agreement Date" shali mean the date first set forth above. (c) "Approved Development Budget" shall mean the proforma development budget, including sources and uses of funds, as approved by the Agency, and attached hereto and incorporated herein as Exhibit B, but which may be amended with the written approval of the Agency as set forth in this Agreement. (d) "Approved Financing" shali be limited to all ofthe following funds acquired by the Borrower and approved by the Agency for the purpose of financing the Development, in addition to the Loan: (i) HOME Loan from the County of Alameda in the approximate amount of Seven Hundred Forty Thousand Dollars ($74,) (the "County HOME Loan"); (ii) A loan from the California Department of Housing and Community Development ("HCD") Multifamily Housing Program in an amount not to exceed Seven MilIion Seven Hundred Twenty Thousand Dollars ($7,72,) (the "MHP Loan"); (iii) Multifamily housing tax-exempt revenue bonds issued by the County of Alameda (the "County") in the approximate amount of Twenty Million Three Hundred Seventy-Four 819\13\

14 Thousand Five Hundred Twenty-Seven Dollars ($2,374,527) for the purpose of providing financing for the acquisition and rehabilitation of the Development (the "Bond Financing") and intended to be paid down to approximately Eleven Million Seven Hundred Seventy-Nine Thousand Eight Hundred Dollars ($11,779,8) after.completion ofrehabilitation (the "Bond Loan"); (iv) Tax credit investor limited partner capital contribution in the approximate amount of Eight Mi11ion Nine Hundred Fifty-Six Thousand Four Hundred Forty-Six Dollars ($8,956,446); and (v) General partner capital contribution in the approximate amount of Four Hundred Thousand Dollars ($4,). (e) "Approved Scope of Rehabilitation" shall mean the scope of rehabilitation, as approved by the Agency, and attached hereto and incorporated herein as Exhibit C. assigns. (f) "Bank" shall mean Banc of America Public Capital Corp., its successors or (g) "Borrower" shall mean Ashland Village Apartments, L.P., a California limited partnership, and its pennitted successors and assigns hereunder. (h) "Construction Bonds" shall have the meaning set forth in Section 3.4. (i) "Conversion Date" shall mean the date the Bond Loan is converted from a construction loan to a pennanent loan. G) "County" shall mean the County of Alameda, a municipal corporation. (k) "Deed of Trust" shall mean the deed of trust that will encumber the Development to secure repayment of the Loan, in substantially the fonn attached hereto as Exhibit E. (I) (m) (n) "Default" shall have the meaning set forth in Section 7.1 below. "Development" shall mean the Property and the Improvements. "Hazardous Materials" shall have the meaning set forth in Section 4.6 below. below. below. () "Hazardous Materials Claim" shall have the meaning set forth in Section 4.6 (p) "Hazardous Materials Law" shall have the meaning set forth in Section 4.6 (q) "Improvements" shall mean the one hundred forty-two (142) units to be rehabilitated under this Agreement. (r) [reserved]. (s) "Loan" shall mean the loan from the Agency to Borrower in the total principal amount not to exceed Six Mi11ion Five Hundred Thousand Dollars ($6,5,). 819\13\

15 (t) "Loan Documents" shall mean this Agreement, the Note, the Regulatory Agreement, the Deed of Trust, and the Notice of Affordability Restriction on Transfer of Property. (u) "Loan Term" shall mean the term of the Loan which commences on the Agreement Date and ends fifty-seven (57) years from the date the Deed of Trust is recorded with the Office of the Alameda County Recorder. (v) "Note" shall mean the Promissory Note that will evidence Borrower's obligation to repay the Loan, in substantially the form attached hereto as Exhibit F. (w) "Notice of Affordability Restriction on Transfer of Property" shall mean the Notice of Affordability Restriction on Transfer of Property to be recorded against the Property pursuant to Health and Safety Code Sections and/or 334l3(c)(5), or successor provisions. The Notice of Affordability Restriction, in substantially the form attached hereto as Exhibit G. (x) "Parties" shall mean the Agency and Borrower. (y) "Property" shall mean the real property located in the County of Alameda, California, more particularly described in the attached Exhibit A. (z) "Regulatory Agreement" shall mean the Regulatory Agreement and Declaration of Restrictive Covenants between the Agency and the Borrower associated with the Loan, in substantially the form attached hereto as Exhibit H. (aa) "Section 8 HAP Contract" shall mean the Section 8 Housing Assistances Payment Contract by and between Borrower and the U.S. Department of Housing and Urban Development ("HUD") under 24 CFR Part 982, providing for twenty (2) years of Section 8 project based assistance for the Development. (bb) "Transfer" shall have the meaning set forth in Section 5.1 below. (cc) "Unit" means one of the one hundred forty-two (142) apartment units to be rehabilitated on the Property. Section 1.2 Exhibits. The following exhibits are attached to this Agreement and incorporated into this Agreement by this reference: EXHIBIT A: EXHIBIT B: EXHIBIT C: EXHIBIT D: EXHIBIT E: EXHIBIT F: Legal Description of the Property Approved Development Budget Approved Scope of Rehabilitation Work Approved Operating Budget Form of Deed oftrust Form of Promissory Note 819\13\

16 EXHffiIT G: EXHffiIT H: Fonn of Notice of Affordability Restriction on Transfer of Property Fonn of Regulatory Agreement ARTICLE 2. LOAN PROVISIONS Section 2.1 Loan. The Agency shall loan to the Borrower the Loan in the principal amount not to exceed Six Million Five Hundred Thousand Dollars ($6,5,) for the purposes set forth in Section 2.3 of this Agreement. Section 2.2 Interest. Interest Rate. Subject to the provisions of Section 2.2(b) below, the outstanding principal balance of the Loan shall accrue simple interest at the rate of three percent (3%) per annum, commencing from the date of disbursement and continuing until the Loan is repaid in full. (b) Default Rate. In the event of a Default, interest on the Loan shall begin to accrue, as of the date of Default and continuing until such time as the Loan funds are repaid in full or the Default is cured, at the default rate of the lesser of ten percent (1%), compounded annually, or the highest rate pennitted by law. Section 2.3 Use of Loan Funds. The Borrower shall use the Loan funds to pay a part ofthe acquisition costs of the Development, consistent with the Approved Development Budget. (b) The Borrower shall not use the Loan funds for any other purpose without the prior written consent of the Agency. Section 2.4 Security. Borrower shall secure its obligation to repay the Loan, as evidenced by the Note, by executing the Deed of Trust, and recording it as a lien against the Property junior only to the deed of trust securing the Bond Financing. (b) The Deed of Trust and/or Regulatory Agreement may be subordinated to the deed of trust securing the Bond Loan and the MHP Loan and the accompanying regulatory agreements (in each case, a "Senior Lien"), but only on condition that all of the following conditions are satisfied: (i) All of the proceeds of the proposed Senior Lien, less any transaction costs, must be used to provide acquisition, construction and/or pennanent financing for the Development. (ii) The proposed lender (each, a "Senior Lender") must be a state or federally chartered financial institution, a nonprofit corporation or a public entity that is not affiliated with Borrower or any of Borrower's affiliates, other than as a depositor or a lender. (iii) Borrower must demonstrate to the Agency's reasonable satisfaction that subordination of the Deed of Trust and/or Regulatory Agreement is necessary to secure adequate 819\13\

17 acquisition, construction, rehabilitation and/or pennanent financing to ensure the viability of the Development, including the operation of the Development as affordable housing, as required by the Loan Documents. To satisfy this requirement, Borrower must provide to the Agency, in addition to any other infonnation reasonably required by the Agency, evidence demonstrating that the proposed amount of the Senior Lien is necessary to provide adequate acquisition, construction, rehabilitation and/or pennanent financing to ensure the viability of the Development, and adequate financing for the Development would not be available without the proposed subordination. (iv) The subordination agreement(s) must be structured to minimize the risk that the Deed oftrust and/or Regulatory Agreement would be extinguished as a result of a foreclosure by the Senior Lender or other holder of the Senior Lien. To satisfy this requirement, the subordination agreement must provide the Agency with adequate rights to cure any defaults by Borrower, including: (A) providing the Agency or its successor with copies of any notices of default at the same time and in the same manner as provided to Borrower; and (B) providing the Agency with a cure period of at least sixty (6) days to cure any default. (v) The subordination(s) described in this section may be effective only during the original term of the Senior Lien and any extension of its tenn approved in writing by the Agency. (vi) No subordination may limit the effect of the Deed of Trust and/or Regulatory Agreement before a foreclosure, nor require consent of the holder ofthe Senior Lien to exercise ofany remedies by the Agency under the Loan Documents. (vii) Upon a detennination by the Agency Executive Director that the conditions in this Section have been satisfied, the Agency Executive Director or hislher designee will be authorized to execute the approved subordination agreement without the necessity of any further action or approval. (viii) In addition, any agreement to subordinate shall comply with the requirements of Health and Safety Code Section Section 2.5 Loan Disbursement. The Agency intends to disburse the entire Loan amount at closing to be used for acquisition of the Property. The Agency shall not be obligated to make any disbursements of the Loan unless the following conditions are satisfied prior to each such disbursement of the Loan or will be satisfied concurrently with the Agency's disbursement: (i) There exists no Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement. (ii) Borrower has purchased the Property, or is purchasing the Property concurrently with the first disbursement of the Loan. (iii) Borrower has executed and delivered to the Agency the Loan Documents and the Deed of Trust, the Regulatory Agreement, and the Notice of Restrictions on Transfer of Property have been executed and recorded against the Property in the Office of the Recorder of the County of Alameda. 819\13\

18 (iv) Borrower has delivered to the Agency a copy of Borrower's organizational documents and a corporate authorizing resolution authorizing Borrower's execution of the Loan Documents and the transactions contemplated by the Loan Documents. (v) Borrower has furnished the Agency with evidence of the insurance coverage meeting the requirements of Section 4.16 below. (vi) Borrower has closed the Bond Loan or is closing the Bond Loan concurrently with the Agency Loan. (vii) A title insurer reasonably acceptable to the Agency is unconditionally and irrevocably committed to issuing an 26 LP-lO ALTA Lender's Policy of insurance insuring the priority of the Deed of Trust in the amount of the Loan, subject only to such exceptions and exclusions as may be reasonably acceptable to the Agency, and containing such endorsements as the Agency may reasonably require. (viii) The undisbursed proceeds of the Loan, together with other funds or firm commitments for funds that the Borrower has obtained in connection with the Development, are not less than the amount that the Agency determines is necessary to pay for acquisition and rehabilitation of the Development and to satisfy all of the covenants contained in this Agreement and the Regulatory Agreement. (ix) The tax credit investor has entered Borrower's Partnership and the Partnership Agreement provides for the tax credit investor to invest an amount sufficient to meet the requirements set forth in Section 1.1 (d)(iv). (x) The Agency has received a written draw request from the Borrower, including certification that the conditions set forth in Section 2.5(a) are satisfied, and setting forth the proposed uses of funds consistent with the Approved Development Budget, and the amount of funds needed. Performance. (xi) The Borrower has submitted and the Agency has approved a Schedule of Section 2.6 Repayment Schedule. The Loan shall be repaid as follows: (a) Special Repayment Following Completion of Rehabilitation. On the earlier of the Conversion Date or December 31, 21, Borrower shall repay Five Million Two Hundred Thousand Dollars ($5,2,). (b) Special Repayments from Net Proceeds of Pennanent Financing. Borrower shall make special repayments of the Agency Loan and the County HOME Loan in a total amount equal to the Net Proceeds of Permanent Financing remaining after HCD has been paid its share of the Net Proceeds of Permanent Financing pursuant to the MHP program regulations (which amount based on the current MHP program regulations is seventy-nine (79%) to HCD, thirteen percent (13%) to the Agency and eight percent (8%) to the County), which amount shall be allocated between the Agency Loan and the County HOME Loan in accordance with the Agency's and County's Lenders' Prorata Percentages. The amount of the Net Proceeds of Permanent Financing shall be determined by the Borrower and submitted to the County and Agency for approval on the date the Borrower submits the final cost audit for the 819\13\

19 Development to the California Tax Credit Allocation Committee. The amount of the Net Proceeds of Permanent Financing shall be calculated using the actual amount of the permanent Approved Financing realized by the Borrower, provided that Borrower provides sufficient evidence that the actual amount of permanent Approved Financing realized by Borrower is the maximum amount that Borrower could secure for the Development applying reasonable underwriting standards. The Borrower shall also submit to the County and Agency any additional documentation sufficient to verify the amount of the Net Proceeds of Permanent Financing. The County and Agency shall each approve or disapprove Borrower's determination of the amount of the Net Proceeds of Permanent Financing in writing within thirty (3) days of their receipt of Borrower's cost audit and supplemental documentation. If Borrower's determination is disapproved by the County or Agency, Borrower shall re-submit documentation to the County and Agency until both County and Agency approval is obtained. The County's and Agency's shares of the Net Proceeds of Permanent Financing shall be due the County and Agency from the Borrower no later than five (5) days following the date Borrower receives its final capital contribution from the Borrower's limited partner investor. As of the date of this Agreement, this final capital contribution is expected to be received on or before January 1, 211. (c) Residual Receipts Payments. Commencing on May 1, 211, and on May 1st of each calendar year thereafter through the end of the Loan Term, Borrower shall make repayments of the Loan equal to the Agency's Prorata Percentage of the Lenders' Share of Residual Receipts (all as defined in Section 2.6(f) below).. Payments made shall be credited first against accrued interest and then against outstanding principal. The Borrower shall provide the Agency with any documentation reasonably requested by the Agency to substantiate the Borrower's determination of Residual Receipts. (d) Payment in Full. All principal and accrued interest on the Loan shall be due in full on the earlier to occur of (i) the date of any Transfer not authorized by the Agency, (ii) the date of any Default, or (iii) the expiration of the Loan Term. (e) Prepayment. The Borrower shall have the right to prepay the Loan at any time without premium or penalty. However, this Agreement shall remain in effect for the entire Loan Term and the Regulatory Agreement shall remain in effect for the entire Loan Term regardless of any prepayment. Section 2.6: (f) Special Definitions. The following definitions shall apply for purposes of this (i) "Annual Operating Expenses" with respect to a particular calendar year shall mean Operating Expenses as defined in 25 California Code of Regulations Section 831(j), subject to the following: (i) a partnership management fees that shall not exceed a total of Twenty Five Thousand Dollars ($25,) per year, and only during the fifteen (15)-year compliance period as described in Section 42(i)(l) of the Internal Revenue Code of 1986, as amended); (ii) debt service payments shall only include mandatory payments on loans associated with the Development and approved by the Agency; and (iii) property management fees and reimbursements shall not exceed fees and reimbursements which are standard in the industry and shall be pursuant to a management contract approved by the Agency. of Residual Receipts. (ii) "Borrower's Share of Residual Receipts" shall mean fifty percent (5%) (iii) "Lenders' Share of Residual Receipts" shall mean fifty percent (5%) of Residual Receipts, which shall be shared among the County, the Agency and HCD to repay the County HOME Loan, the Agency Loan, and the MHP Loan 819\13\

20 (iv) "Net Proceeds of Pennanent Financing" shall mean the portion of the Approved Financing (as defined in the County HOME Loan Agreement and this Agreement) that is not required to pay the costs of acquisition and development of the Development (including but not limited to the funding of reserves). Net Proceeds of Permanent Financing, if any, shall be determined pursuant to the procedure set forth in Section 2.6(b) above. (v) "Prorata Percentages" means, at any time any determination thereof is to be made, (1) for the Agency, the percentage resulting from dividing the Agency Loan funds disbursed to the Borrower in accordance with the Agency Agreement by the sum of such Agency Loan funds, County HOME Loan funds, and MHP Loan funds disbursed to the Borrower in accordance with the applicable agreements, and (2) for the County, the percentage resulting from dividing the County HOME Loan funds disbursed to the Borrower in accordance with the County HOME Loan Agreement by the sum of such County HOME Loan funds, Agency Loan funds, and MHP Loan funds disbursed to the Borrower in accordance with the applicable agreements, and (3) for HCD, the percentage resulting from dividing the MHP Loan funds disbursed to the Borrower in accordance with the documents evidencing the MHP Loan (the "MHP Loan Documents"), over the sum of such MHP Loan funds, Agency Loan funds, and County HOME Loan funds disbursed to the Borrower in accordance with the applicable agreements. In calculating the Prorata Percentages, Agency Loan funds, County HOME Loan funds, and MHP Loan funds that have been repaid shall be deemed not to have ever been disbursed. If all Agency Loan Funds, County HOME Loan funds, and MHP Loan Funds are disbursed and repaid as anticipated, MHP's Prorata Percentage will be seventy-nine percent (79%), the Agency's Prorata Percentage will be thirteen percent (13%) and the County's Prorata Percentage will be eight percent (8%). (vi) "Residual Receipts" in a particular calendar year shall mean Operating Income (as defined in 25 California Code ofregulations Section 83 I(k)) remaining after payment of: (i) Annual Operating Expenses; (ii) reserve deposits in amounts permitted by the MHP Loan; (iii) payment of any previously unpaid portion of the developer fee due Eden Housing, Inc., (without interest), which shall not exceed a cumulative developer fee due Eden Housing, Inc., in the maximum amount set forth in this Agreement; and (vi) any extraordinary operating costs approved by the County and Agency. Section 2.7 Reports and Accounting of Residual Receipts. (a) Audited Financial Statement. In connection with the annual repayment of the Agency Loan, the Borrower shall furnish to the Agency an audited statement duly certified by an independent firm of certified public accountants approved by the Agency, setting forth in reasonable detail the computation and amount ofresidual Receipts during the preceding calendar year. (b) Books and Records. The Borrower shall keep and maintain at Borrower's office, or elsewhere with the Agency's written consent, full, complete and appropriate books, record and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail Borrower's calculation of Residual Receipts. Books, records and accounts relating to Borrower's compliance with the terms, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Agreement which provide for the calculation of Residual Receipts on a cash basis. All such books, records, and accounts shall be open to and available for inspection by the Agency, their auditors or other authorized representatives at reasonable intervals during normal business hours. Copies of all tax returns and other reports that Borrower maybe required to furnish any governmental agency shall at all reasonable times be open for inspection by the Agency at the place that the books, records and accounts of the Borrower are kept. The Borrower shall preserve records on which any statement of Residual Receipts is based for a period of not less than five (5) years after such statement is rendered, and for any period during which there is an audit undertaken pursuant to subsection (c) below then pending. 819\13\

21 (c) Agency Audits. The receipt by the Agency of any statement pursuant to subsection (a) above or any payment by Borrower or acceptance by the Agency of any loan repayment for any period shall not bind the Agency as to the correctness of such statement or such payment. Within five (5) years after the receipt of any such statement, the Agency or any designated agent or employee of the Agency at any time shall be entitled to audit the Residual Receipts and all books, records, and accounts pertaining thereto. Such audit shall be conducted during normal business hours at the principal place of business of Borrower and other places where records are kept. Immediately after the completion of an audit, the Agency shall deliver a copy of the results of such audit to Borrower. If it shall be determined as a result of such audit that there has been a deficiency in a loan repayment to the Agency, then such deficiency shall become immediately due and payable with interest at the Default Rate set forth in this Agreement, as applicable, determined as of and accruing from the date that said payment should have been made. In addition, ifborrower's auditor's statement for any calendar year shall be found to have understated Residual Receipts by more than five percent (5%) and the Agency is entitled to any additional Agency Loan repayment as a result of said understatement, then Borrower shall pay, in addition to the interest charges set forth in the preceding sentence referenced hereinabove, all of the Agency's reasonable costs and expenses connected with any audit or review of Borrower's accounts and records. Section 2.8 Non-Recourse. Except as provided below, neither the Borrower nor any partner of the Borrower shall have any direct or indirect personal liability for payment of the principal of, or interest on, the Loan or the performance of the covenants of the Borrower under the Deed of Trust. The sole recourse of the Agency with respect to the principal of, or interest on, the Note and defaults by Borrower in the performance of its covenants under the Deed oftrust shall be to the Property described in the Deed oftrust; provided, however, that nothing contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against all such security for the Note of all the rights and remedies of the Agency thereunder, or (b) be deemed in any way to impair the right of the Agency to assert the unpaid principal amount of the Note as demand for money within the meaning and intendment of Section of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Note and the performance of the Borrower's obligations under the Deed of Trust, except as hereafter set forth; nothing contained herein is intended to relieve the Borrower of its obligation to indemnify the Agency under Sections 3.8, 3.11,4.6 and 8.4 of this Agreement or liability for (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the Deed oftrust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value of any personal property or fixtures removed or disposed of by Borrower other than in accordance with the Deed of Trust; and (iv) the misappropriation of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Property. 819\13\

22 ARTICLE 3. REHABILITATION OF THE DEVELOPMENT Section 3.1 Permits and Approvals. All permits and approvals necessary for the rehabilitation of the Improvements on the Property and the construction of the new community room must be received no later than February 6, 29, or the Agency, at its option, and with thirty (3) days' prior written notice to the Borrower and opportunity to cure, may declare Borrower in default hereunder. Section 3.2 Approved Scope of Rehabilitation and Community Building Construction Work. As of the date of this Agreement, the Agency has approved the Approved Scope of Rehabilitation and Community Building Construction Work, attached hereto as Exhibit C. Borrower shall submit any proposed amendments to the Approved Scope of Rehabilitation and Community Building Construction Work to the Agency for approval. Written consent of the Agency shah be required to amend the Approved Scope of Rehabilitation and Community Building Construction Work. Section 3.3 Construction Contract. (a) Not later than February 16, 29, the Borrower shall submit to the Agency for its approval the proposed construction contract for the community building and rehabilitation of the Improvements. All rehabilitation work and professional services shall be performed by persons or entities licensed or otherwise authorized to perform the applicable rehabilitation work or service in the State of California. The Agency's approval of the construction contract shall in no way be deemed to constitute approval of or concurrence with any term or condition of the construction contract except as such term or condition may be required by this Agreement. (b) Upon receipt by the Agency of the proposed construction contract, the Agency shall promptly review same and approve or disapprove it within ten (1) working days. If the construction contract is not approved by the Agency, the Agency shall set forth in writing and notify the Borrower of the Agency's reasons for withholding such approval. The Borrower shall thereafter submit a revised construction contract for Agency approval, which approval shall be granted or denied in five (5) working days in accordance with the procedures set forth above. Any construction contract executed by the Borrower for the Development shall be in the form approved by the Agency. The Agency acknowledges that the Borrower has satisfied the requirements of this Section 3.3. Section 3.4 Construction Bonds. Prior to commencement of rehabilitation of the Development, the Borrower shall deliver to the Agency copies oflabor and material bonds and performance bonds for the rehabilitation of the Development in an amount equal to one hundred percent (1%) of the scheduled cost of the Development. Such bonds shall name the Agency as a co-obligee. Section 3.5 Commencement of Rehabilitation. Borrower shall commence rehabilitation of the Development no later than March 1, 29. Section 3.6 Completion of Rehabilitation. Borrower shall diligently prosecute rehabilitation of the Development to completion and shall cause the completion of the rehabilitation of the Development (including construction of the new 819\ 13\

23 community room) no later than January 31, 21, and the completion of the Community Building no later than March 3, 21, as set forth in the approved Schedule of Performance. On the Conversion Date, Borrower shall provide the Agency with a re-write ofthe 26 LP-l ALTA Lender's Policy in the amount of the Loan. Section 3.7 Rehabilitation Pursuant to Plans and Laws. (a) Borrower shall rehabilitate the Development in conformance with Approved Scope ofrehabilitation Work, attached to this Agreement as Exhibit C. Except as provided in this Section 3.7, Borrower shall notify the Agency in a timely manner of any changes in the work required to be performed under this Agreement, including any additions, changes, or deletions to the plans and specifications approved by the Agency. A written change order authorized by the Agency must be obtained before any of the following changes, additions, or deletions in work for the Development may be performed: (i) any change in the work the cost of which exceeds Twenty-Five Thousand Dollars ($25,); or (ii) any set of changes in the work the cost of which cumulatively exceeds Seventy-Five Thousand Dollars ($75,) or ten percent (1%) of the loan amount, whichever is less; or (iii) any material change in building materials or equipment, specifications, or the structural or architectural design or appearance ofthe Development as provided for in the plans and specifications approved by the Agency. Consent to any additions, changes, or deletions to the work shall not relieve or release Borrower from any other obligations under this Agreement, or relieve or release Borrower or its surety from any surety bond. Agency shall utilize best efforts to approve or disapprove change orders within five (5) working days ofreceipt of a request for approval.borrower shall cause all work performed in connection with the Development to be performed in compliance with (i) all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or that may be enacted hereafter, including (without limitation and where applicable) the prevailing wage and other requirements of Sections 177 et!g., ofthe California Labor Code and implementing rules and regulations, and (ii) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction. The work shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, and Borrower shall be responsible to the Agency for the procurement and maintenance thereof, as may be required of Borrower and all entities engaged in work on the Development. (c) Although this Agreement has been prepared with the intention that the Agency assistance under this Agreement meets the exceptions set forth in Labor Code Sections 172(c)(6)(E) and 172(c)(4) to the general requirement that state prevailing wages be paid in connection with construction work that is paid for in whole or in part out of public funds, Borrower shall pay prevailing wages in connection with the construction work as is required by Borrower's receipt ofthe MHP Loan, and Borrower shall also pay Davis Bacon wages as is required by Borrower's receipt of the HOME loan and the Section 8 HAP contract. Borrower shall comply with any laws related to construction wages required by the Approved Financing, if and to the extent applicable to the Development. (d) The Borrower shall defend (with counsel reasonably acceptable to the Agency) the Agency against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including the Borrower, its contractor and subcontractors) to pay prevailing wages as determined pursuant to Labor Code Sections 172 et!g., and implementing regulations of the Department of Industrial Relations or comply with the other applicable provisions of Labor Code Sections 172 ~!g., to employ apprentices pursuant to Labor Code Sections ~!g., and implementing regulations of the Department of Industrial Relations in connection with the rehabilitation, pursuant to this Agreement, of the Development or any other work undertaken or in connection with the Property and shall indemnify and hold the Agency harmless against any damages, compensation, fines, penalties or other amounts resulting from the successful prosecution of such claim. 819\13\

24 This Section 3.7(d) shall survive the repayment of the Loan, the reconveyance ofthe Deed oftrust and the expiration of the Loan Term. Section 3.8 Income Certifications. (a) Promptly following Borrower's acquisition of the Property, Borrower shall diligently take reasonable steps to obtain income and rent certification from all existing residents of the Development and Borrower shall verify resident incomes and provide a report of this information to the Agency within sixty (6) days of this Agreement. In the event that the Borrower is unable to obtain income and rent certification from an existing resident, the Borrower shall include in the report the name and available contact information for such existing resident, and the Borrower shall document in the report the reasonable steps the Borrower performed in attempting to obtain the income and rent certification from the existing resident. Section 3.9 Management and Marketing Plan. (a) No later than sixty (6) days following Borrower's acquisition of the Property, Borrower shall submit to the Agency for approval its plan for marketing the Development to income eligible households as required pursuant to the Regulatory Agreement, including information on affirmative marketing efforts and compliance with fair housing laws. (b) Upon receipt of the Marketing Plan, the Agency shall promptly review the Marketing Plan and shall approve or disapprove it within thirty (3) days after submission. If the Marketing Plan is not approved, Borrower shall submit a revised Marketing Plan within thirty (3) days. If the Agency does not approve the revised Marketing Plan because Borrower fails to make specific revisions requested by the Agency, Borrower shall be in default hereunder. Section 3.1 Relocation. If and to the extent that acquisition and rehabilitation of the Development results in the permanent or temporary displacement ofresidential tenants, homeowners, or businesses, then Borrower shall comply with all applicable local, state, and federal statutes and regulations, (including without limitation California Government Code Section 726 et ~., and accompanying regulations) with respect to relocation planning, advisory assistance, and payment of monetary benefits. Borrower shall be solely responsible for payment of any relocation benefits to any displaced persons and any other obligations associated with complying with such relocation laws. As of the date of this Agreement, the Agency and Borrower have approved a Relocation Plan. (b) The Borrower shall defend (with counsel reasonably acceptable to the Agency), the Agency against any claim for damages, compensation, fines, penalties, relocation payments or other amounts arising out of the failure or alleged failure of any person or entity (including the Borrower or Agency) to satisfy relocation obligations related to the acquisition and rehabilitation of the Development. This Section 3.1 shall survive the repayment of the Loan, the reconveyance of the Deed of Trust and the expiration of the Loan Term. Section 3.11 Equal Opportunity. During the rehabilitation of the Development there shall be no discrimination on the basis ofrace, color, creed, religion, age, sex, sexual orientation, marital status, national origin, ancestry, or disability in the hiring, firing, promoting, or demoting of any person engaged in the rehabilitation work. 819\13\

25 Section 3.12 Progress Reports. Until such time as Borrower has completed rehabilitation of the Property, as evidenced by a building permit sign-off by the County building inspector, Borrower shall provide the Agency with quarterly progress reports regarding the status of the rehabilitation of the Development, including a certification that the actual rehabilitation costs to date conform to the Approved Development Budget, as it may be amended from time to time pursuant to Section 3.16 below. Section 3.13 Rehabilitation Responsibilities. (a) It shall be the responsibility of Borrower to coordinate and schedule the work to be performed so that commencement and completion of rehabilitation will take place in accordance with this Agreement. (b) Borrower shall be solely responsible for all aspects of Borrower's conduct in connection with the Development, including (but not limited to) the quality and suitability of the plans and specifications, the supervision of rehabilitation work, and the qualifications, financial condition, and performance of all architects, engineers, contractors, subcontractors, suppliers, consultants, and property managers. Any review or inspection undertaken by the Agency with reference to the Development is solely for the purpose of determining whether Borrower is properly discharging its obligations to the Agency, and should not be relied upon by Borrower or by any third parties as a warranty or representation by the Agency as to the quality of the design or rehabilitation ofthe Development. Section 3.14 Mechanics Liens, Stop Notices, and Notices of Completion. (a) If any claim of lien is filed against the Property or a stop notice affecting the Loan is served on the Agency or any other lender or other third party in connection with the Development, then Borrower shall, within twenty (2) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the Agency a surety bond in sufficient form and amount, or provide the Agency with other assurance satisfactory to the Agency that the claim of lien or stop notice will be paid or discharged. (b) If Borrower fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Section, then in addition to any other right or remedy, the Agency may (but shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at Borrower's expense. Alternately, the Agency may require Borrower to immediately deposit with the Agency the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. The Agency may use such deposit to satisfy any claim or lien that is adversely determined against Borrower. (c) Borrower shall file a valid notice of cessation or notice of completion upon cessation of rehabilitation on the Development for a continuous period of thirty (3) days or more, and take all other reasonable steps to forestall the assertion of claims of lien against the Property. Borrower authorizes the Agency, but without any obligation, to record any notices of completion or cessation of labor, or any other notice that the Agency deems necessary or desirable to protect its interest in the Development and Property. 819\13\

26 Section 3.15 Inspections. Borrower shall permit and facilitate, and shall require its contractors to permit and facilitate, observation and inspection at the Development by the Agency and by public authorities during reasonable business hours for the purposes of determining compliance with this Agreement. Section 3.16 Approved Development Budget; Revisions to Budget. As ofthe date of this Agreement, the Agency has approved the Approved Development Budget set forth in Exhibit B. Except as provided in Section 3.8, Borrower shall submit any required amendments to the Approved Development Budget to the Agency for approval within fifteen (15) days of the date Borrower receives information indicating that actual costs of the Development vary or will vary from the costs shown on the Approved Development Budget. Written consent of the Agency shall be required to amend the Approved Development Budget. Agency shall utilize best efforts to approve or disapprove requested amendments to the Development Budget within five (5) working days of receipt of a request for approval. Section 3.17.Developer Fee. In no event shall developer fees paid to any entity for development services rendered, including administrative fees and costs in connection with the Development and deferred developer fees exceed Two Million Five Hundred Thousand Dollars ($2,5,) as further shown in the Approved Development Budget attached hereto as Exhibit B. A minimum of One Million Six Hundred Seventy Thousand Three Hundred Ten Dollars ($1,67,31) of the developer fee shall be deferred and paid from project operating revenue; provided, however, if the Approved Development Budget is amended pursuant to Section 3.16 above to add additional sources of funds obtained for the acquisition and rehabilitation of the Development, deferred developer fee may be reduced by the amount of additional funds. Section 3.18 Conversion of Bond Loan; Close of MHP Loan. Borrower shall cause the Bond Loan to be converted from a construction loan to a permanent loan in the approximate amount of Eleven Million Seven Hundred Seventy-Nine Thousand Eight Hundred Dollars ($11,779,8) no later than December 31, (b) The Borrower shall cause the MHP Loan to close no later than December 31, Section 3.19 Section 8 HAP Contract. Borrower shall execute a Section 8 HAP Contract for twenty (2) years of proj ect based Section 8 assistance for one hundred (1%) percent of the Units in the Development no later than April 3,29. Borrower shall submit a copy of the Section 8 HAP Contract no later than April 3, 29. ARTICLE 4. LOAN REQUIREMENTS Section 4.1 Applicability. The Borrower shall comply with this Article Four throughout the Loan Term. 819\13\

27 Section 4.2 Financial Accountings and Post-Completion Audits. No later than sixty (6) days following completion of rehabilitation of the Development, Borrower shall provide to Agency an initial estimated unaudited financial accounting of all sources and uses of funds for the Development. No later than one hundred fifty (15) days following completion of rehabilitation of the Development, Borrower shall submit an audited financial report showing the sources and uses of all funds utilized for the Development. Section 4.3 Information. Borrower shall provide any information reasonably requested by the Agency in connection with the Development. Section 4.4 Records. (b) Borrower shall maintain complete, accurate, and current records pertaining to the Development for a period of five (5) years after the creation of such records, and shall permit any duly authorized representative of the Agency to inspect and copy records. Such records shall include all invoices, receipts, and other documents related to expenditures from the Loan funds. Records must be kept accurate and current. (b) The Agency shall notify Borrower of any records it deems insufficient. Borrower shall have twenty-one (21) calendar days after the receipt of such a notice to correct any deficiency in the records specified by the Agency in such notice, or if a period longer than twenty-one (21) days is reasonably necessary to correct the deficiency, then Borrower shall begin to correct the deficiency within twenty-one (21) days and correct the deficiency as soon as reasonably possible. Section 4.5 Audits. (i) Borrower shall make available for examination at reasonable intervals and during normal business hours to Agency all books, accounts, reports, files, and other papers or property with respect to all matters covered by this Agreement, and shall permit Agency to audit, examine, and make excerpts or transcripts from such records. The Agency may make audits ofany conditions relating to this Agreement. Section 4.6 Hazardous Materials. (a) Borrower shah keep and maintain the Property in compliance with, and shah not cause or permit the Property to be in violation ofany federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Borrower shall not use, generate, manufacture, store or dispose ofon, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of "hazardous substances," hazardous wastes," "hazardous materials," or "toxic substances" under any applicable federal or state laws or regulations (collectively referred to hereinafter as "Hazardous Materials") except such of the foregoing as may be customarily used in rehabilitation of projects like the Development or kept and used in and about residential property of this type. (b) Borrower shall immediately advise the Agency in writing if at any time it receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Borrower or the Property pursuant to any 819\13\

28 applicable federal, state or local laws, ordin<;mces, or regulations relating to any Hazardous Materials, ("Hazardous Materials Law"); (ii) all claims made or threatened by any third party against Borrower or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as "Hazardous Materials Claims"); and (iii) Borrower's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be classified as "border-zone property" under the provision of California Health and Safety Code, Sections 2522 ~ ~., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law. (c) The Agency shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by Borrower. Borrower shall indemnify and hold harmless the City and the Agency and their councilmembers, boardmembers, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Property including without limitation: (i) all foreseeable consequential damages; (ii) the costs ofany required or necessary repair, cleanup or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans; and (iii) all reasonable costs and expenses incurred by the Agency in connection with clauses (i) and (ii), including but not limited to reasonable attorneys' fees. This obligation to indemnify shall survive termination of this Agreement. (d) Without the Agency's prior written consent, which shall not be umeasonably withheld, Borrower shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in the Agency's reasonable judgment, impair the value of the Agency's security hereunder; provided, however, that the Agency's prior consent shall not be necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain the Agency's consent before taking such action, provided that in such event Borrower shall notify the Agency as soon as practicable of any action so taken. The Agency agrees not to withhold its consent, where such consent is required hereunder, if either (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) Borrower will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) Borrower establishes to the reasonable satisfaction of the Agency that there is no reasonable alternative to such remedial action which would result in less impairment of the Agency's security hereunder; or (iv) the action has been agreed to by the Agency. (e) Borrower hereby acknowledges and agrees that (i) this Section is intended as the Agency's written request for information (and Borrower's response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5, and (ii) each representation and warranty in this Agreement (together with any indemnity obligation applicable to a breach of any such representation and warranty) with respect to the environmental condition of the Property is intended by the Parties to be an "environmental provision" for purposes ofcalifornia Code of Civil Procedure Section 736. (f) In the event that any portion of the Property is determined to be "environmentally impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3» or to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(1), then, 819\13\

29 without otherwise limiting or in any way affecting the Agency's or the trustee's rights and remedies under the Deed oftrust, the Agency may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such environmentally impaired or affected portion of the Property and (2) exercise (a) the rights and remedies ofan unsecured creditor, including reduction of its claim against the borrower to judgment, and (b) judgment, and (c) any other rights and remedies permitted by law. For purposes of determining the Agency's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Borrower shall be deemed to have willfully permitted or acquiesced in a release or threatened release of hazardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release ofhazardous materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Property and the Borrower knew or should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred by the Agency in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the lesser often percent (1%) or the maximum rate permitted by law, until paid, shall be added to the indebtedness secured by the Deed of Trust and shall be due and payable to the Agency upon its demand made at any time following the conclusion of such action. Section 4.7 Maintenance and Damage. (a) During the course of both rehabilitation and operation of the Development, Borrower shall maintain the Development and the Property in good repair and in a neat, clean and orderly condition. If there arises a condition in contravention of this requirement, and if Borrower has not cured such condition within thirty (3) days after receiving Agency notice of such a condition, then in addition to any other rights available to the Agency, the Agency shall have the right to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property. (b) Subject to the requirements of senior lenders, and if economically feasible in the Agency's reasonable judgment, if any improvement now or in the future on the Property is damaged or destroyed, then Borrower shall, at its cost and expense, diligently undertake to repair or restore such improvement consistent with the plans and specifications approved by the Agency with such changes as have been approved by the Agency. Such work or repair shall be commenced no later than the later of one hundred twenty (12) days after the damage or loss occurs or thirty (3) days following receipt of the insurance proceeds, and shall be complete within one (1) year thereafter (or such longer period for the commencement and completion as may be extended by the Agency in its reasonable discretion). Any insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, then Borrower shall make up the deficiency. Section 4.8 Fees and Taxes. Borrower shall be solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property or the Development to the extent owned by Borrower, and shall pay such charges prior to delinquency. However, Borrower shall not be required to pay and discharge any such charge so long as (a) the legality thereof is being contested diligently and in good faith and by appropriate proceedings, and (b) if requested by the Agency, Borrower deposits with the Agency any funds or other forms of assurance that the Agency in good faith from time to time determines appropriate to protect the Agency from the consequences of the contest being unsuccessful. 819\13\

30 Section 4.9 Notice of Litigation. Borrower shall promptly notify the Agency in writing of any litigation materially affecting Borrower or the Property and of any claims or disputes that involve a material risk of such litigation. Section 4.1 Operation of Development as Affordable Housing. Upon the execution of this Agreement or the recordation of the Regulatory Agreement, whichever is later, the Borrower shall continuously operate and maintain the Development as multifamily housing rented to occupants and at rent levels in conformity with the Regulatory Agreement. Section 4.11 Nondiscrimination. The Borrower covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation ofa person or of a group of persons on account of race, color, religion, creed, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Borrower or any person claiming under or through the Borrower establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of residents, lessees, subtenants, sublessees or vendees in the Property. The foregoing covenant shall run with the land. Notwithstanding the above, with respect to familial status, the above should not be construed to apply to housing for older persons as defined in Section ofthe Government Code and other applicable sections of the Civil Code identified in Health and Safety Code Section 335(b). Section 4.12 Annual Operating Budget. At least sixty (6) days before the end of the Borrower's fiscal year, the Borrower shall furnish to the Agency an Annual Operating Budget. Upon receipt by the Agency of the proposed Annual Operating Budget, the Agency shall promptly review the same and approve or disapprove it within ten (1) working days. If the Annual Operating Budget is not approved by the Agency, the Agency shall set forth in writing and notify the Borrower of the Agency's reasons for withholding such approval. The Borrower shall thereafter submit a revised Annual Operating Budget for Agency approval, which approval shall be granted or denied within five (5) working days in accordance with procedures set forth above. The Approved Operating Budget for the first (1 51 ) year of operation of the Development following completion of rehabilitation is attached hereto as Exhibit D, and shall be updated annually in accordance with this Section Section 4.13 Creation ofreserve Funds. Borrower agrees to create and maintain three reserves: (i) an Operating Reserve with an initial capitalization of Four Hundred Sixty-One Thousand Eight Hundred Nineteen Dollars ($461,819), (ii) a Replacement Reserve with an initial capitalization of Two Hundred Eighty-Four Thousand Dollars ($284,) to use for emergency repairs, and (iii) a Resident Services Reserve with an initial capitalization oftwo Hundred Thousand Dollars ($2,). The reserves required under this Section 4.13 shall be capitalized no later than the Conversion Date. Section 4.14 Approval of Use of Reserves. Prior to the use of funds from the Operating Reserve, the Replacement Reserve, or the Resident Services Reserve, the Borrower must submit a written request to withdraw funds from the reserve account. The written request shall specify the amount requested and state how the funds will be used. 819\13\

31 The Agency shall approve such request within thirty (3) days ofreceipt of the written request for use of reserves; such request shall not be unreasonably withheld. Section 4.15 Mandatory Language in all Subsequent Deeds, Leases and Contracts. All deeds, leases or contracts made or entered into by the Borrower, its successors or assigns, as to any portion of the Development shall contain therein the following language: (a) In Deeds: "(1) Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) and (d) of Section of the Government Code, as those bases are defined in Sections 12926, , subdivision (m) and paragraph (1) of subdivision (p) of Section and Section of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed, nor shall the grantee or any person claiming under or through the grantee, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of residents, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land. (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (I) shall not be construed to apply to housing for older persons, as defined in Section of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.1, 51.11, and of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 136 of the Civil Code and subdivisions (n), (), and (P) of Section of the Government Code shall apply to paragraph (1)." (b) In Leases: "(1) Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) and (d) of Section of the Government Code, as those bases are defined in Sections 12926, , subdivision (m) and paragraph (1) of subdivision (p) of Section and Section of the Government Code in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee or any person claiming under or through the lessee, establish or permit any such practice or practices ofdiscrimination or segregation with reference to the selection, location, number, use or occupancy of residents, lessees, sublessees, subtenants, or vendees in the premises herein leased. (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 23

32 51.1, 51.11, and of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 136 of the Civil Code and subdivisions (n), (), and (p) of Section of the Government Code shall apply to paragraph (1)." (c) In Contracts: "(1) There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) and (d) of Section of the Government Code, as those bases are defined in Sections 12926, , subdivision (m) and paragraph (1) of subdivision (p) of Section and Section of the Government Code in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of residents, lessees, subtenants, sublessees or vendees of the land. (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3,51.4, 51.1,51.11, and of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 136 of the Civil Code and subdivisions (n), (), and (p) of Section of the Government Code shall apply to paragraph (1)." Section 4.16 Insurance Requirements. The Borrower shall maintain the following insurance coverage throughout the Agreement Term: (a) Worker's Compensation insurance, including Employer's Liability coverage, with limits not less than One Million Dollars ($1,,) each accident. (b) Comprehensive General Liability insurance with limits not less than One Million Dollars ($1,,) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for Contractual Liability, Personal Injury, Broad Form Property Damage, Products and Completed Operations. Products and Completed Operations coverage shall be obtained no later than completion of construction of the Development. (c) Comprehensive Automobile Liability insurance with limits not less than Two Million Dollars ($2,,) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for owned, non-owned and hired vehicles, as applicable; provided, however, that if the Borrower does not own or lease vehicles for purposes of this Agreement, then no automobile insurance shall be required and both parties to this Agreement shall initial this provision signifying same. (d) Property insurance covering the Development and covering all risks of loss, including earthquake (but only if it is commercially affordable at a reasonable price and with a reasonable deductible) and flood (if in a flood zone), and covering all appropriate risks arising from or related to the rehabilitation, for one hundred percent (1%) of the replacement value of the Development, with 819\13\

33 deductible, if any, acceptable to the Agency, naming the Agency as a Loss Payee, as its interest may appear. (e) The Borrower shall cause any general contractor, demolition contractor, or agent working on the Development under direct contract with the Borrower to maintain insurance of the types and in at least the minimum amounts described in subsections (a) through (d) above, and shall require that such insurance shall meet all of the general requirements of subsections (f), (g) and (h) below. Subcontractors working on the Development under indirect contract with the Borrower shall be required to maintain the insurance described in subsections (a), (b) and (c) above, except that the limit for the insurance described in subsection (b) may be One Million Dollars ($1,,). Liability and Comprehensive Automobile Liability insurance to be maintained by such contractors and agents pursuant to this subsection shall name as additional insureds the Agency, its boardmembers, officers, agents, and employees, as well as the City. (f) The required insurance shall be provided under an occurrence form, and the Borrower shall maintain such coverage continuously throughout the Agreement Term. Should any of the required insurance be provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs be included in such annual aggregate limit, such annual aggregate limit shall be three times the occurrence limits specified above. (g) Comprehensive General Liability, Comprehensive Automobile Liability and Property insurance policies (including builders' risk) shall be endorsed to name as an additional insured the City, the Agency, and their officers, agents, employees and members of the City Council and Agency Board. (h) All policies and bonds shall contain (i) the agreement of the insurer to give the Agency at least thirty (3) days' notice prior to cancellation (including, without limitation, for nonpayment of premium) or any material change in said policies; (ii) an agreement that such policies are primary and non contributing with any insurance that may be carried by the Agency; (iii) a provision that no act or omission of the Borrower shall affect or limit the obligation of the insurance carrier to pay the amount of any loss sustained; and (iv) a waiver by the insurer of all rights of subrogation against the Agency and its authorized parties in connection with any loss or damage thereby insured against. (i) Upon the Agency's request at any time during the term of this Agreement, the Borrower shall provide certificates of insurance, in fonn and with insurers reasonable acceptable to the Agency, evidencing compliance with the requirements of this Section, and shall provide complete copies of such insurance policies, including a separate endorsement naming thc Agency as additional insured. ARTICLE 5. ASSIGNMENT AND TRANSFERS Section 5.1 Definitions. For purposes of this Agreement, "Transfer" shall mean any sale, assignment or transfer, whether voluntary or involuntary, of (i) any rights and/or duties under this Agreement, and/or (ii) any interest in the Development, including (but not limited to) a fee simple interest, or an interest evidenced by a land contract by which possession of the Development is transferred and Borrower retains title. 819\13\

34 Section 5.2 Purpose of Restrictions on Transfer. This Agreement is entered into solely for the purpose of the Borrower's rehabilitation and operation of the Development in accordance with the terms of this Agreement and the Regulatory Agreement. The qualifications and identity of the Borrower are of particular concern to the Agency, in view of: community; (a) The importance of the development ofthe Property to the general welfare of the (b) The public aids that have been made available by law and by the government for the purpose of making such development possible; (c) The reliance by the Agency upon the unique qualifications and ability of the Borrower to serve as the catalyst for development of the Property and upon the continuing interest which the Borrower will have in the Property to assure the quality of the use, operation, and maintenance deemed critical by the Agency in the development of the Property; (d) 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 Borrower or the degree thereof, is for practical purposes a transfer or disposition of the Property; and (e) The importance to the Agency of the standards of use, operation, and maintenance of the Property. It is because of the qualifications and identity of the Borrower that the Agency is entering into this Agreement and that Transfers are permitted only as provided in this Agreement. Section 5.3 Prohibited Transfers. The limitations on Transfers set forth in this Article Five shall apply throughout the Agreement Term. Except as expressly permftted in this Agreement, the Borrower 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 the Agency, which consent the Agency may withhold at its sole discretion. Any Transfer made in contravention of this Section 5.3 shall at the Agency's discretion be void and shall be deemed to be a default under this Agreement, whether or not the Borrower knew of or participated in such Transfer. The loan shall automatically accelerate and be due in full upon any unauthorized Transfer. Section 5.4 Permitted Transfers Without Prior Agency Approval. The term "Transfer" shall exclude the leasing of any single Unit in the Development to an occupant in compliance with the Regulatory Agreement. Section 5.5 Permitted Transfers With Prior Approval. (a) Except as permitted under Section 5.4, any Transfer shall be permitted only after (i) the Agency has delivered to the Borrower its prior written approval of such Transfer, which approval may not be unreasonably withheld, and (ii) the transferee has assumed the Borrower's obligations under 819\13\

35 this Agreement by signing this Agreement or such other reasonable documentation as the Agency may require. (b) Following completion of rehabilitation of the Improvements, the Agency shall not unreasonably withhold its consent to a proposed Transfer, providedfthat the Agency reasonably determines that the proposed transferee is qualified to operate the Development in compliance with the Regulatory Agreement including meeting the following requirements: (i) the proposed transferee has at least five (5) years experience operating multifamily rental housing developments comparable to the Development; (ii) the proposed transferee has no record of loan defaults, maintenance problems, housing or building code violations, or substantiated fair housing complaints at properties it has owned or operated; and (iii) the proposed transferee has satisfactory credit. (c) The Agency hereby approves the sale of the limited partnership interests in the Borrower, provided that: (i) the amended partnership agreement of Borrower provides for capital contributions of the general and limited partners in the minimum amount shown in Section 1.1 (d)(iv) and (v) above or such increased amount as is necessary for project feasibility; and (ii) all documents associated with the low-income housing tax credit syndication of the Development are submitted to the Agency for approval prior to execution, which approval shall not be unreasonably withheld. In the event the general partner Borrower is removed by the limited partner of Borrower for cause following default under the Borrower's partnership agreement, the Agency hereby approves the transfer of the general partner interest to a 5 I(c)(3) tax-exempt nonprofit public benefit corporation that is selected by the limited partner and approved in advance and in writing by the Agency, which approval shall not be unreasonably withheld. (d) The Agency also hereby approves future Transfers of limited partner interests provided that: (i) such Transfers do not affect the timing and amount of the limited partner capital contributions provided for in the amended partnership agreement approved by the Agency; and (ii) in such Transfers, Merritt Community Capital Corporation, a California nonprofit public benefit corporation, or an affiliate thereof retains a membership or partnership interest and serves as a managing member or managing general partner of the successor limited partner. (e) The Agency also hereby approves Transfer of the Property from the Borrower to Eden Housing, Inc., or a nonprofit affiliate of Eden Housing, Inc., and an assumption of the Loan by such transferee, provided that (i) the transferee expressly assumes the obligations of the Borrower under the Loan Documents, utilizing a form of assignment and assumption agreement to be provided by the Agency, and (ii) all funds maintained in the Operating Reserve and the Replacement Reserve are transferred to the transferee with the Development and continue to be reserved solely to pay operating costs or replacement costs of the Development. 819\13\

36 ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF BORROWER Section 6.1 Representations and Warranties. Borrower hereby represents and warrants to the Agency as follows: (a) Organization. Borrower is duly organized, validly existing California limited partnership and is in good standing under the laws of the State of California and has the power and authority to own its property and carry on its business as now being conducted. (b) Authority of Borrower. Borrower has full power and authority to execute and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute and deliver the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above. (c) Authority of Persons Executing Documents. This Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered by the Borrower, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of Borrower, and all actions required under Borrower's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken (to the extent such actions are required as of the date of execution and delivery of the above-named documents). (d) Valid Binding Agreements. This Agreement and the Loan Documents and all other documents or instruments which have been executed and delivered by the Borrower pursuant to or in connection with this Agreement constitute or, ifnot yet executed or delivered, will when so executed and delivered constitute, legal, valid and binding obligations of Borrower enforceable by and against it in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting the rights of creditors generally and general principles of equity. (e) No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement and the Loan Documents by the Borrower or of any other documents or instruments executed and delivered, or to be executed or delivered by the Borrower, pursuant to this Agreement, nor the performance by the Borrower of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on Borrower, or any provision of the organizational documents of Borrower, or will conflict with or constitute a breach of or a default under any agreement to which Borrower is a party, or will result in the creation or imposition of any lien upon any assets or property of Borrower, other than liens established pursuant hereto. (f) Compliance With Laws; Consents and Approvals. The rehabilitation of the Development will comply with all applicable laws, ordinances, rules and regulations offederal, state and local governments and agencies and with all applicable directions, rules and regulations of the fire marshal, health officer, building inspector and other officers of any such government or agency. (g) Pending Proceedings. Borrower is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, 819\13\

37 suits or proceedings pending or, to the knowledge of Borrower, threatened against or affecting Borrower, Borrower's general partners, or the Development, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to Borrower, materially and adversely affect Borrower's ability to repay the Loan or impair the security to be given to the Agency pursuant hereto. (h) Title to Land. At the time of recordation of the Deed of Trust, Borrower will have good and marketable fee title to the Development and there will exist thereon or with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other than those liens or encumbrances approved by the Agency or described in Section 1.1 (e) of this Agreement, liens for current real property taxes and assessments not yet due and payable, and liens in favor of the Agency or approved in writing by the Agency. (i) Financial Statements. The financial statements of Borrower and other financial data and information furnished by Borrower to the Agency fairly present the information contained therein. As of the date of this Agreement, there has not been any adverse, material change in the financial condition of Borrower from that shown by such financial statements and other data and information. (j) Sufficient Funds. Borrower holds sufficient funds and/or binding commitments for sufficient funds to complete the acquisition of the Development and the rehabilitation of Development in accordance with the plans and specifications approved by the Agency. ARTICLE 7. DEFAULT AND REMEDIES Section 7.1 Events of Default. Each of the following shall constitute a "Default" by Borrower under this Agreement: (a) Failure to Rehabilitate. Failure of Borrower to commence and complete rehabilitation of the Development within the times set forth in Article 3 above, subject to a thirty (3)-day cure period; (b) Failure to Make Payment. Failure to repay the principal and any interest on the Loan that is due and payable to the Agency pursuant to the Loan Documents, subject to a thirty (3)-day cure period after notice thereof. (c) Breach of Covenants. Failure by Borrower to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the Loan Documents, and such failure having continued uncured for thirty (3) days after receipt of written notice thereof by Borrower from Agency or, if the breach cannot be cured within thirty (3) days, Borrower shall not be in breach so long as Borrower is diligently undertaking to cure such breach and such breach is cured within ninety (9) days or such longer period as the Agency may at its sole discretion approve in writing; provided, however, that if a different period or notice requirement is specified under any other section of this Article 7, the specific provisions shall control. (d) Default Under Other Loans. Failure to make any payment or perform any of Borrower's covenants, agreements, or obligations under the documents evidencing and securing the Approved Financing following expiration of all applicable notice and cure periods. 819\13\

38 (e) Insolvency. A court having jurisdiction shall have made or entered any decree or order (i) adjudging Borrower or Borrower's general partner to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of Borrower or Borrower's general partner or seeking any arrangement for Borrower or Borrower's general partner under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of Borrower or Borrower's general partner in bankruptcy or insolvency or for any of their properties, or (iv) directing the winding up or liquidation of Borrower or Borrower's general partner, if any such decree or order described in clauses (i) to (iv), inclusive, shall have continued unstayed or undischarged for a period of ninety (9) days; or Borrower or Borrower's general partner shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the events of Default in this paragraph shah act to accelerate automatically, without the need for any action by the Agency, the indebtedness evidenced by the Note. (t) Assignment; Attachment. Borrower or Borrower's general partner shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within ninety (9) days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the Agency, the indebtedness evidenced by the Note. (g) Suspension; Tennination. Borrower or Borrower's general partner shall have voluntarily suspended its business or, Borrower or Borrower's general partner has dissolved or tenninated. (h) Liens on Property and the Proj ect. There shall be filed any claim of lien (other than liens approved in writing by the Agency) against the Development or any part thereof, or any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds of the Loan and the continued maintenance of said claim of lien or notice to withhold for a period of twenty (2) days without discharge or satisfaction thereof or provision thereof (including, without limitation, the posting of bonds) satisfactory to the Agency. (i) Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Property and the Development, except that condemnation by the City or Agency shall cause the Loan to accelerate but shall not be a Default. (j) Unauthorized Transfer. Any Transfer other than as pennitted by Article 5. (k) Representation or Warranty Incorrect. Any Borrower representation or warranty contained in this Agreement, or in any application, financial statement, certificate, or report submitted to the Agency in connection with any of the Loan Documents, proving to have been incorrect in any material and adverse respect when made. Section 7.2 Remedies. The occurrence of any Default hereunder following the expiration of all applicable notice and cure periods will, either at the option of the Agency or automatically where so specified, relieve the Agency of any obligation to make or continue the Loan and shall give the Agency the right to proceed with any and all remedies set forth in this Agreement and the Loan Documents, including but not limited to the following: 819\13\

39 (a) Acceleration of Note. The Agency shall have the right to cause all indebtedness of the Borrower to the Agency under this Agreement and the Note, together with any accrued interest thereon, to become immediately due and payable. The Borrower waives all right to presentment, demand, protest or notice of protest or dishonor. The Agency may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the Agency as a creditor and secured party under the law including the Uniform Commercial Code, including foreclosure under the Deed of Trust. The Borrower shall be liable to pay the Agency on demand all reasonable expenses, costs and fees (including, without limitation, reasonable attorney's fees and expenses) paid or incurred by the Agency in connection with the collection of the Loan and the preservation, maintenance, protection, sale, or other disposition of the security given for the Loan. (b) Specific Performance. The Agency shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Borrower to perform its obligations and covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in violation of the provisions of the Loan Documents. (c) Right to Cure at Borrower's Expense. The Agency shall have the right (but not the obligation) to cure any monetary default by Borrower under a loan other than the Loan. The Borrower agrees to reimburse the Agency for any funds advanced by the Agency to cure a monetary default by Borrower upon demand therefor, together with interest thereon at the lesser of the maximum rate permitted by law or ten percent (1%) per annum from the date of expenditure until the date of reimbursement. Section 7.3 Right of Contest. Borrower shall have the right to contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute a Default hereunder. Any such contest shall be prosecuted diligently and in a manner unprejudicial to the Agency or the rights of the Agency hereunder. Section 7.4 Remedies Cumulative. Subject to the non-recourse provisions contained in the Note and this Agreement, no right, power, or remedy given to the Agency by the terms of this Agreement or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the Agency by the terms of any such instrument, or by any statute or otherwise against Borrower and any other person. Neither the failure nor any delay on the part of the Agency to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the Agency of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. Section 7.5 Limited Partner Cure Rights. Borrower's limited partner shall have the right to cure any Default by Borrower hereunder or under any Loan Documents and such cure shall be deemed a cure by Borrower. 819\13\

40 ARTICLE 8. GENERAL PROVISIONS Section 8.1 Relationship of Parties. Nothing contained in this Agreement shall be interpreted or understood by any of the Parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the Agency and Borrower or its agents, employees or contractors, and Borrower shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. Borrower has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. In regards to the purchase of the Property, rehabilitation of the Improvements, and operation of the Development, Borrower shall be solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding, and all other laws and regulations governing such matters, and shall include requirements in each contract that contractors shall be solely responsible for similar matters relating to their employees. Borrower shall be solely responsible for its own acts and those of its agents and employees. Section 8.2 No Claims. Nothing contained in this Agreement shall create or justify any claim against the Agency by any person that Borrower may have employed or with whom Borrower may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the purchase of the Property, the rehabilitation of the Improvements, or the operation of the Development, and Borrower shall include similar requirements in any contracts entered into for the purchase of the Property, the rehabilitation of the Improvements, or the operation of the Development. Section 8.3 Amendments. No alteration or variation of the terms ofthis Agreement shall be valid unless made in writing by the Parties. Section 8.4 Indemnification. The Borrower shall indemnify, defend and hold the Agency, its boardmembers, officers, employees, agents, successors and assigns harmless against all claims made against it and expenses (including reasonable attorneys' fees) which arise out of or in connection with the purchase of the Property, or the development, rehabilitation, marketing and operation of the Development, except to the extent such claim arises from the grossly negligent or willful misconduct of the Agency. The provisions of this Section 8.4 shall survive the repayment of the Loan, the expiration of the Agreement Term, and the reconveyance of the Deed of Trust. Section 8.5 Non-Liability of Agency Officials, Employees and Agents. No member, official, employee or agent of the Agency shall be personally liable to Borrower in the event of any default or breach by the Agency or for any amount which may become due to Borrower or its successor or on any obligation under the terms of this Agreement. 819\13\

41 Section 8.6 No Third Party Beneficiaries. There shall be no third party beneficiaries to this Agreement. Section 8.7 Discretion Retained By County. The Agency's execution of this Agreement in no way limits the discretion of the County in the permit and approval process in connection with rehabilitation of the Development. Section 8.8 Notices, Demands and Communications. Formal notices, demands, and communications between the Parties shall be sufficiently given if and shall not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered by express delivery service, return receipt requested, or delivered personally, to the principal office of the Parties as follows: Agency: Borrower: Alameda County Redevelopment Agency 224 W. Winton Avenue, Rm. 11 Hayward, CA Attn: Executive Director Ashland Village Apartments, L.P Grand Street Hayward, CA Attn: Executive Director With a copy to Borrower's limited partner: Merritt Community Capital Fund XII, L.P. c/o Merritt Community Capital Corporation 197 Broadway, Suite 25 Oakland, CA Attn: President Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected Party may from time to time designate by mail as provided in this Section. Receipt shall be deemed to have occurred on the date shown on a written receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable). Copies of notice, sent to Borrower shall also be sent to any limited partner of Borrower who requests such notice in writing and provides its address. Section 8.9 Applicable Law. This Agreement shall be governed by California law. Section 8.1 Parties Bound. Except as otherwise limited herein, the provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their heirs, executors, administrators, legal representatives, successors, and assigns. This Agreement is intended to run with the land and shall bind Borrower and its 819\13\

42 successors and assigns in the Property and the Development for the entire Agreement Term, and the benefit hereof shall inure to the benefit of the Agency and its successors and assigns. Section 8.11 Attorneys' Fees. If any lawsuit is commenced to enforce any ofthe terms of this Agreement, the prevailing Party will have the right to recover its reasonable attorneys' fees and costs of suit from the other Party. Section 8.12 Severability. If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability. Section 8.13 Force Majeure. In addition to specific provisions of this Agreement, performance by either Party shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; quarantine restrictions; freight embargoes; lack of transportation; or court order; or any other similar causes (other than lack of funds of Borrower or Borrower's inability to finance the rehabilitation of the Development) beyond the control or without the fault of the Party claiming an extension of time to perform. An extension of time for any cause will be deemed granted if notice by the Party claiming such extension is sent to the other within ten (1) days from the commencement of the cause and such extension of time is not rejected in writing by the other Party within ten (1) days of receipt of the notice. In no event shall the Agency be required to agree to cumulative delays in excess of one hundred eighty (18) days. Section 8.14 Agency Approval. Whenever this Agreement calls for Agency approval, consent, or waiver, the written approval, consent, or waiver of the Agency Executive Director shall constitute the approval, consent, or waiver of the Agency, without further authorization required from the Agency Board. The Agency hereby authorizes the Agency Executive Director to deliver such approvals or consents as are required by this Agreement, or to waive requirements under this Agreement, on behalf of the Agency. Any consents or approvals required under this Agreement shall not be unreasonably withheld or made, except where it is specifically provided that a sole discretion standard applies. The Agency Executive Director is also hereby authorized to approve, on behalf of the Agency, requests by Borrower for reasonable extensions of time deadlines set forth in this Agreement. The Agency shall not unreasonably delay in reviewing and approving or disapproving any proposal by Borrower made in connection with this Agreement. Section 8.15 Waivers. Any waiver by the Agency of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by the Agency to take action on any breach or default of Borrower or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to Borrower to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the Agency to any act or omission by Borrower shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the Agency's written consent to future waivers. 819\13\

43 Section 8.16 Title of Parts and Sections. Any titles of the sections or subsections ofthis Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions. Section 8.17 Entire Understanding of the Parties. This Agreement constitutes the entire understanding and agreement of the Parties with respect to the Loan. Section 8.18 Multiple Originals; Counterpart. This Agreement may be executed in multiple original counterparts, each of which is deemed to be an original, and all such counterparts shall constitute one and the same instrument. [SIGNATURES ON FOLLOWING PAGE) 819\13\

44 WHEREAS, this Agreement has been entered into by the undersigned as of the date first above written. AGENCY: REDEVELOPMENT AGENCY OF THE COUNTY OF ALAMEDA, a public body corporate and politic By: Its: BORROWER: ASHLAND VILLAGE APARTMENTS, L.P. a California limited partnership By: Ashland Village Apartments LLC, a California limited liability corporation Its: General Partner By: Eden Development, Inc., a California nonprofit public benefit corporation. Its:.Dlre.chr APPROVED AS TO FORM Richard E. Winnie, County Counsel By signing above, signatory warrants and represents that he/she executed this Agreement in his/her authorized capacity and that by his/her signature on this Agreement, he/she or the entity upon behalf of which he/she acted, executed this Agreement 819\13\

45 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY The land is situated in the County of Alameda, State of California, and is described as follows: LEGAL DESCRIPTION EXHIBIT "A" THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN AN UNINCORPORATED AREA, COUNTY OF ALAMEDA, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: A portion of that certain parcel of land described in the Deed from the San Lorenzo Unified School District of Alameda County, State of California to the City of san Leandro, recorded January 27, 1981, under series No , Official Records of Alameda County, described as follows: Beginning at a point on the northeastern line of said parcel of land, said line being also the southwestern line of East 14th Street, as widened to 1 feet, distant thereon North 48 52'3" West, feet from the most eastern corner of said parcel of land; running thence at right angles to said line, South 41 7'3" West, 11.5 feet; thence North 89 41'15" West, 11. feet; thence parallel to sa id northeastern line, North 48 52'3" West, feet; thence North 18'45" East, feet to the intersection with the northern line of said parcel of land; thence along the exterior boundary line of said parcel of land, the following courses and distances: North 89 41'15" West, feet; along the eastern line of Kent Avenue, South 17'54" West, feet; at right angles to last said line, South 89 42'8" East, 16. feet; at right angles to last said line, South 17'54" West, feet; at right angles to last said line, South 89 42'6" East, 5.6 feet; Nortll 18'35" East, feet; North 41 7'3" East, feet to the said southwestern line of East 14th Street, along the last said line, North 48 52'3" West, 288,26 feet to the point of beginning. Excepting therefrom that portion conveyed to the State of California, by Deed recorded March 6, 1986, Series No , Official Records. APN: \13\ A-I

46 EXHIBITB APPROVED DEVELOPMENT BUDGET 819\13\ B-1

47 EXHIBITC APPROVED SCOPE OF REHABILITATION WORK AND NEW CONSTRUCTION WORK The scope of major planned repairs and replacements for Ashland Village Apartments is described in greater detail below: I) New community building including new property management offices, supportive services office and community room and new landscaping in the area surrounding the community building; 2) Direct security improvements through replacement of the site entry system and addition of a site entry monitoring system and improvement of site lighting in strategic locations to enhance safety; 3) Unit renovations including reframing of and new hardware for the exterior entries and interior doorways for all ADA units for improved accessibility, waterproofing improvements at some unit windows and unit sliding doors, and, replacement of all kitchen cabinets and appliances in ADA unit kitchens, all bathroom fans for improved indoor air quality and moisture reduction and bath tub and surround resealing, kitchen appliances in some units, and some unit water heaters; 4) Exterior ADA improvements such as replacement of concrete walks that have become a tripping hazard and improvement of ADA parking spaces; 5) Exterior building improvements such as dry rot replacement and repair, replacement of roofs on all nine buildings and improvement of flashing and waterproofing at the roofs, and painting of the exterior of all buildings and stucco replacement where necessary; 6) Landscape improvements including replacement of some irrigation heads, and grading and improvement of site drainage in areas ofponding. 819\\3\ C-l

48 EXHIBITD APPROVED OPERATING BUDGET 819\13\ D-l

49 EXHIBITE FORM OF DEED OF TRUST 819\13\ E-1

50 EXHIBITF FORM OF PROMISSORY NOTE 819\13\ F-l

51 EXHIBITG FORM OF NOTICE OF AFFORDABILITY RESTRICTION ON TRANSFER OF PROPERTY 819\13\ G-I

52 EXHIBITH FORM OF REGULATORY AGREEMENT 819\13\ H-l

53 EXHIBITB Form of Approved Development Budget PAGl: 1 l-jan-9 [OrAL INTH! S [ cos r, ~ H Ptfrn8nd IE Secl 8. dand HC[) Multlr~n\lly Huus'ng Program County 1 Aliilme12ii1 ~edevelopmerll Act;(ued/[)Il!lllled IMIlrest County 1 AlarneCJiI HOM( Accrued/Deterred Interest AHP WllnOrllul from ReSlduill Re(;elpl~ Rese:ve Income from Opt'riitlOmi du(lng Rehab Del De ~ee (!Tom loss of AHP} [Jet De folie (from Sponsol 5% [Jlstrlbj Cap'uf ContributIons Generill Panner Limited Pilrtflers roralilliiid S s/ Dehar TE COrl1.( loan (n.ed Ia[e) IE CUrlSI LUilrl [nxed fate) re Canst Loan (hu:d 'i1,e) Courtly 1 AJarned;, Kedeveloprllenl AccruecJ/Olllenel1lnleJI'.'i{ County 1 Alameda HOMl /J.,ccrued/Delerredlnteres( AHP Costs Deferred Uf\tll Permanent Loan C1~11 Withdrawal from Residual Rece'ph Il.eo;ef"'e Income lrom OlJf!fiHlons (Ju"ng Hehab Der De... Fee (from loss 1 AHI-') Oel Dev Fee (from sponj;or SO't'll etlsl!lbj Cilplul ContributionS Generill Pilrtner LlIlwreet Pilltners 4.!H6,8 b,83, 1,12, 1,]. :n, a ,423.2:') , WO,OOO ,57Z,IIZ o AMOUNT 4.~16,8,83. 8,6BO.2,)') 6,SOO. ]2,924 14, \8.741 a 1,461,41 7' 6, 1,423,2:'3 77,31 9UO, 4, USO,OOO 592:'''''' S:l2S% ] % 3% 3't'll % INT R,II,r!' 468'b 468% 4 b8% ] % 3% % 'b."'" 19]% l1m8%,,)% JO '( 17 Reset Rate, 12 % 1858 Ylr~esetRiite I"lOOO't'll SS 55 Committed Bonet R~te Bond Rdte Mandatory Interesl Per Unll 74. AdOr\lon~1 Needed S 8% J MOO% 42% 9, IS') Net De... Fee (toti! less deterred.;- GP Cilpllill) 429,69 % o"nershlp: 1 'b % of lolili taplt< II 4314'b % ownership 9999% rt~"" (Mu j CDlAC ALLOCAfiON NA 1r l'ncluoes:'o ops cusrllon tur sw~p) fotal Cunst Period BOllds 2, \ I ",-Co",","""-'"'!!!m',",',,-"OC"""''''"'''''-'' -"2.'"-"'!'2'.:c9lCJ I " i 11 % 1 toral pay-in 14.9% I I roraliiliill:<s SurpIUsl(Short/~lI) Canst Loan ValuatIon Restncted NO! 1,144,439 Captilhl8d 1'\,3S.484 Creon Value II 9/ 8, BMR flnllncmg Villlle t\ 3] 447 Tuut Vilille ] I,4BO,594 LTV 8% Max Canst. LOiln Amount 2S.184,OOO Commitment Amount 2: Callfurnlil HOUSing Pilrtnershlp Corpornlon

54 rashland VILLAGE APARTM~---~-- --~ U!ie!i of Fund!ii I Version No AHP Scenallo Revised.:.~Q1J -----_ ~--~ loa % 1 OO~ DEPRI:C1ABLE EXPENSED AMQRlllED rax CREDIT ELiGIBLl rotal NON _msn CONSTI Punhp'/C:fJ RESIDENTIAL OlPREC ~ ~ 1",158, L.ilIlCl 1,88,733 7,88,7B 7,OBIUB BUilding 1 l,l69,267 11,269,267 o 1 1,269,267 11,l6IJ,/67 Add'i ~eller CompenSil.t',un (Preprot Penalt y 858,!BI B5B,Hl o ~27,Z6S '>27,265 Tri.,sferTn 2,194 2,1~H 7,798 1<',396 12,396 Tltle/Recordlr\\J"EscrolJt.. AC~L"SI(lon 28,':1 l8,5 11,5 17,495 17,495 HOle! VilCdnlS 37.%': '> 37,965 _~msn r_..., I,.IOI;\"Z Unit ConS!I'JClIOn 4262, ,218 4,262,218 4, B Comrnurllty Rooln n ,8!J 736,B B1>9 Construction Conllngency g95,162 HS,I2 995,16~ P"<.:IrI!.1 Estal.ltlDll 42, ,17l 42,172 Con[lilc{af Overhead i1flcl Pront 422,85 I 4/,UI>1 422, ,8~ 1 Conlractor General Cundltlu"5 )95,189 3~5, I ,1 B9 395,189 Contractor LlilDII,ly Insurance 139, <' 139,2ll, J9,2/2 Local Pe(rll'15/~ees Il9,B4 129,84 129,84 129,84 ~u()contr.etoj Permits 1, 1, 1, 1, Phdse i/a~ue5tos/ TO.lr;s j.7 3,7 3,7 3,7 HUrlC! Prl~'n,u(fl lib,449 6B,449 68,449 6B,449 Sile Irl'lJfOvementVUJldsCilpe 472,6l7 472,627 4/2,627 4/2,627 S'It ImlJIuvemenls"ComfflUntly tlldg 2~dB4 25,3B4 2~,3B4 25,"!84 Alc/l,lecture 467,53 467,'>3 46',53 47,53 SuryeyiEflglneellng 1, 1, 1, 1, AlJprillSill 1.5 1,5 1,5 o 1,5 Marll:et Study If,DOO 17, 17, Constructl(m ESllmill'lIg/Managemenl ,9 l' 3, KelOC.iltioniMovlng E_poI'Inses , lj ,26 122,26 Con511'~clIUIl rmltng/lnl;1j 1. 1, o 1, 1, CaplUI Necl1!i Asse'ument 3,25 H5 o 3,25 3,25 PledeY Interest \l;den LOC) 3, 3, o 3, :W,OOO Co 1lA ConSHuc:t1on loan Inl 32,924 32,924 o ,339 6,'>115 Const loan Interest '1 8nd A/tl Iranc: 78\.1 781, COrlSlluan In(erest fe Bond C Tranc:he 413,r 41],7 24,F4 388,632 24,374 Cons! loin In!. County RDA Loan {a<;(;ru~i 32, B5 26,B9 6,5B5 Const luan IfIt. Counly 1lA loiln 243, ,326 4B,b65 194,b61 4B,665 Cons! Loan Inl. COUflty H()J.IIl (Ac:c:rueO) B,741 3}4B 14,99] 3 '4B - COf\l;trucllon 47,25 47,2" 47,l5 47,i'5 Iltle/Rec:ordln~E'licro.". Illle/Rp<;urOlnglfscrow - Permanent 14.2> \ Sun Cost Cunllngenc:y 2, 2, loo,ooo 2, ICAC App/Res/M(.lnl!orlflg Fee ,5~5 leipi ACquISI(I<.lrl 4, 4, 15, C1osln~ CWlst/unlon 3, 3, 3, 3, o Permafl~nl CloSlJlg 14,<,'> \4,<'5 14.<''> 1 Ptn!>l'lp 5, 5, 5, ()r~mhlron ~yndp(;i1tlon m.ooo 3, 3,ODO 5yndiCillJon COfisull:"'g (CHPC) 42,~ 42,5 42,~ Au(ilVCost Certlf'lcatlun 1,5 16,5 11>,5 Furmsl'llng; 1. 1, 1, 1, Initial DepD'!ill to Rill 284, 284, 284, o Cilflitall/l!d Ope'l nll1!:1 Reserye B19 461,819 Milr(ellflg 2~,5 25,5 25,5 5erVlces Ileserye 2, 2, 2, De'J'l!IOpe'1 Fee 2,5, i',5,ooo o 1,13,686 1,369,314 <XJ5TS Of ISSIlo\IQ Under\lllriler Fee o o l.ender (ounsel 4, 4, 11,979 o 28.l I 11,979 I 1In(j(ounsel 45, 45, 13,476 o ,476 Issuer Counsel 1Irro\lller Counsel Borruwer ~In Consultant (CHPC) 7,5 o 15. 7,> 15," 2,246 o 4,492 o" o 5,254 o 158 2,246 o 4492 lrustee Cuunsel 5, 5, 1,497 o ,497 Issuer "ee-up'ronl '>,575 7,659 o 1/,916 r,b59 Issuer H~e - Construction Period 3b.:nl ]6,2]1 1O,B5 o l'),38 I 1,B'i FinanCial ADYISOI (ls'liuerj 25, 25, 7,487 o 175li 7,487 lender O"gniHlon f-ee-perlt\ilnenl ,79B 3~,277 o B2.~21 H,21 r lender OJlgmallorl F ee,cooshuc(lon 86,IiD3 B6,B3 25,995 o 6,8B l5,995 lerl(jer hpenses 8,45 8,45 2,53 I o 5,919 2,531 CDlAC ~ee 3, o CDIAC Fee UIO 1,77 5] o 1,24 >3 COl Co,.,tlngen[;y 1, 1, 2,99S o 7,5 l, , Z1,924 o 299, ,924 IS"""'".C,,,,,tI,,","c, TOTAL DEVB.Of'MENT ajsti ",uz."! ",In..2 1,111,sSI roc Net of Accroed Interest <4246 p~r Unit 24,111,75 1,44& a,D1 1"",414 n,zzo.uz ld L -. lp Aoml~s\on o M,urmum Potent'i11 rcac Fee per BiiSIC ~OlPllUlii 1,467,B ,647 3,245,56 DUling Construction o Percent of Tolill 452Ht Mo 1% ConverSIon 229,69 ""Iu AilowaOle rcac Fee (Including deterred/gp [;i1p) 1.13,6B6 1,369,314 2,5, ~()rm 869 2, MilX Allowable MHP Foe (cash portion) ,t'rl 1,2, Delerrec:l I I MilXlmum AllowiltJle Fee for [f'lps Pro~ct (profited) 1,13, ,3J 4 2,5, GPCap'lill TOTAL,67.~ 4, 2,5, less. B,oker Fee Nel Fee (Leu other deyelopmenl costs} I, I 3,6B6 " o 1,369,]14 o 2,5, Nel Fee Ac:l Sled II fee oes ne atrv ':1 ]14 25 Cililfornill HO'J5Ing Partnersf'llp COrpoJl.flon

55 o~ I~ ~ I~ ~ I~. gig 5 ~ g~ I~ g~ ~ "'"i _ lh J~ I!, ~ 1 Hi II ~",ooggooo()oo ; ~~ I~ I~ I~ I~ I I~! E /; I I I~ 1 I~ II!. J ~?~~~??n ~~H ~U 2 Woo ~~~~~??~13i~~~I~~~~~ I~~~~~~2~I~JI~!I~~I~?2i~J~~O~!~~~~~ssSI~ I~ D I

56 SHLAND VILLAGE APARTMENTS PAGE 2 UNIT MIX AND RENTAL INCOME VerSion No AHt-' Scenilrlo '-Jan-9 ". 1 B' >35 2 B' $53 3 B' 4 B' :;~ I --~---1 Rf:.SIUENTIAL INCOME T -TER' PERCENT OF TARGETED UNiTS " % MEDIAN PER-UNIT PER-UNIT TOTAL TOTAl PER UNIT TOTAL INCOME MONTHLY MONTHLY MDNTHL Y ANNUAL ~ ~ AFFORDABLE GROSS RENT NET RENT ~TRENT NET RENT l o BR % 22& a 1 BR 6&2 % 256 a 2 BII 793 a % BII 1 8 % 338 ~M ~ a a O'lt. 678 Q.. Q.. T'-'O"-'AL""- -"--..;-'- "-- -'U PERCENT OF TARGETED UNITS 52.9" Tot~ bf!low sou AMI 'It. MEDIAN PER-UNIT PER UNIT TOTAL 5Z9: 1 INCOME MONTHLY MONTHLY MONT"HLY TOTAL PER UNIT ~ SQ.. I AFFORDABLE GROSS RENT ~T RENT NET R!.r:i! DB' o o o " o 527 a o 662 o " o 53 2 '" BR % ,599 3 BR 9 1.BO 9,72 7B3 71 B 6,465 i]b Q. o Q. """ " o B3 Q.. ~~. ~ ~Q~ ~ l1.~ _ I PfRCENT OF TARGETED UNITS "." % MEDIAN PER UNIT PER-UNIT TOTAL TOTAL PER UNIT TOTAL INCOME MONTHLY MONrHLY MONTHLY ANNUAL UNIT TYPE NUMBER ~I ~ AFFORDABLE ~ROSS RENT ~RENT NET RENT NET RENT o B' " 753 I., 662 " BR H.&SO 5% 96B , 3 BR 6 1,8 &.48 SO % 1, ,324 7S,B88 4 BR Q. Q. " I 177 Q. Q.._~._~.!AL 5_6_~ ~.. -"-"-,-= -"",,,-,,,,,,-" PERCENT OF TARGETED UNITS ",,, % MEDIAN PER i.ji',iit PER UNIT TOTAL TOTAL PER UNIT TOTAL INCOME MONTHLY MONTHLY '-4NTHLY ANNUAl ~ ~ AFFORDABLE. ~SS RENT NET RENT NET RENT NET RENT UNIT TYPE O.R o o " o 94 1 BR o 6&2 " o BR &,]44 6 D% 1,1&2 I, I 9 8,869 1& R % 1,343 1,278 2,SS6 3.&67 4 BR Q. o Q. " o 1,427 Q. Q. TOTAL T~.JI.!Ii!!!iL ~ ~~_~~ _ % MEDIAN PER UNIT PER UNIT TOTAL T~ PER UNIT TOTAL INCOME MONTHLY MONTHLY MONTHL Y AN~'~~ I ~Q. I ~F~ ~~ORDABL~ GROSS RENT NET RENT ~ RENT NET RE~TI o BR a o " 1 BR o 662 " 2 BR a 793 " o 3" o 1.8 " tib Q. o Q.."" ~ ~~~ ~ _-.-J TOTAL L o BR 1 BR 2 BR 38' UE TOTAL o o 2 o Q. PER UNIT ~ o ,OBO o TOTAL ~ \,586 Q % MEOIAN INCOME AFFORDABLE " " &% " " PER-UNIT MONTHLY GROSS RENT 1, PER-UNIT ~ONTHLY NET RENT 1,19 TOTAL MONTHlY NET RENT 2,217 Q. ~ TOTAL ANNUAL NET RENT 26,66 Q r~ roral SQ FT rax CREDIT EUG/BLf TOTAL SQ FT NON-TAX CREDfT EUGJBLE. TOTAL RENTABLE 5 FT 17, lutai. IlIII] 142 lutai. MCIfDI..y OW;) llz,771 TOTAl. NIIIolI. l,s5s,ssz PER-UNIT TOTAL TOTAL MONTHL Y MONTHLY ANNUAL LiIIl.lnck)'/Vendln~ ~ ~ ll,92g I FII1anClal =====]T'II' m::hudhap~re""_"'w".'_' '~,....~.. _""_1II1M...t..r!'rk2 =============1 PER UNIT PER UNIT INCREMENT AL MONTHLY ANNUAL TCAC ACTUAL AMI NET BASE RENT NET 58 PER UNIT RENT INCRMTL INCRMTL UNIT TYPE Nl.JM8ER INCOME TIER TARGt:. rting (WID 58l '-4 RENT" F-R'-4S8 58 RENT 58 RENT 2BR-SEC8 65 3S% AMI/'-4HP A 3S D% 62S ,3& 432, SEC 8 5 ~O% AMI 5% 91S S8.4 2BR SEC8 2 6% AMI 6% 1, BR - SEC 8 6 &% AMI &% 119 1, ,29 3BR-SEeS 9 35% AMI/MHP A 3S % 71B 1, ,5&& BR. SEC 8 6 SQ%.A..MI 5% 1, &,3& ~ 2 6% AMI 6% ,S ~ TOTAL 14 II,zU 755,455 COMMERCIAL INCOME TOTAL MONTHLY ~._ ---~--~~ ~- --a- TOTAl ANNUAL D

57 ASHLAND VILLAGE APARTMENTS CALCULATION OF TAX CREDITS VerSion: No AHP Scenario Revised: PAGE ~I 7-Jan-9 ~--' ~~- r---~ FEDERAl. CONSTI ACQUIS REHAB TOTAL ~ CaNST/ ACQUlS REHAB fatal TOTAL.. ElIGIBLE COSTS ,916,414 24,136,75 ll!ss. Hls[QflC Til... Credit (Res. Portion) Non-Eliglblf! (Fedenll/Grant Flf1ancln!il): ---I O ELIGIBLE BASIS,~ 1,916, REQUESTED ELIGIBLE BASIS, 3, ,916,414 24,136,75 t!igh COST ADJUSTMENT (Yor JIll y---- ~--1.%_ ---'3,%.- 1,% 1.% ADJUSTED ELIGIBLE BASIS 13,22,292 14,191,338 27,411,629 APPLICABLE FRACTION- 1.% 1.% 1.% 1.% QUALIFIED CREDIT BASIS 13,22,292 14,191,338 27,411,629 CR.EDIT RATE F.deco' Annu.I/Y, 1 ~3 St".1 334% 3.34% 3.34% 3.34% Year 4 - State 298% 2.98% J -- MAX. CREDIT A~OUNT PER ACTUAL COSfS Fedl:!ral Annual/Yr 1 3 State 441.~5B Year 4 State Total TCAe CREDlf RESER.VATION Federal Annual/Tota.l State NlA N/A NA N/A N/A N/A -..AU..llWAllUCIEIlIB (~"''''''l j Federal Annual/Total Stale B JO ~AU..llWABI TENVENllUTA!. J 9.W 484 _ TOTA!. sr"rt + FEDERAl. urn: ANllUNTS - 1 -~ r _. _ '.155..'" "6 I~ 9'-19M _--,9...1"5..,4",,5,,,69~ _ Total Depreclilble BilSIS ,75 less: AcqUISition BaSiS o less: Personal Propert)' 242 DOD BaSIS for HistOriC Credit 23,894,75 Credit Percentage Q..m! "'_tn* r... _tn* o Ta.x Credit Non-Tax Credit Hgrt Number of Units 14 Fraction 1.%.% Total Sq Ft 17,395 Fraction 1.% % TOTAL ---"- 1.% ~,.% ~FMCT1llN (lesser of ',-ow Income Untts or Sa Ft %) C;lllfornlil Houstng PilrtnershlP Corporation

58 ASHLAND VILLAGE APARTMENTS PAGE 4 BASI' YEAR INCOME/OPERATING EXPENSE STATEMENT No AHP Scenario Revised: 7-Jan-9 INCOME: Scheduled Gross Income - Residential Scheduled Gross Income - Sect 8 Increment Scheduled Gross Income - CommerCial Misc. Income Vacancy Loss - Residential Vacancy Loss - Section 8 Increment Vacancy Loss - Commercial EFFECTIVE GROSS INCOME EXPENSES - RESIDENTIAL Administratillfi Advertising Legal Accounting/Audit Security Misc. Admin Total Administrative Management Fee Utilities Fuel Electricity Gas Total Utilities Water/Seiter PayrolVPayroll Taxes On-Site Manager/Office Payroll Maintenance Payroll Manager Unit Expense/(Credit} Taxes/Benefits Total PayrolVPayroU Taxes Insurance Real Estate Taxes Maintenance Painting Repairs Trash Removal Exterminating Grounds Elevator Janitorial Total Maintenance Replacement Reserve Other Misc. License Service Coordinator Total Other TOTAL EXPENSES - RESIDENTIAL PUPA (incl, Reserves) PUPA (net of reserves) PUPA (w/o taxes/reserves/services) TCAC Minimum (w/o taxes/reserves/svcs, TOTAL EXPENSES - COMMERCIAL NET AVAIlABLE INCOME Less: MHP Mandatory Interest Pmt NET AVAILABLE INCOME - TOTAL NET AVAILABLE INCOME - NET OF SECTION B NET AVAlABLE INCOME - SECTION B INCREMENT Debt Service Coverage Ratio AVAILABLE FOR DEBT SERVICE - SECTION BINCREMENT AVAILABLE FOR DEBT SERVICE - NET OF SECTION B 5.% 5.%.% 1,384 14, 21,88 99,1 53,735 11,148 5,377 Q 84,484 32,672 25,824 23,447 27,9S5 32,944 76,723 2,419 2,769 9,219 S,921 1, 5,995 5,517 5,775 4,4 1,353, ,455 11,928 (68,264 ) (36,773) Q... 1,995,698 19,99 73,272 16,525 44, ,427 59,38 46,19 17,29 68,728 1S,921 8S1,259 1,144,439 Q 1,144, , , ,55 387,614 California Housing Partnership Corporation

59 ASHLAND VILLAGE APARTMENTS PAGE4-A Mortgage Calculation/Bond Ratios Revised: 7-Jan-9 SERIES A BOf\D Financing Type: TE Perm Bond NOI (net of 5ectlon 8) Debt Service Coverage Available for Total Debt Service Less: MHP D/5 Available for Debt Service 445, ,614 (32,4ill 355,19 Debt Service Coverage Loan-ta-Value Percent of Transaction Costs Statutory Limit Lender Commitment MAlON!JM MORTGAGE Underwriting ~Dstralnt ,% 1,% MaXImum Loan Amount 4,976,855 21,846,2 34,672,692 42,853,92 NA 4,976,8 SERIES BBOND Financing Type: TE 5ect 8 8nd Section 8 Increment (net of vacancy allowance) Debt Service Coverage Available for Debt Service 698, ,55 Debt Service Coverage Loan-ta-Value Percent of Transaction Costs Statutory LImit Lender Commitment MAXIMUM MORTGAGE Underwriting Constraint ,% 1,% Maximum Loan Amount 6,83, NA NA NA NA 6,83, Bond/Loan Rate Term (Yr) Mortgage Insurance Premium GNMAl5ervlcing Annual Issuer Fee Other Annual Bond Fees Amort (P&I) loan Constant 1m outed Total Interest Cost TIC FHA/CONV,,% 3,,%.%,%,%,%,% % SERIES A SERIES 8 5,BOOOO% 5,8% 3, 1B,5B,%,% D,OOOOO%,%,125%,125%,%,% 1,2414% 3.499% % % 5,96294% 59B461 % [BONOIREHABIUTAnON RATIOS TIIX-&empt Financil1!l Ratio ("596 Test") AGGREGATE Series A Bonds 4,976,BOO Series B Bonds 6,B3, Tax-Exempt Constr. Loan 8,6BO,255 Tax-Exempt Bridge Loan TOTAL TAX-EXEMPT FINANCING 2,46,55 TOTAL BASIS ALLOCATION (inc, Land) 31,322,26 Percent TIIX-&emDt Financina Rehabilitation Cost Ratios Total RehabIlitation BasIs 1,916,414 UHTCTEST Big. Rehailiiiation P8r Low-lncome Unit Pen:entage of Building Basis TAX~ BOND TEST BUilding BasIs FInanced With Bonds Rehabilitation Basis % Tax-Exempt Use Property Rehab BasIs - Non-Tax-Exempt Use Portion Rehab as 96 of BIela Basis Fmanced wi Bonds 76, (Minimum $3,) (Minimum 1%) 13,22,292 1,916,414,% 1,916, (Minimum 15%) California HOUSing Partnership Corporation

60 ASHLAND VILLAGE APARTMENTS LEASE-UP/PLACED-IN-SERVICE SCHEDULE Version: No AHP Scenario Revised: 7-Jan-9 PAGES UHTC OUAUFIED OCOJPANCY SOiEDULE Lease-Up Start (Year): 29 Completed Lease Up by Month Month No. Units Percent Jan-9.% Feb-9 '26 9.% Mar-9.% Apr-9.% May-9.% Jun-9.% Jul-9.% Aug-9.% Sep-9.% Oct-9.% Nov-9.% Dec-9 11 '.% SUB-TOTAL '4 '.% REHAB PLACED-lN-SERVICE SCHEDULE P.I.S. Start (Year): 29 Bldg. PIS by Month Month Building No. No. Units Jan-9 Feb-9 Mar-9 Apr-9 May-9 Jun-9 Jul-9 Aug-9 Sep-9 Oct-9 Nov-9 Dec-9 TOTAL ill '42 Percent.%.%.%.%.%.%.%.%.%.%.% '.% 1.% OPERATIONS/8LDG ACQ PIS SCHEDULE Operations Start (Year): 29 Completed Lease Up by Month Month No. Units Jan-9 o Feb-9 '42 Mar-9 Apr-9 May-9 o Jun-9 o Jul-9 o Aug-9 o Sep-9 o Oct-9 o Nov-9 o Dec-9 Q TOTAL 142 Total % Qual. OCe. in First Year 83.3% Jan-'O.% Feb-'.% Mar-'O.% Apr-'O.% May-'O.% Jun-'O.% Jul-'O.% Aug-'O.% Sep-'O.% Oct-'O.% Nov-'O.% Dec-'O.% SUB-TOTAL.% Total % PIS in First Year (Cumulative) Jan-'O Feb-'O Mar-'O Apr-'O May, Jun-'O Jul-'O Aug-'O Sep-'O Oct-' Nov-'O Dec-'O TOTAL '42 '42 8.3% 1.%.%.%.%.%.%.%.%.%.%.%.% '.% Total % OperatinQ in First Year 9'.7% Total % Qual. Oee. In Second Year.% Total % PIS in Second Year 1.% California Housing Partnership Corporation

61 ASHLAND VILLAGE APARTMENTS Calculation of Net Syndication Proceeds Version: No AHP Scenario Revised: PAGE 6 7-Jan-9 CAl.ClA..ATION OF SYNDICAnON COSTS Total Federal Credit (1 yr) & State Credit 9,155,484 Gross Proceeds (Total) 8,871,664 Gross Proceeds (net of bridge Int/fees) 8,871,664 Less Upper Tier Costs Attorney 35, Accountant 16,5 ConsultIng 42,5 Broker Brtdge Loan Fee Syndicator Other Total SyndIcation Costs 94, Comments Total Syndication Costs/Gross Proceeds.1 % (Syndication Load) Net Proceeds 8,777,664 Net ProceedsITote' Fed 8I1d St8te Credit Gross Proceeds (ToteO/Totel Fed 8I1d St8te Credit Gross Proceeds (w/o Bridoel/Totel Fed end Stete Credit t8x credit floctor.969 t8x credit floctor,969 tex credit floctor CallfornliJ HOUSing Partnership Corporation

62 [ASHLAND VILLAGE APARTMENTS PAGE 71 IrCAC Basis Limit Calculation ~_n: No AHP Scenano Rev~=d_. 7-Jan-91 f ~ounty: Alameda Count i~",le":c~al:"'~"c~lc~:"-:u"n/le~~y~i~n~-----~--- ~~ ~ 5 eclal Features NA S~Jeature Percent '2.Q% L Unit Type o BR 1 BR 2 BR 3 BR 4 BR No of Umts o o 12, 1/ o 142 Per Unit TCAC Basis 29,94B 242,68 292, 3/3'/6 4_'_6_,3_9_2 TOT Al -- 36,5, 6,353, =.,2,-"-85=3,92g ----.J ~~--~--- PrOject ElIgible BasIs (Requested) TCAC basis Limit (Before Special Feature Adjustment) 24,136'/5 42,B,3,92 TCA( Per Unit BasIs Limit Plus: Lot:al Development Impact Fees SpeCial Features Boost 2.% Bond Boost 35-5% AMI 47.14% Bond Boost <35% AMi 15.71% lnergy Efflclency.% Total TCAC BaSIs Limit 42,B53,92 o 8, fjrev Wage 2,22,562 45,32,715 o 116,929,982 Potential EligIble Basis 24,136'/5 "'S~u,''J'pI'''u''_'sl-'IO'''e'''h'''cl'''t)L- -.:92 / _ Callforma Housing Partnenhlp Corporation

63 EXHIBIT C APPROVED SCOPE OF REHABILITATION WORK AND NEW CONSTRUCTION WORK The scope of major planned repairs and replacements for Ashland Village Apartments is described in greater detail below: 1) New community building including new property management offices, supportive services office and community room and new landscaping in the area surrounding the community building; 2) Direct security improvements through replacement of the site entry system and addition of a site entry monitoring system and improvement of site lighting in strategic locations to enhance safety; 3) Unit renovations including reframing of and new hardware for the exterior entries and interior doorways for all ADA units for improved accessibility, waterproofing improvements at some unit windows and unit sliding doors, and, replacement of all kitchen cabinets and appliances in ADA unit kitchens, all bathroom fans for improved indoor air quality and moisture reduction and bath tub and surround resealing, kitchen appliances in some units, and some unit water heaters; 4) Exterior ADA improvements such as replacement of concrete walks that have become a tripping hazard and improvement of ADA parking spaces; 5) Exterior building improvements such as dry rot replacement and repair, replacement of roofs on all nine buildings and improvement of flashing and waterproofing at the roofs, and painting of the exterior ofall buildings and stucco replacement where necessary; 6) Landscape improvements including replacement of some irrigation heads, and grading and improvement of site drainage in areas ofponding. 819\ 13\ C-l

64 EXHIBIT Form of Approved Operating Budget EXHIBITD APPROVED OPERATING BUDGET \ D-l

65 1 B I c 1 """2 NAME OF PROJECT:ASHLAND 3 NEW BUDGET YEAR:29 ""4 # OF MONTHS OF ACTUALS USED:11-5 # units: 142 I- 6 f--- ~ 8 YARDI DESCRIPTION 9 1 REVENUE Gross Potential Rent or Tenant Assistance to GPR ~ 5122 Tenant Assistance Surplus (Annuity) ' Stores and Commercial '---= $ 517 Garage & Parking Miscellaneous Excess Income ~ 522 Vacancies Commercial Vacancy Loss Rent Concessions Total Rents Other Revenue Monthly Food Revenue Guest's Food Revenue Mise Food-Related Items Service Coordinator Assistance Mise Service Income ~ 31 Total Service Income Interest Income Interest - Tax & Ins Income from Investment-Mise Interest Subsidy Income "37 38 Total Financial Revenue - Unrestricted ~ Laundry Income NSF & Late Fees Warrant Fees Utility Reimbursement Damages & Cleaning ~ 599 Other Revenue ~ 47 Total Other Revenue TOTAL REVENUE 5 51 ADMIN. EXPENSES Advertising Newspaper " Other Renting Expenses Office Salaries ' Temporary Administrative Office Supplies Equipment Leases Management Fees Manager Salary I H I 29 BUDGET 1,33,2 856,614 (17,982) 2,51,652 24,996 24,996 23, 1,2 6 24,8 2,11,448 1,2 1,98 45,684 4,5 3,3 73,272 38,~96 K PER UNIT 9, , (76.43).. 14, ,

66 B 6 I- 7 ~ YARDI DESCRIPTION Staff Rent Free Unit ' Legal Expenses " Audit Accounting Services Professional Fees Telephone/Answering Service Uncollectible Receivables, Bank Charges ' Computer Support & Equipment Training " Mileage Other Miscellaneous n 73 Total Admin Expense UTILITY EXPENSES Electricity n 6451 Water Gas ~ 6453 Sewer "8 649 Cable TV ~ 82 Total Utility Expense MAINTENANCE EXPENSE Fur, Fix & Equipt Expenses Janitor & Cleaning Payroll Janitor & Cleaning Contract f Janitor & Cleaning Supplies ' Exterminating Contract "9 652 Exterminating Supplies Rubbish Removal Security Payroll/Contract Grounds Payroll Grounds Supplies " Grounds Contract " Temporary Maintenance Labor f Maintenance Payroll Maintenance Supplies Repairs Contract Elevator Maintenance/Contract HVAC RepairslMaint Pool Maintenance Decorating Contract f-- ~ 6561 Decorating Supplies Furniture Decorating VehiCle Operation & Repair Other Maintenance Labor Kitchen EqUipment Total Maintenance Expense 111 m C I H I 29 BUDGET 25,824 14,4 7,5 12,78 1,2 6, 6, 1,2 2,6 1,35 1,2 1,8 249,746 17,928 39,457 8,84 1,15 67,375 1,5 9, 6 5,5 3 4, , ,8 62,76 5,5 7,2 9,6 5, ,122 K PER UNIT , , , , OPERATING EXPENSES BEFORE TAX & INSURANCE I 658,243 4,635.51

67 B C I H I K 6 I- c.! 29 PER 8 YARDI DESCRIPTION BUDGET UNIT 115 TAXES & INSURANCE m 671 Real Estate Taxes 97, Payroll Taxes 12,518 m 6719 Misc. Taxes, Licenses & Permits 3,481 1" Property & Liability Insurance 37,85 "' Fidelity Bond Insurance 6722 Workman's Compo 8,92 i Health Benefits 26, Pension Benefits 6,589 ~ 6725 Other Benefits 6729 Other Insurance (Specify) ~ Total Tax & Insurance 193,16 SERVICES EXPENSES 691 Serv Coor - Supplies 2, Serv Coord-Payroll 17, Serv Coord-Payroll Taxes 1, Serv Coord-Health & Benefits 3,334 f Serv Coord-Workers' Comp 1, Serv Coord-Pension Serv Coor-Telephone 1, Serv Coor - Computer Expenses 1, Serv Coor-Training Serv Coord - Mileage 6 f4' 692 Supervision/Overhead Charges 4, Serv Coor - Contracted Services 6927 Resident Activities 2, Other Services Expenses Total Resident Svc Administration 37, Food Costs 6933 Food Supplies Total Food Services 6945 Special Needs Assessment 6946 Special Projects - Advertising 6947 Special Projects - Wages 6948 Special Projects - P/R Taxes 6949 Special Projects - Benefits 695 Special Projects - Workers Comp 6951 Special Projects - Pension 6952 Special Projects-Training 6953 Special Projects-Supplies 6954 Special Projects - Phone 6955 Special Projects - Activities 6956 Special Projects - Supp & Repair 6957 Special Projects - Mileage 6961 Program Expenses 1, lotal ::sp6clal t-'rojecv!t'i'ograms t:xpense u u.uu 169 Total Services Expense 37,149 liu I 171 TOTAL OPERATING EXPENSES 888, ,256.39

68 B C H K PER 8 YARDI DESCRIPTION BUDGET UNIT REPLMT RES EXPENDITURES 731 FLOOR COVERINGS WINDOW COVERINGS KITCHEN APPLIANCE.S COUNTERTOPS I TILE I CABINETS TUBS I SHOWER /TOILETS I SINKS I VANI DOORS & WINDOWS BUILDING SIDING EXTERIOR PAINTING HVAC I WATER HEATERS MAJOR MAINTENANCE EQUIPMENT BOILERS. 732 ROOFS I DECKS FENCES I GATES PLAYGROUND I RECREATION EQUIPMEN PAVING (PARKING LOT I SIDEWALKS) MAJOR LANDSCAPING WATER I GAS DISTRIBUTION LINES FURN, FIXTURES & EQUIPT OTHER IMPROVEMENTS:. 195 FINANCIAL EXPENSES 681 Interest on Bonds Payable. 682 Interest on Mortgage Payable Interest on Notes Payable (LT) Interest on Notes Payable (ST) Interest Developer Fee MIP/MSC Construction Loan Interest Ground Lease Ground Lease Interest Lender and Other Fees Bond Related Fees Letter of Credit Fees HCD Fees Mise Financial Expenses. 743 Partnership Mgmt Fee Asset Mgmt Fee Replacement Reserve Mortgage/Bond Payable Refinancing Reserve Operating Reserve. 219 Total Financial Ex enses REIMBURSEMENTS Interest Reserve Reimb 6998 Service Reserve Reimb 7357 Replacement Reserve Reimbursement 227 Total Reimbursements 228 TOTAl EXPENSES 851,259 5,994.78

69 EXHIBIT E Form of Deed of Trust EXHIBIT E FORM OF DEED OF TRUST 819\13\ E-l

70 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency ofthe County ofalameda 224 W. Winton Avenue, Rm. 11 Hayward, CA Attn: Executive Director NO FEE FOR RECORDING PURSUANT TO GOVERNMENT CODE SECTION AGENCY DEED OF TRUST WITH ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (Ashland Village Apartments) THIS AGENCY DEED OF TRUST WITH ASSIGNMENT OF RENTS AND SECURITY AGREEMENT ("Deed oftrust") is made as ofthis 27th day ofjanuary 29, by and among Ashland Village Apartments, L.P., a California limited partnership ("Trustor"), North American Title Company, a California corporation ("Trustee"), and the Redevelopment Agency ofthe County ofalameda, a public body corporate and politic ("Beneficiary"). FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security ofbeneficiary, under and subject to the terms and conditions hereinafter set forth, Trustor's fee interest in the property located at 13 Kentwood Lane. in the County ofalameda, State ofcalifornia, that is described in the attached Exhibit A, incorporated herein by this reference (the "Property"). TOGETHER WITH all interest, estates or other claims, both in law and in equity which Trustor now has or may hereafter acquire in the Property and the rents; TOGETHER WITH all easements. rights-of-way and rights used in connection therewith or as a means of access thereto, including (without limiting the generality of the foregoing) all tenements, hereditaments and appurtenances thereof and thereto; TOGETHER WITH any and all buildings and improvements of every kind and description now or hereafter erected thereon, and all property ofthe Trustor now or hereafter affixed to or placed upon the Property; TOGETHER WITH all building materials and equipment now or hereafter delivered to said property and intended to be installed therein; TOGETHER WITH all right, title and interest oftrustor, now owned or hereafter acquired, in and to any land lying within the right-of-way ofany street, open or proposed, 819\13\

71 adjoining the Property, and any and all sidewalks, alleys and strips and areas of land adjacent to or used in connection with the Property; TOGETHER WITH all estate, interest, right, title, other claim or demand, ofevery nature, in and to such property, including the Property, both in law and in equity, including, but not limited to, all deposits made with or other security given by Trustor to utility companies, the proceeds from any or all ofsuch property, including the Property, claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by any proceeding or purchase in lieu thereof ofthe whole or any part ofsuch property, including without limitation, any awards resulting from a change ofgrade of streets and awards for severance damages to the extent Beneficiary has an interest in such awards for taking as provided in Paragraph 4.1 herein; TOGETHER WITH all oftrustor's interest in all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the complete and comfortable use and occupancy ofsuch building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner; and TOGETHER WITH all oftrustor's interest in all building materials, fixtures, equipment, work in process and other personal property to be incorporated into the Property; all goods, materials, supplies, fixtures, equipment, machinery, furniture and furnishings, signs and other personal property now or hereafter appropriated for use on the Property, whether stored on the Property or elsewhere, and used or to be used in connection with the Property; all rents, issues and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles, chattel paper, instruments, documents, notes drafts, letters of credit, insurance policies, insurance and condemnation awards and proceeds, trade names, trademarks and service marks arising from or related to the Property and any business conducted thereon by Trustor; all replacements, additions, accessions and proceeds; and all books, records and files relating to any ofthe foregoing. All of the foregoing, together with the Property, is herein referred to as the "Security." To have and to hold the Security together with acquittances to the Trustee, its successors and assigns forever. FOR THE PURPOSE OF SECURING: (a) Payment ofjust indebtedness oftrustor to Beneficiary as set forth in the Note (defined in Article 1 below) until paid or cancelled. Said principal and other payments shall be due and payable as provided in the Note. Said Note and all its terms are incorporated herein by reference, and this conveyance shall secure any and all extensions thereof, however evidenced; and 819\13\

72 (b) Payment of any sums advanced by Beneficiary to protect the Security pursuant to the terms and provisions of this Deed of Trust following a breach oftrustor's obligation to advance said sums and the expiration ofany applicable cure period, with interest thereon as provided herein; and (c) Performance ofevery obligation, covenant or agreement oftrustor contained herein and in the Loan Documents (defined in Section 1.2 below). AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: ARTICLE I. DEFINITIONS In addition to the terms defined elsewhere in this Deed of Trust, terms not defined herein have the meaning ascribed in the Loan Agreement, the following terms shall have the following meanings in this Deed of Trust: Section 1.1 [reserved] Section 1.2 The term "Loan Agreement" means that certain Loan Agreement between Trustor and Beneficiary, ofeven date herewith, providing for the Beneficiary to loan to the Trustor Six Million Five Hundred Thousand Dollars ($6,5,) for the acquisition and permanent financing of the Property. Section 1.3 The term "Loan Documents" means this Deed of Trust, the Note, the Loan Agreement, the Regulatory Agreement, the Notice of Restriction on Transfer of Property and any other debt, loan or security instruments between Trustor and the Beneficiary relating to the Property. Section 1.4 The term "Note" means the promissory note in the principal amount of Six Million Five Hundred Thousand Dollars ($6,5,) ofeven date herewith executed by the Trustor in favor of the Beneficiary, the payment of which is secured by this Deed of Trust. (The Note is on file with the Beneficiary and terms and provisions ofthe Note are incorporated herein by reference.) Note. Section 1.5 The term "Principal" means the amount required to be paid under the Section 1.6 The term "Regulatory Agreement" means that certain Regulatory Agreement and Declaration of Restrictive Covenants of even date herewith by and between the Beneficiary and the Trustor. Section 1.7 The term "Senior Lenders" means lenders associated with the Bond Loan and MHP Loan, pursuant to Section 2.4(b) ofthe Loan Agreement. 819\13\

73 ARTICLE 2. MAINTENANCE AND MODIFICATION OF THE PROPERTY AND SECURITY Section 2.1 Maintenance and Modification of the Property by Trustor. The Trustor agrees that at all times prior to full payment of the sum owed under the Note, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the Security or cause the Security to be maintained and preserved in good condition. The Trustor will from time to time make or cause to be made all repairs, replacements and renewals deemed proper and necessary by it. The Beneficiary shall have no responsibility in any ofthese matters or for the making of improvements or additions to the Security. Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all claims for labor done and for material and services furnished in connection with the Security, diligently to file or procure the filing ofa valid notice of cessation upon the event ofa cessation oflabor on the work or construction on the Security for a continuous period ofthirty (3) days or more, and to take all other reasonable steps to forestall the assertion of claims oflien against the Security ofany part thereof. Trustor irrevocably appoints, designates and authorizes Beneficiary as its agent (said agency being coupled with an interest) with the authority, but without any obligation, to file for record any notices ofcompletion or cessation of labor or any other notice that Beneficiary deems necessary or desirable to protect its interest in and to the Security or the Loan Documents; provided, however, that Beneficiary shall exercise its rights as agent oftrustor only in the event that Trustor shall fail to take, or shall fail to diligently continue to take, those actions as hereinbefore provided. Upon demand by Beneficiary, Trustor shall make or cause to be made such demands or claims as Beneficiary shall specify upon laborers, materialmen, subcontractors or other persons who have furnished or claim to have furnished labor, services or materials in connection with the Security. Nothing herein contained shall require Trustor to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting provided that Trustor shall, within thirty (3) days after the filing of any claim of lien, record in the Office ofthe Recorder, a surety bond in an amount I and 1/2 times the amount ofsuch claim item to protect against a claim of lien. Section 2.2 Granting of Easements. Trustor may not grant easements, licenses, rights-of-way or other rights or privileges in the nature ofeasements with respect to any property or rights included in the Security except those required or desirable for installation and maintenance of public utilities including, without limitation, water, gas, electricity, sewer, telephone, cable and telegraph, or those required by law, and as approved, in writing, by Beneficiary. Section 2.3 Assignment of Rents. 819\13\

74 As part of the consideration for the indebtedness evidenced by the Note, Trustor hereby absolutely and unconditionally assigns and transfers to Beneficiary all the rents and revenues of the Property including those now due, past due, or to become due by virtue of any lease or other agreement for the occupancy or use ofall or any part of the Property, regardless ofto whom the rents and revenues ofthe Property are payable. Trustor hereby authorizes Beneficiary or Beneficiary's agents to collect the aforesaid rents and revenues and hereby directs each resident ofthe Property to pay such rents to Beneficiary or Beneficiary's agents; provided, however, that prior to written notice given by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement oftrustor in the Loan Documents, Trustor shall collect and receive all rents and revenues of the Property as trustee for the benefit ofbeneficiary and Trustor to apply the rents and revenues so collected to the sums secured by this Deed of Trust with the balance, so long as no such breach has occurred, to the account oftrustor, it being intended by Trustor and Beneficiary that this assignment of rents constitutes an abso lute assignment and not an assignment for additional security only. Upon delivery ofwritten notice by Beneficiary to Trustor ofthe breach by Trustor of any covenant or agreement oftrustor in the Loan Documents, and without the necessity of Beneficiary entering upon and taking and maintaining full control ofthe Property in person, by agent or by a court-appointed receiver, Beneficiary shall immediately be entitled to possession ofall rents and revenues ofthe Property as specified in this Section 2.3 as the same becomes due and payable, including but not limited to rents then due and unpaid, and all such rents shall immediately upon delivery ofsuch notice be held by Trustor as trustee for the benefit of Beneficiary only; provided, however, that the written notice by Beneficiary to Trustor of the breach by Trustor shall contain a statement that Beneficiary exercises its rights to such rents. Trustor agrees that commencing upon delivery of such written notice oftrustor's breach by Beneficiary to Trustor, each Resident ofthe Property shall make such rents payable to and pay such rents to Beneficiary or Beneficiary's agents on Beneficiary's written demand to each resident therefor, delivered to each resident personally, by mail or by delivering such demand to each rental unit, without any liability on the part ofsaid resident to inquire further as to the existence of a default by Trustor. Trustor hereby covenants that Trustor has not executed any prior assignment of said rents, that Trustor has not performed, and will not perform, any acts or has not executed and will not execute, any instrument which would prevent Beneficiary from exercising its rights under this Section 2.3, and that at the time ofexecution of this Deed of Trust, there has been no anticipation or prepayment of any ofthe rents ofthe Property for more than two (2) months prior to the due dates of such rents. Trustor covenants that Trustor will not hereafter collect or accept payment of any rents ofthe Property more than two (2) months prior to the due dates of such rents. Trustor further covenant that Trustor will execute and deliver to Beneficiary such further assignments of rents and revenues ofthe Property as Beneficiary may from time to time request. Upon Trustor's breach of any covenant or agreement oftrustor in the Loan Documents, Beneficiary may in person, by agent or by a court-appointed receiver, regardless ofthe adequacy ofbeneficiary's security, enter upon and take and maintain full control ofthe Property in order to perform all acts necessary and appropriate for the operation and maintenance thereof including, but not limited to, the execution, cancellation or modification of leases, the collection of all rents and revenues of the Property, the making of repairs to the Property and the execution or termination ofcontracts providing for the management or maintenance ofthe Property, all on 819\13\

75 such terms as are deemed best to protect the security ofthis Deed oftrust. In the event Beneficiary elects to seek the appointment ofa receiver for the Property upon Trustor's breach of any covenant or agreement oftrustor in this Deed oftrust, Trustor hereby expressly consents to the appointment ofsuch receiver. Beneficiary or the receiver shall be entitled to receive a reasonable fee for so managing the Property. All rents and revenues collected subsequent to delivery ofwritten notice by Beneficiary to Trustor of the breach by Trustor of any covenant or agreement oftrustor in the Loan Documents shall be applied first to the costs, if any, oftaking control of and managing the Property and collecting the rents, including, but not limited to, attorney's fees, receiver's fees, premiums on receiver's bonds, costs of repairs to the Property, premiums on insurance policies, taxes, assessments and other charges on the Property, and the costs of discharging any obligation or liability oftrustor as lessor or landlord of the Property and then to the sums secured by this deed oftrust. Beneficiary or the receiver shall have access to the books and records used in the operation and maintenance ofthe Property and shall be liable to account only for those rents actually received. Beneficiary shall not be liable to Trustor, anyone claiming under or through Trustor or anyone having an interest in the Property by reason of anything done or left undone by Beneficiary under this Section 2.3. Ifthe rents of the Property are not sufficient to meet the costs, if any, of taking control of and managing the Property and collecting the rents, any funds expended by Beneficiary for such purposes shall become indebtedness oftrustor to Beneficiary secured by this Deed oftrust pursuant to Section 3.3 hereof. Unless Beneficiary and Trustor agree in writing to other terms of payment, such amounts shall be payable upon notice from Beneficiary to Trustor requesting payment thereof and shall bear interest from the date ofdisbursement at the rate stated in Section 3.3. Any entering upon and taking and maintaining ofcontrol ofthe Property by Beneficiary or the receiver and any application of rents as provided herein shall not cure or waive any default hereunder or invalidate any other right or remedy ofbeneficiary under applicable law or provided herein. This assignment of rents of the Property shall terminate at such time as this Deed oftrust ceases to secure indebtedness held by Beneficiary. ARTICLE 3. TAXES AND INSURANCE; ADVANCES Section 3.1 Taxes, Other Governmental Charges and Utility Charges. Trustor shall pay, or cause to be paid, at least fifteen (15) days prior to the date of delinquency, all taxes, assessments, charges and levies imposed by any public authority or utility company which are or may become a lien affecting the Security or any part thereof; provided, however, that Trustor shall not be required to pay and discharge any such tax, assessment, charge or levy so long as (a) the legality thereofshall be promptly and actively contested in good faith and by appropriate proceedings, and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant to this Section 3.1. With respect to taxes, special assessments or other similar 819\13\

76 governmental charges, Trustor shall pay such amount in full prior to the attachment of any lien therefor on any part ofthe Security; provided, however, if such taxes, assessments or charges may be paid in installments, Trustor may pay in such installments. Except as provided in clause (b) of the first sentence of this paragraph, the provisions ofthis Section 3.1 shall not be construed to require that Trustor maintain a reserve account, escrow account, impound account or other similar account for the payment of future taxes, assessments, charges and levies. In the event that Trustor shall fail to pay any ofthe foregoing items required by this Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to fully pay such items within seven (7) business days after receipt of such notice. Any amount so advanced therefor by Beneficiary, together with interest thereon from the date of such advance at the maximum rate permitted by law, shall become an additional obligation oftrustor to the Beneficiary and shall be secured hereby, and Trustor agrees to pay all such amounts. Section 3.2 Provisions Respecting Insurance. Trustor agrees to provide insurance conforming in all respects to that required under the Loan Documents during the course of construction and following completion, and at all times until all amounts secured by this Deed of Trust have been paid and all other obligations secured hereunder fulfilled, and this Deed of Trust reconveyed. All such insurance policies and coverages shall be maintained at Trustor's sole cost and expense. Certificates of insurance for all of the above insurance policies, showing the same to be in full force and effect, shall be delivered to the Beneficiary upon demand therefor at any time prior to the Beneficiary's receipt ofthe entire Principal and all amounts secured by this Deed of Trust. Section 3.3 Advances. In the event the Trustor shall fail to maintain the full insurance coverage required by this Deed oftrust or shall fail to keep the Security in accordance with the Loan Documents, the Beneficiary, after at least seven (7) days prior notice to Beneficiary, may (but shall be under no obligation to) take out the required policies of insurance and pay the premiums on the same or may make such repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefor by the Beneficiary shall become an additional obligation ofthe Trustor to the Beneficiary (together with interest as set forth below) and shall be secured hereby, which amounts the Trustor agrees to pay on the demand of the Beneficiary, and ifnot so paid, shall bear interest from the date of the advance at the lesser of ten percent (1%) per annum or the maximum rate permitted by law. 819\13\

77 ARTICLE 4. DAMAGE, DESTRUCTION OR CONDEMNATION Section 4. J Awards and Damages. Subject to the rights of senior lenders, all judgments, awards of damages, settlements and compensation made in connection with or in lieu of (1) taking of all or any part of or any interest in the Property by or under assertion of the power of eminent domain, (2) any damage to or destruction of the Property or in any part thereof by insured casualty, and (3) any other injury or damage to all or any part of the Property ("Funds") are hereby assigned to and shall be paid to the Beneficiary by a check made payable to the Beneficiary. The Beneficiary is authorized and empowered (but not required) to collect and receive any Funds and is authorized to apply them in whole or in part upon any indebtedness or obligation secured hereby, in such order and manner as the Beneficiary shall determine at its sole option if Beneficiary reasonably determines that, after reviewing Borrower's plans for repair or restoration and any funds committed therefor, the security for the indebtedness secured hereby is impaired. The Beneficiary shall be entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust and may deduct and retain from the proceeds of such insurance the amount of all expenses incurred by it in connection with any such settlement or adjustment. Except as provided above, all or any part ofthe amounts so collected and recovered by the Beneficiary shall be released to Trustor upon such conditions as the Beneficiary may impose for its disposition including repair or restoration in accordance with Section 4.7(b) of the Loan Agreement. Application of all or any part of the Funds collected and received by the Beneficiary or the release thereof shall not cure or waive any default under this Deed oftrust. The rights ofthe Beneficiary under this Section 4.1 are subject to the rights of any senior mortgage lender. ARTICLE 5. AGREEMENTS AFFECTING THE PROPERTY; FURTHER ASSURANCES; PAYMENT OF PRINCIPAL AND INTEREST Section 5.1 Other Agreements Affecting Property. The Trustor shall duly and punctually perform all terms, covenants, conditions and agreements binding upon it under the Loan Documents and any other agreement of any nature whatsoever now or hereafter involving or affecting the Security or any part thereof. Section 5.2 Agreement to Pay Attorneys' Fees and Expenses. In the event of any Event of Default (as defined below) hereunder, and if the Beneficiary should employ attorneys or incur other expenses for the collection of amounts due or the enforcement of performance or observance of an obligation or agreement on the part of the Trustor in this Deed oftrust, the Trustor agrees that it will, on demand therefor, pay to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the indebtedness secured by the lien of this Deed of Trust, and shall bear interest from the date such 819\13\

78 expenses are incurred at the lesser often percent (1%) per annum or the maximum rate permitted by law. Section 5.3 Payment of the Principal. The Trustor shall pay to the Beneficiary the Principal and any other payments as set forth in the Note in the amounts and by the times set out therein. Section 5.4 Personal Property. To the maximum extent permitted by law, the personal property subject to this Deed of Trust shall be deemed to be fixtures and part of the real property and this Deed oftrust shall constitute a fixtures filing under the California Uniform Commercial Code. As to any personal property not deemed or permitted to be fixtures, this Deed oftrust shall constitute a security agreement under the California Uniform Commercial Code. Section 5.5 Financing Statement. The Trustor shall deliver to the Beneficiary such financing statements pursuant to the appropriate statutes, and any other documents or instruments as are required to convey to the Beneficiary a valid perfected security interest in the Security. The Trustor agrees to perform all acts which the Beneficiary may reasonably request so as to enable the Beneficiary to maintain such valid perfected security interest in the Security in order to secure the payment ofthe Note in accordance with their terms. The Beneficiary is authorized to file a copy ofany such financing statement in any jurisdiction(s) as it shall deem appropriate from time to time in order to protect the security interest established pursuant to this instrument. Section 5.6 Operation ofthe Security. The Trustor shall operate the Security (and, in case of a transfer of a portion of the Security subject to this Deed oftrust, the transferee shall operate such portion of the Security) in full compliance with the Loan Documents. Section 5.7 Inspection of the Security. At any and all reasonable times upon seventy-two (72) hours' notice, the Beneficiary and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right, without payment of charges or fees, to inspect the Security. Section 5.8 Nondiscrimination. The Trustor herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, age, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment ofthe Security, nor shall the Trustor 819\13\

79 itself or any person claiming under or through it establish or permit any such practice or practices ofdiscrimination or segregation with reference to the selection, location, number, use or occupancy ofresidents, lessees, subtenants, sublessees or vendees in the Security. The foregoing covenants shall run with the land. ARTICLE 6. HAZARDOUS WASTE Trustor shall keep and maintain the Property in compliance with, and shall not cause or permit the Property to be in violation ofany federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Trustor shall not use, generate, manufacture, store or dispose ofon, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of"hazardous substances," hazardous wastes," "hazardous materials," or "toxic substances" under any applicable federal or state laws or regulations (co liectively referred to hereinafter as "Hazardous Materials") except such of the foregoing as may be customarily kept and used in and about multifamily residential property. Trustor shall immediately advise Beneficiary in writing if at any time it receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Trustor or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, ("Hazardous Materials Law"); (ii) all claims made or threatened by any third party against Trustor or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above hereinafter referred to a "Hazardous Materials Claims"); and (iii) Trustor's discovery of any occurrence or condition on any real property adjoining or in the vicinity ofthe Property that could cause the Property or any part thereof to be classified as "border-zone property" under the provision ofcalifornia Health and Safety Code, Sections 2522 et ~., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law. Beneficiary shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by Trustor. Trustor shall indemnify and hold harmless Beneficiary and its board members, supervisors, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Property including without limitation: (a) all foreseeable consequential damages; (b) the costs of any required or necessary repair, cleanup or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans; and (c) all 819\13\

80 reasonable costs and expenses incurred by Beneficiary in connection with clauses (a) and (b), including but not limited to reasonable attorneys' fees. Without Beneficiary's prior written consent, which shall not be unreasonably withheld, Trustor shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in Beneficiary's reasonable judgment, impair the value of the Beneficiary's security hereunder; provided, however, that Beneficiary's prior consent shall not be necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is ofsuch a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain Beneficiary's consent before taking such action, provided that in such event Trustor shall notify Beneficiary as soon as practicable of any action so taken Beneficiary agrees not to withhold its consent, where such consent is required hereunder, if either (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) Trustor will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) Trustor establishes to the reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial action which would result in less impairment of Beneficiary's security hereunder; or (iv) the action has been agreed to by Beneficiary. The Trustor hereby acknowledges and agrees that (i) this Article is intended as the Beneficiary's written request for informat ion (and the Trustor's response) concerning the environmental condition ofthe Property as required by California Code of Civil Procedure Section 726.5, and (ii) each representation and warranty in this Deed of Trust or any of the other Loan Documents (together with any indemnity applicable to a breach of any such representation and warranty) with respect to the environmental condition of the property is intended by the Beneficiary and the Trustor to be an "environmental provision" for purposes of California Code ofcivil Procedure Section 736. In the event that any portion ofthe Property is determined to be "environmentally impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(I)), then, without otherwise limiting or in any way affecting the Beneficiary's or the Trustee's rights and remedies under this Deed oftrust, the Beneficiary may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such environmentally impaired or affected portion ofthe Property and (2) exercise (a) the rights and remedies ofan unsecured creditor, including reduction of its claim against the Trustor to judgment, and (b) any other rights and remedies permitted by law. For purposes of determining the Beneficiary's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Trustor shall be deemed to have willfully permitted or acquiesced in a release or threatened release of hazardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(I), if the release or threatened release of hazardous materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion ofthe Property and the Trustor knew or should have known of 819\13\

81 the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys' fees, incurred by the Beneficiary in connection with any action commenced under this paragraph, including any action required by California Code ofcivil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the rate specified in the Note until paid, shall be added to the indebtedness secured by this Deed oftrust and shall be due and payable to the Beneficiary upon its demand made at any time following the conclusion ofsuch action. ARTICLE 7. EVENTS OF DEFAULT AND REMEDIES Section 7.1 Events of Default. The following shall constitute Events of Default following the expiration ofany applicable notice and cure periods: (I) failure to make any payment to be paid by Trustor under the Loan Documents; (2) failure to observe or perform any of Trustor's other covenants, agreements or obligations under the Loan Documents, including, without limitation, the provisions concerning discrimination; or (3) failure to make any payment or perform any of Trustor's other covenants, agreements, or obligations under any other debt instruments or regulatory agreement secured by the Property, which default shall not be cured within the times and in the manner provided therein. Section 7.2 Acceleration of Maturity. If an Event of Default shall have occurred and be continuing, then at the option of the Beneficiary, the amount ofany payment related to the Event of Default and the unpaid Principal ofthe Note shall immediately become due and payable, upon written notice by the Beneficiary to the Trustor (or automatically where so specified in the Loan Documents), and no omission on the part of the Beneficiary to exercise such option when entitled to do so shall be construed as a waiver of such right. Section 7.3 The Beneficiary's Right to Enter and Take Possession. If an Event of Default shall have occurred and be continuing, the Beneficiary may: (a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof (or any part thereot) and ofany of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability ofthe Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any Event of Default or Notice of Default and Election to Sell (as defined below) hereunder or invalidate any act done in response to such Default or pursuant to such Notice of Default and Election to Sell and, notwithstanding 819\13\

82 the continuance in possession of the Security, Beneficiary shall be entitled to exercise every right provided for in this Deed oftrust, or by law upon occurrence of any Event of Default. including the right to exercise the power of sale; (b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any ofthe covenants hereof; (c) Del iver to Trustee a written declaration ofdefault and demand for sale, and a written notice of default and election to cause Trustor's interest in the Security to be sold ("Notice of Default and Election to Sell"), which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records; or (d) Exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. Section 7.4 Foreclosure By Power of Sale. Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Beneficiary shall give notice to the Trustee (the "Notice of Sale") and shall deposit with Trustee this Deed oftrust which is secured hereby (and the deposit ofwhich shall be deemed to constitute evidence that the unpaid principal amount ofthe Note is immediately due and payable), and such receipts and evidence ofany expenditures made that are addit ionally secured hereby as Trustee may require. (a) Upon receipt ofsuch notice from the Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Default and Election to Sell as then required by law and by this Deed oftrust. Trustee shall, without demand on Trustor, after lapse ofsuch time as may then be required by law and after recordation ofsuch Notice of Default and Election to Sell and after Notice of Sale having been given as required by law, sell the Security, at the time and place of sale fixed by it in said Notice of Sale, whether as a whole or in separate lots or parcels or items as Trustee shall deem expedient and in such order as it may determine unless specified otherwise by the Trustor according to California Civil Code Section 2924g(b), at public auction to the highest bidder, for cash in lawful money of the United States payable at the time ofsale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed or any matters offacts shall be conclusive proof ofthe truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale, and Trustor hereby covenants to warrant and defend the title of such purchaser or purchasers. (b) After deducting all reasonable costs, fees and expenses oftrustee, including costs ofevidence oftitle in connection with such sale, Trustee shall apply the proceeds ofsale to payment of: (i) the unpaid Principal amount of the Note; (ii) all other amounts owed to 8I 9113\

83 Beneficiary under the Loan Documents; (iii) all other sums then secured hereby; and (iv) the remainder, if any, to Trustor. (c) Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new Notice of Sale. Section 7.5 Receiver. If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of right and without further notice to Trustor or anyone claiming under the Security, and without regard to the then value of the Security or the interest of Trustor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice ofany application therefor. Any such receiver or receivers shall have all the usual powers and duties ofreceivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided herein, and shall continue as such and exercise all such powers until the date of confirmation of sale ofthe Security, unless such receivership is sooner terminated. Section 7.6 Remedies Cumulative. No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of Trust is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy given hereunder or now or hereafter existing at law or in equity. Section 7.7 No Waiver. (a) No delay or omission ofthe Beneficiary to exercise any right, power or remedy accruing upon any Event of Default shall exhaust or impair any such right, power or remedy, or shall be construed to be a waiver of any such Event of Default or acquiescence therein; and every right, power and remedy given by this Deed oftrust to the Beneficiary may be exercised from time to time and as often as may be deemed expeditious by the Beneficiary. Beneficiary's express or implied consent to a breach by Trustor, or a waiver of any obligation of the Trustor hereunder shall not be deemed or construed to be a consent to any subsequent breach, or further waiver, of such obligation or of any other obligations of the Trustor hereunder. Failure on the part of the Beneficiary to complain ofany act or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary of its right hereunder or impair any rights, power or remedies consequent on any Event of Default by the Trustor. (b) Ifthe Beneficiary (i) grants forbearance or an extension oftime for the payment of any sums secured hereby, (ii) takes other or additional security or the payment of any sums secured hereby, (iii) waives or does not exercise any right granted in the Loan Documents, (iv) releases any part ofthe Security from the lien ofthis Deed of Trust, or otherwise changes 819\13\

84 any ofthe terms, covenants, conditions or agreements in the Loan Documents, (v) consents to the granting of any easement or other right affecting the Security, or (vi) makes or consents to any agreement subordinating the lien hereof, any such act or omission shall not release, discharge, modify, change or affect the original liability under this Deed of Trust, or any other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, cosigner, endorser, surety or guarantor (unless expressly released); nor shall any such act or omission preclude the Beneficiary from exercising any right, power or privilege herein granted or intended to be granted in any Event of Default then made or of any subsequent Event of Default, nor, except as otherwise expressly provided in an instrument or instruments executed by the Beneficiary shall the lien of this Deed oftrust be altered thereby. Section 7.8 Suits to Protect the Security. The Beneficiary shall have power to (a) institute and maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Security and the rights ofthe Beneficiary as may be unlawful or any violation of this Deed oftrust, (b) preserve or protect its interest (as described in this Deed oftrust) in the Security, and (c) restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment, rule or order would impair the Security thereunder or be prejudicial to the interest of the Beneficiary. Section 7.9 Trustee May File Proofs ofclaim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Trustor, its creditors or its property, the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims ofthe Beneficiary allowed in such proceedings and for any additional amount which may become due and payable by the Trustor hereunder after such date. Section 7.1 Waiver. The Trustor waives presentment, demand for payment, notice ofdishonor, notice of protest and nonpayment, protest, notice of interest on interest and late charges, and diligence in taking any action to collect any sums owing under the Note or in proceedings against the Security, in connection with the delivery, acceptance, performance, default, endorsement or guaranty of this Deed of Trust. 819\13\

85 ARTICLE 8. MISCELLANEOUS Section 8.1 Amendments. This instrument cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by Beneficiary and Trustor. Section 8.2 Reconveyance by Trustee. Upon written request of Beneficiary stating that ali sums secured hereby have been paid or forgiven, upon expiration of the term of the Regulatory Agreement, and upon surrender ofthis Deed oftrust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee shall reconvey the Security to Trustor, or to the person or persons legally entitled thereto. Section 8.3 Notices. If at any time after the execution ofthis Deed of Trust it shall become necessary or convenient for one of the parties hereto to serve any notice, demand or communication upon the other party, such notice, demand or communication shall be in writing and shall be served personally or by depositing the same in the registered United States mail, return receipt requested, postage prepaid and (I) if intended for Beneficiary shall be addressed to: Alameda County Redevelopment Agency 224 W. Winton Avenue, Rm. 11 Hayward, CA Attn: Executive Director and (2) if intended for Trustor shall be addressed to: Ashland Village Apartments, L.P Grand Street Hayward, CA Attn: Executive Director with a copy to the Limited Partner: Merritt Community Capital Corporation 197 Broadway, Suite 25 Oakland, CA Attn: Executive Director Any notice, demand or communication shall be deemed given, received, made or communicated on the date personal delivery is effected or, if mailed in the manner herein specified, on the delivery date or date delivery is refused by the addressee, as shown on the return receipt. A copy 819\13\

86 of any notice sent to Agency must also be sent to the Office of the City Clerk at the above address. Either party may change its address at any time by giving written notice of such change to Beneficiary or Trustor as the case may be, in the manner provided herein, at least ten (1) days prior to the date such change is desired to be effective. Section 8.4 Successors and Joint Trustors. Where an obligation is created herein binding upon Trustor, the obligation shall also apply to and bind any transferee or successors in interest. Where the terms of the Deed of Trust have the effect of creating an obligation of the Trustor and a transferee, such obligation shall be deemed to be a joint and several obligation of the Trustor and such transferee. Where Trustor is more than one entity or person, all obligations of Trustor shall be deemed to be a joint and several obligation of each and every entity and person comprising Trustor. Section 8.5 Captions. The captions or headings at the beginning of each Section hereof are for the convenience ofthe parties and are not a part of this Deed of Trust. Section 8.6 Invalidity ofcertain Provisions. Every provision of this Deed of Trust is intended to be severable. In the event any term or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court or other body ofcompetent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. If the lien of this Deed oftrust is invalid or unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part ofthe Security, the unsecured or partially secured portion ofthe debt, and all payments made on the debt, whether voluntary or under foreclosure or other enforcement action or procedure, shall be considered to have been first paid or appl ied to the full payment of that portion of the debt which is not secured or partially secured by the lien of this Deed of Trust. Section 8.7 Governing Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. Section 8.8 Gender and Number. In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neuter and vice versa, if the context so requires. Section 8.9 Deed of Trust, Mortgage. Any reference in this Deed oftrust to a mortgage shall also refer to a deed oftrust and any reference to a deed of trust shall also refer to a mortgage. 819\13\

87 Section 8.1 Actions. Trustor agrees to appear in and defend any action or proceeding purporting to affect the Security. Section 8.11 Substitution oftrustee. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office ofthe county or counties in which the Property is situated, shall be conclusive proof of proper appointment of the successor trustee. Section 8.12 Statute of Limitations. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law. Section 8.13 Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law the Trustee is not obligated to notify any patty hereto of pending sale under this Deed of Trust or of any action of proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. Section 8.14 Tax Credit Provisions Notwithstanding anything to the contrary contained herein or in any documents secured by this Deed oftrust or contained in any subordination agreement, the Beneficiary acknowledges and agrees that in the event of a foreclosure or deed-in-lieu of foreclosure (collectively, "Foreclosure") with respect to the Property encumbered by this Deed of Trust, the following rule contained in 26 U.S.c. Section 42(h)(6)(E)(ii), as amended, shall apply: For a period of three (3) years from the date of Foreclosure, with respect to any unit that had been regulated by the Regulatory Agreement with the California Tax Credit Allocation Committee, (i) none of the tenants occupying those units at the time of Foreclosure may be evicted or their tenancy terminated (other than for good cause), (i i) nor may any rent be increased except as otherwise permitted under Section 42 of the Internal Revenue Code. (SIGNATURES ON FOLLOWING PAGE] 819\13\

88 IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first above written. TRUSTOR: ASHLAND VILLAGE APARTMENTS, L.P., a California limited partnership By: Its: Ashland Village Apartments LLC, a California limited liability company General Partner By: Its: Eden Development, Inc., a California nonprofit public benefit corporation Member/Manager By: Its: _ 819\13\

89 STATE OF CALIFORNIA ) ) COUNTY OF ALAMEDA ) On, 2 before me, Notary Public, personally appeared, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) \13\

90 EXHIBIT A LEGAL DESCRIPTION The land is situated in the County ofalameda, State ofcalifornia, and is described as follows: LEGAL DESCRIPTION EXHIBIT "A" THE LAND REFERRED TO HEREIN BELOW IS S.ITUATED IN AN UNINCORPORATED AREA, COUNTY OF ALAMEDA, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: A portion of that certain parcel of land described in the Deed from the San Lorenzo Unified School District of Alameda County, State of California to the City of San Leandro, recorded January 27, 1981, under Series No , Official Records of Alameda County, described as follows: Beginning at a point on the northeastern line of said parcel of land, said line being also the southwestern line of East 14th Street, as widened to 1 feet, distant thereon North 48 52'3" West, feet from the most eastern corner of said parcel of land; running thence at right angles to said line, South 41 7'3" West, 11.5 feet; thence North 89 41'15" West, 11. feet; thence parallel to said northeastern line, North 48 52'3" West, feet; thence North 18'45" East, feet to the intersection with the northern line of said parcel of land; thence along the exterior boundary line of said parcel of land, the following courses and dista nces: North 89 41'15" West, feet; along the eastern line of Kent Avenue, South 17'54" West, feet; at right angles to last said line, South 89 42'8" East, 16. feet; at right angles to last said line, South 17'54" West, feet; at right angles to last said line, South 89 42'6" East, 5.6 feet; Nortll 18'35" East, feet; North 41 7'3" East, feet to the said southwestern line of East 14th Street, along the last said line, North 48 52'3" West, feet to the point of beginning. Excepting therefrom that portion conveyed to the State of California, by Deed recorded March 6, 1986, Series No , Official Records. APN: \ 13\ A-I

91 EXHIBIT F Form of Promissory Note EXHIBIT F FORM OF PROMISSORY NOTE 819\13\ F-l

92 AGENCY PROMISSORY NOTE (Ashland Village Apartments) $6,5, Oakland, California January 27,29 FOR VALUE RECEIVED, Ashland Village Apartments, L.P., a California limited partnership ("Borrower"), promises to pay to the Redevelopment Agency of the County of Alameda, a public body corporate and politic (the "Agency"), or order, the principal sum of up to Six Million Five Hundred Thousand Dollars ($6,5,), or so much as is disbursed to Borrower, plus interest thereon pursuant to Section 2 below. I. Borrower's Obligation. This promissory note (the "Note") evidences the Borrower's obligation to pay the Agency the principal amount ofup to Six Million Five Hundred Thousand Dollars ($6,5,) for the funds loaned to the Borrower by the Agency to finance the acquisition and rehabilitation of the Improvements pursuant to the Loan Agreement between the Borrower and the Agency of even date herewith (the "Loan Agreement"). All capitalized terms not otherwise defined in this Note shall have the meanings set forth in the Loan Agreement. 2. Interest. (a) Interest Rate. Subject to the provisions of Section (b) below, commencing on the date of disbursement and continuing until the loan is fully repaid, the outstanding principal balance ofthe Loan shall accrue simple interest at the annual rate of three percent (3%). (b) Default Rate. In the event of a Default, interest on the Loan shall begin to accrue, as of the date of Default and continuing until such time as the Loan funds are repaid in full or the Default is cured, at the default rate of the lesser of ten percent (1%), compounded annually, or the highest rate permitted by law. 3. Term and Repayment Requirements. This Note shall be due and payable as set forth in Section 2.6 of the Loan Agreement. Repayment of this Note shall be nonrecourse to the Borrower pursuant to Section 2.8 of the Loan Agreement, and subject to the exceptions set forth therein. 4. No Assumption. This Note shall not be assumable by the successors and assigns of Borrower without the prior written consent ofthe Agency as provided in Article 5 of the Loan Agreement. Property. 5. Security. This Note is initially secured by the Deed of Trust covering the 819\13\656374

93 6. Terms of Payment. All payments due under this Note shall be paid in currency of the United States of America, which at the time of payment is lawful for the payment of public and private debts. (a) All payments on this Note shall be paid to Agency at Alameda County Redevelopment Agency, 224 W. Winton Avenue, Rm. 11, Hayward, CA Attention: Executive Director or to such other place as the Agency may from time to time designate in writing. (b) All payments on this Note shall be without expense to the Agency, and the Borrower agrees to pay all costs and expenses, including re-conveyance fees and reasonable attomey's fees ofthe Agency, incurred in connection with the payment ofthis Note and the release of any security hereof. (c) Notwithstanding any other provision ofthis Note, or any instrument securing the obligations of the Borrower under this Note, if, for any reason whatsoever, the payment of any sums by the Borrower pursuant to the terms of this Note would result in the payment of interest which would exceed the amount that the Agency may legally charge under the laws ofthe State ofcalifomia, then the amount by which payments exceed the lawful interest rate shall automatically be deducted from the principal balance owing on this Note, so that in no event shall the Borrower be obligated under the terms of this Note to pay any interest which would exceed the lawful rate. 7. Default. this Note: (a) Any of the following shall constitute an Event of Default under (i) Any failure to pay, in full, any payment required under this Note when due following written notice by Agency ofsuch failure and thirty (3) days opportunity to cure; (ii) Any failure in the performance by the Borrower of any term, condition, provision or covenant set forth in this Note subject to the notice and cure period set forth in Section 7.1 of the Loan Agreement; and (iii) The occurrence of any Event of Default under the Loan Agreement, the Deed of Trust, or the Regulatory Agreement, or other instrument securing the obligations of the Borrower under this Note or under any other promissory notes hereafter issued by the Borrower to the Agency pursuant to the Loan Agreement or the Deed of Trust, subject to notice and cure periods, if any. set forth therein. (b) Upon the occurrence of such an Event of Default, the entire unpaid principal balance, together with all interest thereon, and together with all other sums then payable under this Note and the Deed of Trust shall at the option of the Agency become 819\13\

94 immediately due and payable upon written notice by the Agency to the Borrower without further demand. (c) The failure to exercise the remedy set forth in Subsection 7(b) above or any other remedy provided by law upon the occurrence of one or more of the foregoing events of default shall not constitute a waiver of the right to exercise any remedy at any subsequent time in respect to the same or any other default. The acceptance by Agency ofany payment which is less than the total of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any ofthe foregoing remedies or options at that time or at any subsequent time, or nullify any prior exercise ofany such remedy or option, without the express consent of the Agency, except as and to the extent otherwise provided by law. 8. Waivers. (a) The Borrower hereby waives diligence, presentment, protest and demand, and notice of protest, notice of demand, and notice of dishonor of this Note. The Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time, and that the Agency may accept further security or release any security for this Note, all without in any way affecting the liability of the Borrower. (b) No extension of time for payment of this Note or any installment hereof made by agreement by the Agency with any person now or hereafter liable for payment of this Note shall operate to release, discharge, modify, change or affect the original liability ofthe Borrower under this Note, either in whole or in part. (c) The obligations ofthe Borrower under this Note shall be absolute and the Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reason whatsoever. 9. Miscellaneous Provisions. (a) All notices to the Agency or the Borrower shall be given in the manner and at the addresses set forth in the Loan Agreement, or to such addresses as the Agency and the Borrower may hereinafter designate. (b) The Borrower promises to pay all costs and expenses, including reasonable attorney's fees, incurred by the Agency in the enforcement of the provision of this Note, regardless of whether suit is filed to seek enforcement. (c) This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought. (d) This Note shall be governed by and construed in accordance with the laws of the State of California. 819\13\

95 (e) The times for the performance of any obligations hereunder shall be strictly construed, time being of the essence. (f) This document, together with the Loan Documents (as defined in the Loan Agreement), contains the entire agreement between the parties as to the Loan. It may not be modified except upon written consent of the parties. BORROWER: ASHLAND VILLAGE APARTMENTS, a California limited liability partnership By: Ashland Village Apartments LLC, a California limited liability company Its: General Partner By: Its: Eden Development, Inc., a California nonprofit public benefit corporation Member/Manager By: _ Its: \13\

96 EXHIBITG Fonn of Notice of Affordability Restrictions EXHIBIT G FORM OF NOTICE OF AFFORDABILITY RESTRICTION ON TRANSFER OF PROPERTY 819\13\ G-l

97 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the County of Alameda 224 W. Winton Avenue, Rm. 11 Hayward, CA Attn: Executive Director NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (Ashland Village Apartments) NOTICE IS HEREBY GIVEN, that the Redevelopment Agency of the County of Alameda, a public body, corporate and politic (the "Agency"), to carry out certain obligations under the Community Redevelopment Law of the State of California (Health and Safety Code Section 33 et ~.), and the Redevelopment Plan for the County of Alameda-City of San Leandro Redevelopment Project and the Redevelopment Plan for the Eden Area Project Area, has required Ashland Village Apartments, L.P., a California limited partnership (the "Owner") to enter into certain affordability covenants and restrictions entitled, Agency Regulatory Agreement and Declaration of Restrictive Covenants (the "Restrictions"), with reference to a housing development (the "Development") situated on that certain real property (the "Property"), located at 13 Kentwood Lane, Alameda County, Assessor's Parcel No. 8B-3-2-5, and further described in Exhibit A incorporated herein by reference. The affordability covenants and restrictions contained in the Restrictions include without limitation and as further described in the Restrictions: 1. One hundred thirty (13) units in the Development are restricted for occupancy by very low income households, at rents affordable to very low income households; 2. Ten (1) units in the Development are restricted for occupancy by lower income households, at rents affordable to lower income households; and 3. Additional requirements concerning operation, management, and maintenance of the Development are also imposed by the Restrictions. 819\13\

98 In the event of any conflict between this Notice ofaffordability Restrictions on Transfer ofproperty (the "Notice") and the Restrictions, the terms of the Restrictions shall prevail. The Restrictions have been recorded concurrently herewith, and shall remain in effect for fifty-seven (57) years from the date the Deed of Trust is recorded with the Office of the Alameda County Recorder or until February 28, 266. This Notice is being recorded and filed by the Agency in compliance with Health and Safety Code Sections (f)(3) and (4) and/or Section 33413(c)(5), as amended effective this date, and shall be indexed against the Agency and the Owner. IN WITNESS WHEREOF, the parties have executed this Notice ofaffordability Restrictions on Transfer ofproperty on or as of this 27th day of January, 29. [Signatures on following page] 819\13\

99 AGENCY: REDEVELOPMENT AGENCY OF THE COUNTY OF ALAMEDA, a public body, corporate and politic OWNER: ASHLAND VILLAGE APARTMENTS, L. P., a California limited partnership. By: _ By: Ashland Village Apartments, LLC, a California limited liability company Its: Executive Director Its: General Partner By: Its: Eden Development, Inc., a California nonprofit public benefit corporation Member/Manager By: Its: APPROVED AS TO FORM Richard E. Winnie, County Counsel By _ By signing above, signatory warrants and represents that he/she executed this Agreement in his/her authorized capacity and that by hislher signature on this Agreement, he/she or the entity upon behalf of which he/she acted, executed this Agreement 819\13\

100 STATE OF CALIFORNIA ) ) COUNTY OF ALAMEDA ) On, 2 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 hislher/their authorized capacity(ies), and that by hislher/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 ofthe State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _ Signature (Seal) STATE OF CALIFORNIA COUNTY OF ALAMEDA ) ) ) On,2 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 hislher/their authorized capacity(ies), and that by hislher/their signature(s) on the instrument the person(s), or the entity upon behalf ofwhich the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws ofthe State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 819\13\

101 EXHIBIT A LEGAL DESCRIPTION The land is situated in the State of Cal ifornia, County ofalameda, and is described as follows: LEGAL DESCRIPTION EXHIBIT "A" THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN AN UNINCORPORATED AREA, COUNTY OF ALAMEDA, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: A portion of that certain parcel of land described in the Deed from the San Lorenzo Unified School District of Alameda County, State of California to the City of san Leandro, recorded January 27, 1981, under series No , Official Records of Alameda County, described as follows: Beginning at a point on the northeastern line of said parcel of land, said line being also the southwestern line of East 14th Street, as widened to 1 feet, distant thereon North 48 52'3" West, feet from the most eastern corner ofsaid parcel of land; running thence at right angles to said line, South 41 7'3" West, 11.5 feet; thence North 89 41'15" West, 11. feet; thence parallel to said northeastern line, North 48 52'3" West, feet; thence North 18'45" East, feet to the intersection with the northern line of said parcel of land; thence along the exterior boundary line of said parcel of land, the following courses and distances: North 89 41'15" West, feet; along the eastern line of Kent Avenue, South 17'54" West, feet; at right angles to last said line, South 89 42'8" East, 16. feet; at right angles to last said line, South 17'54" West, feet; at right angles to last said line, South 89 42'6" East, 5.6 feet; North 18'35" East, feet; North 41 7'3" East, feet to the said southwestern line of East 14th Street, along the last said line, North 48 52'3" West, feet to the point of beginning. Excepting therefrom that portion conveyed to the State of California, by Deed recorded March 6, 1986, Series No , Official Records. APN: 8B-3o \13\ A-I

102 EXHIBIT H Form of Regulatory Agreement EXHIBIT H FORM OF REGULATORY AGREEMENT 819\13\ H-l

103 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Redevelopment Agency of the County of Alameda 224 W. Winton Avenue, Rm. 11 Hayward, CA Attn: Executive Director NO FEE DOCUMENT PURSUANT TO GOVERNMENT CODE SECTION AGENCY REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (Ashland Village Apartments) This Agency Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement") is made and entered into as of January 27,29, by and between the Redevelopment Agency of the County of Alameda, a public body, corporate and politic (the "Agency") and Ashland Village Apartments, L.P., a California limited partnership (the "Owner"). RECITALS I. The Agency has entered into a Loan Agreement with Owner under which the Agency will loan Six Million Five Hundred Thousand Dollars ($6,5,) (the "Loan") to Owner which will be used for the acquisition and rehabilitation of a one hundred and forty-two (142)-unit multifamily rental housing development (the "Development") located on the real property at 13 Kentwood Lane, County of Alameda, more particularly described in Exhibit A attached hereto and incorporated herein (the "Property"). 2. The funds loaned to Owner pursuant to the Agency Loan Agreement are Agency Redevelopment Low and Moderate Income Housing Funds. 3. The Agency and the Alameda County Board of Supervisors have made the necessary findings to spend Agency Redevelopment Low and Moderate Income Housing Funds from the Eden Area Redevelopment Project Area (the "Eden Project Area") and the County of Alameda-City of San Leandro Redevelopment Project Area (the "Joint Project Area") in the Joint Project Area, as evidenced by Agency Resolution No. R and the Alameda County Board of Supervisors Resolution No. R adopted concurrently on March 18, 28. Expenditure of monies deposited in the Housing Fund to fund the acquisition and related costs will serve the purposes of Health and Safety Code Section (g), as well as the goals and objectives of the Redevelopment Plan for both the Eden Project Area and Joint Project Area, by improving and increasing the community's supply of affordable housing. 819\13\

104 4. The Agency has agreed to loan funds to Owner on the condition that the Development be maintained and operated in accordance with Health and Safety Code Sections et ~., 33413(a) and 33413(b)(2)(A)(ii) and in accordance with additional restrictions concerning affordability, operation, and maintenance of the Development, as specified in this Agreement. 5. The Agency has acquired long term affordability covenants that restrict the rental ofthe Units on the Property pursuant to Health and Safety Code Section 33413(b)(2)(B) and 33413(b)(2)(C); 6. In consideration of receipt ofthe Loan at an interest rate substantially below the market rate, Owner has further agreed to observe all the terms and conditions set forth below. 7. In order to ensure that the entire Development will be used and operated in accordance with these conditions and restrictions, the Agency and Owner wish to enter into this Agreement. THEREFORE, the Agency and Owner hereby agree as follows: ARTICLE I. DEFINITIONS 1.1 Definitions. When used in this Agreement, the following terms shall have the respective meanings assigned to them in this Article I. (a) "Actual Household Size" shall mean the actual number of persons in the applicable household. (b) "Adjusted Income" shall mean the total anticipated annual income ofall persons in a household, as calculated in accordance with 25 California Code of Regulations Section 6914 or pursuant to a successor State housing program that utilizes a reasonably similar method of calculation of adjusted income. In the event that no such program exists, the Agency shall provide the Owner with a reasonably similar method of calculation of adjusted income as provided in said Section (c) "Agency" shall mean the Redevelopment Agency ofthe County of Alameda, a public body, corporate and politic. (d) "Agreement" shall mean this Agency Regulatory Agreement and Declaration of Restrictive Covenants. (e) "Assumed Household Size" shall have the meaning set forth in Section 2.2(c). The definition is utilized to calculate affordable rent and is not intended to be a limit on the number of persons occupying a unit. ofcalifornia. (f) "County" shall mean Alameda County, a political subdivision ofthe State 819\13\

105 (g) "Deed of Trust" shall mean the deed of trust in favor of the Agency on the Property which secures repayment of the Loan and performance of this Agreement. (h) "Development" shall mean the Property and the one hundred forty-two (142) units to be rehabilitated on the Property, as well as all landscaping, roads and parking spaces existing thereon, as the same may from time to time exist. (i) "Existing Residents" shall mean the _ U households that occupy the units on the date of Owner's acquisition. Agreement. U) "Loan" shall mean all funds loaned to Owner pursuant to the Loan (k) "Loan Agreement" shall mean the Redevelopment Agency Loan Agreement entered into by and between the Agency and Owner, dated of even date herewith. (I) "Lower Income Household" shall mean a household with an Adjusted Income that does not exceed the qualifying limits for lower income households, adjusted for Actual Household Size, as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, and as published by the State of California Department ofhousing and Community Development. (m) "Lower Income Rent" shall mean the rent permitted to be charged for a Lower Income Unit pursuant to Section 2.2(b) below. (n) "Lower Income Units" shall mean the Units, which, pursuant to Section 2.I(b) below, are required to be occupied by Lower Income Households. () "Median Income" shall mean the median gross yearly income adjusted for Actual Household Size (to qualify residents) or Assumed Household Size (to calculate rents), as applicable, in the County of Alameda, Califomia, as published from time to time by the State of Califomia Department of Housing and Community Development. In the event that such income determinations are no longer published, or are not updated for a period of at least eighteen (18) months, the Agency shall provide the Owner with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by the State ofcalifomia Department of Housing and Community Development. (p) "Note" shall mean the promissory note from the Owner to the Agency evidencing all or any part of the Loan. (q) "Owner" shall mean Ashland Village Apartments, L.P., a California limited partnership, and its successors and assigns to the Development. (r) "Property" shall mean the real property described in Exhibit A attached hereto and incorporated herein. (s) "Rent" shall mean the total of monthly payments by the residents of a Unit (other than the manager's Unit) for the following: use and occupancy ofthe Unit and land and 819\13\

106 associated facilities, including parking; any separately charged fees or service charges assessed by Owner which are required of all residents, other than security deposits; the cost of an adequate level of service for utilities paid by the resident, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not cable or telephone service; any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than Owner, and paid by the Resident. (t) "Resident" shall mean a household occupying a Unit. (u) "Term" shall mean the term of this Agreement, which shah commence on the date of recordation of this Agreement, and shall terminate the earlier of: (i) the date of expiration of the term of the MHP Regulatory Agreement, or (ii) the date which is fifty-seven (57) years after the date of recordation of this Agreement; but in no event prior to the date which is fifty-five (55) years from the date of recordation ofthis Agreement. (v) "Units" shall mean the one hundred forty-two (142) rental units to be rehabilitated by the Owner on the Property. (w) "Very Low Income Household" shall mean a household with an Adjusted Income that does not exceed the qualifying limits for very low income households, adjusted for Actual Household Size, as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, and as published by the State of California Department of Housing and Community Development. (x) "Very Low Income Rent" shall mean the rent permitted to be charged for a Very Low Income Unit pursuant to Section 2.2(a) below. (y) "Very Low Income Units" shall mean the Units, which, pursuant to Section 2.1(a) below, are required to be occupied by Very Low Income Households. 2.1 Occupancy Requirements. ARTICLE 2. AFFORDABILITY COVENANTS (a) Very Low Income Units. One hundred thirty (13) Units, one hundred fifteen (115) two-bedroom units and fifteen (15) three-bedroom units shall be rented to and occupied by or, if vacant, available for occupancy by Very Low Income Households. (b) Lower Income Units. Ten (l) Units, eight (8) two-bedroom units and two (2) three-bedroom units, shall be rented to and occupied by or, if vacant, available for occupancy by Lower Income Households. (c) Manager's Units. Two (2) two-bedroom units shall be available for designation as the manager's unit. 819\13\

107 (d) Existing Residents. Owner may at its option terminate tenancies of Existing Residents that do not meet the household income requirements ofthis Agreement; provided, however, such over income Existing Residents shall receive ninety (9) days written notice oftermination and shall be eligible for relocation assistance pursuant to the relocation plan approved by the Agency pursuant to Section 3.1 of the Agency Loan Agreement. 2.2 Allowable Rent. (a) Very Low Income Rent. Subject to Section 2.4 below, the Rent charged to Residents of the Very Low Income Units shall not exceed one-twelfth (l/12 th ) ofthirty percent (3%) of fifty percent (5%) of Median Income, adjusted for Assumed Household Size. (b) Lower Income Rent. Subject to Section 2.4 below, the Rent charged to Residents of the Lower Income Units shall not exceed one-twelfth (l/12 th ) ofthirty percent (3%) of sixty percent (6%) of Median Income, adjusted for Assumed Household Size. (c) Assumed Household Size. Pursuant to Health and Safety Code Section 552.5(h) the Federal Tax Credit Regulations are applicable to this Development and thus in calculating the allowable Rent for the Units. the following Assumed Household Sizes shall be utilized: Number ofbedrooms Assumed Household Size Two 3 Three 4.5 (d) No later than March I of each calendar year, the Agency shall provide the Owner with a schedule of permissible maximum Very Low Income Rents and the permissible maximum Lower Income Rents for the succeeding year. Under no circumstance may Owner raise rents above the permissible maximum rents as allowed under the annual rent schedule provided by the Agency. 2.3 Increased Income of Residents. (a) Increase in Income ofverv Low Income Household. If, upon recertification of a Resident's income, the Owner determines that a former Very Low Income Household's Adjusted Income has increased and exceeds the qualifying income for a Very Low Income Household set forth in Section 1.1(w) above, then, upon expiration ofthe Resident's lease: (I) Such Resident's Unit may be considered a Lower Income Unit; (2) Such Resident's Rent may be increased to a Lower Income Rent, upon sixty (6) days' written notice to the Resident; and (3) The Owner shall rent the next available Unit to a Very Low Income Household at a Very Low Income Rent. 819\13\

108 (b) Increase in Income of Lower Income Household. If, upon recertification ofa Resident's income, the Owner determines that a former Lower Income Household Adjusted Income has increased and exceeds the qualifying income for Lower Income Households set forth in Section 1.1 (I) the Owner shall continue to rent the unit to the former Lower Income Household at a Lower Income Rent. (c) Termination of Occupancy. Except if the character ofa Unit as a Very Low Income Unit has been redetermined pursuant to Section 2.3(a) above due to the increased income of a Resident, upon termination of occupancy of a Unit by a Resident, such Unit shall be deemed to be continuously occupied by a household of the same income level (e.g., Very Low Income Household or Lower Income Household as the initial income level of the vacating Resident, until such Unit is reoccupied, at which time the income character of the Unit (e.g., Very Low Income Unit or Lower Income Unit) shall be redetermined. If the character of the Unit as a Very Low Income Unit been redetermined pursuant to Section 2.3 above, upon termination of occupancy of a Unit by a Resident, such Unit shall be deemed to be continuously occupied by a household of the same income level (e.g., Very Low Income Household or Lower Income Household) as the income level of the vacating Resident, until such Unit is reoccupied, at which time the income character of the Unit (e.g., Very Low Income Unit or Lower Income Unit) shall be redetermined. 2.4 Resident Selection. (a) Before leasing any vacant Units in the Development, the Owner must provide the Agency for its review and approval the Owner's written marketing and resident selection plan. (b) The Owner shall not discriminate against any applicants for tenancy on the basis of source of income or rent payment (for example, without limitation, Temporary Assistance for Needy Families (TANF) or Section 8), and Owner shall consider a prospective Resident's previous rent history of at least one (l) year, or such other time period the Owner deems reasonable, as evidence of the prospective Resident's ability to pay the applicable Rent. 2.5 Lease Provisions. Owner shall include in leases for all Units provisions which authorize Owner to immediately terminate the tenancy of any household one or more of whose members misrepresented any fact material to the househo Id's qualification as a Very Low Income Household or Lower Income Household. Each lease or rental agreement shall also provide that the household is subject to annual certification in accordance with Section 3.1 below, and that, if the household's income increases above the applicable limits for a Very Low Income Household or Lower Income Household, as applicable, such household's Rent may be subject to increase. 2.6 Condominium Conversion. The Owner shall not convert Development units to condominium or cooperative ownership or sell condominium or cooperative conversion rights to the Property during the Term of this Agreement. 819\13\

109 ARTICLE 3. INCOME CERTIFICATION AND REPORTING 3.1 Income Certification. With respect to new Residents, the Owner will obtain, and complete, as a condition to initial occupancy and with respect to new Residents and Existing Residents, obtain and maintain on file annually thereafter, income certifications from each Resident renting any ofthe Units. The Owner shall make a good faith effort to verify that the income provided by an applicant or occupying household in an income certification is accurate by taking two or more of the following steps as a part ofthe verification process: (I) obtain a minimum of the three (3) most current pay stubs for all adults age eighteen (18) or older; (2) obtain an income tax return for the most recent tax year; (3) conduct a credit agency or similar search; (4) obtain the three (3) most current savings and checking account bank statements;(s) obtain an income verification form from the applicant's current employer; (6) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; or (7) if the applicant is unemployed and has no such tax return, obtain another form of independent verification. Copies of Resident income certifications shall be available to the Agency upon request. 3.2 Annual Report to Agency. Owner shall submit to the Agency (a) not later than the forty-fifth (4S th ) day after the close ofeach calendar year, or such other date as may be requested by the Agency, a statistical report, including income and rent data for all Units, setting forth the information called for therein, and (b) within fifteen (IS) days after receipt of a written request, any other information or completed forms requested by the Agency. 3.3 Additional Information. Owner shall provide any additional information reasonably requested by the Agency. The Agency shall have the right to examine and make copies ofall books, records or other documents of Owner which pertain to any Unit. 3.4 Records. Owner shall maintain complete, accurate and current records pertaining to the Development, and shall permit any duly authorized representative of the Agency to inspect records, including records pertaining to income and household size of Residents. All Resident lists, applications and waiting lists relating to the Development shall at all times be kept separate and identifiable from any other business of the Owner and shall be maintained as required by the Agency, in a reasonable condition for proper audit and subject to examination during business hours by representatives ofthe Agency. The Owner shall retain copies of all materials obtained or produced with respect to occupancy of the Units for a period of at least five (S) years. 3.S Annual Operating Budget. The Owner, shall within sixty (6) days of the end of each of the Owner's fiscal year, furnish the Agency a proposed Annual Operating Budget for the following calendar year. Upon receipt by the Agency ofthe proposed Annual Operating Budget, the Agency shall promptly review the same and approve or disapprove it within ten (1) working days. If the proposed Annual Operating Budget is not approved by the Agency, the Agency shall set forth in writing and notify the Owner of the Agency's reasons for withholding such approval. The Owner shall thereafter submit a revised proposed Annual Operating Budget for Agency approval, which approval shall be granted or denied within five (5) working days in accordance 819\13\

110 with the procedures set forth above. Satisfaction of the requirements specified under this Section 3.5 shall be deemed compliance with Sections 2.7(d) and 4.12 of the Agency Loan Agreement. 3.6 Approval of Use of Reserve Funds. Owner agrees to create and maintain three reserves: Operating Reserve with an initial capitalization of Four Hundred Sixty-One Thousand Eight Hundred Nineteen Dollars ($461,819), a Replacement Reserve with an initial capitalization oftwo Hundred Eighty-Four Thousand Dollars ($284,), to use for emergency repairs, transitional management costs, and other costs related to the rehabilitation and lease up of the Development, and a Resident Service Reserve with an initial capitalization of Two Hundred Thousand Dollars ($2,). The Operating Reserve and Replacement Reserve shall be capitalized at funding on the Conversion Date. Prior to the use of funds from the Operating Reserve or Replacement Reserve, Owner must submit a written request to withdraw funds from the reserve account. The written request shall specify the amount requested and state how the funds will be used. The Agency shall approve such request within thirty (3) days of receipt of the written request for use of reserves; such request shall not be unreasonably withheld. If the Agency fails to approve a request within the thirty (3) days, such request shall be deemed approved. Satisfaction of the requirements specified under this Section 3.6 shall be deemed compliance with Section 4.13 of the Agency Loan Agreement. 3.7 On-site Inspection. The Agency shall have the right to perform, upon reasonable notice, an on-site inspection of the Development at least one (l) time per year. The Owner agrees to cooperate in such inspection. ARTJCLE4. OPERATJON OF THE DEVELOPMENT 4.1 Residential Use. The Development shall be operated only for residential use as permanent multifamily rental housing. 4.2 Taxes and Assessments. Owner shall pay all real and personal property taxes, assessments, if any, and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any line or charge from attaching to the Property; provided, however, that Owner shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event Owner exercises its right to contest any tax, assessment, or charge against it, Owner, on final determination of the proceeding or contest, shall immediately payor discharge any decision or judgment rendered against it, together with all costs, charges and interest. 4.3 Nondiscrimination. (a) The Development shall be operated at all times in compliance with the provisions of (i) the Unruh Act; (ii) the California Fair Employment and Housing Act; (iii) Section 54 of the Rehabilitation Act of 1973; and (iv) the United States Fair Housing Act, as amended; and (v) any other applicable law or regulation (including the American With Disabilities Act, to the extent applicable to the Development). 819\13\

111 (b) All of the Units shall be available for occupancy on a continuous basis to members of the general public who are income eligible. Owner shall not give preference to any particular class or group of persons in renting the Units, except to the extent that the Units are required to be leased to Very Low Income Households or Lower Income Households, or pursuant to Section 4.5 below. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, age, source of income, disability, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor shall Owner or any person claiming under or through the Owner, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of residents, lessees, sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons for the operation and management of the Development. All deeds, leases or contracts made or entered into by Owner as to the Units or the Development or portion thereof, shall contain covenants concerning discrimination as prescribed by the Loan Agreement. Notwithstanding the above, with respect to familial status, the above should not be construed to apply to housing for older persons as defined in Section of the Government Code and other applicable sections of the Civil Code as identified in Health and Safety Code Section 335(b). 4.4 Section 8 Certificate Holders. The Owner will accept as residents, on the same basis as all other prospective residents, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act, or its successor. The Owner shall not apply selection criteria to Section 8 certificate or voucher holders that is more burdensome than criteria applied to all other prospective residents, nor shall the Owner apply or permit the application of management policies or lease provisions with respect to the Development which have the effect of precluding occupancy of units by such prospective Residents. 4.5 Preference to County and Agency Displacees. Owner shall give a preference in the rental ofany Units to eligible households displaced by activity ofthe Agency or the County, as provided in Health and Safety Code Section The preferences stated in this section apply to the rentals of Units throughout the Term. ARTICLE 5. PROPERTY MANAGEMENT AND MAINTENANCE 5.1 Management Responsibilities. The Owner is responsible for all management functions with respect to the Development, including without limitation the selection of residents, certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The Agency shall have no responsibility over management of the Development. The Owner shall retain a professional property management company, approved by the Agency in its reasonable discretion, to perform its management duties hereunder. A resident manager shall also be required. At least six (6) months prior to completion of rehabilitation of the Development Owner shall submit a proposed management plan to the Agency for approval by the Agency. The Agency shall approve or disapprove (with written 819\13\

112 explanation for disapproval) ofthe proposed management plan by notifying the Owner in writing within sixty (6) days ofthe date of submission to the Agency. 5.2 Management Agent; Periodic Reports. The Development shall at all times be managed by an experienced management agent reasonably acceptable to the Agency, with demonstrated ability to operate residential facilities like the Development in a manner that will provide decent, safe, and sanitary housing (as approved, the "Management Agent"). The Agency approves Eden Housing Management, Inc., as the initial Management Agent. The Owner shall submit for the Agency's approval the ident ity ofany proposed Management Agent and on-site resident manager. The Owner shall also submit such additional information about the background, experience and financial condition of any proposed Management Agent and on-site resident manager as is reasonably necessary for the Agency to determine whether the proposed Management Agent or on-site resident manager meets the standard for a qualified Management Agent or on-site resident manager set forth above. If the proposed Management Agent or on-site resident manager meets the standard for a qualified Management Agent or on-site resident manager set forth above, the Agency shall approve the proposed Management Agent or on-site resident manager by notifying the Owner in writing. Unless the proposed Management Agent or on-site resident manager is disapproved by the Agency within thirty (3) days, which disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed approved. 5.3 Performance Review. The Agency reserves the right to conduct an annual (or more frequently, if deemed reasonably necessary by the Agency) review of the management practices and financial status of the Development. The purpose of each periodic review will be to enable the Agency to determine if the Development is being operated and managed in accordance with the requirements and standards of this Agreement. The Owner shall cooperate with the Agency in such reviews. 5.4 Replacement of Management Agent or On-Site Resident Manager. If, as a result ofa periodic review, the Agency determines, in its reasonable judgment, that the Development is not being operated and managed in accordance with any ofthe material requirements and standards of this Agreement, the Agency shall deliver notice to Owner of its intention to cause replacement of the Management Agent or on-site resident manager, including the reasons therefor. Within fifteen (15) days of receipt by Owner of such written notice, Agency staff and the Developer shall meet in good faith to consider methods for improving the financial and operating status ofthe Development. If, after a reasonable period as determined by the Agency (not to exceed sixty (6) days), the Agency determines that the Owner is not operating and managing the Development in accordance with the material requirements and standards of this Agreement, the Agency may require replacement of the Management Agent or on-site resident manager. If, after the above procedure, the Agency requires in writing the replacement ofthe Management Agent or on-site resident manager, Owner shall promptly dismiss the then Management Agent or on-site resident manager, and shall appoint as the Management Agent or on-site resident manager a person or entity meeting the standards for a Management Agent or onsite resident manager set forth in Section 5.2 above and approved by the Agency pursuant to Section 5.2 above. 819\13\

113 Any contract for the operation or management of the Development entered into by Owner shall provide that the contract can be terminated as set forth above. Failure to remove the Management Agent or on-site resident manager in accordance with the provisions of this Section shall constitute default under this Agreement, and the Agency may enforce this provision through legal proceedings as specified in Section Approval of Management Policies. The Owner shall submit its written management policies with respect to the Development to the Agency for its review, and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement. 5.6 Property Maintenance. The Owner agrees, for the entire Term ofthis Agreement, to maintain all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials, and in accordance with the following maintenance conditions: (a) Landscaping. The Owner agrees to have landscape maintenance performed every other week, including replacement of dead or diseased plants with comparable plants. Owner agrees to adequately water the landscaping on the Property. No improperly maintained landscaping on the Property shall be visible from public streets and/or rights of way. including: (b) Yard Area. No yard areas on the Property shall be left unmaintained, (l) broken or discarded furniture, appl iances and other, household equipment stored in yard areas for a period exceeding one (l) week; (2) packing boxes, lumber trash, dirt and other debris in areas visible from public property or neighboring properties; and (3) vehicles parked or stored in other than approved parking areas. (c) Building. No buildings located on the Property may be left in an unmaintained condition so that any ofthe following exist: (I) violations of state law, uniform codes, or County ordinances; (2) conditions that constitute an unsightly appearance that detracts from the aesthetics or value ofthe Property or constitutes a private or public nuisance; (3) broken windows; (4) graffiti (must be removed within seventy-two (72) hours); and 819\13\ II

114 malicious mischief. (5) conditions constituting hazards and/or inviting trespassers, or (d) Sidewalks. The Owner shall maintain, repair, and replace as necessary all public sidewalks adjacent to the Development. The Agency places prime importance on quality maintenance to protect its investment and to ensure that all Agency-assisted affordable housing projects within the County are not allowed to deteriorate due to below-average maintenance. Normal wear and tear of the Development will be acceptable to the Agency assuming the Owner agrees to provide all necessary improvements to assure the Development is maintained in good condition. The Owner shall make all repairs and replacements necessary to keep the improvements in good condition and repair. In the event that the Owner breaches any ofthe covenants contained in this section and such default continues for a period of seven (7) days after written notice from the Agency with respect to graffiti, debris, waste material, and general maintenance or thirty (3) days after written notice from the Agency with respect to landscaping and building improvements, then the Agency, in addition to whatever other remedy it may have at law or in equity, shall have the right to enter upon the Property and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the Agency shall be permitted (but is not required) to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, and to attach a lien on the Property, or to assess the Property, in the amount ofthe expenditures arising from such acts and work of protection, maintenance, and preservation by the Agency and/or costs of such cure, including a ten percent (l%) administrative charge, which amount shall be promptly paid by the Owner to the Agency upon demand. 5.7 Safety Conditions. (a) The Owner acknowledges that the Agency places a prime importance on the security of Agency assisted projects and the safety ofthe residents and surrounding community. The Owner agrees to implement and maintain throughout the Term the following security measures in the Development: (1) to the extent feasible employ defensible space design principles and crime prevention measures in the operation of the Development including but not limited to maintaining adequate lighting in parking areas and pathways; (2) use its best efforts to work with the County Sheriffs Department to implement and operate an effective neighborhood watch program; and (3) provide added security including dead-bolt locks for every entry door, and where entry doors are damaged, replace them with solid-core doors. (b) The Agency shall have the right to enter on the Property and/or contact the County Sheriffs Department if it becomes aware of or is notified of any conditions that pose a danger to the peace, health, welfare or safety ofthe Residents and/or the surrounding 819\13\