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HomeMy WebLinkAboutED Ground Lease to Centertown II, LP of 855 C Street____________________________________________________________________________________ FOR CITY CLERK ONLY Council Meeting: September 13, 2021 Disposition: Passed Ordinance No. 2000 to Print Agenda Item No: 8.a Meeting Date: September 13, 2021 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Economic Development Prepared by: Danielle O’Leary, Economic Development Director City Manager Approval: ______________ TOPIC: GROUND LEASE TO CENTERTOWN II, LP OF 855 C STREET SUBJECT: ORDINANCE APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE A GROUND LEASE OF THE REAL PROPERTY AT 855 C STREET, SAN RAFAEL (CENTERTOWN) TO CENTERTOWN II, LP RECOMMENDATION: Pass to print an ordinance approving and authorizing the Mayor to execute a “Ground Lease (Centertown Project)” substantially in the form attached, which grants Centertown II, LP a California limited partnership, a 99-year ground lease of the City-owned property at 855 C Street, and to sign all documents reasonably required to terminate the current ground lease in favor of Centertown Ltd., a California limited partnership (and affiliate of Centertown II, LP), and authorizing the Mayor and City Manager to execute all other documents reasonably required to carry out the intent and purposes of the foregoing. BACKGROUND: On August 17, 2020, the City Council adopted Resolution No. 14851, approving and authorizing the City Manager to execute an Option to Lease, which granted Centertown II, LLC, an affiliate of Centertown II, LP, an option to lease this same City-owned property at 855 C Street. The background to Resolution No. 14851, including the original (current) lease to Centertown, Ltd. (an affiliate of Centertown II, LLC and Centertown II, LP), and the need to raise funds to rehabilitate the property, is described in the agenda report for the August 17, 2020 San Rafael City Council meeting. ANALYSIS: This Ground Lease is the next stage of the transaction contemplated by Resolution No. 14851. As contemplated by that Resolution, Centertown II, LP has, subject to closing, obtained the necessary funding to rehabilitate the property. From the City’s perspective, the essential business terms of the Ground Lease are as follows: SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 Term: 99 years. Under the current schedule, the commencement date will be on or about October 22, 2021, although that could change. Premises: City-owned land at 855 C Street, previously leased to Centertown, Ltd. (an affiliate of Centertown LP). The improvements, previously owned by Centertown, LTD, will be owned by its successor Centertown II, LP. The prior lease with Centertown, Ltd. will be terminated. Base Rent to City: One-time payment of $83,000 (appraised land value) plus $1.00 per year (both payable at closing), plus a $5,000 per year monitoring fee (escalated per CPI). Use: Rehabilitating, constructing, owning and operating a residential development and related uses, including at least 60 dwelling units. Consistent with the current ground lease, at least 48% of the units (i.e., 28 of the 60) must be rented to households earning not more than 80% of the area median income in the San Francisco Bay Area, adjusted for household size (“lower income”). Other funders have even stronger restrictions. For example, CTCAC requires 100% of the units (other than the manager’s) to be leased to tenants at or below 60% of Marin County AMI. As described in the Seifel Consulting, Inc. report included with the Resolution No. 14851 agenda report, all Centertown residents at the time were lower income households, and many of them were extremely low. City Loans: As described in the Resolution No. 14851 agenda report, the various City outstanding loans will be consolidated into a single loan. The City is not expected to be required to loan additional funds for the project. The specific terms of the City’s consolidated loan, as well as a specific City Affordable Housing Regulatory Agreement, will be brought to the Council for review and approval at a later meeting closer to the expected closing/commencement date. Timing: The current project schedule contemplates a closing on October 22, 2021. This ordinance is being introduced for initial approval at the September 13, 2021 City Council meeting and if passed, will be scheduled for final adoption at the September 20, 2021 Council meeting. The intent is to have the approved ordinance become effective on October 20, 2021, in advance of the anticipated closing date. FISCAL IMPACT: The purpose of this ordinance is to provide BRIDGE/EAH the opportunity to re-syndicate and refinance Centertown located at 855 C Street in San Rafael, California to provide flood improvements, ADA improvements, and other necessary ongoing maintenance. City Council approval of an ordinance is required to approve the new ground lease for BRIDGE/EAH to proceed with re-syndication and refinancing of this property. There is no fiscal impact in adopting an ordinance that approves and authorizes the Mayor to execute the ground lease. The City will receive a base rent payable at closing along with a $5,000 per year monitoring fee (escalated per CPI). OPTIONS: The City Council has the following options to consider on this matter: 1. Pass the ordinance to print. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3 2. Pass the ordinance with modifications. 3. Direct staff to return with more information. 4. Take no action. RECOMMENDED ACTION: Adopt ordinance approving and authorizing the Mayor to execute a ground lease of real property at 855 C Street, San Rafael (Centertown) to Centertown II, LP. ATTACHMENTS: 1. San Rafael Centertown Apartments Due Diligence Analysis 2. Ordinance of the City Council of the City of San Rafael Approving and Authorizing the Mayor to Execute a Lease of Real Property at 855 C Street, San Rafael (Centertown) to Centertown II, LP 3. Exhibit A to Ordinance – New Centertown II, LP Ground Lease 4. Public Hearing Notice 369 Pine Street Suite 350 San Francisco CA 94104 | 415-618-0700 | www.seifel.com Memorandum Date August 7, 2020 To: City of San Rafael From: Seifel Consulting, Inc. Subject: San Rafael Centertown Apartments Due Diligence Seifel Consulting, Inc. (Seifel) has performed a due diligence analysis regarding a proposed ground lease amendment and funding request from BRIDGE Housing and EAH Housing (BRIDGE/EAH) that would substantially rehabilitate Centertown Apartments (Centertown) in downtown San Rafael. The current residents of Centertown are in substantial need of affordable housing as their incomes are significantly below typical household incomes in Marin County. Prior to BRIDGE/EAH acquiring the site, the property was originally planned as condominiums, but the condominium development failed financially prior to construction completion. The City of San Rafael (City) and its former Redevelopment Agency collaborated with BRIDGE/EAH to acquire the property and redevelop it as 60 units of affordable rental housing. As part of the project’s financial structure, the City owns the land, and a BRIDGE/EAH-controlled limited partnership (Centertown Associated Ltd) ground leases the property from the City and owns the Centertown building improvements. EAH is the property manager for the property. While BRIDGE/EAH were able to redevelop the property into apartments in 1992 by incorporating the existing, partially built foundation, Centertown has unfortunately experienced subsequent construction related issues including significant problems related to water intrusion.. These problems, coupled with the overall age of the building, have resulted in the need for substantial ongoing investment out of operating cash flow. BRIDGE/EAH have requested and been granted the deferral of payments on the City’s ground lease and outstanding promissory note, as well as loan payment deferrals from other soft lenders, to pay for needed repairs and increase replacement reserves to help pay for the proposed substantial rehabilitation of the property. BRIDGE/EAH commissioned Marx | OKUBO Associates to perform a Facility Condition Assessment of the property to determine its condition and the need for repairs to the building systems. As will be further described below, the property is in significant need of repair given its age and construction type. BRIDGE/EAH are proposing to undertake rehabilitation improvements to the property as recommended in the Facility Condition Assessment and to provide additional building common area for residents and property management. The proposed re-syndication of the property and amendment to the ground lease is anticipated to leverage substantial funding from the State of California, County of Marin and private capital to holistically correct the property’s waterproofing issues and to undertake other needed rehabilitation. Both BRIDGE and EAH have a long history of developing, rehabilitating and managing affordable housing. As the property manager of Centertown, EAH provides a broad array of resident services and regularly communicates with residents. Once BRIDGE/EAH have been able to secure funding for the Seif el CONSULTING INC Page 2 rehabilitation, they will provide information to the residents regarding the likely rehabilitation schedule and information regarding any temporary moves that households may need to make during the rehabilitation process. Alternative housing will be provided at no additional cost to residents who need to be temporarily relocated, and they will receive assistance with their move and will not have to pay any costs associated with the move or storage for personal belongings. The main focus will be to provide ample information and support to residents, as well as comfortable and convenient accommodations during any temporary moves. In order to perform its due diligence analysis, Seifel analyzed a series of technical documents that were provided by City and BRIDGE/EAH staff and are referenced in this memorandum. Seifel also interviewed City staff and BRIDGE/EAH staff regarding specific elements of the proposed project and worked with staff and outside counsel to refine the proposed terms of the ground lease amendment and funding request to the City. This memorandum is organized into the following sections: A. Project Description B. Existing Ground Lease C. Existing City Loan and Other Financial Obligations D. Proposed Rehabilitation Program E. Proposed Funding Program and Ground Lease Modifications F. Due Diligence Findings G. Conclusion The due diligence analysis in this memorandum documents why BRIDGE/EAH’s proposed modifications to the ground lease and City loan requests are reasonable, and how they will help the City of San Rafael preserve and substantially rehabilitate an important source of affordable housing for local residents, consistent with the City’s Housing Element goals. The proposed resyndication and rehabilitation program will improve the living environment for approximately 180 of the City’s lower income residents and will leverage sufficient public and private funding to accomplish much needed repairs and building improvements that will enhance the City’s long-term interests in the property. A. Project Description Centertown Apartments is located at 855 C Street on a 0.98-acre lot in downtown San Rafael owned by the City of San Rafael. The property was a housing asset of the former San Rafael Redevelopment Agency (SRRA). The City also owns the adjoining property at 815 C Street. BRIDGE/EAH redeveloped the property into 60 affordable apartments in 1992 by incorporating an existing, partially completed foundation structure that was part of a former condominium development.1 The former condominium developer declared bankruptcy before construction was complete, and the property was foreclosed in 1984 by the United States Bank. The foundations remained as they were constructed in 1983 until BRIDGE/EAH began construction on Centertown Apartments in the early 1990s.2 1 For purposes of this memorandum, the use of the term BRIDGE/EAH refers to the Centertown legal entities that have developed and are proposing to rehabilitate and resyndicate the property. 2 A detailed history of the development and key terms of the City’s ground lease and loans are presented in the Centertown Deal Memo, which was prepared by Page Robbins Associates for the City of San Rafael on February 1, 2000. This is a major source of information that was used in this due diligence analysis, which was verified to the extent feasible with current City and BRIDGE/EAH staff, as well as outside counsel. I Page 3 The apartment building contains approximately 85,469 gross square feet of building area and is arranged around a central courtyard. Centertown provides 59 affordable family apartments– 17 one-bedroom units, 27 two-bedroom units, and 15 three-bedroom units. An onsite property manager occupies a two-bedroom manager’s unit for a total of 60 units. The property includes 102 parking spaces including six offsite spaces on 815 C Street that are able to be used by Centertown residents under the terms of a recorded Declaration of Restrictions for as long as the property remains residential and parking is required by the City. All of the residents of Centertown are lower income households, with many of them being extremely low income. According to BRIDGE/EAH, the average household income of Centertown residents is about 32% of the Marin County Areawide Median Income (AMI). B. Existing Ground Lease On March 8, 1988, BRIDGE entered into the initial Purchase Agreement with United Savings Bank to acquire the property. Later that year, property ownership was transferred from United Savings Bank to the former San Rafael Redevelopment Agency (SRRA). In 1989, property ownership of the adjacent 815 C Street was transferred from BRIDGE to SRRA. Both sites were then leased by the Lessor, SRRA, through a long-term ground lease to the Lessee, a project specific legal entity called Centertown Associates managed by BRIDGE/EAH. The ground lease was originally recorded on November 30, 1989, and the term of the ground lease is 75 years. Three ground lease amendments have occurred since 1989 that amended specific sections related to the payment of ground rent given evolving financial conditions over time. The original ground lease and subsequent amendments describe a complicated stream of payments that occur during specific periods of time. These payment amounts were tied to the project’s projected ability to meet its financial obligations including the repayment of loans that were provided by the City and the former SRRA. The most critical portions of the ground lease payment structure are summarized here: • For the first five years, the Lessee’s initial ground lease payment or ground rent was $1 per year. o A reconciliation was done in the sixth year to determine if the Lessee’s equity investment had been returned, and the rent continued at $1 per year until this occurred. • Once the Lessee’s equity investment was returned, the ground rent became 9% of gross income paid annually in arrears until it accumulates to $1,061,104. o As further described below, the California Department of Housing and Community Development (HCD) provided a loan to the property that is subject to an HCD Regulatory Agreement that limits the amount of annual ground lease payments to a maximum of $69,880 ($84,880 minus a $15,000 partnership management fee).3 • Once $1,061,104 in ground rent payments have accumulated, the ground lease payment is $1 per year until all of the original City and SRRA loans are repaid. (Only one City loan is currently outstanding as described below.) • After the City and SRRA loans are repaid, ground rent is then based on 6% of gross income. 3 The HCD Regulatory Agreement does not allow cumulative distributions, but instead allows an annual distribution of up to $84,880 in any year when there is net cash flow. After the allowable deduction of $15,000 for a Partnership Management Fee, $69,880 is available for payment of the deferred ground lease rent, although in recent years, surplus revenues have been used to fund reserves in order to meet repairs. I Page 4 Based on an analysis of historical payments that were reported in annual financial audits performed on Centertown, the Lessee has made approximately $430,000 in payments on the ground lease through December 2019, which means that about $631,000 is remaining to be paid on the current $1,061,104 ground lease payment tranche. Since 2016, almost all of the remaining cash flow has been deposited in the replacement reserve account to help pay for repairs on the property, and only about $4,500 in ground lease payments have been made since then. C. Existing City Loan and Other Loan Obligations The property has several outstanding loans that are payable to the City of San Rafael, State of California, County of Marin, and Citibank. 1. Existing City Loan The former SRRA and the City provided three loans to help finance redevelopment of the property. All but one loan was repaid in the early 1990s. The remaining $303,000 promissory note from the former SRRA was transferred to the City, which is referred to in this memo as the existing City loan. According to the City’s FY 2018/19 Consolidated Annual Financial Report (CAFR), the former SRRA loaned $303,000 at 3% simple interest to Centertown Associates, Ltd, which was due to be paid semi- annually. This existing City loan is fully secured by a deed of trust. With the dissolution of the Redevelopment Agency effective February 1, 2012, the assets of the Agency’s Low and Moderate Income Housing Fund (LMHAF), including the Centertown Associates loan, were assumed by the City’s Low and Moderate Income Housing Special Revenue Fund. The existing City loan was amended, with the relevant terms being contained in the Amended and Restated Promissory Note dated May 6, 1991, with a maturity date of June 30, 2023. Payments have been made on this loan over the years, and the remaining balance is about $260,000 according to the most recent City Consolidated Annual Financial Report (CAFR) and Centertown 2019 Audit performed on behalf of BRIDGE/EAH.4 (Please see Appendix Table A-1 for additional information regarding this loan and other loan obligations.) 2. California Housing and Community Development (HCD) Loan The California Department of Housing and Community Development (HCD) provided a Rental Housing and Construction Program (RHCP) loan to the property in the early 1990s, which is subject to an HCD Regulatory Agreement that restricts rents on 29 units (RHCP units). The loan is for 3% simple interest and is payable by November 5, 2052. The current principal balance is $1,722,662, and about $1.45 million in interest has accrued on this loan as of the end of 2019. 3. County of Marin Loan The County of Marin (County) provided two loans totaling $99,504 loan to the property in the early 1990s, which is subject to a loan agreement that has a unique set of interest and payment provisions. No interest or principal is currently due, but the loan comes due on May 1, 2021. (The County also provided a CDBG loan of $59,504 that has since been retired.) 4 The remaining balance on the City loan is $259,756 (including accrued interest) as of December 31, 2019, according to the most recent Centertown 2019 Audit (Centertown Associates, Ltd. Financial Statements and Independent Auditor’s Report, December 31, 2019). The City’s FY 2018/19 Consolidated Annual Financial Report (CAFR) indicates that the remaining balance as of the end of June 30, 2019 was $256,870. I Page 5 4. Citibank Loans (AHP and Permanent Mortgage) In addition to these soft, public agency loans, two private loans were provided to the project. The Affordable Housing Program (AHP) loan is a soft private loan that is provided through Citibank (Citi). It has a 0% interest rate and a 30-year term, with a due date of June 30, 2023. BRIDGE/EAH believe that this loan will be forgiven and will no longer apply to the property in the future. A senior permanent mortgage with a remaining balance of $236,321 is payable to Citibank and serviced by Berkadia Commercial Mortgage. This loan is senior to all other loan obligations, and the required payments are due in monthly installments of $5,981, based on a 30-year amortization including interest at 4.690%. The loan is due in full in the year 2023. (Please refer to Appendix Table A-1 for a summary of these loans that is organized according to the seniority of the loans based on the City’s records.) 5. Deferral of Loan Payments In the past five years, BRIDGE/EAH have requested and been granted annual deferral of payments on the City’s ground lease and outstanding promissory note, as well as loan payment deferrals from HCD in order to contribute additional funds to the replacement reserves. According to the Centertown 2019 Audit, the property currently has about $614,354 in replacement reserves available for capital improvements as of the end of 2019. D. Proposed Rehabilitation Program As described above, the Centertown development has experienced numerous construction related issues, which include significant problems related to water intrusion, aging building systems and deferred maintenance, as identified in the Facility Needs Assessment performed by Marx | OKUBO Associates. These problems are not uncommon for a building that was constructed about three decades ago, particularly for affordable housing that does not generate sufficient cash flow to pay for significant rehabilitation costs. While ongoing repairs have been undertaken, the needed level of repairs substantially exceeds the replacement reserve account that has been accumulated from project cash flow, and the apartments require substantial renovation to improve the health, safety and quality of life for residents. BRIDGE/EAH are proposing to resyndicate and refinance Centertown using tax exempt bonds and low income housing tax credits (LIHTC), as further described in the next section, in order to rehabilitate the property to address all immediate physical needs and establish reserves and cash flow to address future maintenance needs as they arise. All of the existing residents will be able to continue to reside in their apartments, although some residents could be temporarily moved depending on the extent of renovation in their units. These residents will be able to move back to their original unit once renovated. The rehabilitation program is proposed to include the following improvements in the following priority order: 1. Waterproofing-related repairs, including the replacement of windows and sliding glass doors, repair of the roof membrane, shingles, gutters, and downspouts, and the removal and replacement of all cement plaster, repair of gypsum and plywood siding. 2. Exterior improvements to improve health and safety, including replacement of ceramic tiles, use of non-skid strips, signage, upgrades to handrails and entrances. 3. Accessibility upgrades to meet Americans with Disabilities Act (ADA) requirements, including the renovation of six apartment units to serve persons with disabilities. 4. Upgrade and/or replacement of HVAC, plumbing and electrical that will make the property safer, healthier, and environmentally sustainable and provide more efficient operations. I Page 6 5. Upgrade of unit interiors to address critical repairs related to plumbing leaks and decayed unit finishes. 6. Community building addition of approximately 1,100 square feet to be located on the property’s lower, interior courtyard, which will provide a community room, common area restrooms, kitchen area, resident service rooms and management offices. 7. Upgrade of common areas, including replacement of damaged exterior common area and dwelling unit doors and installation of resilient flooring in corridors. 8. Repair and upgrade of the courtyard and parking areas. 9. Should sufficient funds be available, additional rehabilitation of unit interiors will be done to those units most in need of updated interior finishes, which would include new kitchens, bathrooms, flooring and lighting fixtures. These improvements will be done approximately in the priority order described above. The total estimated cost for the proposed improvements is approximately $10 million, which includes an approximately 10 percent hard cost contingency that is typical for rehabilitation of older properties. The City’s Building Department will monitor the rehabilitation efforts through its permitting and inspection process. Appendix Table A-2 shows the proposed development sources, which presents all of the costs associated the renovation and resyndication including the construction hard cost. To permit the new addition proposed for the lower, interior courtyard, the BRIDGE/EAH team have submitted a design review application to the City’s Zoning Administrator, and approvals were received on July 22, 2020. The remainder of the rehabilitation scope is by-right and a building permit application will be submitted in February 2021, in anticipation of a May 2021 construction start. E. Resident Communication and Temporary Relocation As the property manager of Centertown, EAH regularly communicates with Centertown residents and provides an array of social services through the EAH “StayWell!” program for families, individuals, and aging adults. Once BRIDGE/EAH have been able to secure funding for the rehabilitation, they will provide information to the residents regarding the proposed rehabilitation schedule and any temporary moves that households may need to make during the rehabilitation process. The proposed exterior rehabilitation and a substantial portion of the interior rehabilitation, including window/sliding door replacement, lighting, heating and water saving upgrades to all 60 units, can be performed while residents remain in their units. However, the proposed ADA retrofits for 6 units, and the potential kitchen and/or bathroom replacements in about 6-12 units, will be most effectively and safely done if households are temporarily moved while these upgrades are performed. This means that some households will be temporarily relocated for a period of approximately 4-8 weeks while their units undergo interior rehabilitation work. Every effort will be made to minimize the time when residents must leave their homes. A relocation consultant and on-site property management staff will work with all affected households to address their immediate needs and resolve health and safety concerns. Accommodations will be provided to residents who are temporarily relocated at no additional cost to the tenants. Packing materials, moving and storage of tenant belongings will also be coordinated and facilitated for them. The rehabilitation budget includes projected costs associated with the temporary relocation, and affected residents will not have to pay any of these expenses. The main focus will be to provide ample information and communication regarding any required move and to provide comfortable and convenient alternative housing for them during the relocation period. Once unit renovations are complete residents will be able to return to their original units. I Page 7 BRIDGE/EAH are in the process of retaining a relocation consultant who will interview residents, prepare a relocation plan and then implement the plan to accomplish the temporary relocation in compliance with all relevant State and Federal laws. Interviews will be conducted with current residents to understand their housing needs, including any special needs related to disabilities and health problems, and their preferences related to the location and type of temporary housing. Relocation information and assistance will be provided in the primary language of the residents in order to assure that they understand the relocation plan and how their housing needs will be addressed. A relocation schedule and noticing will be provided to households once the construction phasing is confirmed and BRIDGE/EAH know which households may be affected. A BRIDGE/EAH rehabilitation project manager will work closely with the General Contractor, relocation consultant, and property management staff to ensure a smooth construction schedule and facilitate temporary relocation. F. Proposed Funding Program and Ground Lease Amendment BRIDGE/EAH are proposing to renegotiate the existing City, County and State loans to extend their term and modify their interest rates in some cases, among other modifications to be negotiated between the parties. BRIDGE/EAH are also proposing to resyndicate and refinance the development using tax exempt bonds and LIHTC that would be applied for in September 2020 to the California Debt Limit Advisory Committee (CDLAC). Each of the major proposed sources of funding are described below and shown in Appendix Table A-3. As part of the proposed funding program, the apartments will continue to be restricted as affordable rental units for another 55 years. BRIDGE/EAH propose to maintain the current income restrictions, which range from 50% to 60% of the Area Median Income (AMI). More than 40% of the units will continue to house residents earning 50% AMI or less. Currently, fifteen residents receive Housing Choice Vouchers (HCV) from the Marin County Housing Authority that provide additional annual revenues to Centertown. The 29 RHCP units will be maintained, which are subject to the HCD Regulatory Agreement and have rents that are subject to review and approval by HCD. Table 1 shows the proposed household income distribution at Centertown, which will remain substantively the same as the current income mix. I Page 8 Table 1 Resident Affordability by Unit Type Centertown Apartments The current resident population is primarily families, with a number of single adults and seniors. This resident mix is proposed to continue in the future. While Centertown does not currently have any special needs or targeted populations, BRIDGE/EAH are proposing to retrofit six units to be fully ADA accessible, as required by TCAC. These units will be available to current households with disabilities and will be also be provided to new households with disabilities if residents were to move. Although no special needs units would be designated, some of the units will continue to be rented to extremely low- income households that earn 30% or less of AMI. (Although these units are designated as very low- income units affordable at 50% AMI, some are occupied by extremely low-income households. 1. Modifications to City Loans and Ground Lease BRIDGE/EAH are proposing that the City amend the loan terms of the existing City loan, and this loan would continue to remain a source of funding for the rehabilitation program. The existing City loan would be modified to change the interest rate to meet tax credit requirements (from 3% simple to compounding interest at the Applicable Federal Rate or AFR), extend the loan term to 55 years, and other needed changes to be negotiated with the City. The existing City loan would be assigned to the new tax credit partnership when this occurs, anticipated to be in May 2021. A Fourth Amendment to the Ground Lease is proposed to occur at the end of 2020, and an option to enter into a new ground lease would be entered into during August 2020, with the formal agreement for the new ground lease to occur only if and when the re-syndication and refinancing process moves forward. The Option to Ground Lease is a required document to be submitted with the project’s joint TCAC/CDLAC application to establish site control (a Purchase and Sale Agreement will also be entered into for the improvements). Bedrooms Rental Restriction AMI Total Units 1 TCAC (RHCP)50%6 1 TCAC + HCV 60%10 1 TCAC (Rent Burdened)60%1 2 TCAC (RHCP)50%11 2 TCAC + HCV 60%5 2 TCAC (Rent Burdened)60%10 2 TCAC 60%1 3 TCAC (RHCP)50%8 3 TCAC (RHCP)60%4 3 TCAC (Rent Burdened)60%2 3 TCAC 60%1 2 Manager's Unit N/A 1 Subtotal RHCP Units 29 Subtotal HCV Units 15 Total 60 Source: City of San Rafael, BRIDGE Housing, EAH Housing.I Page 9 a. Fourth Amendment to the Ground Lease (To be Executed by End of 2020) Under the City’s existing ground lease, the City is unlikely to receive substantive ground lease payments in the future as surplus cash flow will likely continue to be needed for repairs. The estimated hard cost for repairs (before consideration of soft costs related to professional services to undertake them) is $10 million in 2020 dollars. If this amount of rehabilitation were divided by the 42 years remaining on the ground lease, the operating cash flow would need to contribute $238,000 per year (in 2020 dollars) toward these repairs to accomplish them by the end of the ground lease. As noted in Section C, only $69,880 is allowed by HCD to be annually paid out of project cash flow, so there would not be sufficient cash flow to pay for all of the proposed repairs before the end of the lease term. In recent years, the developer has requested permission to contribute excess cash flow into replacement reserves, rather than make residual receipts distributions to ground lease and soft debt payments. These requests have consistently been approved by the City and HCD. The replacement reserves have been used to make immediate repairs and to save for the upcoming substantial rehabilitation that is planned for 2021. Additionally, structural changes to the current ground lease payment structure are needed to bring the ground lease into compliance with IRS rules. These changes need to occur prior to the anticipated construction financing closing/resyndication event that is anticipated for May 2021. The developer and investor’s respective tax counsel advise that amendments to the ground lease and the new loan be completed in 2020. Taking into account these considerations while also seeking to enhance potential revenues to the City, the fourth amendment of the ground lease is proposed to modify the lease as follows: • $1 per year ground lease payment plus a $5,000 per year annual City monitoring fee. These annual payments will continue until a new lease is negotiated. • The remaining balance of the second ground lease payment tranche, which is approximately $631,000, will become the principal amount on a new City loan.5 o The precise loan amount will be verified with City staff and be based on the Centertown 2019 Audit as of 12/31/19 and the City’s FY 2018/19 CAFR.) o This new City loan will ultimately be consolidated with the existing City loan and become part of a consolidated City loan to the new Limited Partnership should the resyndication and refinancing proceed. This consolidated City loan will be a part of the overall residual receipts distributions. • The fourth amendment and the new City deferred loan are proposed to be entered into by the end of 2020 with City Council approval, once receipt of the tax credit and bond allocation is received. The proposed 4th Amendment and the New City Loan allows the accrued ground rent of $631,000 to be recast as a loan, which paves the way for an optimal structure for the project’s resyndication and future 5 The New City Loan will be evidenced by a promissory note, with a maturity date of November 6, 2052 (after the HCD loan term has expired but before the expiration of the current Ground Lease term, which expires November 5, 2064) and will be a fully deferred soft loan. It will not be secured by the Property, but a default under the promissory note will be a default under the Ground Lease, which is how the Ground Lease payment is secured now. The New City Loan will essentially be a placeholder loan, as it will be consolidated with the City's Existing Loan when that loan is modified (to change some of the terms to comply with tax credit requirements such as: changing the interest rate from 3% simple to compounding AFR, extending the term to 55 years, and other needed changes to be negotiated with the City) and assigned to the new tax credit partnership in May 2021. I Page 10 ground lease, while at the same time preserving the City’s ability to retain the ability to collect residual receipts payments from $631,000 in the resyndication financial plan. b. Option to Ground Lease and New Ground Lease (Option To be Executed in August 2020; New Ground Lease Agreement to Occur with Proposed Resyndication and Refinancing) The proposed ground lease option would enable BRIDGE/EAH and the City to negotiate a new lease under the following terms, which may be modified as the financing program is refined over the next few months: • A new ground lease term of 99 years from the date of execution. • $83,000 upfront ground lease payment based on a 2020 property appraisal that indicates the current land value is $83,000, due to existing regulatory restrictions on the property. (This amount would be paid to the City at closing.) • Payment of a $5,000 per year annual City monitoring fee, which could escalate at 3% per year after permanent financing is in place. This amount will be determined in collaboration with City staff based on experience with other projects, taking into account the size of this development. • The ground lease language will be modernized in connection with the resyndication, which will include a provision that the ground rent won't exceed the market value of the land. • As described above, the consolidated City loan would be entered into at the same time. As noted above, BRIDGE/EAH need a contractual option to enter a new ground lease in order to meet requirements for applying for tax credits and tax exempt bond monies. Entering into a new ground lease will enable the proposed resyndication and rehabilitation to occur, which will significantly improve the building improvements. As the City will ultimately receive the building improvements at the end of the lease, the rehabilitation will enhance the City’s long-term asset. Any new ground lease will have to be approved by the City Council, but subject to the material terms agreed to in the Option. c. New Housing Trust Fund Loan BRIDGE/EAH is applying to the City for between $500,000 and $1 million in Housing Trust Funds to help fund the rehabilitation of the development. (The City’s funds will be solely used for this purpose.) If approved, these loan funds would collectively be repaid out of residual cash flow from the project in proportion to the City’s contribution, as the project stabilizes. Table 2 summarizes the proposed City funding. Table 2 Proposed City Funding Centertown Apartments Proposed City Loans Potential Loan Amount City- Existing Loan $259,576 City- New Loan $631,000 City- Housing Trust Fund $524,927 Total Proposed Loans $1,415,503 Source: City of San Rafael, BRIDGE Housing, EAH Housing.I Page 11 2. California Housing and Community Development (HCD) Loan BRIDGE/EAH are proposing that HCD amend the existing HCD loan terms and allow this loan to remain a source of funding for the rehabilitation program pursuant to HCD's Loan Portfolio Restructuring Program and Guidelines. The existing HCD loan would be modified to change the interest rate to AFR, extend the loan term to 55 years, and other needed changes to be negotiated with HCD. The HCD loan would also be assigned to the new tax credit partnership. HCD would likely continue to receive an annual senior payment of $10,311 per year, as well as a proportionate share of residual receipts. 3. County of Marin Loan BRIDGE/EAH are also proposing that the County amend the loan terms of its existing County loan and allow this loan to remain a source of funding for the rehabilitation program. In addition, BRIDGE/EAH have received additional funding of approximately $1 million to help fund the project’s substantial rehabilitation. The existing and new County loan would likely have the same terms, which would need to be consistent with tax credit requirements and would be similar to the City and HCD loan terms as described above. 4. Private Loans In addition to these soft, public agency loans, BRIDGE/EAH will secure a permanent mortgage, which is projected to be about $5 million in size. This loan will be senior to all other loan obligations, and the required payments will likely be due in monthly installments based on a 40-year amortization at an interest of about 4.25%. (The AHP loan is assumed to be forgiven.) 5. Replacement Reserves BRIDGE/EAH are proposing to utilize about $680,000 in funding from replacement reserves to help pay for the rehabilitation. As indicated earlier, the Centertown replacement reserve account has $614,354 in funds as of 2019. Assuming the continuation of substantial HCV payments to tenants, additional funds could be available from surplus cash flow to be deposited in the replacement reserve. The final amount of replacement reserves that could be available to help pay for future rehabilitation costs will be finalized at the close of construction period financing, and upon finalization of the 2020 financial audit of the property. If additional reserves result in a surplus of project sources, the City of San Rafael Housing Trust Fund would be reduced by an amount commensurate to the surplus. 6. Syndication Proceeds, General Partner Equity and Seller Carry Back Loan BRIDGE/EAH are applying for low income housing tax credits, which will be syndicated and are projected to yield about $9.1 million in investor equity. BRIDGE/EAH will also contribute about $1.7 million in General Partner Equity that is equal to the portion of the developer fee that is in excess of the allowable fee pursuant to State guidelines. The seller carry back loan represents the difference between the appraised value for Centertown and the sum of the refinanced loans and the sponsor loan. G. Due Diligence Findings The Centertown apartments are in substantial need of rehabilitation, which is evident from the Facility Needs Assessment performed by Marx | OKUBO Associates. In addition, BRIDGE/EAH retained an experienced General Contractor (Saarman) to review the building conditions and prepare a detailed cost estimate to undertake the rehabilitation in alignment with the findings of the Facility Needs Assessment. Seifel reviewed the Facility Needs Assessment and interviewed BRIDGE/EAH to understand what rehabilitation elements are most critically needed, as there may not be sufficient funding to undertake all I Page 12 of the improvements that have been identified. Section D of this memorandum describes the proposed rehabilitation and the proposed order of priority to undertake these improvements depending on the level of available funding from all sources. Seifel has reviewed BRIDGE/EAH’s funding plan as it evolved over the past two months and agrees that BRIDGE/EAH has identified all relevant public funding sources that could be utilized for this rehabilitation effort. BRIDGE/EAH will work to maximize the amount of revenues that are generated from LIHTC, and BRIDGE/EAH will contribute about 40 percent of its eligible developer fee (in the form of a General Partner contribution) to help fund the planned rehabilitation. In addition, BRIDGE/EAH is providing a seller back carry loan to the development that is equal to the difference between the appraised property value and the existing debt. Repayment on this loan is limited to 50% of cash flow per the HCD Loan Portfolio Restructuring Guidelines. Seifel reviewed BRIDGE/EAH’s financial pro forma, and the proposed high priority rehabilitation projects that can be feasibly undertaken if the City, County, State and private lender provide the requested level of funding. BRIDGE/EAH has included a 10% contingency to take into account cost escalation and potential rehabilitation needs that could occur once construction begins. Should less funding be available, the scope of the rehabilitation may need to be reduced. If additional funding is available or not all of the construction contingency funds are needed, additional rehabilitation improvements could be undertaken. Seifel worked with BRIDGE/EAH to identify and prioritize these improvements, and BRIDGE/EAH is committed to implementing as many of the needed rehabilitation improvements as possible, following the order of priority in this memorandum, or as this priority may be further revised in consultation with City staff. BRIDGE/EAH proposes that the existing public loans (soft debt) from the City of San Rafael, Marin County and the State of California will be amended to a compounded interest rate equal to the AFR, which is currently approximately 1.2%. While this proposed modification could generate less interest than the City’s current 3% simple interest rate, this modification will generate additional tax credit equity for the project. Furthermore, the AFR may increase by the time this project proceeds and be closer to the City’s current effective interest rate. Seifel worked with City staff, BRIDGE/EAH and outside counsel to refine what BRIDGE/EAH originally proposed with respect to the ground lease and City funding. The proposed Fourth Amendment to the Ground Lease and proposed Option to Ground Lease, and the recommended provision of a new City loan equal to the outstanding balance on the ground lease, will enable the City to properly secure its interest in the property and provide for greater participation in future residual receipts. Seifel also prepared a comparative analysis of what the City would likely receive under the existing ground lease and with the proposed project under two alternative revenue scenarios. Table 3 on the next page compares the City revenues under these three scenarios. As this shows, the City will likely receive a larger stream of revenues with the proposed project than under the existing ground lease scenario. 1. Scenario 1– Existing Ground Lease With Fourth Amendment Scenario 1 assumes that the City would enter into the Fourth Amendment to the Ground Lease by the end of 2020. As described above under Section E, the Fourth Amendment to the Ground Lease will revise the existing payment terms to confirm with current IRS rules, provide for the payment of an annual monitoring fee, and will facilitate the creation of a new City loan that will be refinanced in the resyndication of the project, generating revenues to the City from residual receipts. I Page 13 2. Scenario 2A and 2B– Proposed Project Under Two Revenue Scenarios Two proposed project scenarios are analyzed that assume the proposed resyndication and rehabilitation occurs based on key financial projections in the BRIDGE/EAH proforma. Scenario 2A assumes that future rental revenues do not include payments from Housing Choice Vouchers, as HCV payments cannot be underwritten to secure a permanent mortgage. Scenario 2A assumes that the resyndication occurs in May 2021, the new ground lease is signed in connection with the resyndication’s financial closing, an upfront ground lease payment of $83,000 is made at this time, and the City’s annual monitoring fee payments continue throughout the term. Scenario 2B assumes that 15 residents will continue to receive HCV, and revenues from these HCV payments are included in the cash flow projections. Scenario 2B assumes that the resyndication is delayed two years and occurs in May 2023, the new ground lease is signed prior to this date, an upfront ground lease payment of $83,000 is made in May 2023, and the City’s annual monitoring fee payments continue throughout the term. Scenario 2B generates significantly more revenues than the other two scenarios as additional cash flow is generated, and about 12.7% of this cash flow accrues to the City. I Page 14 Table 3 Comparison of City Revenues from Alternative Scenarios Centertown Apartments Lease Year (Fiscal Year Beginning) Pro Forma Year Scenario 1: Existing (Amended) Scenario 2A: Proposed Project Scenario 2B: Proposed Project (Plus HCV) 2020 $5,001 $0 $0 2021 $5,001 88,000 $5,001 2022 $5,001 $5,000 $5,001 2023 1 $5,001 $5,680 $101,066 2024 2 $5,001 $5,759 $18,392 2025 3 $5,001 $5,816 $18,702 2026 4 $5,001 $5,850 $18,994 2027 5 $5,001 $5,860 $19,267 2028 6 $5,001 $5,846 $19,521 2029 7 $5,001 $5,805 $19,753 2030 8 $5,001 $5,736 $19,963 2031 9 $5,001 $5,638 $20,150 2032 10 $5,001 $5,510 $20,312 2033 11 $5,001 $5,350 $20,449 2034 12 $5,001 $5,157 $20,557 2035 13 $5,001 $5,000 $20,637 2036 14 $5,001 $5,000 $20,686 2037 15 $5,001 $5,000 $20,703 2038 16 $5,001 $6,942 $22,953 2039 17 $5,001 $6,645 $22,969 2040 18 $5,001 $6,306 $22,950 2041 19 $5,001 $5,924 $22,894 2042 20 $5,001 $5,498 $22,800 2043 21 $5,001 $5,024 $22,665 2044 22 $5,001 $5,000 $22,488 2045 23 $5,001 $5,000 $22,266 2046 24 $5,001 $5,000 $21,997 2047 25 $5,001 $5,000 $21,680 2048 26 $5,001 $5,000 $21,311 2049 27 $5,001 $5,000 $20,889 2050 28 $5,001 $5,000 $20,411 2051 29 $5,001 $5,000 $19,874 2052 30 $5,001 $5,000 $19,276 2053 31 $5,001 $5,000 $18,614 2054 32 $5,001 $5,000 $17,886 2055 33 $5,001 $5,000 $17,087 2056 34 $5,001 $5,000 $16,216 2057 35 $5,001 $5,000 $15,269 2058 36 $5,001 $5,000 $14,243 2059 37 $5,001 $5,000 $13,135 2060 38 $5,001 $5,000 $11,940 2061 39 $5,001 $5,000 $10,656 2062 40 $5,001 $5,000 $9,278 2063 41 $5,001 $26,993 $43,893 2064 42 $5,001 $25,183 $42,317 Total $225,045 $359,524 $947,113 I Page 15 H. Conclusion As described above, the property needs to be substantially rehabilitated, and the proposed funding request is reasonable. The City should continue to work with BRIDGE/EAH and the County to obtain the additional $1 million in funding, as well as to facilitate the renegotiation of the HCD loan. In total, the City’s commitment to the development would be to amend and renegotiate the ground lease and to enter into the following loans with the future Limited Partnership: • Existing Loan—Approximately $260,000, which is the current remaining balance including accrued interest. • New Loan– Approximately $631,000, which is equivalent to the remaining unpaid amount from the ground lease. • Potential Housing Trust Fund Loan— Between $500,000 and $1,000,000, which, if awarded, would be used to help pay for new community facilities. These loans would be repaid out of the resyndicated project’s residual cash flow in proportion to the City’s contribution. The City’s investment will leverage about $21.8 million in private and public funding to meet the total development costs of about $23.2 million net of the building acquisition value. The City’s ground lease modification and investment will result in the following: • Enhanced living environment for approximately 180 of the City’s lower income residents. • Substantial health, life-safety, environmental and accessibility improvements. • Continued preservation of 60 affordable apartments, with an extension of the affordability covenants for another 55 years. • Recapitalization of the development, which will leverage sufficient funding to undertake much needed rehabilitation improvements that will enhance the City’s long term interests in the property. I Seifel Consulting Inc. Centertown Apartments July 2020 Appendix Table A-1 Summary of Existing and Proposed Loans Centertown Apartments Original Outstanding Balance as of Dec. 31, 2019 Key Loan Terms Proposed Principal Principal Accrued Interest Total Due Date Rate Existing Loans First Mortgage (Berkadia, Citi)$1,025,504 $236,321 $924 $237,245 2023 4.69% Affordable Housing Program (AHP, Citi)$390,000 $390,000 $0 $390,000 2023 None California HCD (RHCP)$2,647,711 $1,722,662 $1,495,167 $3,217,829 2052 3.00% City of San Rafael/Former SRRA*$303,000 $219,982 $39,594 $259,576 June 2023 3.00% City of San Rafael and Former SSRA*$616,000 $0 $0 $0 N/A N/A County of Marin $99,504 $99,504 $0 $99,504 May 2021 Specific Terms Subtotal $5,081,719 $2,668,469 $1,535,685 $4,204,154 * The City and the former San Rafael Redevelopment Agency (SRRA) provided three loans to the development, two of which were repaid in the 1990s. The remaining $303,000 promissory note was transferred to the City as a former housing asset of the SRRA. Source: Centertown Associates, Ltd. Financial Statements and Independent Auditor’s Report, December 31, 2019, BRIDGE Housing, EAH Housing, . Seifel Consulting Inc. Centertown Apartments July 2020 Appendix Table A-2 Estimated Development Uses Centertown Apartments Project Estimates Cost As % of Development Cost (Uses)Total Per Unit Property Related Costs Acquisition Cost (Upfront Ground Lease Payment)$83,000 $1,383 Acquisition Cost or Value- Building $14,917,000 $248,617 BRIDGE WC Interest $50,000 $833 Other Acquisition Costs $41,500 $692 Subtotal $15,091,500 $251,525 Hard Construction Costs Rehabilitation Costs $6,937,344 $115,622 General Conditions $416,241 $6,937 General Requirements & Profit $554,988 $9,250 Covid Related $300,000 $5,000 GC Testing Allowance $40,000 $667 Insurance & Bond $158,171 $2,636 Design Contingency $840,674 $14,011 Hard Cost Contingency $924,742 $15,412 Subtotal $10,172,160 $169,536 Project Related Soft Costs Architecture/Engineering $1,085,109 $18,085 Legal $135,000 $2,250 Marketing/Lease-up $123,800 $2,063 Appraisal $7,500 $125 Miscellaneous $549,450 $9,158 Title & Recording $52,500 $875 Furnishings and Equipment $49,000 $817 Permits and Fees $60,000 $1,000 Soft Cost Contingency and Reserves $682,602 $11,377 Insurance $79,218 $1,320 Subtotal $2,824,179 $47,070 Project Financing Construction Interest & Fees $1,365,688 $22,761 Permanent Financing $327,500 $5,458 Subtotal $1,693,188 $28,219 Syndication & Developer Fee Capitalized Developer Fee $2,010,264 $33,504 GP Equity $2,010,264 $33,504 Construction Management and Other Consultants $170,600 $2,843 Subtotal $4,191,128 $69,852 Total Development Cost $33,972,155 $566,203 Source: City of San Rafael, BRIDGE Housing, EAH Housing. Seifel Consulting Inc. Centertown Apartments July 2020 Appendix Table A-3 Estimated Development Sources Centertown Apartments Project Estimates Development Revenues (Sources)Total Per Unit Permanent Loan $5,406,942 $90,116 Building Acquisition Value Seller Note $2,500,000 $41,667 Seller Carryback Loan $8,222,431 $137,041 Subtotal $10,722,431 $178,707 Tax Credit Equity Federal $9,144,715 $152,412 State $0 $0 Subtotal $9,144,715 $152,412 City of San Rafael Financial Assistance City- Existing Loan $259,576 $4,326 City- New Loan (Former Ground Lease)$631,000 $10,517 City- Housing Trust Fund $524,927 $8,749 Subtotal $1,415,503 $23,592 Other Public Funding Assistance HCD RHCP- Existing Loan $1,722,662 $28,711 County of Marin- Existing Loan $99,504 $1,658 County of Marin- New Loan $1,013,732 $16,896 Subtotal $2,835,898 $47,265 Other Revenues GP Equity $2,010,264 $33,504 Accrued interest during construction $1,603,421 $26,724 Income From Operations $152,725 $2,545 Contributed Reserves $680,257 $11,338 Subtotal $4,446,667 $74,111 Deferred Developer Fee $0 $0 Total $33,972,155 $566,203 Source: City of San Rafael, BRIDGE Housing, EAH Housing. OAK #4852-2546-7639 v1 1 ORDINANCE NO. 2000 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE A GROUND LEASE OF THE REAL PROPERTY AT 855 C STREET, SAN RAFAEL (CENTERTOWN) TO CENTERTOWN II, LP WHEREAS, the City of San Rafael owns real property located at 855 C Street, commonly known as Centertown, and leases that real property to Centertown, Ltd, a California limited partnership, which has constructed and operates on the real property a 60 residential unit affordable housing development; and WHEREAS, the original development, constructed in approximately 1992, is in need of substantial rehabilitation; and WHEREAS, to permit a resyndication and refinancing of Centertown using tax exempt bonds and low-income housing tax credits (LIHTC), on August 17, 2020, the City Council, in Resolution No. 14851, approved an Option to Lease with Centertown II, LLC, an affiliate of Centertown, Ltd., for a ninety-nine-year term; and WHEREAS, as contemplated by Resolution No. 14851, Centertown II, LP, an affiliate of Centertown II, LLC and Centertown, Ltd has, subject to closing, obtained the necessary funding to rehabilitate the property; and WHEREAS, the City Council wishes to support the continuation of Centertown as an affordable housing project, and finds that leasing the property to Centertown II, LP would be in the best interests of the public and would benefit the public health and welfare; and WHEREAS, the City Council finds that approval of a lease of an existing structure is categorically exempt from environmental review, pursuant to CEQA Guidelines Section 15301; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DOES ORDAIN AS FOLLOWS: DIVISION 1. The City Council hereby approves, and authorizes the Mayor to execute, a lease of the Centertown property to Centertown II, LP for a term of ninety-nine (99) years, at a base rental of Eighty-Three Thousand Dollars ($83,000) plus One Dollar ($1.00) per year (both payable at closing), plus a Five Thousand Dollar ($5,000) per year monitoring fee (escalated per CPI), and OAK #4852-2546-7639 v1 2 on substantially the other terms set forth in the “Ground Lease (Centertown)” Between the City of San Rafael and Centertown II, LP, a California limited partnership attached hereto as Exhibit A, subject to final approval as to content and form by the City Manager and City Attorney. DIVISION 2. The City Council hereby authorizes the Mayor to execute all documents reasonably required to terminate the current ground lease in favor of Centertown Ltd., a California limited partnership, subject to approval as to form by the City Attorney. DIVISION 3. The City Council hereby authorizes the Mayor and City Manager to execute, all other documents reasonably required to carry out the intent and purposes of the foregoing lease, subject to approval as to form by the City Attorney. DIVISION 4: This Ordinance shall be published once, in full or in summary form, before its final passage, in a newspaper of general circulation, published, and circulated in the City of San Rafael, and shall be in full force and effect thirty (30) days after its final passage. If published in summary form, the summary shall also be published within fifteen (15) days after the adoption, together with the names of those Councilmembers voting for or against same, in a newspaper of general circulation published and circulated in the City of San Rafael, County of Marin, State of California. KATE COLIN, Mayor ATTEST: LINDSAY LARA, City Clerk OAK #4852-2546-7639 v1 3 The foregoing Ordinance No. 2000 was introduced at a Regular Meeting of the City Council of the City of San Rafael, held on the 13th day of September 2021 and ordered passed to print by the following vote, to wit: AYES: Councilmembers: Bushey, Hill, Kertz, Llorens Gulati & Mayor Kate NOES: Councilmembers: None ABSENT: Councilmembers: None and will come up for adoption as an Ordinance of the City of San Rafael at a Regular Meeting of the Council to be held on the 20th day of September 2021. LINDSAY LARA, City Clerk LANDLORD ESTOPPEL CERTIFICATE October 22, 2021 Umpqua Bank One Capitol Mall, Suite 610 Sacramento, California 95814 Attention: Monica Sharp Re: That certain Ground Lease (Centertown Project) dated as of October 22, 2021, by and between Centertown Il, LP, a California limited partnership ("Lessee"), as lessee, and the City of San Rafael, a municipal corporation ("Lessor"), as lessor, relating to certain real property located in the County of Marin, State of California (the "Ground Lease") Ladies and Gentlemen: The undersigned, as Lessor, does hereby state, declare, represent and warrant to Umpqua Bank, an Oregon banking corporation, and its successors and/or assigns (the "Lender"), as follows: 1. Attached hereto as Exhibit A is a true, correct and complete copy of the above - captioned Ground Lease. There are no amendments, supplements, modifications or changes to the Ground Lease. Terms not otherwise defined herein shall have the meanings as ascribed to such terms in the Ground Lease. 2. The undersigned is the Lessor under the Ground Lease. The undersigned has not assigned the Lessor's interest under the Ground Lease in whole or in part. 3. The Ground Lease is in full force and effect. 4. To Lessor's actual knowledge, no default, or event or condition which with the passing of time or the giving of notice, or both, would constitute a default on the part of Lessor or Lessee exists under the Ground Lease in the performance of the terms, covenants and conditions of the Ground Lease required to be performed on the part of Lessor or Lessee. 5. Lessor has received no written notice of any prior assignment, hypothecation, mortgage or pledge of Tenant's interest under the Ground Lease. 6. Lessor hereby consents to Lessee's executing, delivering and recording the leasehold mortgage in favor of Lender as security for the $18,442,396 loan from Lender to Lessee. Lessor acknowledges receipt of a copy of that leasehold mortgage. Lessor further acknowledges that all conditions precedent to the encumbrance of the Lessee's leasehold estate under the Ground Lease with the Lender's leasehold mortgage have been satisfied or waived. Lessor further acknowledges receipt of all notices and certificates required pursuant to the Ground Lease to encumber Lessee's leasehold interest in the Land with the Lender's leasehold [Centertown] 4840-9398-2966v.3 0113877-000029 Landlord Estoppel Certificate mortgage and that Lender, upon the recordation of the Lender's leasehold mortgage, will be the holder of a Leasehold Mortgage under the Ground Lease, will be a Leasehold Mortgagee under the Ground Lease, and will also be entitled to all of the rights of a Leasehold Mortgagee under the Ground Lease. 7. The address for notice to Lender, for all purposes under the Ground Lease, is: Umpqua Bank One Capitol Mall, Suite 610 Sacramento, California 95814 Attention: Monica Sharp Lessor executes this Estoppel Certificate, solely in its capacity as the Lessor under the Ground Lease, for the benefit and protection of Lender with full knowledge that Lender is relying on this Estoppel Certificate in making a loan to Lessee. [Remainder of Page Intentionally Left Blank] 2 4840-9398-2966v.3 0113877-000029 [Centertown] Landlord Estoppel Certificate A IN WITNESS WHEREOF, the undersigned, as Lessor, has executed this Landlord Estoppel Certificate as of the date first written above. CITY OF SAN RAFAEL, a municipal corporation By: 6(y M ager S-1 [Centertown] Landlord Estoppel Certificate EXHIBIT A GROUND LEASE [See Attached] A-1 4840-9398-2966v.3 0113877-000029 [Centertown] Landlord Estoppel Certificate GROUND LEASE (Centertown Project) Between CITY OF SAN RAFAEL and CENTERTOWN 11, LP A California Limited Partnership OAK #4812-6430-1550 v18 Execution Table of Contents Section 3.7 Condition of Land................................................................................13 Page ARTICLE 1 DEFINITIONS ........................................................................................................ 2 Section1.1 Definitions............................................................................................. 2 ARTICLE 2 LEASE OF THE LAND; RENTAL PROVISIONS; TAXES AND Proprietary and Governmental Roles: Actions by City.....................14 ASSESSMENTS................................................................................................ Section 3.11 6 Section 2.1 Ground Lease of the Land................................................................... 6 Section 2.2 Duration of Term.................................................................................. 6 Section 2.3 Rental Provisions, Including Monitoring Fee ..................................... 6 Section 2.4 Use of Development and Assurances of Lessee ............................... 6 Section 2.5 Rights of Lessee................................................................................... 7 Section 2.6 Taxes and Assessments...................................................................... 7 ARTICLE 3 CONSTRUCTION OF LESSEE IMPROVEMENTS; REHABILITATION AND MAINTENANCE; USE OF LAND......................................................................10 Section 3.1 Construction of Lessee Improvements..............................................10 Section 3.2 Alterations...........................................................................................11 Section 3.3 Permits, Licenses and Easements.....................................................12 Section 3.4 Use of Development............................................................................12 Section 3.5 Maintenance of the Improvements and the Land..............................13 Section 3.6 Utilities.................................................................................................13 Section 3.7 Condition of Land................................................................................13 Section 3.8 "As -Is, Where -IS" Existing Improvements.........................................13 Section3.9 Management........................................................................................14 Section 3.10 Proprietary and Governmental Roles: Actions by City.....................14 Section 3.11 City Manager Authority and Limitations............................................14 Section 3.12 City Leasehold Mortgage Documents................................................15 ARTICLE 4 LEASEHOLD MORTGAGES.................................................................................15 Section 4.1 Mortgage of Leasehold and Improvements.......................................15 Section 4.2 Notice to and Rights of Leasehold Mortgagees and Investor(s)............................................................................................15 Section 4.3 Registration of Leasehold Mortgagees and Investor(s)....................19 Section 4.4 Notice and Right to Cure Defaults Under Leasehold Mortgages............................................................................................19 Section 4.5 Priorities..............................................................................................A 9 Section4.6 No Merger............................................................................................19 ARTICLE5 INSURANCE.........................................................................................................19 Section 5.1 Required Insurance Coverage............................................................19 OAK #4812-6430-1550 08 ..I. Table of Contents (continued) Page Section 5.2 Insurance Policies and Premiums......................................................20 Section 5.3 Proceeds of Insurance Upon Damage or Destruction ......................20 Section 5.4 Hold Harmless and Indemnity............................................................21 ARTICLE 6 PROVISIONS RESPECTING CONDEMNATION AND DAMAGE OR DESTRUCTION OF DEVELOPMENT..............................................................22 Section 6.1 Condemnation or Damage or Destruction of Development ............. 22 Section 6.2 Lessee, Lessor and Leasehold Mortgagees to be Made Parties in Legal Proceedings..............................................................23 Section 6.3 Waiver of Eminent Domain.................................................................24 Section 6.4 Waiver of CCP Section 1265.130........................................................24 ARTICLE 7 PARTICULAR COVENANTS................................................................................24 Section 7.1 Non -Discrimination Clause.................................................................24 Section 7.2 Lessee to Extend Vendor's Warranties to Lessor .............................24 Section 7.3 Ground Leases and Contracts............................................................24 Section 7.4 Lessee's Right of First Refusal..........................................................25 Section 7.5 Estoppel Certificates...........................................................................25 Section 7.6 No Land Encumbrances......................................................................26 ARTICLE 8 COVENANTS AND ASSURANCES OF LESSOR.................................................26 Section 8.1 Lessor to Give Peaceful Possession.................................................26 Section 8.2 Lessor to Ground Lease Development with Marketable Title ........... 27 Section 8.3 Lessor to Obtain Necessary Governmental Approvals .................... 27 ARTICLE 9 DEFAULTS AND REMEDIES...............................................................................27 Section 9.1 Default of Lessee.................................................................................27 Section 9.2 Default of Lessor.................................................................................28 ARTICLE 10 GENERAL PROVISIONS....................................................................................28 Section 10.1 HCD Rider and TCAC Rider................................................................28 Section 10.2 No Third Party Beneficiary..................................................................28 Section 10.3 Instrument is Entire Agreement.........................................................29 Section 10.4 Amendment of Ground Lease............................................................29 Section10.5 Notices.................................................................................................29 Section 10.6 Recording of Memorandum................................................................31 Section 10.7 Accessibility; Disability Laws.............................................................31 Section 10.8 Non -Waiver of Breach.........................................................................31 OAK #4812-6430-1550 v18 -ii. Table of Contents (continued) Page Section 10.9 Effectiveness: Counterparts...............................................................31 Section 10.10 Ground Lease Binding on Successors..............................................32 Section 10.11 Relationship of Parties........................................................................32 Section 10.12 Termination: Holding Over.................................................................32 Section 10.13 Consents; Further Acts.......................................................................32 Section 10.14 Construction of Words........................................................................32 Section10.15 Titles.....................................................................................................32 Section 10.16 Days of the Week....................................._...........................................33 Section 10.17 Invalidity of Particular Provisions......................................................33 Section 10.18Assignment..........................................................................................33 Section 10.19Applicable Law....................................................................................35 Section 10.20 Requests for Approval........................................................................35 Section 10.21 Non -Recourse and Non-Liability........................................................35 Section 10.22 List of Exhibits.....................................................................................36 OAK #4812-6430-1550 08 -III- GROUND LEASE (Centertown Project) THIS GROUND LEASE, dated for convenience October 22, 2021 (the "Ground Lease"), is by and between the CITY OF SAN RAFAEL, a municipal corporation ("Lessor" or "City") and CENTERTOWN II, LP, a California limited partnership ("Lessee"). RECITALS A. The former Redevelopment Agency of the City of San Rafael, sometimes referred to as San Rafael Redevelopment Agency, a public body, corporate and politic, and a redevelopment agency organized pursuant to the former California Community Redevelopment Law ("CRL"), California Health and Safety Code Section 33000 et seq. ("Former Agency"), was the former owner of certain land, located at 855 C Street in the City (APN 011-254-19), which is now more particularly described in Exhibit A attached hereto and incorporated herein (the "Land"). The Former Agency, as Lessor ("Prior Lessor"), entered into a 75 -year Ground Lease, dated November 6, 1989 ("Original Ground Lease") for the Land with Centertown Ltd., a California limited partnership, with Centertown, Inc., a California nonprofit public benefit corporation as general partner ("Prior Lessee"), for low income housing use. B. The Original Ground Lease was subsequently amended and restated by the First Amended and Restated Ground Lease dated August 20, 1990 ("A&R Ground Lease"). The A&R Ground Lease was subsequently amended by the Second Amendment to the First Amended and Restated Ground Lease dated May 6, 1991 ("Amendment 2"), the Third Amendment to First Amended and Restated Ground Lease dated April 1, 1993 ("Amendment 3"), and the Fourth Amendment to First Amended and Restated Ground Lease dated June 2, 2021 ("Amendment 4"). The A&R Ground Lease, together with Amendment 2, Amendment 3 and Amendment 4, is hereby referred to as the "Prior Ground Lease." C. Pursuant to the Original Ground Lease, Prior Lessor and Prior Lessee executed a Memorandum of Ground Lease, dated November 6, 1989 ("Original Memorandum"), and caused the original Memorandum to be recorded in the official records of Marin County ("Official Records") on November 30, 1989 as Document No. 89-69343. The Original Memorandum was amended by that certain Amendment to Memorandum of Ground Lease, dated May 6, 1991, recorded in Official Records on July 8, 1991 as Document No. 91-041695 (re-recorded in Official Records on January 16, 1992 as Document No. 92-003311) ("Memorandum Amendment 1") and that certain Second Amendment to memorandum of Ground Lease, recorded in Official Records June 30, 1993 in Document No. 93-052072 ("Memorandum Amendment 2" and, together with the Original Memorandum and Memorandum Amendment 1, the "Prior Memorandum"). D. Pursuant to the Prior Ground Lease, the Prior Lessee developed, constructed, owns and operates a residential development consisting of 59 units rented to and occupied by very low, low and lower income households (plus one manager's unit) and commonly known as Centertown Apartments ("Project"). The Project was completed on or about 1992. E. By a Declaration of Restrictions executed by the Prior Lessor, recorded September 11, 1990 in Official Records as Recorder's Serial No. 90-53574, Prior Lessee obtained a non-exclusive right to use six (6) parking spaces at 1412 2nd Street, San Rafael California (APN 11-252-10) ("Parking Rights"). 08678.1 OAK #4812-6430-1550 v18 F. In 2011, the California Legislature adopted, the Governor signed, and the California Supreme Court, in California Redevelopment Association, et al. v. Matosantos (2012) 53 CalAth 231, upheld Assembly Bill x1 26 ("ABx1 26"). Pursuant to ABx1 26 (as amended by AB 1484 and SB 107, the "Dissolution Law"), all California redevelopment agencies were dissolved effective February 1, 2012, including the Former Agency. Pursuant to the Dissolution Law and resolutions adopted by the City's City Council on January 3, 2012 the City elected to become the successor housing agency to the Former Agency, and thereby succeeded to all of the Former Agency's right, title and interest in and to the Land and Prior Ground Lease. G. The Project is in need of rehabilitation. To finance the rehabilitation, it was determined to obtain a new allocation of low-income housing tax credits pursuant to Internal Revenue Code Section 42 ("LIHTC"), which required, among other things, that: (1) the Project be owned by a new limited partnership, the Lessee and (2) the term of the ground lease for the Land be ninety-nine (99) years. Pursuant to that certain Option Agreement dated August 27, 2020 ("Option Agreement") by and between the City (as Prior Lessor) and Centertown II, LLC, a California limited liability company ("General Partner"), with sole members BRIDGE Housing Corporation and EAH Inc., each, a California nonprofit public benefit corporation (collectively, the "Members"), as assigned by General Partner to Lessee, pursuant to that certain Assignment and Assumption of Purchase and Sale Agreement and Option (the "Assignment Agreement"), Lessee has an option to enter into a new 99 -year ground lease for the Land, on terms and subject to certain conditions set forth in the Option Agreement, including (1) sale of the Project to Lessee pursuant to a purchase and sale agreement and (11) termination of the Prior Ground Lease. H. After the Option Agreement: (1) the Prior Lessee entered into a Purchase and Sale Agreement, dated September 8, 2020 ("PSA") with General Partner, which was assigned by General Partner to Lessee pursuant to the Assignment Agreement, to purchase the Project. I. Concurrently with the execution and delivery of this Ground Lease: (1) Lessor and Lessee will record the Memorandum (as defined in Section 10.6) in the Official Records, (2) Lessee will purchase a fee simple interest in all improvements on the Land, including without limitation the Project in accordance with the PSA, pursuant to a [Grant Deed] executed by Prior Lessee and recorded in the Official Records substantially concurrently with the Memorandum; (3) Lessor and Prior Lessee will execute and deliver a Termination of Ground Lease Agreement and Release of Memorandum of Ground Lease dated October 22, 2021, to be recorded in the Official Records (which shall also terminate the Prior Memorandum); and (4) Prior Lessee will execute and deliver to Lessor a recordable Quitclaim of all of its right, title and interest in and to the Land. THEREFORE, in consideration of the promises and the respective covenants and agreements hereinafter contained, the parties hereby agree as follows: ARTICLE 1 DEFINITIONS Section 1.1 Definitions. The following terms shall have the following meanings in this Ground Lease: (a) "Alterations" is defined in Section 3.2. 2 08678.1 OAK #4812-6430-1550 v18 (b) "Assignment Agreement" is defined in the Recitals. (c) "business day" is defined in Section 10.16. (d) "City Leasehold Mortgage" shall mean the Leasehold Mortgage on the Development, executed by Lessee for the benefit of the City, as security for the City Leasehold Loan, and recorded in the Official Records substantially concurrently with the Memorandum. (e) "City Leasehold Loan" shall mean the $$909,876.00 loan made by the City to Lessee. (f) "City Leasehold Mortgage Documents" shall mean all documents executed by Lessee and/or the City evidencing or securing the City Leasehold Loan. (g) "Commencement Date" shall mean the date the Memorandum is recorded in the Official Records of Marin County. (h) "CPI" means the Consumer Price Index (1982-84=100) for all Urban Consumers published by the United States Department of Labor, Bureau of Labor Statistics for the San Francisco -Oakland -Hayward area, or any successor thereof. (i) "Development" shall mean and include both the Improvements owned by Lessee and located on the Land and the leasehold estate in the Land held by Lessee which is created by this Ground Lease. (j) "Dwelling Units" shall mean the residential units within the Development, and any additions or alterations thereto; such Dwelling Units shall be occupied by Residents. (k) "General Partner" is defined in the Recitals. (1) "Governmental Capacity" is defined in Section 3.10. (m) "Ground Lease" shall mean this Ground Lease between Lessor and Lessee, and shall include all further amendments, addenda or modifications to this Ground Lease. (n) "HCD" shall mean the Department of Housing and Community Development, a public agency of the State of California. (o) "HCD Rider" shall mean the Lease Rider (Ground Lease) among Lessor (as Landlord), Lessee and HCD (as the Department), attached hereto and incorporated herein as Exhibit C. (p) "Household" shall mean all persons residing together in one Dwelling Unit. (q) "Impositions" shall mean any Property Taxes, possessory interest taxes, licenses and permit fees, charges for public utilities of any kind, and obligations for any and all other governmental charges, general and special, of any kind and nature whatsoever, as well as assessments for sidewalks, streets, sewers, water or any other public improvements and any other improvements or benefits which shall, during the Term hereof, be made, assessed, levied or imposed upon or become due and payable in connection with, or a lien upon, the 3 08678.1 OAK #4812-6430-1550 08 Development, or any part thereof, or upon this Ground Lease, and any payment in lieu of taxes which Lessee has agreed to or is bound to pay with respect to the Development. (r) "Improvements" shall mean that portion of the Development consisting of 60 Dwelling Units, including all structures, fixtures, equipment, landscaping, driveways, off-street parking on the Land and other improvements constructed or installed on the Land, including without limitation the Lessee Improvements. (s) "Investors" (individually "Investor") shall mean Lessee's limited partner(s), including those identified as such in Exhibit B.: (t) "Laws" (individually, "Law") shall mean all laws, codes, rules, orders, zoning, ordinances, directions, regulations, permits, or other requirements of federal, state, county, municipal, or other governmental authorities having jurisdiction, now in force or which may hereafter be in force. (u) "Lessee Improvements" shall mean the rehabilitation of Centertown Apartments and all other improvements to be constructed or rehabilitated on the Land as described in the design plans titled "Plans and Project Manual" prepared by TWM Architects + Planners, dated June 21, 2021 and approved by the Lessee and Lessor, which are incorporated herein by this reference (as modified from time to time, the "Lessee Improvement Plans"). (v) "Lessee Improvement Plans" shall have the meaning set forth in the definition of Lessee Improvements. (w) "Leasehold Mortgage" is defined in Section 4.1 (x) "Leasehold Mortgage Documents" shall mean all documents executed by Lessee evidencing or securing the Leasehold Mortgages, including without limitation the City Leasehold Mortgage Documents and all other documents evidencing or securing the loans identified on Exhibit B attached hereto. (y) "Leasehold Mortgagee" shall mean the holder or beneficiary of any Leasehold Mortgage, including without limitation, those securing the loans identified in Exhibit B attached hereto, or any other holder of a Leasehold Mortgage. (z) "Lower Income Household" means a household whose annual income does not exceed eighty percent (80%) of the Area Median Income as determined for the San Francisco, California HUD Metro FMR Area annually by HUD and adjusted for household size. In the event that such income determinations are no longer published by HUD, "Median Income" shall mean the median gross yearly income for households in Marin County, as published periodically by the California Department of Housing and Community Development ("HCD"). In the event that such income determinations are no longer published by HCD, or are not updated for a period of at least eighteen months, Lessor shall provide Lessee with other income determinations which are reasonably similar with respect to method of calculation to these previously published by HCD or HUD. (aa) "Material Alterations" is defined in Section 3.2 (bb) "Members" is defined in the Recitals. 4 08678.1 OAK #4812-6430-1550 v18 (cc) "Memorandum" is defined in Section 10.6. (dd) "Monetary Default" is defined in Section 4.2(d). (ee) "New Lease" is defined in Section 4.2(g). (ff) "Non -Monetary Default" is defined in Section 4.2(d). (gg) "Partnership Agreement" shall mean that certain Amended and Restated Agreement of Limited Partnership of Lessee dated on or about the date hereof, as may be amended and or supplemented from time to time. (hh) "Property Taxes" is defined in Section 2.6. (ii) "Proprietary Capacity" is defined in Section 3.10. (jj) "Rent" is defined in Section 2.3. (kk) "Residents" shall mean the residents of the Dwelling Units in the Development to whom Lessee leases such Dwelling Units. (II) "TCAC" means the California Tax Credit Allocation Committee. (mm) "TCAC Rider" shall mean the California Tax Credit Allocation Committee Lease Rider Agreement (Tax Credits) Ground Lease among Lessor, Lessee and TCAC, which shall be recorded after the permanent conversion of the construction loan for the Lessee Improvements, the form of which is attached hereto and incorporated herein as Exhibit D. (nn) "Term" shall mean period set forth in Section 2.2 during which this Ground Lease shall be operative, unless earlier terminated in accordance with this Ground Lease. (oo) "Title Report" mean that certain Preliminary Report on the Land issued by Old Republic Title Company, dated as of September 14, 2021, 11th Updated — Leasehold and Fee Improvements Amend, Order No. 1117019475.3 -JM. 5 08678.1 OAK #4812-6430-1550 08 ARTICLE 2 LEASE OF THE LAND• RENTAL PROVISIONS; -TAXES AND ASSESSMENTS Section 2.1 Ground Lease of the Land.Lessor for and in consideration of the rent, covenants and agreements of Lessee set forth herein, to be paid, kept and performed by Lessee, hereby leases the Land to Lessee, and in consideration thereof, Lessee does take, hire and lease the Land from Lessor pursuant to the terms of this Ground Lease. Section 2.2 Duration of Term.The Term of this Ground Lease shall commence on the Commencement Date, and shall expire at midnight ninety-nine (99) years thereafter. Section 2.3 Rental Provisions, Including Monitoring Fee.Lessee agrees to pay the Lessor the following as "Rent" for the Land: (i) On or before the Commencement Date, and as a condition thereof, Lessee shall pay Lessor a one-time, upfront lease payment of $83,000.00, being the value of the Land pursuant to a 2020 appraisal. (ii) Commencing on the Commencement Date, the Lessee shall pay, on an annual basis, rent in the amount of One Dollar ($1.00) per year or fraction thereof. Lessor hereby acknowledges and agrees that, as of the Commencement Date, Lessee has paid to Lessor all Rent due under this Section 2.3(a)(ii) in the amount of $99.00, and no further rent is due under this Section 2.3(a)(ii). (iii) In connection with the requirements imposed by this Ground Lease and to ensure compliance, Lessee agrees to pay Lessor on January 1 of each year a Five Thousand Dollar ($5,000.00) annual monitoring fee ("Monitoring Fee"). The Monitoring Fee will not be prorated for any partial year of the Term. The Monitoring Fee shall be increased by 3.00% each January 1, commencing with the amount due January 1, 2023. (b) Rent and all other sums payable by Lessee to Lessor under this Ground Lease shall be paid in lawful currency of the United States of America at Lessor's address for notices as set forth below, or to such other person or at such other place as Lessor may from time to time designate by notice in writing to Lessee. Section 2.4 Use of Development and Assurances of Lessee. (a) The Land shall be used by Lessee solely for rehabilitating, constructing, owning and operating a residential development and related ancillary uses, including at least 60 Dwelling Units, of which no less than 28 Dwelling Units shall be rented to Lower Income Households. (b) Lessee hereby agrees. subject to applicable law: (i) not to use or permit the use of the Development or the Land for any disorderly or unlawful purpose, and not to use the Land and the Development other than to provide proper housing facilities to Residents and to maintain the character of the Development as required by any Leasehold Mortgage Documents and this Ground Lease, for so long as such Leasehold Mortgage Documents remain in effect and for the entire Term of this Ground Lease; 6 08678.1 OAK #4812-6430-1550 08 (ii) not to utilize any of the Dwelling Units at any time on a transient basis or for hotel, motel, dormitory, rooming house, nursing home, hospital, rest home or similar uses; (iii) to notify the Lessor promptly in writing of any defect appearing in the Land or any part thereof; (iv) to use reasonable efforts to prevent any Resident from committing or maintaining any nuisance or unlawful conduct on or about the Development or the Land; (v) to use reasonable efforts to prevent any Resident from violating any of the covenants and conditions of the Ground Lease with respect to the Development or the Land; (vi) to take necessary action, to abate any violation of this Ground Lease by any Resident; and (vii) to permit the Lessor and its agents to inspect the Development and the Land or any part thereof at any reasonable time during the Term of this Ground Lease, subject to the rights of any Residents under the terms of such Residents' leases for Dwelling Units. (c) Lessee will maintain complete and accurate records pertaining to the Dwelling Units, and will permit any duly authorized representative of the Lessor upon ten days' notice to inspect the books and records of the Lessee pertaining to Lessee's obligation to rent at least 28 of the Dwelling Units to eligible Residents under this Lease. (d) Costs and expenses, if any, incurred by the Lessor for the review of certificates described in this Section 2.4 shall be borne by the Lessor. Section 2.5 Rights of Lessee. Subject to the terms and conditions set forth in Section 2.4, Lessee shall have the sole and exclusive right: (a) to select and terminate the occupancy of a Resident; (b) to determine the eligibility of a Resident for rental of a Dwelling Unit within the Development; (c) to give notice to a Resident to vacate the Development or any part thereof; and (d) to institute and prosecute legal proceedings against a Resident and levy execution upon any judgement obtained in such proceedings. Section 2.6 Taxes and Assessments. (a) Subject to Section 2.6(c), as a part of the consideration for the execution and delivery of this Ground Lease and as additional rent and subject to all provisions hereof, Lessee covenants and agrees during the entire Term of this Ground Lease, at its own cost and expense, to pay the public officers charged with the collections thereof, as the same become due and payable and before any fine, penalty, interest or other charge may be added thereto for the nonpayment thereof, all Impositions. 7 08678.1 OAK #4812-6430-1550 V18 Any Impositions which are applicable only to a portion of the Term hereof shall be appropriately prorated between Lessor and Lessee; provided that, if by law any Imposition may at the option of the taxpayer be paid in installments, Lessee may exercise such option, and in such event Lessee shall pay all such installments and interest, if any, becoming due during, or allocable to, the Term of this Ground Lease as the same become due and before any additional interest or any penalty, fine or cost may be added thereto, except that any amount properly allocable to periods subsequent to the expiration of the Term of this Ground Lease shall not be chargeable to nor payable by Lessee, it being agreed that such impositions for said partial taxing period shall be prorated between Lessor and Lessee on the basis that the number of days in each such fractional tax year bears to 365. Upon request by Lessor, Lessee covenants to furnish to Lessor, prior to delinquency, official receipts of the proper taxing or other authority, or other proof satisfactory to Lessor, evidencing the full payment thereof. In the event of Lessee's failure to pay any such Imposition, Lessor shall have the right to pay the same and charge said amount to Lessee as additional rent, which rent shall not be deferred but shall be due and payable immediately upon receipt of notice to Lessee that Lessor has paid an Imposition pursuant to this Section. Lessor agrees promptly to send to Lessee (i) copies of any notices for any Impositions, if such notices have been received by Lessor, and (ii) evidence of any such payment of Impositions made by the Lessor, which are the responsibility of Lessee pursuant to the terms of the Ground Lease. Subject to the rights of the Leasehold Mortgagees and Investor under, and without limiting the scope of Article 4, failure by Lessee to pay any such Imposition shall be a default by Lessee under this Ground Lease for which Lessor may terminate the Ground Lease. (b) The provisions of this Ground Lease shall not be deemed to require Lessee to pay municipal, county, state or federal income or gross receipts or excess profits taxes assessed against Lessor, or municipal, county, state or federal capital levy, succession, gift or transfer taxes of Lessor, or corporation franchise taxes imposed upon any fee interest of the Lessor in the Land, or any increase in real estate taxes or assessments on account of Lessor's transfer of its fee title to the Land or a change in ownership of the Land other than to Lessee. Lessee agrees promptly to send to Lessor copies of any and all notices received by it in respect to any taxes or assessments affecting the Land which are the responsibility of the Lessor, pursuant to the terms hereof. (c) Notwithstanding anything to the contrary contained in the Lease, if Lessee deems any Imposition imposed in connection with the ownership, use or occupancy of the Development to be excessive or illegal, Lessee may defer payment thereof so long as the validity or the amount thereof is contested by Lessee with diligence and in good faith; provided, however, that Lessee, upon request by Lessor, shall furnish to Lessor a bond in form, and issued by a surety company, reasonably satisfactory to Lessor, in an amount equal to the amount of the tax so contested, which bond shall guarantee the payment thereof with interest and penalties thereon; and provided further that if, at any time, payment of the whole of such tax shall become necessary in order to prevent the termination by sale or otherwise of the right of redemption of all or any part of the Development, or to prevent eviction of Lessor or of Lessee because of non-payment thereof, Lessee shall pay the same, or cause the same to be paid, in time to prevent such termination of the right of redemption or such eviction. Any contest as to the validity or amount of any tax, whether before or after payment, may be made by Lessee in the name of Lessor or of Lessee, or both, as Lessee shall determine, and Lessor agrees that it will, at Lessee's expense, cooperate with Lessee in any such contest to such extent as Lessee may reasonably request, it being understood, however, that Lessor shall not be subject to any 08678.1 OAK #4812-6430-1550 08 liability for the payment of any costs or expenses in connection with any proceedings brought by Lessee, and Lessee covenants to pay, and to indemnify and save Lessor harmless from, any such costs or expenses. Lessee shall be entitled to any refund of any such tax and penalties or interest thereon which have been paid by Lessee or by Lessor and reimbursed to Lessor by Lessee. (d) In the event Lessor fails to timely pay any Imposition affecting the Land or Development which Lessor is obligated to pay, Lessee may (but shall not be required to) pay such Imposition and seek reimbursement from Lessor for such costs, which reimbursement shall be made promptly following Lessee's request therefor. (e) As used herein, the term "Property Taxes" shall include all general and special taxes, assessments, duties and levies, charged and levied upon or assessed by any governmental authority against the Development, including the Land, the Improvements, any other improvements situated on the Land other than the Improvements, the various estates in the Land and the Development, any leasehold improvements, fixtures, installations, additions and equipment, whether owned by Lessor or Lessee. Further included in the definition of Property Taxes herein shall be general and special assessments, license fees, levy or tax (other than federal or state income or gift tax, and any franchise, capital stock, inheritance or estate taxes) imposed by any authority having the direct or indirect power to tax, as against any legal or equitable interest of the Lessor and/or Lessee in the Land or in the Development or on the act of entering into leases or any tax, fee, or charge with respect to the possession, leasing, transfer of interest, operation, management, maintenance, alteration, repair, use or occupancy of the Development, or any tax imposed in substitution, partially or totally, for any tax previously included within the definition of Property Taxes. Further, if at any time during the term of this Ground Lease the method of taxation or assessment of real estate or the income therefrom prevailing at the time of execution hereof shall be, or has been altered so as to cause the whole or any part of the taxes now or hereafter levied, assessed or imposed on real estate to be levied, assessed or imposed upon Lessor, wholly or partially, as a capital levy, business tax, permit or other charge, then such new or altered taxes, regardless of their nature, which are attributable to the land, the Improvements or to the Development shall be deemed to be included within the term "Property Taxes" for purposes of this Subsection, whether in substitution for, or in addition to any other Property Taxes. However, with respect to any general or special assessments which may be levied upon or against the Land or which may be evidenced by improvement or other bonds, or may be paid in annual or semiannual installments, only the amount of such installment, prorated for any partial year, and statutory interest shall be included within the computation of Property Taxes for which the Lessee is responsible hereunder. 9 08678.1 OAK #4812-6430-1550 08 ARTICLE 3 CONSTRUCTION OF LESSEE IMPROVEMENTS; REHABILITATION AND MAINTENANCE,• USE OF LAND Section 3.1 Construction of Lessee Improvements. (a) Lessee shall renovate the Improvements by constructing the Lessee Improvements substantially as indicated in the Lessee Improvement Plans. All of the Improvements, including without limitation the Lessee Improvements, shall be the fee simple property of Lessee until the termination of this Ground Lease. (b) Lessee shall construct the Lessee Improvements on or before the dates set forth in the Schedule of Performance attached hereto as Exhibit E; provided, however, that any delay in construction due to causes beyond the reasonable control of Lessee shall extend the time in which said construction must be completed by the length of such delay. (c) For the purpose of this Section 3.1, the term "beyond the reasonable control of the Lessee" shall mean, and is limited to, delays caused directly by acts of God; epidemics; pandemics, quarantine restrictions, strikes; lockouts; sit-downs; acts of a governmental agency; priorities or privileges established for the manufacture, assembly, or allotment of materials necessary in the work by order, decree or otherwise of the United States or by any department, bureau, commission, committee, agent, or administrator of any legally constituted public authority; changes in the work ordered by City of San Rafael insofar as they necessarily require additional time in which to complete the work; the prevention by City of Lessee from commencing or prosecuting the work because of the acts of others, excepting Lessee's contractors and subcontractors; or the prevention of Lessee from commencing or prosecuting the work because of a citywide failure of public utility service. Lessor may grant an extension of time for unavoidable delay as a result of inclement weather. The term "beyond the reasonable control of Lessee" shall specifically not include: (i) any delay which could have been avoided by the exercise of care, prudence, foresight and diligence; and (ii) any delay in the prosecution of parts of the work, which may in itself be unavoidable but which does not necessarily prevent or delay the prosecution of other parts of the work, nor the completion of the whole work within the time specified. (d) Notwithstanding the above and the Schedule of Performance set forth in Exhibit E, so long as (i) Lessee is diligently prosecuting the work and (ii) any Leasehold Mortgagee has, agreed to extend performance dates under its Leasehold Mortgage Documents so as not to cause a default thereunder, Lessor's consent to extend the performance dates set forth in Exhibit E shall not be unreasonably withheld. (e) Prior to the commencement of construction of the Lessee Improvements, Lessee shall, at its own cost and expense, furnish to Lessor as obligee or co -obligee, either (i) a faithful performance bond of a surety company licensed to transact business in the State of California and satisfactory to Lessor with Lessee's contractor or contractors as principal, in a sum not less than one hundred percent (100%) of the estimated cost of construction, and a labor and materials bond of a surety company licensed to transact business in the State of California and satisfactory to the Lessor with Lessee's contractor or contractors as principal in a sum not less than 50% of the total estimated cost of the construction contract or contracts for the Lessee Improvements, guaranteeing respectively, faithful performance and the payment for all materials, 10 08678.1 OAK #4812-6430-1550 v18 provisions, provender, supplies and equipment used in, upon, for or about the performance of said construction work or labor done thereon of any kind whatsoever, or (ii) other instrument of security or completion assurance agreement or payment assurance agreement acceptable to the Leasehold Mortgagees and approved by the Lessor to guarantee completion of such construction and payment of all such items. In the event that Lessee obtains from its contractor or contractors such bonds, security or assurance agreements in like amount which is satisfactory to Lessor, Lessor, upon application by Lessee and upon naming Lessor an additional obligee of Lessee's principal and surety under such bonds or agreements, will release Lessee from Lessee's obligation to provide its bonds, agreements or instruments of security pursuant to this Section 3.1(e). Section 3.2 Alterations. (a) Following completion of the Lessee Improvements, Lessee shall, subject to the Leasehold Mortgage Documents, have the right to further alter, modify or rehabilitate the Improvements (together, "Alterations") as Lessee shall deem desirable; provided that for any Material Alterations, Lessor's prior written consent shall first have been obtained, which consent shall not be unreasonably withheld. "Material Alterations" means (a) the construction of any new additional building or structure, (b) an increase in the height of the Improvements, (c) demolition or removal of all or any substantial part of the Improvements; (d) change in the number of Dwelling Units or total square footages of the Dwelling Units; (e) any material alteration of exterior architectural designs, colors or materials (unless the applicable exterior component is not reasonably available or does not meet current code requirements, and Lessee uses materials of equal quality, durability, design standards, and appearance to the materials originally installed), or (f) reconstruction following fire or other casualty in excess of $1,000,000 (subject to adjustment pursuant to the CPI from and after the Commencement Date. Lessee shall also obtain building permits for all Alterations to the extent required by City of San Rafael codes and other customary requirements. (b) Fee simple title to all of the Improvements (including without limitation the Lessee Improvements) shall be in and remain in Lessee for and during the entire Term of the Ground Lease and Lessee alone shall be entitled to all of the tax attributes of ownership, including, without limitation, the right to claim depreciation or cost recovery deductions, the right to amortize capital costs, the right to claim any tax credits for federal or state tax purposes relating to the Improvements and any other federal or state tax benefits attributable to the Improvements. At the expiration of the Ground Lease Term, or upon the sooner termination of this Ground Lease (unless a New Lease is executed), title to the Improvements shall vest in Lessor, free and clear of all claims to or against them by Lessee or any third person, except those existing and created pursuant to the terms of this Ground Lease or those remaining on title with the consent or at the request of the Lessor. Lessee agrees to execute at the time of such expiration or termination a quitclaim deed for the Improvements to Lessor to be recorded at Lessor's option and at Lessor's sole cost and expense. Lessee shall defend, indemnify and hold Lessor harmless against any and all claims, liability and losses arising from such claims or from Lessor's exercise of the right conferred by this Section 3.2(b). (c) Lessor shall have the right at all reasonable times to post, and keep posted, on the Land and Improvements any notices which Lessor may reasonably deem necessary for the protection of Lessor and of the Land from mechanics' liens or other claims. Lessee shall give Lessor ten days' prior written notice of the commencement of the Lessee Improvements and any Alterations that could give rise to mechanics' liens to be done on or about the Land or Improvements to enable Lessor to post such notice. , 11 08678.1 OAK #4812-6430-1550 v18 (d) Lessee agrees that the Improvements and any maintenance, repair work, Alterations, replacements and/or additions in connection therewith (including without limitation the Lessee Improvements) shall be of good quality. Lessee shall have no authority to place any lien or any encumbrances upon the fee title to the Land, or in any manner to bind the interest of Lessor in the Land or, except as provided elsewhere in this Ground Lease, to assign the rentals payable to Lessor under this Ground Lease for any claim in favor of any person dealing with Lessee. Lessee covenants and agrees promptly to pay all sums legally due and payable by Lessee on account of any labor performed or materials supplied for which a lien can legally be asserted against Lessee's leasehold interest in the Land or Lessee's fee title to the Improvements thereon. In the event any mechanic or materialmen's lien is filed against the Land, Lessee at its expense, shall promptly cause such lien to be removed by bonding or otherwise. If Lessee disputes liens or claims of materialmen, mechanics or laborers, upon the Land or the Improvements, regardless of whether such amounts are payable by Lessor or Lessee, Lessee may contest and defend against the same at its cost, and in good faith diligently conduct any necessary proceedings in connection therewith to prevent and avoid the same; provided, however, that such contest shall be prosecuted to a final conclusion as speedily as possible. During any such contest, Lessee shall (by the payment of such disputed charges, if necessary) prevent any foreclosure of, or any divesting thereby of Lessor's title, reversion or other interest in or to the Land. Section 3.3 Permits Licenses and Easements. Lessor (as the lessor hereunder and not as a government authority having jurisdiction over the Development) agrees that, within ten days after receipt of written request from Lessee, it will (at no expense to Lessor) join in all applications for permits, licenses or other authorizations required by any governmental or other body claiming jurisdiction in connection with any work which Lessee may perform in connection with the Development, and will also join in any grants of easements for public or private utilities useful, desirable or necessary to the proper economic development of the Land or to the improvements to be constructed thereon, if required to do so by such governmental or other bodies (including without limitation utility companies). Nothing herein will limit the City's rights in a Proprietary Capacity or Governmental Capacity in accordance with Section 3.10. Section 3.4 Use of Development. Lessee shall cause the Development to be used solely for purposes specified in Section 2.4(a), consistent with all applicable zoning and environmental laws of any governmental authority having jurisdiction over the Development. Lessee agrees to comply reasonably, promptly and effectively with all applicable and lawful statutes, rules, orders, ordinances, requirements and regulations of the State of California, the Federal Government, the City and any other governmental authority having jurisdiction over the Development. Lessee shall have the right, if in good faith and on reasonable grounds, to dispute the validity of any charge, complaint or action taken pursuant to or under color of any statute, rule, order, ordinance, requirement or regulation, defend against the same, and in good faith diligently conduct any necessary proceedings to prevent and avoid any adverse consequence of the same. Lessee agrees that any such contest shall be prosecuted to a final conclusion as speedily as possible. Except to the extent City is acting in a Governmental Capacity in accordance with Section 3.10, Lessor agrees upon request by Lessee to sign, promptly and without charge therefor to Lessee, all applications for licenses and permits required by Lessee for the lawful conduct and operation of any business on the Land or in the Improvements, including, without limitation, applications for occupancy permits, provided that the cost of 12 08678.1 OAK #4812-6430-1550 v18 obtaining such licenses and permits shall be borne by Lessee, and to the extent such participation by the Lessor is required by the body receiving such application. Section 3.5 Maintenance of the Improvements and the Land. During the Term of this Ground Lease, Lessee or its designee shall perform, or cause to be performed, all maintenance and repairs necessary to maintain the Improvements and Land in good repair and tenantable condition, except for ordinary wear and tear, and in full compliance with all Leasehold Mortgage Documents. Section 3.6 Utilities. Lessee shall be responsible for the cost of all utilities, including water, heat, gas, electricity, waste removal or other utilities or services supplied to the Development, and Lessee will pay or cause same to be paid currently and as due. Lessor without limitation of the foregoing acknowledges that Lessee may require each Resident to pay for utility charges for each Resident's Dwelling Unit. Section 3.7 Condition of Land. Lessor has knowledge that prior to the Original Ground Lease certain petroleum hydrocarbons had come to be located on or beneath the Land from an underground fuel tank. The fuel tank and contaminated soil surrounding the area of the tank were removed before the Original Ground Lease; however, some petroleum hydrocarbons or dirt contaminated with such materials or substances may have remained on the Land thereafter. Lessee has knowledge of the facts in the preceding sentence and agrees to lease the Land in an "as is" condition, with no warranty, express or implied, by the Lessor as to the condition of the soil, its geology, the presence of known or unknown faults or the former presence of petroleum hydrocarbons. It shall be the sole responsibility of the Lessee at its expense to investigate and determine the soil conditions for the Lessee Improvements to be constructed thereon and for the Improvements to be leased, owned and operated thereon, including the presence of potentially toxic materials or soils. If the soil conditions are not in all respects entirely suitable for the use or uses to which the Land is currently being put and will be put under this Lease, it is the sole responsibility and obligation of Lessee, at its sole cost, to take such action as may be necessary to place the soil conditions of the Land in a condition entirely suitable for the Lessee's purposes under this Lease, subject to all other provisions contained in this Ground Lease, including Section 10.20. Section 3.8 "As -Is. Where -IS" Existing Improvements. Lessor makes no warranty, express or implied, regarding the condition of the Land or any physical improvements to the Land existing as of the Commencement Date, including without limitation the existing Improvements. Lessee had inspected the Land and all improvements and acknowledges that it is leasing the Land and, as between Lessor and Lessee, is acquiring fee title to the improvements thereon existing as of the Commencement Date in an "as is" condition. 13 08678.1 OAK #4812-6430-1550 08 Section 3.9 Management. Lessee shall direct and supervise the operation and management of the Development and shall, at all times during the term of this Ground Lease, maintain or employ a professionally trained staff to manage the Development. Lessor hereby consents to management of the Development by Bridge Property Management Company or Ecumenical Association for Housing; provided, however, that Lessor may require Lessee to remove any manager of the Development within 120 days of notice from Lessor if Lessor determines there is good and sufficient cause for such removal, and provided, further, that Lessor provides Lessee with the opportunity to contest Lessor's reasons for the removal of the management agent. Lessee shall not contract with another person to manage the Development without Lessor's consent, which shall not be unreasonably withheld. Section 3.10 Proprietary and Governmental Roles: Actions by City. Except where clearly and expressly provided otherwise in this Ground Lease, the capacity of the Lessor in this Ground Lease shall be as owner and lessor of property only ("Proprietary Capacity"), and any obligations or restrictions imposed by this Ground Lease on Lessor shall be limited to that capacity and shall not relate to, constitute a waiver of, supersede or otherwise limit or affect its governmental capacities, including enacting laws, inspecting structures, reviewing and issuing permits, and all of the other legislative and administrative or enforcement functions pursuant to federal, state or local law ("Governmental Capacity"). When acting in its Proprietary Capacity, discretionary actions may be undertaken by the City Manager or other designees as designated by the City Manager to the extent otherwise provided for in this Ground Lease. In addition, nothing in this Ground Lease shall supersede or waive any discretionary or regulatory approvals required to be obtained from Lessor under applicable Law, nor guarantee that Lessor, in its Governmental Capacity, will grant any particular request for a license, permit or other regulatory approval. Lessee understands that Lessor may grant or deny such request in its sole discretion, and may impose such terms and conditions as it deems consistent with that discretion and applicable Laws. Section 3.11 City Manager Authority and Limitations. Any amendment to this Ground Lease which affects or relates to: (1) the Term of this Ground Lease; (2) the permitted use of the Land; (3) rent amounts and other monetary payments by Lessor; or (iv) any other material provision of this Ground Lease, shall require approval by the Lessor's City Council. Subject to the foregoing, the City Manager may also issue without City Council approval any consent or approval which Lessor is entitled to provide under this Ground Lease, including without limitation: (1) approvals of Material Alterations under Section 3.2; and (11) rules for a CASp inspection under Section 10.7. 14 08678.1 OAK #4812-6430-1550 08 Section 3.12 City Leasehold Mortgage Documents. Nothing in this Ground Lease shall limit any City right under the City Leasehold Mortgage Documents. ARTICLE 4 LEASEHOLD MORTGAGES Section 4.1 Mortgage of Leasehold and Improvements. Lessee shall have the right to encumber the Development (i.e., the Improvements and the leasehold estate created by this Ground Lease) by whatever security instruments are used in the locale of the Land, including without limitation deeds of trust, security deeds, assignments of rents, issues and profits, and conditional deeds, as well as financing statements, security agreements and documentation required pursuant to the Uniform Commercial Code (each, a "Leasehold Mortgage") to secure repayment of any loan and associated obligations of Lessee in connection with the acquisition, construction, rehabilitation or refinancing of the Development. The term "Leasehold Mortgage" shall also include any instruments required in connection with a sale leaseback transaction. Section 4.2 Notice to and Rights of Leasehold Mortgagees and Investor(s). (a) During the continuance of any Leasehold Mortgage and until such time as the lien of any such Leasehold Mortgage has been extinguished, the Leasehold Mortgagees shall have all rights provided in this Article 4. Lessor shall not accept any cancellation or surrender of this Ground Lease, Lessee shall not make any election or waiver to terminate, cancel or surrender this Ground Lease, nor shall Lessor or Lessee consent to any amendment or modification of this Ground Lease without, in each instance, the prior written consent of all Leasehold Mortgagees and the Investor. Without limiting the foregoing, no election by Lessee to terminate this Ground Lease shall be effective unless the same is contained in a written instrument signed by Lessee, each Leasehold Mortgagee and the Investor. (b) When giving any notice to Lessee with respect to this Ground Lease or any provision hereunder, Lessor shall also give a concurrent copy of each such notice to any Leasehold Mortgagee and Investor who shall have given Lessor a written notice requesting such notice and specifying its name and address. No notice by Lessor to Lessee shall be deemed to have been given unless, and until, a copy thereof shall have been delivered to each Leasehold Mortgagee and Investor as set forth herein. The names and addresses of the initial Leasehold Mortgagees and Investor are set forth on Exhibit B attached hereto, and this shall constitute such Leasehold Mortgagees' and Investor's request for copies of all notices at such addresses pursuant to this Section 4.2(b). All notices by Lessor to Leasehold Mortgagees and Investor shall be given by registered or certified mail, return receipt requested, or reputable courier service with confirmation, addressed to the Leasehold Mortgagees or Investor, as applicable, at the address last specified to Lessor by the Leasehold Mortgagees and shall be effective upon receipt by such recipient(s) (or refusal to accept delivery by such recipient(s)). (c) In the event Lessee shall default in the performance of any of the terms, covenants, agreements or conditions of this Ground Lease on Lessee's part to be performed, any Leasehold Mortgagee shall have the right, but not the obligation, within the grace period available to Lessee for curing such default and such additional period permitted under Section 4.2(d), to cure such default, whether the same consists of the failure to pay rent, to effect any 15 08678.1 OAK #4812-6430-1550 v18 insurance, to pay any taxes or assessments, to make any repairs or improvements, to do any other act or thing required of Lessee under the Lease, and to do any act or thing which may be necessary and proper to be done in the performance and observance of the agreements, covenants and conditions to prevent termination of the Lease, and the Lessor shall accept any such performance by any Leasehold Mortgagee as though the same had been done or performed by Lessee. Any Leasehold Mortgagee and its agents and contractors shall have full access to the Land and Improvements for purposes of accomplishing any of the foregoing. (d) In case of a default by Lessee in the payment of money or the performance of any other obligation due under this Ground Lease, Lessor will take no action to effect a termination of this Ground Lease by reason thereof unless, following the expiration of the grace periods (if any) otherwise granted to Lessee hereunder, including, without limitation, under Section 9.1, such default has continued beyond 60 days in the case of any default resulting from Lessee's failure to pay money due to Lessor (a "Monetary Default"), and beyond 180 days, in the case of any other default by Lessee hereunder (a "Non -Monetary Default"), after Lessor has given written notice to each Leasehold Mortgagee and Investor of such Monetary Default or Non -Monetary Default, as applicable and Lessor's its intent to terminate the Ground Lease as a result of such default, it being the intent hereof and the understanding of the parties that any Leasehold Mortgagee and Investor shall be allowed up to, but not in excess of 60 days in the case of a Monetary Default, and 180 days in the case of a Non -Monetary Default by Lessee, to cure such default, in addition to the cure and grace periods (if any) otherwise granted to Lessee under this Ground Lease, including without limitation Section 9.1. Notwithstanding the foregoing or anything else to the contrary contained herein, in the case of any Non -Monetary Default, Lessor shall take no action to effect a termination of this Ground Lease by reason thereof if, within 180 days after the Leasehold Mortgagees and Investor receive written notice thereof, as provided for in this Section 4.2(d), a Leasehold Mortgagee or Investor has either: (i) commenced to cure such default and to proceed diligently with such cure thereafter, if such default can -be cured by the Leasehold Mortgagee without the Leasehold Mortgagee obtaining possession of the Development; (ii) commenced proceedings to obtain possession of the Development (including possession by a receiver) and proceeded diligently to obtain such possession and to cure such default in the case of default which can be cured only after the Leasehold Mortgagee has obtained possession thereof; or (iii) instituted foreclosure proceedings (either judicial or non -judicial) and thereafter to diligently proceed to complete such foreclosure proceedings (either judicial or non - judicial) or otherwise acquire Lessee's interest under this Ground Lease with reasonable and continuous diligence in the case of a default which cannot be cured in the manner set forth in subparagraphs (i) or (ii) above. As long as any Leasehold Mortgagee is diligently proceeding to complete foreclosure, the Lessor shall not terminate the Ground Lease. No Leasehold Mortgagee shall be required to continue such possession or continue such foreclosure proceedings (either judicial or non -judicial) if the default which prompted the service of such a notice has been cured. No Leasehold Mortgagee shall be obligated to cure any Monetary Default which has occurred more than 90 days before such Leasehold Mortgagee's receipt of notice of such default, in order to preserve its interest under its Leasehold Mortgage Documents or to exercise any of the rights granted to it under this Ground Lease. Nothing herein shall require a Leasehold Mortgagee who has acquired Lessee's leasehold interest and has taken possession of the Development to cure any Non -Monetary Default which is not reasonably capable of being cured by such,Leasehold Mortgagee, and such default shall be deemed to be 16 08678.1 OAK #4812-6430-1550 08 waived following Leasehold Mortgagee's acquisition of Lessee's leasehold interest and such Leasehold Mortgagee's timely cure of all Monetary Defaults and all Non -Monetary Defaults which are reasonably capable of cure by such Leasehold Mortgagee in accordance with the foregoing provision. (e) All right of Lessor to terminate the Lease as the result of the occurrence of any default shall be subject to, and conditioned upon, Lessor having first given to each Leasehold Mortgagee and Investor written notice of the default as required under Section 4.2(b), and each Leasehold Mortgagee and Investor having failed to remedy such default or acquire the Leasehold or commence foreclosure or other appropriate proceedings in the nature thereof as set forth in Section 4.2(d). (f) If a Leasehold Mortgagee is prohibited by any process or injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving Lessee from commencing or prosecuting foreclosure or other appropriate proceedings, the times specified in this Section 4.2 for commencing or prosecuting such foreclosure or other proceedings shall be extended for the period of such prohibition, provided that Leasehold Mortgagee shall have fully cured any default in the payment of any monetary obligations of Lessee under this Ground Lease and shall continue to pay currently such monetary obligations as and when the same fall due. (g) Lessor agrees that, in the event of termination of the Lease for any reason (including without limitation by reason of any default by Lessee or by reason of the disaffirmance thereof by a receiver, liquidator or trustee for Lessee or its property): (i) Lessor shall (1) promptly give each Leasehold Mortgagee and Investor written notice of such termination and (2) if requested by any Leasehold Mortgagee, enter into a new lease of the Land ("New Lease") with the most senior Leasehold Mortgagee requesting a New Lease, which New Lease shall commence as of the date of termination of this Ground Lease and shall run for the remainder of the Ground Lease Term, at the same Rent and additional rent and upon the same terms, provisions, covenants and agreements, and subject to the rights, if any, of any parties then in possession of any part of the leasehold estate, provided: (1) The Leasehold Mortgagee shall make written request upon Lessor for the New Lease not later than 60 days after the date such Leasehold Mortgagee receives written notice of the termination from Lessor; (2) The Leasehold Mortgagee shall pay to Lessor at the time of the execution and delivery of the New Lease any and all sums which would, at the time of the execution and delivery thereof, be due and unpaid pursuant to the Ground Lease but for its termination, and in addition thereto any expenses, including reasonable attorneys' fees, to which Lessor shall have been subjected by reason of Lessee's default; (3) The Leasehold Mortgagee shall perform and observe all covenants in this Ground Lease to be performed and observed by Lessee, and shall further remedy any other conditions which Lessee under the terminated Ground Lease was obligated to perform under its terms, to the extent the same are curable or may be performed by the Leasehold Mortgagee; and (ii) The lessee under the New Lease shall have the same right, title and interest in and to the Improvements as Lessee had under the terminated Ground Lease 17 08678.1 OAK #4812-6430-1550 v18 immediately prior to its termination, and such New Lease shall be senior in priority to all mortgages, deeds of trust, or other lien or charge or encumbrance on the Land. The New Lease shall be accompanied by a conveyance of title to the Improvements (free of any mortgage, deed of trust, lien, charge, or encumbrance created by Lessor) for a term of years equal to the term of the New Lease, subject to the reversion in favor of Lessor upon expiration or sooner termination of the New Lease. (h) Nothing herein contained shall require any Leasehold Mortgagee to enter into a New Lease pursuant to Section 4.2(g), nor to cure any default of Lessee referred to above. (i) Except as provided in Section 4.20), during the period that a Leasehold Mortgagee shall be in possession of the Land and/or Development and/or during the pendency of any foreclosure proceeding instituted by a Leasehold Mortgagee, subject to the cure periods set forth in Section 4.2(d)(iii), the Leasehold Mortgagee shall pay or cause to be paid the Rent specified in Section 2.3 and all other charges of whatever nature payable by Lessee hereunder which have been accrued and are unpaid and will continue to pay, when due, all such amounts which accrue thereafter during such Leasehold Mortgagee's possession of the Development. 0) In the event two or more Leasehold Mortgagees exercise their rights hereunder, and there is a conflict which renders it impossible to comply with all such requests, the Leasehold Mortgagee holding the most senior Leasehold Mortgage shall prevail. (k) Upon the request of any Leasehold Mortgagee, Lessor agrees to execute any amendment to this Ground Lease which does not adversely affect Lessor's rights hereunder, subject to Section 10.4. (1) Any Investor shall have the same notice and cure rights as the Leasehold Mortgagee as set forth in this Section 4.2 for so long as it is a limited partner of Lessee; provided, however, that Investor shall be deemed to have met any condition relating to commencement or continuation of a foreclosure proceeding as set forth in Section 4.2(d), if it is attempting with diligence and in good faith to remove the general partner of Lessee. As long as any Investor is diligently proceeding to remove the general partner of Lessee, the Lessor shall not terminate the Ground Lease. The address for any notices to Investor, as of the date hereof, is provided in Exhibit B. (m) Foreclosure of any Leasehold Mortgage, or any sale thereunder, whether by judicial proceedings or by virtue of any power contained in the Leasehold Mortgage, or any conveyance of the Development from Lessee to any Leasehold Mortgagee or its designee through, or in lieu of, foreclosure or other appropriate proceedings in the nature thereof, shall not require the consent of Lessor or constitute a breach of any provision of, or a default under, the Lease, and upon such foreclosure, sale or conveyance, Lessor shall recognize the purchaser or other transferee in connection therewith as the Lessee under this Ground Lease. (n) In the event any Leasehold Mortgagee or any designee of it becomes the Lessee under this Ground Lease or under any New Lease obtained pursuant to Section 4.2(g), above, the Leasehold Mortgagee or its designee shall be personally liable for the obligations of Lessee under this Ground Lease or New Lease only to the extent that they arise during the period of time that the Leasehold Mortgagee or its designee constitutes the actual beneficial holder of the leasehold estate. The Leasehold Mortgagee's, or its designee's, right thereafter to assign this Ground Lease or the New Lease shall not be subject to any restriction. .,I ig 08678.1 OAK #4812-6430-1550 08 (o) Notwithstanding anything to the contrary contained herein, under no circumstances shall any Leasehold Mortgagee (or its designee), whether before or after a foreclosure of its Leasehold Mortgage (or acceptance of a deed in lieu thereof), be obligated to pay any amounts or perform any obligations owing to Lessor under the City Leasehold Mortgage Documents. Section 4.3 Registration of Leasehold Mortgagees and Investor(s). Upon written request by Lessor, Lessee shall provide written notice to Lessor of the name and address of each Leasehold Mortgagee and each Investor under this Ground Lease. Section 4.4 Notice and Right to Cure Defaults Under Leasehold Mortgages. Upon the recording of the Memorandum pursuant to Section 10.6, Lessee on behalf of Lessor shall cause to be recorded in the office of the County Recorder of Marin County requests for copies of any notice of default or notice of sale under the Leasehold Mortgages. Section 4.5 Priorities. No deed of trust, mortgage, lien, encumbrance, restriction or exception shall be superior to any of Lessor's interests in the Land. Section 4.6 No Merger. In the event Lessee acquires the fee estate of Lessor in the Land, except with the written consent of all Leasehold Mortgagees there shall be no merger of Lessee's leasehold and fee estates, but rather the lien of such mortgage, deed of trust or other encumbrance shall continue and apply to the entire right, title and interest of Lessee. ARTICLE 5 INSURANCE Section 5.1 Required Insurance Coverage. (a) Fire and Special Coverage Endorsement. Lessee shall during the Term of this Ground Lease keep the Development insured against loss or damage by fire, and all other risks as may be included in the standard form of extended coverage endorsement (including flood if the Land is located in flood zone A or V if required by a Leasehold Mortgagee), in amounts such that the proceeds of such insurance shall not be less than the full replacement value of the buildings and Improvements or any other amount required by the Leasehold Mortgagees and approved by Lessor which is reasonably and commercially available. (b) Liability and Property Damage Insurance. During the Term of the Ground Lease, Lessee shall keep in full force and effect a policy or policies of commercial general liability and property damage insurance against liability for bodily injury to or death of any person or property damage arising out of the Development and/or the Land. If reasonably and commercially available, the limits of such insurance shall not be less than ten million dollars ($10,000,000) combined single limit for injury to persons or death for any one occurrence, and not less than five million dollars ($5,000,000) for property damage to others' property. (Notwithstanding the 19 08678.1 OAK #4812-6430-1550 08 foregoing, compliance with the first lien position Leasehold Mortgagee's lability and property damage insurance shall be deemed compliance with this section.). (c) Workers' Compensation Insurance. Lessee shall carry workers' compensation insurance covering all persons employed by Lessee as required by law. (d) Builders Risk Insurance. Lessee shall obtain or require its contractor(s) to obtain builder's risk insurance, at Lessee or contractor's own cost and expense, at all times during the rehabilitation of the Improvements and until Lessee has filed with the Lessor a certificate of fire, liability and property damage insurance on the completed Improvements, and shall provide to Lessor prior to commencement of construction a certificate evidencing the same. Lessee shall request its contractor's insurance carrier to provide a certificate which shall state that the insurance coverage shall not be cancelled or excluded on account of completion, occupancy or use of the improvements unless and until (1) Lessor is given at least 30 days prior written notice of cancellation after completion of construction or (2) there is on file with Lessor with respect to the Improvements the certificate required evidencing liability and property damage insurance coverage. (e) Review. The liability and property damage insurance requirements may be reviewed by Lessor every five years, for the purpose of (in consultation with its insurance advisors) adjusting the specific policy requirements, and minimum limits of such insurance from time to time, to requirements and minimum limits which shall be reasonable and customary for similar facilities of like size and operation in accordance with generally accepted insurance industry standards. However, in no event will Lessee be required to change specific policy requirements more frequently that every five years, nor increase the amount of coverage for any five-year period by more than the lesser of (1) 50% and (2) two times the CPI increase since the last increase under this Section. Section 5.2 Insurance Policies and Premiums. (a) All policies of insurance required under this Ground Lease shall name the Lessor, including its members, officers, employees and agents, and the Leasehold Mortgagees, as additional insureds as their respective interests may appear; provided, however, that the Leasehold Mortgagees for so long as the Leasehold Mortgages are outstanding, shall be added to the "Loss Payable Endorsement" of all insurance policies required to be carried by Lessee hereunder, and all insurance proceeds shall be payable to the most senior Leasehold Mortgagee and applied in accordance with the terms of such Leasehold Mortgagee's Leasehold Mortgage Documents and applicable Law. Duplicate copies of such policies or certificates of such insurance shall be promptly furnished to the Leasehold Mortgagees and the Lessor. (b) Any policy of insurance shall provide that any change or cancellation of said policy must be in writing to the Leasehold Mortgagees, Lessee, and the Lessor at their respective principal offices at least 30 days before the effective date of said change or cancellation. Section 5.3 Proceeds of Insurance Upon Damage or Destruction. (a) For so long as a Leasehold Mortgage on the Development is outstanding, all fire and special or extended coverage (casualty) and builders' risk insurance proceeds shall be applied, subject to the rights of the most senior Leasehold Mortgagee, to the payment of the costs of repairing or rebuilding that part of the Development damaged or destroyed if Lessee 20 08678 1 OAK #4812-6430-1550 v18 agrees in writing within 90 days after payment of the proceeds of insurance that such repair or rebuilding is economically feasible. If the Development is not repaired or replaced, all such proceeds shall be applied in a manner consistent with the terms of the most senior Leasehold Mortgage Documents. The balance, if any, after payment to the most senior Leasehold Mortgagee, shall, subject to the rights of the other Leasehold Mortgagees, be paid to Lessee and, subject to the prior written consent of each Leasehold Mortgagee and Investor, Lessee may terminate this Ground Lease, in which case this Ground Lease shall become void from the time of termination, and from that date the parties hereto shall be released from further obligation hereunder. (b) In the event all Leasehold Mortgages have been paid in full, all insurance proceeds received under the policies set forth in this Article 5 shall be applied to the payment of the costs of repairing or rebuilding that part of the Development damaged or destroyed, if Lessee agrees in writing within 90 days after the payment of the proceeds of insurance that such repair or rebuilding is economically feasible. If Lessee decides that such repair or replacement is not economically feasible, the proceeds shall be paid to Lessee and this Ground Lease shall terminate, and shall become void from the time the decision is made by Lessee to rebuild, and from that date the parties hereto shall be released from further obligation hereunder. (c) Upon the occurrence of any loss, damage or destruction to the Improvements or operations of the Development resulting from such damage or destruction, Lessee's obligation to pay rent as set forth in Section 2.3 (other than Monitoring Fee) shall be abated, subject to the following: (i) If only a portion of the Improvements is damaged or destroyed, the rent (other than Monitoring Fee) shall be abated or reduced by the percentage of the amount of damage or destruction to the Improvements until the Improvements are repaired or rebuilt and approved for occupancy by the City. (d) Notwithstanding anything to the contrary contained herein, in no event may Lessor or Lessee exercise any right to terminate the Lease in connection with any casualty or similar matter without the prior written consent of each Leasehold Mortgagee and Investor (each, in its sole and absolute discretion). Section 5.4 Hold Harmless and Indemnity. (a) Indemnification of Lessor. To the greatest extent permitted by Law (including without limitation Civil Code Section 2782 if and to the extent applicable), Lessee shall indemnify and hold Lessor harmless from and shall defend (including payment of attorney's fees) Lessor against all liability, penalties, losses, damages, costs and expenses including attorney's fees, claims or judgment arising from any injury to any person or persons or any damage to any property occurring in, on or about the Development and/or the Land, or as a result of any accident or other occurrence during the Term, occasioned in any way as a result of Lessee's or Lessee's officers', employee', agents', servants', concessionaires', licensees', contractors' or invitees' use, maintenance, occupation or operation of the Development and/or the Land; provided, however, that Lessee shall not be required to indemnify Lessor for any damage or injury of any kind arising as the result of Lessor's negligent act or omission or misconduct or that of its officers, agents, employees or contractors. Notwithstanding the foregoing or anything else to the contrary contained herein, but without limiting Lessor's rights under any insurance maintained by Lessee, no Leasehold Mortgagee or subsequent lessee 21 08678 1 OAK #4812-6430-1550 v18 shall be required to indemnify Lessor for any act or omission of the prior lessee under this Ground Lease (or to cure any failure of any such prior lessee to indemnify the Lessor). (b) Indemnification of Lessee. Lessor shall indemnify and hold Lessee harmless from and shall defend (including payment of attorneys' fees) Lessee against all liability, penalties, losses, damages, costs and expenses including attorneys' fees, claims or judgment arising from any injury to any person or persons or any damage to any property occurring in, on or about the Development and/or the Land, or as a result of any accident or other occurrence during the Term occasioned in any way as a result of Lessor's or Lessor's officers', employees', agents', servants', concessionaires', licensees', contractors' or invitees' use, maintenance, occupation or operation of the Development and/or the Land; provided, however, that Lessor shall not be required to indemnify Lessee for any damage or injury of any kind arising as the result of Lessee's negligent act or omission or misconduct or that of its officers, agents, employees or contractors. ARTICLE 6 PROVISIONS RESPECTING CONDEMNATION AND DAMAGE OR DESTRUCTION OF DEVELOPMENT Section 6.1 Condemnation or Damage or Destruction of Development. (a) If the Development or any part thereof shall be taken or condemned, for any public or quasi -public purpose or use by any competent entity in appropriate proceedings, or by any right of eminent domain, the whole compensation therefore shall be paid directly to the most senior Leasehold Mortgagee, subject to the terms of the Leasehold Mortgage Documents and applicable Laws. In the event that the Leasehold Mortgages have been paid in full, all proceeds resulting from any taking or condemnation of the Development or any portion thereof, shall be paid to Lessee. (b) Subject to the rights of the most senior Leasehold Mortgagee, all condemnation proceeds received by the Leasehold Mortgagees, or paid to Lessee, in compensation for taking of less than substantially all of the Development shall be applied as follows: (i) If the Development or any part thereof is taken without any material loss of or damage resulting to the Development, but creating a right to compensation therefor, the net condemnation award shall be applied pursuant to the terms of the most senior Leasehold Mortgage Documents, with the remaining balance thereafter (if any), subject to the rights of the other Leasehold Mortgagees, to be paid to Lessee; (ii) If the Development or any part thereof is taken with material loss of or any damage to the Development resulting from such taking, and Lessee agrees in writing within 90 days after payment of the condemnation award that continuation of the operation of the Development and reconstruction or restoration of all or any part of the Development taken or damaged is economically feasible, then the net condemnation award shall be applied, subject to the rights of the most senior Leasehold Mortgagee, first to the reconstruction or restoration, and the balance, if any, subject to the rights of the other Leasehold Mortgagees, shall be paid to Lessee. In the event of such taking and subsequent determination to proceed with reconstruction or restoration, the rights and obligations of the parties to this Ground Lease shall continue in full force and effect, subject to the rights of the most senior Leasehold Mortgagee. . T 22 08678.1 OAK #4812-6430-1550 08 (c) Upon the occurrence of a loss of, or any damage to, the Development or operation of the Development, resulting, from such taking, Lessee's obligation to pay Rent as set forth in Section 2.3 (other than Monitoring Fee) shall be abated, subject to the following: (i) If only a portion of the Improvements is damaged or destroyed, the Rent (other than Monitoring Fee) shall be abated or reduced by the percentage of the amount of damage or destruction to the Improvement. (d) If the entire Development shall be taken as provided in this Section, or, in the case of a partial taking, there is a decision not to continue with the Development and carry out its reconstruction or restoration pursuant to (b) above, then the net condemnation award for the Development shall be paid to the most senior Leasehold Mortgagee in accordance with the terms of that Leasehold Mortgagee's Leasehold Mortgage Documents, and the balance (if any) shall be paid, subject to the rights of the other Leasehold Mortgagees, to the Lessee. At the election of Lessor and Lessee, this Ground Lease shall then terminate, and shall become void from the time possession thereof is required for public use, and from that date the parties hereto shall be released from further obligation hereunder. (e) Lessor shall be entitled to all condemnation proceeds for the taking of the Land in the event the Land is taken by eminent domain, provided that the award to which Lessor is entitled for such taking shall take into consideration the fact that Lessor's interest in the Land is limited to the fee interest in the Land, as encumbered by this Ground Lease and, upon the expiration of the Term, a reversionary interest in the Improvements. (f) Notwithstanding any other provision of this Ground Lease, in no event may Lessor or Lessee exercise any right to terminate the Lease in connection with any condemnation or similar matter without the prior written consent of each Leasehold Mortgagee and Investor (each in its sole and absolute discretion). Section 6.2 Lessee. Lessor and Leasehold Mortgagees to be Made Parties in Legal Proceedings. (a) In the event proceedings shall be instituted (1) for the exercise of the power of eminent domain, or (2) as a result of any damage to or destruction of the Development, Lessee, Lessor, and the Leasehold Mortgagees (at their election) shall be made parties thereto, and if not made parties thereto by the petitioning party, at their election, shall be brought into the proceedings by appropriate proceedings of parties thereto so that adjudication may be made of such damages, if any, as are to be paid to Lessee, Lessor, or the Leasehold Mortgagees as compensation for loss of their rights in the Development or the Land, or for damage to or destruction of the Development. (b) The Lessor, Lessee and the Leasehold Mortgagees shall cooperate and consult with each other in all matters pertaining to the settlement, compromise, arbitration, or adjustment of any and all (1) legal proceedings affecting Lessee, the Lessor and the Development, or (2) claims and demands for damages on account of damage to or destruction of the Development, or for damages on account of the taking or condemnation of the Development or the Land. 23 08678.1 OAK #4812-6430-1550 v18 Section 6.3 Waiver of Eminent Domain. (a) So long as Lessee is not in breach of any of the material terms, conditions or covenants of this Ground Lease, after notice and the expiration of applicable cure periods, the Lessor agrees not to exercise its own right of eminent domain against the Development for the term of this Ground Lease. Section 6.4 Waiver of CCP Section 1265.130. Each party waives the provisions of the Code of Civil Procedure Section 1265.130 allowing either party to petition the Superior Court of the County of Marin, State of California to terminate this Ground Lease in the event of a partial taking of the Development. ARTICLE 7 PARTICULAR COVENANTS Section 7.1 Non -Discrimination Clause. (a) Lessee herein covenants by and for Lessee and Lessee's successors and assigns and all persons claiming under Lessee or through Lessee that this Ground Lease is made and accepted upon and subject to the condition that 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 or familial status, national origin or ancestry, or handicap, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Land herein leased nor shall Lessee or any person claiming under or through Lessee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of Residents or vendees in the Land herein leased. (b) The obligations of Lessee and the Lessor to comply with this section inures to the benefit of each to the other and to the Leasehold Mortgagees where applicable. The Leasehold Mortgagees, as appropriate, shall be entitled to invoke any remedies available by Applicable Law to redress any breach of these subsections or to compel compliance therewith by Lessee and Lessor. Section 7.2 Lessee to Extend Vendor's Warranties to Lessor. Lessee covenants that it will, to the extent available at no cost to Lessee, extend to the Lessor all vendor's warranties received by Lessee in connection with the provision, construction and equipment of the Land and any improvements thereon, including any warranties given by contractors, manufacturers or service organizations who have performed construction work on the Land; provided, however, that Lessor's rights to such warranties shall be subordinate to those of the most senior Leasehold Mortgagee. If requested, Lessee shall execute and deliver appropriate instruments to the Lessor to accomplish the foregoing, all without cost to Lessee. Section 7.3 Ground Leases and Contracts. Lessee covenants that it will require a provision in all contracts involving the Development and in all leases to its Residents in the Development entered into after the date of 24 08678.1 OAK #4812-6430-1550 v18 this Agreement, that these contracts and leases require compliance with the terms and conditions of this Ground Lease applicable to such contracts and leases. Section 7.4 Lessee's Right of First Refusal. (a) If Lessor wishes to sell or transfer its interest in the Land and this Ground Lease, Lessor shall first give 45 days' written notice to Lessee so that Lessee may have the first right to purchase the Land. The notice shall contain the purchase price and a complete description of the terms on which Lessor wishes to sell or transfer the Land. Within 45 days of receipt of the notice given by Lessor, Lessee shall in writing either accept the offer to purchase the Land on the terms provided in the notice or reject the offer. Failure to accept the offer in writing within the 45 -day period shall be deemed a rejection. If the terms of the sale or transfer change or if Lessor desires to sell or transfer the Land after expiration of a 90 -day period from the date Lessee receives the last notice from Lessor, the sale or transfer shall again be subject to Lessee's right of first refusal contained in this Section. (b) In the event that Lessee exercises its right to purchase the interest of Lessor on the terms and conditions set forth in this Section, Lessor and Lessee intend that the rights under this Section shall be specifically enforceable, without limitation on the right of Lessee or Lessor to resort to any other remedy available at law. If required by a Leasehold Mortgagee, Lessee shall execute an assignment of Lessee's right of first refusal in favor of the Leasehold Mortgagee and shall notify Lessor of the assignment in writing, and Lessor hereby consents to such assignment. (c) Notwithstanding Section 7.4(a) and Section 7.4(b), neither Lessee nor any Leasehold Mortgagee shall have a right to purchase the interest of Lessor in the Land and this Ground Lease in the event Lessor transfers all of its interest in the Land, and all of its rights and obligations under this Ground Lease from and after the effective date of the sale or transfer (A) by operation of Law, or (B) to (1) another governmental entity, (2) an entity all of whose members are also governmental entities, or (3) a not for profit entity established and operated for the purpose of affordable housing; provided, however, Lessee, and each Leasehold Mortgagee and Investor shall have the right to approve such transferee, such approval not to be unreasonably withheld, delayed or conditioned, and provided further that in each such instance any such sale or transfer shall be expressly subject to this Ground Lease, and neither Lessee's nor any Leasehold Mortgagee or Investor's other rights arising out of this Ground Lease shall be affected or disturbed in any way by any such sale or transfer. Each covenant, agreement or obligation of Lessor under this Ground Lease is intended to and shall constitute a covenant running with the title to the Land and shall be binding upon any subsequent owner of the Land. At such time as Lessor shall sell or transfer its entire interest in the Land and this Ground Lease, all Lessor obligations and liability arising under this Ground Lease from and after the effective date of such sale or transfer shall terminate as to Lessor, and thereupon all such liabilities and obligations shall be binding upon the transferee. Section 7.5 Estoppel Certificates. Lessor and Lessee agree that at any time and from time to time upon not less than 20 days' prior written notice by the other party, or upon request from any Leasehold Mortgagee or Investor or a permitted assignee, Lessor or Lessee will execute and deliver to the other party or to such Leasehold Mortgagee or Investor a statement in writing certifying (a) that this Ground Lease is unmodified and in full force and effect (or specifying any known amendments if applicable); (b) the date through which the Rent has been paid; and (c) that, to the knowledge of 25 08678 1 OAK #4812-6430-1550 08 the certifier (if such be the case), there is no default (or any conditions existing which, but for the passage of time or the giving of notice, would constitute a default) set off, defense or other claim against Lessor or Lessee, as applicable, other than those, if any, so specified in the estoppel. It is intended that any such statement may be relied upon by any persons proposing to acquire the interest of Lessor, Lessee or any Leasehold Mortgagee or Investor, as the case may be, in this Ground Lease or by any prospective Leasehold Mortgagee or Investor or permitted assignee of any Leasehold Mortgage or Investor. Section 7.6 No Land Encumbrances. Lessor shall not encumber the Land without the prior written consent of each Leasehold Mortgagee and Investor, which consent shall be granted or withheld in such Leasehold Mortgagee's or Investor's sole and absolute discretion. Lessor hereby approves the HCD Rider substantially in form attached hereto as Exhibit C and, following the permanent conversion of the construction loan for the Lessee Improvements, the TCAC Rider substantially in form attached hereto as Exhibit D. In the event of any default under a deed of trust, mortgage or other financing document which (1) encumbers Lessor's interest in the Land and (2) is prior to the Ground Lease, Lessee may cure such default and deduct all amounts reasonably expended in so doing from the next installment(s) of rent. ARTICLE 8 COVENANTS AND ASSURANCES OF LESSOR Section 8.1 Lessor to Give Peaceful Possession. (a) Lessor covenants that to its actual knowledge it is seized in fee simple of, and has good and marketable title to, the Land and that except as set forth in the Title Report, and the HCD Rider and TCAC Rider, the Land is free of all easements, covenants, conditions and restrictions. Lessor covenants and warrants that it has the full right and authority to make this Ground Lease. Lessor covenants and warrants that so long as Lessee is not in default under this Ground Lease and is paying the Rent and performing all of the covenants and conditions of this Ground Lease, Lessee and the Residents shall have, hold and enjoy, during the Ground Lease Term, peaceful, quiet and undisputed possession of the Land herein leased without hindrance or molestation by or from Lessor or anyone acting by or through Lessor so long as Lessee. (b) Lessor covenants and agrees that Lessor shall not mortgage, convey, pledge, or otherwise encumber the Land without the written consent of Lessee, Investor and Leasehold Mortgagees, which written consent may be withheld in the Lessee, Investor or Leasehold Mortgagees' sole discretion. Any document evidencing such encumbrances shall be expressly subordinate to the leasehold estate created hereunder and any Leasehold Mortgages. In such event, Lessee shall not be required, nor shall Lessee be permitted without the consent of all Leasehold Mortgagees, to subordinate the leasehold established hereunder to any mortgage entered into by Lessor after the date hereof. However, nothing in this Section shall limit any City exercise of its regulatory or governmental authority, including without limitation pursuant to Section 3.10 above 26 08678.1 OAK #4812-6430-1550 08 Section 8.2 Lessor to Ground Lease Development with Marketable Title. The Lessor covenants and warrants that there are no outstanding liens and encumbrances of record that will interfere with Lessee's possession of the Land. Section 8.3 Lessor to Obtain NecessarV Governmental Approvals. The Lessor as landlord (not as a public body) covenants that as of the date of this Ground Lease, all necessary approvals from any and all governmental agencies in compliance with all federal, state, and local laws, ordinances, and regulations requisite to leasing of the Land have been obtained. ARTICLE 9 DEFAULTS AND REMEDIES Section 9.1 Default of Lessee. (a) Any one or more of the following events shall constitute an "Event of Default": (i) Failure of Lessee to make timely payment of Rent otherwise due pursuant to this Ground Lease. All Rent payments shall first be applied to accrued and unpaid Rent and then to Rent currently due. (ii) Failure to make any monetary payment (other than Rent) due to Lessor under the Ground Lease, and continuance of such failure for 30 days, in addition to a grace period of 21 days after receipt by Lessee of written notice from Lessor specifying such failure; (iii) Failure of Lessee to observe and perform any other material covenant, condition or agreement hereunder on its part to be performed and (i) continuance of such failure for a period of 60 days, in addition to a grace period of 21 days, after receipt by Lessee of written notice from Lessor or its agent specifying the nature of such default, or (ii) if by reason of the nature of such default the same cannot be remedied within the said 60 days and grace period, Lessee fails to proceed with reasonable diligence after receipt of said notice to cure the same; and (iv) Lessee's abandonment of the Land as determined under Civil Code Section 1951.3 or succeeding statutes. (b) Notices given under this Section shall specify the alleged default and the applicable Ground Lease provisions and shall demand that Lessee perform this Ground Lease or pay the rent that is in arrears, as the case may be, within the applicable period of time, or quit the premises. No such notice shall be deemed a forfeiture or a termination of this Ground Lease unless Lessor so elects in the notice, and in no event shall any termination of this Ground Lease be effective unless the provisions of Article 4 have been complied with. (c) Subject to Section 10.19 and Article 6, whenever any Event of Default referred to in (a)(i), (a)(ii) or (a)(iii) above shall have occurred and be continuing, the Lessor may take whatever action at law or in equity as may appear necessary or reasonable to enforce performance or observance of any obligations, agreements or covenants of Lessee under this Ground Lease. If Lessor terminates the Ground Lease after an Event of Default, which 27 08678.1 OAK #4812-6430-1550 v18 termination right shall at all times be subject to the rights of Leasehold Mortgagees and Investor under Article 4, Lessor shall have the right to hire a property manager for the Development, to release or sell the Development, or to take any other action it desires with the Development. Upon Lessor's termination of this Ground Lease after an Event of Default, subject to the rights of Leasehold Mortgagees and Investor under Article 4, Lessee shall have no further monetary or other obligations or liabilities under this Ground Lease. Section 9.2 Default of Lessor. (a) Lessor shall be in default or breach of this Ground Lease if Lessor fails to observe or perform any material covenant, condition or agreement hereunder on its part to be performed, and (A) continuance of such failure for a period of 60 days after receipt by the Lessor of written notice specifying the nature of such default, or (B) if by reason of the nature of such default the same cannot be remedied within said 60 days, the Lessor fails to proceed with reasonable diligence after receipt of the notice to cure the default. (b) If the Lessor breaches or defaults under the Ground Lease, Lessee shall give the Lessor and the Leasehold Mortgagees written notice requiring that the breach or default be remedied by the Lessor. If the default or breach is not cured within the time set forth in (a) above, Lessee or the Leasehold Mortgagees may take any action at law or in equity as may be necessary to protect their respective interests. Such action shall include but is not limited to the right of (i) Lessee or the Leasehold Mortgagees to cure such default and recover any expenditure with interest thereon (at the reference lending rate then in effect at the largest financial institution in the State of California, or at the maximum amount allowed under applicable law, if less), from the Lessor within 30 days after sending to Lessor a statement therefor, (ii) any rights or remedies granted to Lessee and/or the Leasehold Mortgagees under the Leasehold Mortgage Documents or the laws of the State of California. Lessee and Leasehold Mortgagees shall have the right to offset expenses incurred by Lessee or the Leasehold Mortgagees to cure such default against Rent due under Section 2.3. ARTICLE 10 GENERAL PROVISIONS Section 10.1 HCD Rider and TCAC Rider. The Ground Lease is amended by the HCD Rider and, following the permanent conversion of the construction loan for the Lessee Improvements, the TCAC Rider. In the event of any conflict or inconsistency between the other terms of the Ground Lease and either the HCD Rider or the TCAC Rider, the terms of the HCD Rider or TCAC Rider shall govern and control. In the event of any conflict or inconsistency between the HCD Rider and the TCAC Rider, the HCD Rider shall take precedence. Section 10.2 No Third Party Beneficiary. The provisions of this Ground Lease are for the exclusive benefit of Lessee and Lessor and their successors and assigns, and not for the benefit of any third person, nor shall this Ground Lease be deemed to have conferred any rights, express or implied, upon any third person, except those rights conferred on the Leasehold Mortgagees and Investor by this Ground Lease, with respect to which each Leasehold Mortgagee and Investor is hereby made an express third party beneficiary. 28 08678.1 OAK #4812-6430-1550 08 Section 10.3 Instrument is Entire Agreement. This Ground Lease and the attached Exhibits constitute the entire agreement between the parties as to the lease of the Land by Lessor to Lessee. The Recitals, exhibits, and defined terms herein and therein, are incorporated into this Ground Lease by this reference. This Ground Lease shall completely and fully supersede all inconsistent other prior understandings or agreement, both written and oral, between the Lessor on the one hand, and Lessee or General Partner on the other hand, relating to the Ground Lease of the Land by the Lessor to Lessee, including without limitation the Option Agreement. Section 10.4 Amendment of Ground Lease. (a) No amendment to this Ground Lease shall be effective unless (1) the amendment is in writing and executed by both Lessor and Lessee and (2) written consent to the amendment has been obtained from each Leasehold Mortgagee and Investor. (b) Lessor and Lessee acknowledge and agree that Leasehold Mortgagees may require amendments to this Ground Lease as a condition precedent to providing Leasehold Mortgages. Lessor agrees to cooperate with Lessee and Leasehold Mortgagees, and Lessor's approval of amendments shall not be unreasonably withheld; provided, however, that any such amendment shall not in any way (1) affect Lessor's fee estate or other interest in the Land, (2) affect the Term, rent or any amount otherwise payable to Lessor under this Ground Lease, or (3) otherwise in any material respect adversely affect any rights of Lessor under this Ground Lease or (except as otherwise expressly provided herein) Section 2.4. Section 10.5 Notices. Except as otherwise provided in Section 4.2, all notices, demands and other formal communications hereunder shall be deemed given if: (a) delivered personally or by courier, (b) sent by overnight express delivery, or (c) mailed by registered or certified mail (return receipt requested), postage prepaid, to a party at its respective address set forth below (or at such other address as shall be specified by the party by like notice given to the other party(ies), addressed: (1) if to the Lessor: City of San Rafael 1400 Fifth Avenue, Room 202 San Rafael, California 94901 with copy to: City of San Rafael 1400 Fifth Avenue, Room 202 San Rafael, CA 94901 (2) If to Lessee: Centertown II, LP c/o BRIDGE Housing Corporation 600 California St #900 29 08678.1 OAK #4812-6430-1550 v18 San Francisco, CA 94108 Attn: General Counsel And: Centertown II, LP EAH Inc. 22 Pelican Way San Rafael, CA 94901 Attn: Welton Jordan Chief Real Estate Development Officer With a copy to: Goldfarb & Lipman LLP 1300 Clay Street, 11th Floor Oakland, CA 94612 Attention: Erica Williams Orcharton And Bocarsly Emden Cowan Esmail & Arndt LLP 633 West Fifth Street, 64th Floor Los Angeles, CA 90071 Attention: Nicole Deddens And: NHT Equity, LLC 2245 North Bank Drive, Suite 200 Columbus, Ohio 43220 Attention: NAHT Asset Management SAHF Affordable Housing Communities Fund 2019 (MS) Limited Partnership c/o NHT Equity, LLC 2245 North Bank Drive, Suite 200 Columbus, Ohio 43220 Attention: NAHT Asset Management With a copy to: Kutak Rock LLP 1650 Farnam Street Omaha, NE 68102 Attention: Jill H. Goldstein, Esq. 30 08678.1 OAK #4812-6430-1550 08 The Lessor, the Leasehold Mortgagees, Investor and Lessee may, by like notice, designate any further or different addresses to which subsequent notices shall be sent. Section 10.6 Recording of Memorandum. The Lessor shall record the Memorandum of Ground Lease, substantially in the form attached hereto as Exhibit F ("Memorandum"), in Official Records. Section 10.7 Accessibility; Disability Laws. (a) Neither the Land nor the Improvements have undergone an inspection by a Certified Access Specialist (CASp). (b) "A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction -related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction -related accessibility standards within the premises." (c) Since compliance with the Americans with Disabilities Act ("ADA") and other federal and state disability laws ("Disability Laws") is dependent upon Lessee's specific use of the Land, Lessor makes no warranty or representation as to whether or not the Land complies with ADA or Disability Laws. In the event that Lessee's use of the Land requires modifications or additions to the Improvements in order to be in compliance with the ADA or Disability Laws, Lessee agrees to make any such necessary modifications and/or additions at Lessee's sole cost and expense. Section 10.8 Non -Waiver of Breach. Neither the failure of the Lessor or Lessee to insist upon strict performance of any of the covenants and agreements of this Ground Lease nor the failure by the Lessor or Lessee to exercise any rights or remedies upon default while the Lessor or Lessee is in default hereunder shall be deemed a waiver or relinquishment (1) of any covenant herein contained or of any of the rights or remedies of the Lessor or Lessee hereunder, (2) of the right in the future of the Lessor or Lessee to insist upon and to enforce by mandamus or other appropriate legal remedy a strict compliance with all of the covenants and conditions hereof, or (3) the right of the Lessor to recover possession of the Land after the expiration of applicable cure periods. Section 10.9 Effectiveness. Counterparts. This Ground Lease shall become effective upon the Commencement Date. This Ground Lease may be executed in two counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 31 08678.1 OAK #4812-6430-1550 v18 Section 10.10 Ground Lease Binding on Successors. Subject to Section 4.2, this Ground Lease and all its provisions and attached Exhibits shall inure to the benefit of, and shall be binding upon, the Lessor, Lessee and their respective successors and assigns. Without limiting the foregoing, all rights herein granted to any Leasehold Mortgagee shall also apply to any Leasehold Mortgagee of any successor or assign of Lessee. Section 10.11 Relationship of Parties. Nothing contained in this Ground Lease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent or of partnership or of joint venture or of association whatsoever between Lessor and Lessee, it being expressly understood and agreed that neither the computation of any payments and other charges hereunder nor any other provisions contained in this Ground Lease, nor any act or acts of the parties hereto, shall be deemed to create any relationship between Lessor and Lessee other than the relationship of landlord and tenant. Section 10.12 Termination: Holding Over. This Ground Lease shall terminate without further notice upon the expiration of the Term hereof, and any holding over by Lessee after the expiration of said Term shall not constitute a renewal hereof or give Lessee any rights hereunder or in or to the Land, except as otherwise herein provided, it being understood and agreed that this Ground Lease cannot be renewed, extended or in any manner modified except in writing signed by Lessor and Lessee (and consented to by all Leasehold Mortgagees). Upon termination of this Ground Lease, Lessee shall convey the Improvements to Lessor by quit claim deed. Section 10.13 Consents; Further Acts. Whenever in this Ground Lease the consent or approval of either Lessor or Lessee is required or permitted, the party requested to give such consent or approval will act promptly and will not unreasonably withhold its consent or approval unless expressly provided otherwise herein. Each party to this Ground Lease agrees to perform any further acts and to execute and deliver any documents that may be reasonably convenient or necessary to carry out this Ground Lease. Section 10.14 Construction of Words. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa, words imparting persons shall include firms, association, partnerships and corporation, and words of either gender shall include the other gender. Section 10.15 Titles. The titles and headings are inserted only for convenience, and are in no way to be construed as a part of this Ground Lease or as a limitation on the scope of the particular provisions to which they refer. 32 08678.1 OAK #4812-6430-1550 08 Section 10.16 Days of the Week. A "business day," as used herein, shall mean any day other than a Saturday, Sunday or holiday, as defined in Section 6700 of the California Government Code. If any date for performance herein falls on a day other than a business day, the time for such performance shall be extended to 5:00 pm on the next business day. Section 10.17 Invalidity of Particular Provisions. If any provision of this Ground Lease or the application thereof to any person or circumstances shall to any extent be invalid or unenforceable, the remainder of this Ground Lease, or the application of such provision to person or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each provision of this Ground Lease shall be valid and be enforced to the fullest extent permitted by law. Section 10.18 Assignment. (a) Except as provided in this Section or Article 4, Lessee shall not assign or transfer its interest in the Development or sublease all or any part of the Development or allow any other person or entity (except Lessee's authorized representatives) to occupy or use all or any part of the Development without first obtaining Lessor's written consent, which shall not be unreasonably withheld, provided, however, that nothing contained herein shall prohibit Lessee from conducting a multi -family residential rental business on the Development, including the renting of Dwelling Units to Residents, in accordance with the terms of this Ground Lease, nor require Lessee to obtain Lessor's consent thereto. Lessee shall have the right to encumber its leasehold interests in accordance with Article 4. Any assignment or transfer without Lessor's consent shall be voidable, and, at Lessor's election, shall constitute a default. No consent to any assignment or transfer shall constitute a waiver of this Section. (b) If Lessee or any approved successor is a partnership, a withdrawal or change, voluntarily, involuntarily or by operation of law, of a general partner or limited partner or the dissolution of the partnership, or the transfer of any interest resulting from the death or incapacity of a general partner, shall be deemed a voluntary assignment requiring Lessor's consent; provided, however, that: (i) a transfer of any interest among the partners or to an entity wholly owned or controlled by the partner making the transfer, shall not be deemed a prohibited assignment or an assignment which requires the consent of Lessor; (ii) the removal of a general partner by the Investor pursuant to the terms of the Partnership Agreement shall not be deemed a voluntary assignment which requires the consent of Lessor; (iii) Lessor consents to those purchase options and rights of first refusal in favor of the Members or their designees pursuant to the terms of the Partnership Agreement, and agrees that transfer of title to the Development in accordance therewith shall not constitute a default under this Ground Lease nor require Lessor's consent, provided that Lessee gives Lessor at least 30 days prior written notice of such transfer, accompanied by documentation reasonably requested by Lessor and contact information for such transferee, and provided that the transferee agrees to assume the duties and obligations of the original Lessee respecting the Lease on the same terms as those imposed on the original Lessee; and 33 08678.1 OAK #4812-6430-1550 08 (iv) a transfer of any limited partner interest in Lessee shall not be deemed a prohibited assignment or an assignment which requires the consent of Lessor. (c) If Lessee or an approved successor is a corporation, any dissolution, merger, consolidation, or other reorganization of Lessee, or the sale or transfer of more than 50% of the capital stock of Lessee, or more than 50% of the value of the assets of Lessee, shall be deemed a voluntary assignment requiring Lessor's consent. (d) Anything contained in this Section to the contrary notwithstanding, a transfer by Lessee or an approved successor hereunder of the leasehold estate or any interest therein, to an entity wholly owned or controlled by Lessee or approved successor shall not constitute a voluntary assignment or require the prior approval of Lessor. Nothing contained herein shall prohibit the Lessee or require the consent of Lessor to a transfer of any interest by Lessee resulting from a sale of stock or interest by the Lessee to the public through a recognized exchange or over-the-counter. (e) Except as otherwise specifically provided herein, no interest of Lessee in this Ground Lease shall be assignable by operation of law (including, without limitation, the transfer of this Ground Lease by testacy or intestacy). Each of the following acts shall be considered an involuntary assignment: (i) If Lessee is or becomes bankrupt or insolvent, makes an assignment for the benefit of creditors, or institutes a proceeding under the Bankruptcy Act in which Lessee is the bankrupt; provided, however, that in the case of an involuntary petition for bankruptcy, Lessee shall have 90 days to cause such petition to be withdrawn or dismissed. (ii) If a writ of attachment or execution is levied on this Ground Lease, which writ is not withdrawn or dismissed within 90 days. (iii) If, in any proceeding or action to which Lessee is a party, a receiver is appointed with authority to take possession of the premises, which appointment is not withdrawn or dismissed within 90 days. (f) An involuntary assignment shall constitute a default by Lessee and Lessor shall have the right to exercise its remedies under this Ground Lease. (g) Except as otherwise permitted herein, Lessor reserves the right to condition such consent upon the conditions that the financial net worth and business experience of the proposed assignee or transferee is, in the opinion of Lessor, reasonably comparable to that of Lessee. Subject to the above condition, Lessor agrees not to unreasonably withhold its consent to any assignment or transfer. (h) Lessee agrees to pay Lessor for Lessor's actual and reasonable costs including attorney's fees, incurred in conjunction with the processing and documentation of any such requested consent, assignment, transfer of ownership of this Ground Lease or Lessee's interest in and to the premises; provided, however, that Lessee's total obligation hereunder shall not exceed $2,500 for each transaction, subject to adjustment by the CPI increase (if any) from and after the Commencement Date. (i) Each transfer or assignment to which there has been consent shall be subject to Section 10.20 and shall be an instrumerit,in writing in form satisfactory to Lessor, and shall be 34 08678.1 OAK #4812-6430-1550 v18 executed by the transferor or assignor, and the transferee or assignee, shall agree in writing for the benefit of the Lessor herein to assume, to be bound by, and to perform the terms, covenants and conditions of this Ground Lease to be done, kept and performed by Lessee, including the payment of all amounts due or to become due under this Ground Lease directly to Lessor. One executed copy of such written instrument shall be delivered to Lessor. Failure to first obtain in writing Lessor's consent or failure to comply with this provision shall operate to prevent any such transfer or assignment from becoming effective. (j) As used in this Section 10, 18, the term "involuntary assignment" shall not include any judicial or non -judicial proceeding against the Development by a Leasehold Mortgagee. Section 10.19 Applicable Law. This Ground Lease shall be governed by and construed in accordance with the laws of the State of California, including its statutes of limitations but without regard to its conflict of laws principles. Section 10.20 Requests for ARproval. Whenever Lessor or Lessee is required to obtain prior written consent on any matter from the other party, and no specific time for response is set by terms of this Ground Lease, then after notice has been duly given as required by this Ground Lease and no response has been given to the other party for ten business days after receipt of such notice, and three business days after further notice specifically identified in all BOLD ALL CAPITAL LETTERS as a "SECOND NOTICE" and specifically stating "FAILURE TO RESPOND BY [INSERT SPECIFIC THREE BUSINESS DAYS RESPONSE DEADLINE] WILL BE DEEMED APPROVAL OF THE MATTERS CONTAINED IN THE ORIGINAL NOTICE DATED [INSERT ORIGINAL NOTICE DATE]," then written consent shall be deemed to have been given by the party failing to respond. Section 10.21 Non -Recourse and Non -Liability. (a) Notwithstanding any other provision in this Ground Lease, Lessee, its partners and their respective successors and assigns, shall not have any personal liability under this Ground Lease. In the event of any default by Lessee, Lessor's remedy shall be limited to its right to terminate this Ground Lease and recover the Development as provided herein. Lessor may seek appropriate interim remedies not inconsistent herewith, but, in no event, shall Lessor assert any claim or have any right to seek or obtain any judgment against Lessee or any partners of Lessee for rent, damages or any other obligations, or exercise any offset against any assets of Lessee held by Lessor or funds owed by Lessor to Lessee or any of its partners. (b) Similarly, no member, official or employee of Lessor shall be personally liable to Lessee, or any successor in interest, in the event of any default or breach by Lessor or for any amount which may become due to Lessee or its successors, or on any obligations under the terms of this Ground Lease. Lessee hereby waives and releases any claim it may have against the members, officials or employees of Lessor with respect to any default or breach by Lessor or for any amount which may become due to Lessee or its successors, or on any obligations under the terms of this Ground Lease. 35 08678.1 OAK #4812-6430-1550 08 Section 10.22 List of Exhibits. The following Exhibits are attached hereto and incorporated herein by this reference: Exhibit A: Land Legal Description Exhibit B: Initial Leasehold Mortgagees and Investor(s) Exhibit C: HCD Rider Exhibit D: TCAC Rider Exhibit E: Schedule of Performance Exhibit F: Memorandum IN WITNESS WHEREOF, the parties have executed this Ground Lease as of the day and year first above written. [SIGNATURE PAGES FOLLOW] 36 08678.1 OAK #4812-6430-1550 v18 A prove as to Form - Lessor's rLessor's Attorney Attest: � / Lindsay Lara, City Clerk LESSOR: CITY OF SAN RAFAEL, a municipal corporation By: Kate Colin, Mayor LESSEE: CENTERTOWN II, LP., a California limited Partnership By: Centertown II, LLC, a California limited liability company, its managing general partner By: BRIDGE Housing Corporation, a California nonprofit public benefit corporation, its mlanaging member ,te By. mitha SeshazIt Executive Vice President By: EAH Inc., a California nonprofit public benefit corporation, its managing member By: ym ' � �. ;-' Welton Jordan, Assistant Secretary and Chief Real Estate Development Officer Ground Lease Signature Page ORDER NO.: 1117019475.3 EXHIBIT A The land referred to is situated in the County of Marin, City of San Rafael, State of California, and is described as follows: PARCEL One: All the lands shown upon that certain Map entitled, "Map of Centertown, an Air -Space Condominium", filed for record on December 13, 1983 in Volume 18 of Maps, at Page 98, Marin County Records. PARCEL One -A: Beginning at a point on the Westerly line of "C" Street distant thereon 109 feet and 8 inches Northerly from the intersection of said Westerly line of "C" Street and the Northerly line of Second Street, said point of beginning being the Southeast corner of that Lot conveyed by Loretta Ceaser to John Mirata by Deed recorded in Book 165 of Deeds, at Page 269, running thence Westerly at a right angle to "C" Street and along the Southerly line of the Lot so conveyed by Ceaser to Mirata 150 feet; thence Southerly at a right angle 42 feet; thence Easterly at a right angle 150 feet to the Westerly line of "C" Street thence Northerly along the said line of "C" Street 42 feet to the point of beginning. Being a portion of Block 15 of the Townsite of the Town of San Rafael. The above Parcels being all the lands, as shown upon that Parcel Map entitled, "Parcel Map Being a Reversion to Acreage of Lands of San Rafael Redevelopment Agency as described in Doc. No. 89-0044735 and Doc. No. 89-0069342 Marin County Records Portion Block 15 'Map of Townsite of San Rafael' recorded in Rack 1, Pull 4, Marin County Records, San Rafael, Marin County, California", filed for record August 1, 1990 in Volume 24 of Parcel Maps, at Page 92, Marin County Records. Excepting therefrom: All the buildings, structures and other improvements including the building fixtures therein, which are and shall remain real property, now or hereafter located on and permanently annexed to or on the land hereinafter described in PARCEL One and PARCEL One -A above. APN: 011-254-19 Exhibit A 144\76\3108678.1 OAK #4812-6430-1550 08 Exhibit B INITIAL LEASEHOLD MORTGAGES AND INVESTOR(S) Loans Secured by Leasehold Mortgages 1. Umpqua Bank — $18,442,396 (approximate) 2. Department of Housing and Community Development — $3,311,425 (approximate) 3. County of Marin (HOME) — $950,000 4. County of Marin (CDBG) — $59,504 5. County of Marin (HTE) — $40,000 6. City of San Rafael — $909,876 (approximate) 7. BRIDGE and EAH, as assignees of Seller Loan — $10,828,396 (approximate) Leasehold Mortgagees Umpqua Bank One Capitol Mall, Suite 610 Sacramento, California 95814 Attention: Monica Sharp Department of Housing and Community Development State of California Asset Management and Compliance P.O. Box 952054 Sacramento, CA 94252-2054 Attn: Program Manager LPR Loan No.: 19-LPR-0049 County of Marin Community Development Agency 3501 Civic Center Drive, Suite 308 San Rafael, CA 94903 Attention: Housing and Federal exhibit eGrants Division City of San Rafael 1400 Fifth Avenue, Room 202 San Rafael, California 94901 Attention: City Manager With copy to: City of San Rafael 1400 Fifth Avenue, Room 202 San Rafael, CA 94901 Attn: Robert Epstein, City Attorney Exhibit B 144\76\3108678.1 OAK #4812-6430-1550 v18 BRIDGE Housing Corporation 600 California St #900 San Francisco, CA 94108 Attn: General Counsel EAH Inc. 22 Pelican Way San Rafael, CA 94901 Attn: Chief Real Estate Development Officer Investor(s) NHT Equity, LLC 2245 North Bank Drive, Suite 200 Columbus, Ohio 43220 Attention: NAHT Asset Management And: SAHF Affordable Housing Communities Fund 2019 (MS) Limited Partnership c/o NHT Equity, LLC 2245 North Bank Drive, Suite 200 Columbus, Ohio 43220 Attention: NAHT Asset Management With copy to: Kutak Rock LLP 1650 Farnam Street Omaha, NE 68102 Attention: Jill H. Goldstein, Esq. Exhibit B 144\76\3108678.1 OAK #4812-6430-1550 v18 Exhibit C HCD RIDER [to be attached] Exhibit C 144\76\3108678.1 OAK #4812-6430-1550 v18 Free recording in accordance with California Government Code section 27383 and 27388.1. RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: State of California Department of Housing and Community Development Loan Portfolio Restructuring Program P.O. Box 952052 Sacramento, CA 94252-2052 Attn: Legal Affairs Division 19-LPR-0049 LEASE RIDER (Ground Lease) This Lease Rider (the "Agreement") is made and entered into as of October 22, 2021, for reference purposes only, and is effective as the Commencement Date (as defined in the "Lease" as defined below) which Commencement Date is also the date of recordation hereof (the "Effective Date"), by and among the City of San Rafael, a municipal corporation (the "Landlord"), Centertown II, L.P., a California limited partnership (the "Lessee"), and the Department of Housing and Community Development, a public agency of the State of California (the "Department") in consideration of the following facts and circumstances which are all limited to and provided as of the Effective Date. RECITALS: A. Landlord is the fee simple owner of that certain real property described in Exhibit A attached hereto and incorporated herein (the "Pro ert"). Lessee is the owner of the Improvements (as defined below) and leasehold estate in that real property described in ExNbit A; B. Landlord and the Lessee entered into a ground lease (the "Ground Lease" also referred to as the "Lease"), as memorialized by a Memorandum of Ground Lease of the Property dated October 22, 2021, and recorded in the Official Records of Marin County, California (the "Official Records") substantially concurrent herewith, which granted Lessee the leasehold estate in the Property mentioned in Recital A; C. Pursuant to the Lease, Lessee has agreed to rehabilitate, lease, construct, own, operate and manage a rental housing development on the Property consisting of 60- LPR Lease Rider Page 1 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) residential rental units. Lessee is the owner of the fee interest in all of those certain buildings, improvements and fixtures now or hereafter erected thereon, and all appurtenances, easements, and articles of property now or hereafter affixed to, placed upon or used in connection with such real property and owned by Lessee or in which Lessee has an interest, together with all additions to, substitutions for, changes in our replacements of the whole or any part of said articles of property (collectively, the "Improvements"). Collectively, the Property and the Improvements are hereinafter sometimes referred to as the Development the "Development"; D. The Department has agreed to restructure an existing Department loan into a new restructured loan in the original principal sum of Three Million Four Hundred Twenty Thousand Two Hundred Eighty Four and 42/100 Dollars ($3,420,284.42) with accrued interest, if any, as stated in the Note (described below) (the "Loan") to Lessee to finance the Development pursuant to the Loan Portfolio Restructuring Program (the "Program"). The Loan is subject to numerous terms and conditions, including without limitation, the execution and delivery of this Agreement; E. As a further condition of the Loan and pursuant to the requirements of the Program, Lessee and the Department have entered into a Regulatory Agreement, including any amendments thereto (the "Regulatory Agreement"), governing the use, occupancy, operation, management and ownership of the Development. Landlord and Lessee hereby waive any such provisions of the Lease in conflict with or which would frustrate Lessee's compliance with the Regulatory Agreement in favor of the terms of the Regulatory Agreement (including in particular the provisions of paragraphs 20 [Use of Income from Operations], 21 [Distributions] and 22 [Use of Net Cash Flow]); F. The Loan will be evidenced by a Promissory Note (the "Note") from Lessee and secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the "Trust Deed") on Lessee's interests in the Property; G. Lessee and Landlord have requested that the Department accept the Lease as security for the Loan. In order to induce the Department to make the Loan, Landlord and Lessee have agreed to enter into and record this Agreement for the benefit of the Department, its successors, and assigns; and H. This Agreement encumbers the Landlord's fee interest in the Property and the Development. NOW THEREFORE, in consideration of the foregoing recitals and the mutual covenants hereinafter contained, the Department, Lessee and Landlord hereby agree as follows: 1. Leasehold. As used herein, "Leasehold" means all of Lessee's interest in the Property described in Exhibit A, in the Development, in the Improvements now or hereafter located on the Property, all options contained in the Lease or granted in connection with the Lease, LPR Lease Rider Page 2 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No: 19-LPR-0049 (formerly, 90-RHCP-005) all other rights of Lessee under the Lease, and all subleases entered into in connection with the Lease (the "Subleases"). 2. Representations and Warranties of Landlord. Landlord hereby represents and warrants to the Department as follows: a. Title. To Landlord's actual knowledge, Landlord's interest in the Development is free and clear of all liens, encumbrances, covenants, easements, licenses, judgments, or other matters of record except those shown as affecting the fee interest of the Property in that certain Preliminary Report regarding the Property issued on September 14, 2021, at 7:30 AM, issued by Old Republic Title Company, for Escrow No. 1117019475.3, (the "Report"). The Report is attached hereto as Exhibit B. Landlord has not required or permitted, and has no actual knowledge of any other matters of record to be recorded against the Property that are not contained in the Report. b. Priority. The Lease is superior to any and all mortgage liens on the Property. c. Transfers by Landlord. Landlord has not assigned, mortgaged, or otherwise hypothecated or transferred, or agreed to assign, mortgage or otherwise hypothecate or transfer, its interest in the Property and the Development in whole or in part, except as shown in the Report and except as security for loans to Lessee approved in writing by the Department. d. Status of Lease. (1) Landlord is the current Lessor under the Lease. The Lease is in full force, and to Landlord's actual knowledge the Lease is not void, voidable or terminable at the option of any party thereto or of any other person or entity claiming an interest in or to such Lease or the Development, and there has been no default thereunder on the part of Lessee, nor has any event occurred which, with the giving of notice or the passage of time, or both, would be an event of default thereunder. Landlord has not been informed of and has not otherwise received notice from Lessee or from any other person or entity concerning any alleged default on the part of Landlord under the Lease. As of the Effective Date, to Landlord's actual knowledge there exist no defenses or offsets to enforcement of the Lease by Lessee. (2) To Landlord's actual knowledge, any consent or approval of any third party (including any lender) that is required to deliver this Agreement has been obtained, including consents by the Investor and Leasehold Mortgagees (defined in the Lease). LPR Lease Rider Page 3 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) (3) To Landlord's actual knowledge, no alterations, improvements or additions have been made to the Property since commencement of the Lease that have not been approved by the Landlord. e. Other Agreements. All terms and conditions of the Lessee's tenancy under the Lease are set forth in the Lease and there have been no further or other supplements, amendments, modifications or extensions thereof except those described in the Report and submitted to and approved by the Department. Nothing in this Lease Rider is intended to waive, supersede, modify or terminate any provision of the Lease granting rights to the Department as a Mortgage Lender. f. Lease Term. The date of the commencement of the Lease term is the Commencement Date, and will end after Ninety -Nine (99) years. To Lessor's actual knowledge, all conditions precedent to the effectiveness of the Lease or the exercise of any of Lessee's rights thereunder has been fully satisfied. g. Development. Including Lessee's construction of the Lessee Improvements (as defined in the Lease), to Landlord's knowledge the Development acquired and/or rehabilitated by Lessee on the Property satisfies (or will satisfy) all requirements affecting the design, use or characteristics of such Development imposed by Landlord under the Lease or otherwise, all applicable provisions of federal, state and local laws, and all agreements with any public entities concerning the Development, as amended from time to time. h. Insurance. As of the Effective Date, all notices, certificates, binders, endorsements, copies of policies, and receipts required under the Lease to have been delivered to Landlord have been delivered and approved by Landlord. 3. Representations and Warranties of Lessee. Lessee, as borrower of the Loan, hereby represents and warrants to the Department as follows: a. The Lease is superior to any and all mortgage liens on Lessee's Leasehold in the Property. b. Any consent or approval of any third party (including any Lender of Lessee) that is required to deliver this Lease Rider has been obtained. c. Including Lessee's construction of the Lessee Improvements, the Improvements acquired and/or rehabilitated by Lessee on the Property satisfy (or will satisfy) all requirements affecting the design, use or characteristics of such Development imposed by Landlord under the Lease or otherwise, any and all applicable provisions of federal, state and local laws, and all agreements with any public entities concerning the Development, as amended from time to time. LPR Lease Rider Page 4 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) d. As of the Effective Date, all notices, certificates, binders, endorsements, copies of policies, and receipts relating to insurance required under the Lease have been delivered to Landlord. 4. Cancellation, Transfer of Interest. a. Landlord and Lessee agree that so long as the Department, its successor or assigns holds the Trust Deed and Regulatory Agreement encumbering the Leasehold, no termination of the Lease by Lessee, and no subordination, cancellation, surrender, amendment or modification of the Lease (other than upon expiration of the 99 -year Lease term) shall be effective without the prior written consent of the Department, which consent shall be in the Department's sole and absolute discretion, and may be conditioned upon the satisfaction of such terms and conditions as the Department may prescribe. Any attempt by Lessee to take such action shall be void without the Department's prior written consent. b. Landlord agrees, except for the matters in the Report agreed to by the Department, that it shall not transfer, convey, sell, hypothecate, assign, encumber or permit any liens against its interest, or any portion thereof, in the Property or the Development without the prior written approval of the Department, which consent shall be in the Department's sole and absolute discretion, and may be conditioned upon the satisfaction of such terms and conditions as the Department may prescribe. If the Department approves any such transfer, conveyance, sale, hypothecation, assignment or other encumbrance of its interest, or any portion thereof, in the Property or the Development, Landlord will (subject to the rights of any permitted senior mortgage holder) require that any purchaser, assignee or transferee expressly assume all of the obligations of Landlord under the Lease and this Agreement by a written instrument recordable in the Official Records. c. Bankruptcy. Neither the Landlord nor the Lessee, in the event of bankruptcy by either, will take the benefit of any provisions in the United States Bankruptcy Code that would cause the termination of the Lease or otherwise render it unenforceable in accordance with its terms. d. No Merger. There shall be no merger of the Lease or any interest in the Lease, nor of the Leasehold, with the fee estate in the Property if the Lease or such interest therein, or such Leasehold estate may be directly or indirectly held by or for the account of any person who shall hold the fee estate in the Property, or any interest in such fee estate, nor shall there be such a merger by reason of the fact that all or any part of the Leasehold estate created thereby may be conveyed or mortgaged in a leasehold mortgage, deed of trust, or other security instrument to a leasehold mortgagee that shall hold the fee estate in the Development or any interest of the Landlord under the Lease. LPR Lease Rider Page 5 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) 5. Consent to Assignment, Payment of Rent. a. Landlord hereby consents to and approves the following to the extent such consents or approvals are required under the Lease: (1) Lessee's encumbering the Lease, the Leasehold and the Development by the Trust Deed and the Regulatory Agreement; possession of the Property and any Development thereon by the Department or by a receiver under the Trust Deed or the Regulatory Agreement; and sale of the Leasehold and the Development by foreclosure under the Trust Deed or transfer by deed in lieu of foreclosure; (2) Assignments to the Department or its designee of any subleases and any and all rents from such subleases; and (3) Sale or assignment of all or any part of any interest in the Leasehold to any purchaser at a foreclosure sale under the Trust Deed or to any transferee of a deed in lieu of foreclosure (such purchaser or transferee, including the Department, is collectively referred to as the 'Transferee"), and to subsequent transfers without restriction other than any matter identified in the Report as being senior to the Trust Deed (all such assignments, transfers, and subsequent transfers referred to in this Agreement as the "Transfer"). Any such Transferee, upon the Transfer of all its interest in the Development and the Leasehold, shall be relieved of all liability under the Lease accruing after date of such Transfer. b. Nothing in this Agreement, in the Trust Deed or in the Lease shall impose on the Department the obligations of Lessee under the Lease or require the Department to assume the Lease unless the Department forecloses on the Leasehold under the Trust Deed or accepts an assignment or deed in lieu of foreclose. 6. Notice of Defaults; Termination Notice. a. Notice and Cure. Landlord shall provide simultaneously to the Department a written copy of all notices and demands, including, without limitation, notices of default or breach which Landlord has given, delivered or sent to Lessee under the Lease. No notice or demand under the Lease shall be effective unless and until a copy of such notice is provided to the Department as provided herein. Any notice of default under the Lease or this Agreement shall describe the default(s) with reasonable detail. The Department shall have the right, but not the obligation, to cure any breach or default within the time period given in the Lease; provided that, if such notice to the Department is not given or is delayed for any reason, the period of time within which the Department may cure any such breach or default shall commence upon receipt by the Department of such notice. Landlord and Lessee authorize the Department to enter the Development for the purpose of preventing defaults or LPR Lease Rider Page 6 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) exercising its right to cure and any other powers given the Department under the Trust Deed, this Agreement or the Lease. b. (i) Termination Notice. After the expiration of the grace period given Lessee under the Lease to cure the default, Landlord shall not terminate the Lease on account of such default but shall give the Department a written notice (the "Termination Notice") that Lessee has failed to cure the default within the grace period and that, on account thereof, Landlord intends to terminate the Lease, which notice shall set a termination date not earlier than ninety (90) days after the Department's receipt of the Termination Notice, provided that Landlord agrees to extend such termination date if the Department reasonably requires additional time to accommodate the Department's taking possession of the Development where possession is necessary to cure Lessee's default. No Termination Notice shall be effective to terminate the Lease if: (1) Except as provided in section 5.c., within one hundred eighty (180) days after receipt of the Termination Notice, the Department cures any default which can be cured by payment or expenditure of money with or without possession of the Development; or provides reasonable assurance and undertakings for the cure of such default. To effect a cure of Lessee's default, the Department may make any repair of improvement, do any other act or thing required of Lessee under the Lease, or do any act or thing which may be necessary or proper to prevent termination of the Lease. The Department and its agents and contractors will have full access to the Development for purposes of accomplishing the curing of defaults under the Lease. Any of the foregoing done by the Department shall be as effective to prevent a termination of the Lease as the same would have been if done by Lessee; or (2) The Department commences and diligently pursues to completion proceedings for foreclosure and sale under the Trust Deed or assignment or transfer in lieu of foreclosure. b. (ii) Termination of Agreement and removing the Lease Rider from fee title. The Department upon (receiving the Termination Notice and) being informed that Landlord intends to terminate the Lease because of Lessee's default or breach, may exercise its right to cure any breach or default under this Agreement and prevent Lease termination. However, should the Department elect not to exercise its cure rights under the Agreement in the event of Lessee default, in conjunction with Landlord, the Department will take steps to terminate the Agreement and execute the appropriate documents to remove the Agreement from the fee title, to the extent such actions are required to remove the Agreement. LPR Lease Rider Page 7 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) c. Defaults Not Susceptible to Department_ Cure. The Department shall not be required to perform any act which is not susceptible to performance by the Department, such as to cure a filing or condition of bankruptcy or insolvency or to cure or commence the cure of any default which is Lessee's failure to pay any lien, charge or encumbrance which is junior in priority to the Trust Deed, or to pay any amount owed under an indemnity of Landlord by Lessee based on an event occurring prior to the Department's possession of the Development. d. Landlord's Payment of Loan _Payment s. Landlord agrees that if Landlord cures Lessee's failure to make any payment due under the Loan, it shall seek reimbursement of amounts so paid solely from Lessee and the Department shall have no obligation to pay such amounts to Landlord. e. Waiver of Breach or Default. On transfer of the Leasehold at any foreclosure sale under the Trust Deed or by acceptance of a deed in lieu of foreclosure, all violations, defaults and breaches by Lessee under the Lease, including, without limitation, nonpayment of rent or other amounts payable under the Lease, shall be deemed personal obligations of Lessee, and the Department or other Transferee shall be entitled to the New Lease as described in section 7 below without incurring or assuming any liability or obligation of, or claim against, Lessee under the Lease. Nothing in this section shall be deemed a waiver of any claim by Landlord against Lessee under the Lease. f. Enforcement Not a Breach. No action taken by the Department to enforce its rights under any of the documents governing the Loan against either the Landlord or the Lessee, or both, including, without limitation, any actions taken to collect any amounts due and owing to the Department or any action to appoint a receiver for the Development or to otherwise protect the security of the Loan, shall constitute or result in a breach or violation of the Lease. g. Status Quo Ante. Any default by Lessee shall not prejudice the Department if the Department chooses to cure such default within the applicable grace period, and Landlord acknowledges and agrees that upon the Department's cure of any such default, the Lease shall be restored status quo ante. 7. New Lease. a. Conditions. Section 6 hereof notwithstanding, Landlord agrees to comply with the requirements of subsection 7.b., if the following conditions specified in this subsection 7.a. apply: (1) The Lease is terminated for any reason whatsoever (other than expiration of the 99 -year term) or if the Department forecloses under the Trust Deed or accepts a deed in lieu of foreclosure; and LPR Lease Rider Page 8 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) (2) Department or other Transferee, whether or not such party has assumed the Lease, requests Landlord in writing to enter into a new lease of the Property within one hundred (180) days after (a) the Department completes a foreclosure under the Trust Deed, or (b) the Department accepts a deed in lieu of foreclosure, or the end of the cure period provided to the Department in the Termination Notice (the "New Lease"). b. Obligations. If the conditions specified in section 7.a. have been satisfied, Landlord shall: (1) upon receipt of the request for New Lease described in subsection 7.a.(2) above, enter into a New Lease of the Property with the Department, its nominee, or its successor -in -interest or other Transferee, for the remainder of the term of the Lease, effective as of the date of the termination or conveyance pursuant to a foreclosure sale or of a deed -in -lieu of foreclosure. The New Lease shall be at the rent of, and consistent with the terms, provisions, covenants, options and agreements contained in the terminated or foreclosed Lease, or granted by the Landlord in connection with the Lease, all as modified or supplemented by this Agreement; (2) convey by grant deed to the Department, its nominee or its successor -in -interest or other Transferee, all title and interest to the Development (other than the Property), if any, which may become vested in Landlord as a result of any termination of the Lease or foreclosure of the Trust Deed or conveyance of Lessee's interest by deed in lieu of foreclosure; (3) assign to the Department, its nominee, or its successor -in -interest or other Transferee, all of Landlord's interest, if any, in all existing subleases of all or any part of the Development and all attornments given by the sublessees. c. Primo. The Leasehold estate and the title (if any) in the Development granted to the Department, its nominee or its successor -in -interest under this section 7 shall be prior to any mortgage or other lien, charge or encumbrance on the Development, except as approved in writing by the Department or as shown in the Report. Notwithstanding the foregoing or anything else to the contrary contained herein, all rights of the Department under this Section 7 shall at all times be subject and subordinate to the rights of any holder of a deed of trust or mortgage that is senior in priority to the Trust Deed (a "Senior Lienholder"). 8. Successors to Department. Subject to section 5 hereof, if the Leasehold is transferred by a foreclosure sale under the Trust Deed or by a deed in lieu of foreclosure, Landlord shall recognize the Transferee as the tenant under the Lease. Anything in the Lease LPR Lease Rider Page 9 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) notwithstanding (other than the rights of Senior Lienholders, if any), the rights and benefits of the Department under this Agreement shall benefit and may be exercised by any Transferee or by the holder of any mortgage or deed of trust which may be given to secure a portion of the purchase price in any sale by the Department or its successor(s) after the Department acquires the Leasehold or enters into a New Lease under this Agreement. 9. Diligence of Department. So long as the Department is prevented by any process or injunction issued by any court or by any statutory stay, or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving Landlord or Lessee, from commencing or prosecuting foreclosure or other appropriate proceedings in the nature thereof, the Department shall not be deemed for that reason to have failed to commence such proceedings or to have failed to prosecute diligently such proceedings, provided, however, that the Department shall use reasonable efforts to contest and appeal the issuance or continuance of any such process, stay or injunction. 10. Condemnation and Insurance Proceeds. a. Anything in the Lease notwithstanding, all fire and other hazard or casualty insurance proceeds shall be paid to the Department to the extent required by the Regulatory Agreement but at all times subject and subordinate to the rights of all Senior Lienholders. In addition, in the event of any condemnation or partial condemnation, all condemnation award proceeds payable on account of such condemnation or partial condemnation shall be paid to the Department to the extent required by the Regulatory Agreement, subject to the rights of Senior Lienholders, if any. b. During the term of the Loan, the Department shall, subject to the rights of Senior Lienholders, have the right to participate in any settlement or stipulation of judgment with respect to any condemnation proceeding entered into with the condemnation authority affecting all or any portion of the Development or any agreement to sell all or any portion of the Development in lieu of condemnation, and no such settlement, stipulation or agreement shall be made or entered into without the Department's prior written consent, which consent shall be in the Department's sole and absolute discretion and may be conditioned upon the satisfaction of such terms and conditions as the Department may prescribe. Department shall also have the right (but not the obligation) to participate in any settlement, discussion, and/or arbitration proceeding between Landlord and Lessee with respect to the apportionment or application of any condemnation award, but at all times subject and subordinate to the rights of all Senior Lienholders. 11. Certificate by Landlord. Within fifteen (15) calendar days after written request by the Department, Landlord shall execute and deliver to the Department or to any proposed purchaser or encumbrancer of Lessee's estate a certificate declaring (i) the existence and validity of the Lease, or New Lease as the case may be, and amendments thereto, if any, LPR Lease Rider Page 10 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) remains in full force and effect; (ii) that all conditions under the Lease, or New Lease, have been satisfied, and that there are no Landlord defaults or, to Landlord's actual knowledge, defaults by Lessee, under the Lease or New Lease, or if there has been a Landlord default under the Lease or New Lease or Landlord has actual knowledge of a Tenant default under the Lease or New Lease, a description of the nature of such default; (iii) any other information relating to the condition of the Lease, the Property or the Development reasonably requested by the Department; and (iv) that Landlord understands the recipient will rely on the certificate and that the Landlord will describe in reasonable detail any exceptions to the foregoing statements. 12. Notices. Notices and other communications required by this Agreement shall be delivered by messenger to the addresses provided below or sent by U.S. Postal Service certified mail, return receipt requested, postage prepaid, addressed as follows: To Department: Department of Housing and Community Development Asset Management and Compliance P.O. Box 952052 Sacramento, CA 94252-2052 Attn. Closings Manager or: 2020 West EI Camino Avenue Sacramento, CA 95833 Attn: Closings Manager To Landlord: City of San Rafael 1400 Fifth Avenue, Room 202 San Rafael, California 94901 Attention: City Manager With a copy to: City of San Rafael 1400 Fifth Avenue, Room 202 San Rafael, CA 94901 Attn: City Attorney To Lessee. Centertown II, LP c/o BRIDGE Housing Corporation 600 California St #900 San Francisco, CA 94108 Attn: General Counsel LPR Lease Rider Page 11 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) and Centertown II, LP EAH Inc. 22 Pelican Way San Rafael, CA 94901 Attn: Welton Jordan Chief Real Estate Development Officer With a copy to Goldfarb & Lipman LLP 1300 Clay Street, 11 th Floor Oakland, CA 94612 Attention: Erica Williams Orcharton and Bocarsly Emden Cowan Esmail & Arndt LLP 633 West Fifth Street, 64th Floor Los Angeles, CA 90071 Attention: Nicole Deddens And NHT Equity, LLC 2245 North Bank Drive, Suite 200 Columbus, Ohio 43220 Attention: NAHT Asset Management And SAHF Affordable Housing Communities Fund 2019 (MS) Limited Partnership c/o NHT Equity, LLC 2245 North Bank Drive, Suite 200 Columbus, Ohio 43220 Attention: NAHT Asset Management With a copy to: Kutak Rock LLP 1650 Farnam Street LPR Lease Rider Page 12 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) Omaha, NE 68102 Attention: Jill H. Goldstein, Esq. These addresses may be changed by a notice given in the same manner provided that Landlord acknowledges and agrees that it shall have a duty to verify the addresses provided herein. Notices shall be effective on receipt. 13. Department's Rights Against Lessee. Nothing in this Agreement shall limit or restrict the Department's rights and remedies under the Note, the Trust Deed, the Regulatory Agreement, or any other agreement between the Department and Lessee. 14. Successors and Assigns. This Agreement shall inure to the benefit of and bind the successors and assigns of the Department, Landlord and Lessee. 15. Uninsured Hazard. Landlord agrees that neither the Department nor any person acquiring the Property or a portion of the Leasehold pursuant to a foreclosure under the Trust Deed, or deed in lieu of foreclosure, nor the lessee under a New Lease pursuant to section 6 hereof, nor any successive owner of a portion of the Leasehold after such foreclosure or New Lease shall have any obligation hereunder or under the Lease or New Lease to repair or reconstruct any damage or loss to the Development which is due to a hazard not required to be covered by insurance under the Lease or New Lease. 16. Duty to Repair. Landlord agrees that if the Department, its nominee, or its successor -in -interest succeeds to Lessee's leasehold interest in the Property and if the Development on the Property shall have been or becomes materially damaged before or after the date of such acquisition, the Department's, its nominee's, or its successor -in -interest's obligation, if any, to repair, replace or reconstruct the Development shall in any such event be limited to the greater of: i) the amount of the net insurance proceeds received by the Department by reason of that damage or ii) the amount the Department would be entitled to if in compliance with the minimum insurance requirements of Lessee under the Lease. 17. Options. Subject to the rights of any Senior Lienholder, Landlord and Lessee agree that the Department may exercise any option to extend the term of the Lease or to purchase any interest in the Property which is granted to Lessee under or in connection with the Lease. 18. Limitation on Liability. If the Department agrees to be bound by the terms of the Lease, or in the event of any Transfer to a Transferee, neither the Department nor Transferee shall have any obligation under the Lease with respect to any liabilities, obligations, losses, damages, fines, penalties, claims, demands, suits, actions, causes of actions, charges, judgments, costs, and expenses (including architects' and attorneys' fees and court costs) arising out of or resulting from acts, omissions, circumstances or events occurring before or existing at the time of such Transfer or the Department's agreement to LPR Lease Rider Page 13 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) be bound by the Lease. Nothing in this Agreement or in the Lease shall impose on the Department any liability to perform the obligations of Lessee under the Lease or require the Department to assume the Lease unless and until the Department acquires Lessee's rights by foreclosure or deed in lieu of foreclosure. After acquiring Lessee's rights by foreclosure or deed in lieu of foreclosure, the Department shall be liable to perform Lessee's obligations only until the Department assigns or transfers the Leasehold. The Department shall not, however, be required to cure Lessee's defaults occurring before the Department's acquisition of Lessee's rights by foreclosure. 19. Conflict With Lease. The provisions herein are intended to be supplementary to, and not in derogation of, the parties' rights and obligations contained in the Lease (including all of the Department's rights under the Lease as a leasehold mortgagee), but in the event of any conflict or inconsistency between the terms of the Lease and the terms of this Agreement, the terms of this Agreement shall govern and control, and the Lease shall be deemed to be modified hereby. 20. Attorney Fees, Costs. In any action to enforce or relating to any provision of this Agreement, the prevailing party shall be entitled to recover from the other party, its costs and expenses. The term "costs and expenses" as used herein shall include all costs and expenses actually and reasonably incurred, including by not limited to attorney's fees; filing, motion, and jury fees; juror food and lodging; taping, videotaping, and transcribing depositions and travel expenses to attend depositions; service of process by a public officer, registered process server, or other means; expenses of attachment including keeper's fees; premiums on surety bonds; ordinary witness fees pursuant to section 68093 of the California Government Code; fees of expert witnesses whether or not ordered by the court; transcripts of court proceedings whether or not ordered by the court; court reporters fees as established by statute; investigation expenses in preparing the case for trial; postage, telephone, and photocopying charges; costs in investigation of jurors or in preparation for voir dire; models, blowups and photocopies of exhibits, and any other item that is required to be awarded to the prevailing party pursuant to statute as an incident to prevailing in the action at trial or on appeal. Such costs and expenses shall be recoverable whether the services were rendered by a salaried employee of the party or by an independent contractor. 21. Transferee. A Transferee must be qualified and experienced to perform the obligations of the Lease and the Regulatory Agreement. 22. Notice to Landlord. Landlord shall be provided notice of Lessee's default or breach under the Loan and Landlord shall have the right (but not the obligation) to cure any such default or breach within 60 days of receipt of notice. 23. Future Amendments. Lessee warrants that it can perform and comply with all the provisions and covenants of all the documents in its operation of the Development. Except as provided in this Agreement, none of the parties shall take any action or pursue any remedy which vitiates or negates any provision of the Lease, the Department loan LPR Lease Rider Page 14 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) documents, or this Agreement, without the prior written consent of the Landlord and the Department. The Landlord may not modify the Lease in any way that jeopardizes Lessee's performance under the Department's loan documents. The Department may not modify its loan documents in any way that jeopardizes Lessee's performance under the Lease. 24. Acknowledgment. Landlord and Lessee acknowledge that the Department is relying on the foregoing representations, warranties, covenants and agreements of the undersigned in making the Loan to Lessee, and warrants and affirms to and for the benefit of the Department that each of those representations is true, correct and complete as of this date. 25. Definition of Landlord's Knowledge. For the purpose of this Agreement, without creating any personal liability on behalf of any individual, usage of "to Landlord's actual knowledge," or words to such effect, shall mean the present, actual knowledge of Danielle O'Leary, the City of San Rafael's Economic Development Director, and her senior staff, or her successor (if any). [Signature page follows.] LPR Lease Rider Page 15 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) Approved as to Form: LANDLORD: CITY OF SAN RAFAEL, a municipal corporation Lessor's Attorney By: Kate Colin, Mayor Attest: Lindsay Lara, City Clerk [Signatures continue on page 17 of this Lease Rider.] [The remainder of this page is blank.] LPR Lease Rider Page 16 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) LESSEE: Centertown II, LP, a California limited partnership By: Centertown II, LLC, a California limited liability company Its: Managing General Partner By: BRIDGE Housing Corporation, a California nonprofit public benefit corporation Its: Managing Member By: _ Smitha Seshadri, Executive Vice President By: EAH Inc., a California nonprofit public benefit corporation Its: Managing Member Welton Jordan, Assistant Secretary and Chief Real Estate Development Officer [Signatures continue on page 18 of this Lease Rider.] [The remainder of this page is blank.] LPR Lease Rider Page 17 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) DEPARTMENT: Department of Housing and Community Development, a public agency of the State of California al Emeline T. Alvarez, Manager Transactions Unit [All Signatures must be acknowledged.] LPR Lease Rider Page 18 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY The Land referred to in this Policy is situated in the County of Marin, City of San Rafael, State of California, and is described as follows: PARCEL One: All the lands shown upon that certain Map entitled, "Map of Centertown, an Air -Space Condominium", filed for record on December 13, 1983 in Volume 18 of Maps, at Page 98, Marin County Records. PARCEL One -A: Beginning at a point on the Westerly line of "C" Street distant thereon 109 feet and 8 inches Northerly from the intersection of said Westerly line of "C" Street and the Northerly line of Second Street, said point of beginning being the Southeast corner of that Lot conveyed by Loretta Ceaser to John Mirata by Deed recorded in Book 165 of Deeds, at Page 269, running thence Westerly at a right angle to "C" Street and along the Southerly line of the Lot so conveyed by Ceaser to Mirata 150 feet; thence Southerly at a right angle 42 feet; thence Easterly at a right angle 150 feet to the Westerly line of "C" Street thence Northerly along the said line of "C" Street 42 feet to the point of beginning. Being a portion of Block 15 of the Townsite of the Town of San Rafael, The above Parcels being all the lands, as shown upon that Parcel Map entitled, "Parcel Map Being a Reversion to Acreage of Lands of San Rafael Redevelopment Agency as described in Doc. No. 89-0044735 and Doc. No. 89-0069342 Marin County Records Portion Block 15 'Map of Townsite of San Rafael' recorded in Rack 1, Pull 4, Marin County Records, San Rafael, Marin County, California", filed for record August 1, 1990 in Volume 24 of Parcel Maps, at Page 92, Marin County Records. Excepting therefrom: All the buildings, structures and other improvements including the building fixtures therein, which are and shall remain real property, now or hereafter located on and permanently annexed to or on the land hereinafter described in PARCEL One and PARCEL One -A above. PARCEL One -B: A Non-exclusive right to use six (6) Parking Spaces, as set forth in that certain Declaration of Restrictions executed by the Redevelopment Agency of the City of San Rafael, a public body, corporate and politic, recorded September 11, 1990 as Recorder's Serial No. 90-53574, Marin County Records. LPR Lease Rider Page 19 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) PARCEL Two: All the buildings, structures and other improvements including the building fixtures therein, which are and shall remain real property, now or hereafter located on and permanently annexed to or on the land hereinafter described. A) All the lands shown upon that certain map entitled, Map of Centertown, an Air -Space Condominium filed for record December 13, 1983 in Volume 18 of Maps, at Page 98, Marin County Records. B) Beginning at a point on the Westerly line of "C" Street Distant thereon 109 feet and 8 inches Northerly from the intersection of said Westerly line of "C" Street and the Northerly line of Second Street, said point of beginning being the Southeast corner of that lot conveyed by Loretta Ceaser to John Mirata by Deed recorded in Book 165 of Deeds, Page 269, running thence Westerly at a right angle to "C" Street and along the Southerly line of the Lot so conveyed by Ceaser to Mirata 150 feet; thence Southerly at a right angle 42 feet; thence Easterly at a right angle 150 feet to the Westerly line of "C" Street thence Northerly along the said line of "C" Street 42 feet to the point of beginning. Being a portion of Block 15 of the Townsite of the Town of San Rafael. The above Parcels being all the lands, as shown upon that Parcel Map entitled, "Parcel Map Being a Reversion to Acreage of Lands of San Rafael Redevelopment Agency as described in Doc. No. 89-0044735 and Doc. No. 89-0069342 Marin County Records Portion Block 15 'Map of Townsite of San Rafael' recorded in Rack 1, Pull 4 Marin County Records, San Rafael, Marin County, California", filed for record August 1, 1990 in Volume 24 of Parcel Maps, at Page 92, Marin County Records. APN: 011-254-19 LPR Lease Rider Page 20 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) EXHIBIT B THE REPORT LPR Lease Rider Page 21 of 21 Rev: 09/04/2018 Prep: 10/15/2021 Dev: Centertown Apartments Loan No.: 19-LPR-0049 (formerly, 90-RHCP-005) * Oa 12th Street, Suite 2000 OLD REPUBLIC Oakland, CA 94607 TITLE COMPANY (510) 272-1121 Fax: (510) 208-5045 Buyer: PRELIMINARY REPORT BRIDGE HOUSING 600 California Street, Suite 900 San Francisco, CA 94108 Attention: Kaitlyn Berti Centertown II, LP, a California limited partnership Property Address: 855 C Street, San Rafael, CA 94901 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND Our Order Number 1117019475.3-]M When Replying Please Contact: Julie Massey ]Massey@ortc.com (510) 272-1121 In response to the above referenced application for a policy of title insurance, OLD REPUBLIC TITLE COMPANY, as issuing Agent of Old Republic National Title Insurance Company, hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an Exception below or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations of said policy forms. The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said Policy or Policies are set forth in Exhibit I attached. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. Limitations on Covered Risks applicable to the Homeowner's Policy of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for certain coverages are also set forth in Exhibit I. Copies of the Policy forms should be read. They are available from the office which issued this report. Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in Exhibit I of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested. Dated as of September 14, 2021, at 7:30 AM OLD REPUBLIC TITLE COMPANY For Exceptions Shown or Referred to, See Attached Page 1 of 17 Pages nRT "�1 SR -A (P— f1ww/(1R1 OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND The form of policy of title insurance contemplated by this report is: CLTA Standard Coverage Policy -1990; AND ALTA Loan Policy - 2006. A specific request should be made if another form or additional coverage is desired. The estate or interest in the land hereinafter described or referred or covered by this Report is: Leasehold estate as created by that certain lease dated November 6, 1989, made by and between San Rafael Redevelopment Agency, a public body, corporate and politic, as lessor, and Centertown Associates, LTD., a California limited partnership, as lessee, for the term of 75 years and upon the terms and conditions contained in said lease and subject to provisions contained in the lease which limit the right of possession, Memorandum of Ground Lease thereof recorded November 30, 1989, Document No. 89-69343, and amended July 8, 1991 in Document No. 1991-41695 (Re-recorded on January 16, 1992, Document No. 92-3311) and also amended on June 30, 1993 in Document No. 93-52072, all of Official Records, as to Parcel One -A, an Easement as to Parcel One -B; Fee as to Parcel Two Title to said estate or interest at the date hereof is vested in: Centertown Associates, Ltd., a California limited partnership The land referred to in this Report is situated in the County of Marin, City of San Rafael, State of California, and is described as follows: PARCEL One: All the lands shown upon that certain Map entitled, "Map of Centertown, an Air -Space Condominium", filed for record on December 13, 1983 in Volume 18 of Maps, at Page 98, Marin County Records. PARCEL One -A: Beginning at a point on the Westerly line of "C" Street distant thereon 109 feet and 8 inches Northerly from the intersection of said Westerly line of "C" Street and the Northerly line of Second Street, said point of beginning being the Southeast corner of that Lot conveyed by Loretta Ceaser to John Mirata by Deed recorded in Book 165 of Deeds, at Page 269, running thence Westerly at a right angle to "C" Street and along the Southerly line of the Lot so conveyed by Ceaser to Mirata 150 feet; thence Southerly at a right angle 42 feet; thence Easterly at a right angle 150 feet to the Westerly line of "C" Street thence Northerly along the said line of "C" Street 42 feet to the point of beginning. Being a portion of Block 15 of the Townsite of the Town of San Rafael. The above Parcels being all the lands, as shown upon that Parcel Map entitled, "Parcel Map Being a Reversion to Acreage of Lands of San Rafael Redevelopment Agency as described in Doc. No. 89-0044735 and Doc. No. 89-0069342 Marin County Records Portion Block 15 'Map of Townsite of San Rafael' recorded in Rack 1, Pull 4, Marin County Records, San Rafael, Marin County, California", filed for record August 1, 1990 in Volume 24 of Parcel Maps, at Page 92, Marin County Records. Excepting therefrom: Page 2 of 17 nPT 't1 SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND All the buildings, structures and other improvements including the building fixtures therein, which are and shall remain real property, now or hereafter located on and permanently annexed to or on the land hereinafter described in PARCEL One and PARCEL One -A above. PARCEL One -B: A Non-exclusive right to use six (6) Parking Spaces, as set forth in that certain Declaration of Restrictions executed by the Redevelopment Agency of the City of San Rafael, a public body, corporate and politic, recorded September 11, 1990 as Recorder's Serial No. 90-53574, Marin County Records. PARCEL Two: All the buildings, structures and other improvements including the building fixtures therein, which are and shall remain real property, now or hereafter located on and permanently annexed to or on the land hereinafter described. A) All the lands shown upon that certain map entitled, Map of Centertown, an Air -Space Condominium filed for record December 13, 1983 in Volume 18 of Maps, at Page 98, Marin County Records. B) Beginning at a point on the Westerly line of "C" Street Distant thereon 109 feet and 8 inches Northerly from the intersection of said Westerly line of "C" Street and the Northerly line of Second Street, said point of beginning being the Southeast corner of that lot conveyed by Loretta Ceaser to John Mirata by Deed recorded in Book 165 of Deeds, Page 269, running thence Westerly at a right angle to "C" Street and along the Southerly line of the Lot so conveyed by Ceaser to Mirata 150 feet; thence Southerly at a right angle 42 feet; thence Easterly at a right angle 150 feet to the Westerly line of "C" Street thence Northerly along the said line of "C" Street 42 feet to the point of beginning. Being a portion of Block 15 of the Townsite of the Town of San Rafael. The above Parcels being all the lands, as shown upon that Parcel Map entitled, "Parcel Map Being a Reversion to Acreage of Lands of San Rafael Redevelopment Agency as described in Doc. No. 89-0044735 and Doc. No. 89-0069342 Marin County Records Portion Block 15 'Map of Townsite of San Rafael' recorded in Rack 1, Pull 4 Marin County Records, San Rafael, Marin County, California", filed for record August 1, 1990 in Volume 24 of Parcel Maps, at Page 92, Marin County Records. APN: 011-254-19 At the date hereof exceptions to coverage in addition to the Exceptions and Exclusions in said policy form would be as follows: 1. Taxes and assessments, general and special, for the fiscal year 2021 - 2022, a lien, but not yet due or payable. 3 of 17 (1RT '41 SR -R 3. 5 nPT 71 SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND Taxes and assessments, general and special, for the fiscal year 2020 - 2021, as follows: Assessor's Parcel No 011-254-19 Code No. 008-023 1st Installment $30,260.23 Marked Paid 2nd Installment $30,260.23 Marked Paid Land Value $2,080,192.00 Imp. Value $10,290,453.00 P.P. Value $83,586.00 Exemption $12,454,231.00 AO The lien of supplemental taxes, if any, assessed pursuant to the provisions of Section 75, et seq., of the Revenue and Taxation Code of the State of California. Encroachment of wood frame building and concrete wall along the Southerly line of the herein described property, as shown upon the filed Map referred to herein. Deed of Trust to secure an indebtedness of the amount stated below and any other amounts payable under the terms thereof, Amount $126,000.00 Trustor/Borrower Centertown Associates, Ltd., a California limited partnership Trustee First American Title Insurance Company, a California corporation Beneficiary/Lender City of San Rafael, a public entity Dated August 20, 1990 Recorded September 11, 1990 in Official Records under Recorder's Serial Number 90-53573 Amendment to Deed of Trust, pertaining to said Deed of Trust executed by City of San Rafael and Centertown Associates, Ltd.. Dated May 6, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-041696 4 of 17 Pages OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND NOTE: Said Deed of Trust by the provisions of an agreement Dated May 6, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-41711 was made subordinate to the Deed of Trust referred to herein as Instrument No. 91- 041700. 6. Matters as contained or referred to in an instrument, Entitled Declaration of Restrictions Executed By Redevelopment Agency of the City of San Rafael Dated May 7, 1990 Recorded September 11, 1990 in Official Records under Recorder's Serial Number 90-53574 Note: Reference is made to said instrument for full particulars. 7. Deed of Trust to secure an indebtedness of the amount stated below and any other amounts payable under the terms thereof, Amount $303,000.00 Trustor/Borrower Centertown Associates, Ltd., a California limited partnership Trustee First American Title Insurance Company, a California corporation Beneficiary/Lender San Rafael Redevelopment Agency, a public body, corporate and politic Dated : August 20, 1990 Recorded September 12, 1990 in Official Records under Recorder's Serial Number 90-53793 Amendment to Deed of Trust, pertaining to said Deed of Trust executed by San Rafael Redevelopment Agency and centertown Associates, LTD. Dated May 6, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-041697 5 of 17 nRT -41 SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND NOTE: Said Deed of Trust by the provisions of an agreement Dated May 6, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-041712 was made subordinate to the Deed of Trust referred to herein as Instrument No. 91- 041700. Modification to Deed of Trust, pertaining to said Deed of Trust executed by Centertown Associates, LTD.. Dated June 9, 1993 Recorded June 30, 1993 in Official Records under Recorder's Serial Number 93-052074 NOTE: Said Deed of Trust by the provisions of an agreement Dated June 8, 1993 Recorded June 30, 1993 in Official Records under Recorder's Serial Number 93-052089 was made subordinate to the Deed of Trust referred to herein as Instrument No. 93- 052079. 8. Deed of Trust to secure an indebtedness of the amount stated below and any other amounts payable under the terms thereof, Amount $490,000.00 Trustor/Borrower Centertown Associates, Ltd., a California limited partnership Trustee First American Title Insurance Company, a California corporation Beneficiary/ Lender San Rafael Redevelopment Agency, a public body, corporate and politic Dated August 20, 1990 Recorded September 13, 1990 in Official Records under Recorder's Serial Number 90-54246 Amendment to Deed of Trust, pertaining to said Deed of Trust executed by San Rafael Redevelopment Agency. Dated May 6, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-041698 6 of 17 Pages nPT 11 SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND NOTE: Said Deed of Trust by the provisions of an agreement Dated May 6, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-041713 was made subordinate to the Deed of Trust referred to herein as Instrument No. 91- 041700. Modification to Deed of Trust, pertaining to said Deed of Trust executed by Centertown Associates, Ltd.. Dated June 9, 1993 Recorded June 30, 1993 in Official Records under Recorder's Serial Number 93-052075 NOTE: Said Deed of Trust by the provisions of an agreement Dated June 8, 1993 Recorded June 30, 1993 in Official Records under Recorder's Serial Number 93-052091 was made subordinate to the Deed of Trust referred to herein as Instrument No. 93- 052079. 9. Deed of Trust to secure an indebtedness of the amount stated below and any other amounts payable under the terms thereof, Amount $2,647,711.00 Trustor/Borrower Centertown Associates, Ltd., a California limited partnership Trustee First American Title of Marin Beneficiary/Lender California Department of Housing and Community Development Dated June 14, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-041700 Loan No. 90-RHCP-005 7 of 17 (1RT 31 SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND 10. Matters as contained or referred to in an instrument, Entitled Department of Housing and Community Development Rental Housing Construction Program Regulatory Agreement Executed By Department of Housing and Community Development and Centertown Associates, Ltd. Dated June 14, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91- 041701 And as modified by an instrument, executed by Centertown Associates, Ltd., recorded January 16, 1992 in Official Records under Recorder's Serial Number 92- 003312. And as modified by an instrument, executed by Centertown Associates, Ltd., a California limited partnership, recorded June 30, 1993 in Official Records under Recorder's Serial Number 93-052073. NOTE: Said Agreement by the provisions of an agreement Dated June 28, 1993 Recorded June 30, 1993 in Official Records under Recorder's Serial Number 93-052087 was made subordinate to the Deed of Trust referred to herein as Instrument No. 93- 052079. 11. Deed of Trust to secure an indebtedness of the amount stated below and any other amounts payable under the terms thereof, Amount $40,000.00 Trustor/Borrower Centertown Associates, Ltd., a California limited partnership Trustee First American Title Insurance Company, a California corporation Beneficiary/Lender County of Marin, State of California Dated May 1, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-041718 Page 8 of 17 Pages nPT -41 SR -R 12 (IRT 'i1 SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND Madification Agreement, pertaining to said Deed of Trust executed by County of marin. Dated August 20, 1991 Recorded January 16, 1992 in Official Records under Recorder's Serial Number 92-003313 Second Modification to Deed of Trust, pertaining to said Deed of Trust executed by Centertown Associates, Ltd.. Dated May 18, 1993 Recorded June 30, 1993 in Official Records under Recorder's Serial Number 93-052076 NOTE: Said Deed of Trust by the provisions of an agreement Dated April 24, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-041721 was made subordinate to the Deed of Trust referred to herein as Instrument No. 91- 041700. NOTE: Said Deed of Trust by the provisions of an agreement Dated May 27, 1993 Recorded June 30, 1993 in Official Records under Recorder's Serial Number 93-052093 was made subordinate to the Deed of Trust referred to herein as Instrument No. 93- 52079. Deed of Trust to secure an indebtedness of the amount stated below and any other amounts payable under the terms thereof, Amount $59,504.00 Trustor/Borrower Centertown Associates, Ltd., a California limited partnership Trustee First American Title Insurance Company, a California corporation Beneficiary/Lender County of Marin, State of California Dated May 1, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-041723 9 of 17 Wages OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND Modification Agreement, pertaining to said Deed of Trust executed by County of Marin. Dated August 20, 1991 Recorded January 16, 1992 in Official Records under Recorder's Serial Number 92-003314 Second Modification to Deed of Trust, pertaining to said Deed of Trust executed by Centertown Associates, Ltd.. Dated May 18, 1993 Recorded June 30, 1993 in Official Records under Recorder's Serial Number 93-052077 NOTE: Said Deed of Trust by the provisions of an agreement Dated April 24, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-041726 was made subordinate to the Deed of Trust referred to herein as Instrument No. 91- 041700. NOTE: Said Deed of Trust by the provisions of an agreement Dated April 24, 1991 Recorded July 8, 1991 in Official Records under Recorder's Serial Number 91-041728 was made subordinate to the Deed of Trust referred to herein as Instrument No. 91- 041718. NOTE: Said Deed of Trust by the provisions of an agreement Dated May 18, 1993 Recorded June 30, 1993 in Official Records under Recorder's Serial Number 93-052095 was made subordinate to the Deed of Trust referred to herein as Instrument No. 93- 052079. nPT 't1 SR -R 10 of 17 Pages 13. 14 15. 16 nPT "�1 SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND Deed of Trust to secure an indebtedness of the amount stated below and any other amounts payable under the terms thereof, Amount $1,025,504.00 Trustor/Borrower Redevelopment Agency of the City of San Rafael, a public body, corporate and politic, and Centertown Associates, Ltd., a California limited partnership Trustee Master Mortgage Company, a California corporation Beneficiary/ Lender First Nationwide Bank, a federal savings bank Dated June 29, 1993 Recorded June 30, 1993 in Official Records under Recorder's Serial Number 93-052079 The record beneficial interest under said Deed of Trust as a result of the last recorded assignment thereof is, Vested In First Madison Bank, FSB By Assignment From First Nationwide Bank, a federal savings bank Dated September 30, 1994 Recorded October 10, 1994 in Official Records under Recorder's Serial Number 94-072220 Terms and provisions as contained in an instrument, Entitled Consent to Deed of Trust and Fixture Filing; Subordination of Fee Interest Executed By Redevelopment Agency of the City of San Rafael Dated June 27, 1993 Recorded June 30, 1993 in Official Records under Recorder's Serial Number 93- 052083 Agreement for Regulatory Executed By Tax Credit Allocation Committee On the terms, covenants and conditions contained therein, Recorded January 19, 1994 in Official Records under Recorder's Serial Number 94-004677 Note: Reference is made to said instrument for full particulars. Intentionally Deleted Page 11 of 17 lift IM 19 nPT "21 SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND Intentionally Deleted An unrecorded lease upon the terms, covenants, and conditions contained or referred to therein, Lessor Center Town Associates, by Jeff Kohler, Attorney -in -Fact Lessee Web Service Company, Inc. Disclosed by Memorandum of Lease Dated November 15, 2005 Recorded March 8, 2006 in Official Records under Recorder's Serial Number 2006-0014354 NOTE: The present ownership of said leasehold or leaseholds and other matters affecting the interest of the lessee or lessees are not shown herein. A financing Statement filed/recorded in the office of the County Recorder, showing Debtor Centertown Associates, LTD Secured Party Citibank, N.A. Recorded March 2, 2009 in Official Records under Recorder's Serial Number 2009-0010127 An amendment to the above Nature of Change Continuation Recorded October 22, 2013 in Official Records under Recorder's Serial Number 2013-0066461 An amendment to the above Nature of Change Continuation Recorded September 18, 2018 in Official Records under Recorder's Serial Number 2018-0032994 12 of 17 Pages 20. 21. 22. (1RT 11 SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND An easement affecting that portion of said land and for the purposes stated herein and incidental purposes as provided in the following Instrument Grant of Easement Granted To Comcast Cable Holdings, LLC, its successors and assigns For Broadband communication systems amd ingress and egress Dated July 9, 2014 Recorded November 17, 2014 in Official Records under Recorder's Serial Number 2014-0047852 Affects The land Upon the terms and conditions contained therein. An easement affecting that portion of said land and for the purposes stated herein and incidental purposes as provided in the following Instrument Grant of Easement Granted To Comcast Cable Communications, LLC, its successors and assigns For Broadband communication systems amd ingress and egress Dated February 19, 2018 Recorded May 15, 2018 in Official Records under Recorder's Serial Number 2018-0017307 Affects The land Upon the terms and conditions contained therein. An unrecorded lease upon the terms, covenants, and conditions contained or referred to therein, Lessor Centertown Associates, Ltd., a California limited partnership Lessee Wash Multifamily Laundry Systems, LLC Disclosed by Memorandum of Lease Recorded April 9, 2019 in Official Records under Recorder's Serial Number 2019-0011396 NOTE: The present ownership of said leasehold or leaseholds and other matters affecting the interest of the lessee or lessees are not shown herein. 13 of 17 Pages OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND 23. Any rights, easements, interests or claims which may exist or arise by reason of or reflected by the facts shown on the plat of a survey made by Adobe Associates, Inc., on June 30, 2020, designated Job No. 20102, as follows: A) 8" concrete wall straddles property line along the southerly boundary B) neighboring building to the south encroaches approximately 0.2' into the southerly portion of the premises C) the neighboring buildings footing encroaches approximately 0.3' into the southerly portion of the premises D) the roof drainage is discharged onto the paved drive surface with a downspout and flashing at the base of the building siding allowing drainage to flow from the side of the building to the paved drive and into the projects drainage system to "C" Street drainage system. 24. The terms, covenants and conditions of the lease or leases described or referred to herein and the effect of any failure to comply therewith. 25. The requirement that the Company be provided with an executed copy of the underlying lease and "landlord's estoppel certificate", contemporaneous with the transaction, for its review. The estoppel certificate should state, at a minimum: a. There are no unrecorded amendments, modifications or transfers affecting the lease; and b. There is no breach of any covenants, conditions, stipulations or other provisions of the lease on either side thereof and said lease is in full force and effect. The Company may have different and/or additional requirements after its review. Absent a satisfactory estoppel certificate, the following will appear as an exception in Schedule B of the final policy of title insurance: "Any facts, rights, interests or claims which are not shown by the public records, but which could be ascertained by making inquiry of the lessors in the lease or leases described or referred to herein." Note: Title to the lessor's interest at the date hereof is vested in: San Rafael Redevelopment Agency. 14 of 17 OPT'Al SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3-3M 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND 26. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 27. The requirement that this Company be provided with a suitable Owner's Declaration (form ORT 174). The Company reserves the right to make additional exceptions and/or requirements upon review of the Owner's Declaration. 28. Any unrecorded and subsisting leases. 29. Satisfactory evidence furnished to this Company: a) as to the due formation and continued existence of Bridge Housing as a legal entity under the laws of California; and b) documents from its board of directors authorizing this transaction and specifying the officers to execute on behalf of the corporation. 30. Any loss or damage, including attorneys' fees and costs, resulting from any violation or claim of violation of the California statutes commonly known by their bill number AB 1X 26 regarding the abolition of redevelopment agencies, including but not limited to failure to comply with any requirement of those statutes or to obtain any approval required by any state agencies or their governing boards or any city, county or other local governments or authorities. -------------------- Informational Notes ------------------- A. The applicable rate(s) for the policy(s) being offered by this report or commitment appears to be section (s) 1.1 and 2.1. 15 of 17 Pages (1RT -41 SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND B. The above numbered report (including any supplements or amendments thereto) is hereby modified and/or supplemented to reflect the following additional items relating to the issuance of an American Land Title Association loan form policy: NONE NOTE: Our investigation has been completed and there is located on said land a multi -family residence known as 855 C Street, San Rafael, CA 94901. The ALTA loan policy, when issued, will contain the CLTA 100 Endorsement and 116 series Endorsement. Unless shown elsewhere in the body of this report, there appear of record no transfers or agreements to transfer the land described herein within the last three years prior to the date hereof, except as follows: NONE C. NOTE: The last recorded transfer or agreement to transfer the land described herein is as follows: Instrument Entitled Memorandum of Ground Lease By/From San Rafael Redevelopment Agency, a public body, corporate and politic ("Lessor") To Centertown Associates, LTD., a California limited partnership ("Lessee") Dated November 6, 1989 Recorded November 30, 1989 in Official Records under Recorder's Serial Number 89-69343 Affects Parcel One OPT 't1 SR -R 16 of 17 Pacies 0a (1RT 11 SR -R OLD REPUBLIC TITLE COMPANY ORDER NO. 1117019475.3 -JM 11th UPDATED -LEASEHOLD AND FEE IMPROVEMENTS AMEND NOTE: The last recorded transfer or agreement to transfer the land described herein is as follows: Instrument Entitled Corporation Quitclaim Deed By/From Redevelopment Agency of the City of San Rafael, a public body, corporate and politic To Centertown Associates, Ltd., a California limited partnership Dated November 6, 1989 Recorded November 30, 1989 in Official Records under Recorder's Serial Number 89-69344 Affects Parcel Two 0.N, am Page 17 of 17 Exhibit I CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY -1990 (11/09/18) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses which arise by reason of: 1. (a) Any law, ordinance, or governmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions, or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien, or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims, or other matters: (a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for the estate or interest insured by this policy. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing -business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws. EXCEPTIONS FROM COVERAGE SCHEDULE B -PARTI This policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees, or expenses which arise by reason of: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. 2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof. 3. Easements, liens or encumbrances, or claims thereof, not shown by the public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are shown by the public records. 6. Any lien or right to a lien for services, labor or material unless such lien is shown by the public records at Date of Policy. Page 1 of 2 Exhibit I AMERICAN LAND TITLE ASSOCIATION LOAN POLICY OF TITLE INSURANCE (06/17106) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions, or location of any improvement erected on the Land; (iii) the subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13, or 14); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing -business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth -in -lending law. 6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is (a) a fraudulent conveyance or fraudulent transfer, or (b) a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy. 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage provided under Covered Risk 11(b). The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE SCHEDULE B - PART I Except as provided in Schedule B - Part II, this policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees, or expenses that arise by reason of: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material unless such lien is shown by the Public Records at Date of Policy. Page 2 of 2 * * * OLD REPUBLIC TITLE WHAT REPUBLIC TITLE ES 177�CTS ��ffI DO WITHOYOUOR PERSONAL INFORMATION? 11100-01M Why? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. Can you limit this The types of personal information we collect and share depend on the product or service you Republic Title have with us. This information can include: • Social Security number and employment information What? Mortgage rates and payments and account balances • Checking account information and wire transfer instructions transactions, maintain your account(s), or respond to court orders and When you are no longer our customer, we continue to share your information as described in this No notice. All financial companies need to share customers' personal information to run their everyday How? business. In the section below, we list the reasons financial companies can share their customers' We don't share personal information; the reasons Old Republic Title chooses to share; and whether you can limit this sharing. Go to www.oldrepubli"itl_e.c_om (Contact Us) Does Old Can you limit this Reasons we can share your personal information Republic Title sharing? share? For our everyday business purposes — such as to process your transactions, maintain your account(s), or respond to court orders and Yes No legal investigations, or report to credit bureaus For our marketing purposes — No We don't share to offer our products and services to you For joint marketing with other financial companies No We don't share For our affiliates' everyday business purposes — Yes No information about your transactions and experiences For our affiliates' everyday business purposes — No We don't share information about your creditworthiness For our affiliates to market to you No We don't share For non -affiliates to market to you No We don't share Go to www.oldrepubli"itl_e.c_om (Contact Us) Paget Who we are Who is providing this notice? Companies with an Old Republic Title name and other affiliates. Please see below for a list of affiliates. What we do How does Old Republic Title To protect your personal information from unauthorized access and use, we use security protect my personal measures that comply with federal law. These measures include computer safeguards information? and secured files and buildings. For more information, visit https://www.oldrepubIictitle.com/privacy-policy How does Old Republic Title We collect your personal information, for example, when you: collect my personal information? . Give us your contact information or show your driver's license Non -affiliates • Show your government -issued ID or provide your mortgage information • Make a wire transfer We also collect your personal information from others, such as credit bureaus, Joint marketing affiliates, or other companies. Why can't I limit all sharing? Federal law gives you the right to limit only: ■ Sharing for affiliates' everyday business purposes -information about your creditworthiness • Affiliates from using your information to market toyou • Sharing for non -affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See the State Privacy Rights section location at https://www.olcirepublictitle.com/orivacy- op Ilio for your rights understate law. Definitions Affiliates Companies related by common ownership or control. They can be financial and nonfinancial companies. • Our affiliates include companies with an Old Republic Title name, and financial companies such as Attorneys' Title Fund Services, LLC, Lex Terrae National Title Services, Inc., Mississippi Valley Title Services Company, and The Title Company of North Carolina. Non -affiliates Companies not related by common ownership or control. They can be financial and non- financial companies. • Old Republic Title does not share with non -affiliates so they can market to you Joint marketing A formal agreement between non-affiliated financial companies that together market financial products or services to you. • Old Republic Title doesn't jointly market. Page<2 Affiliates Who May be Delivering This Notice American First Title American Guaranty Attorneys' Title Fund Compass Abstract, Inc. eRecording Partners & Trust Company Title Insurance Services, LLC Network, LLC Company Genesis Abstract, LLC Guardian Consumer !Marc, Inc. Kansas City L.T. Service Corp. Services, Inc. Management Group, LLC National Title Agent's Lenders Inspection Lex Terrae National Lex Terrae, Ltd. Mississippi Valley Title Company Title Services, Inc. Services Company Services Company Old Republic Branch Old Republic Old Republic Escrow Old Republic Exchange Old Republic National Information Services, Diversified Services, of Vancouver, Inc. Company Ancillary Services, Inc. Inc. Inc. Old Republic Title Old Republic Old Republic Title Old Republic National Old Republic Title National Commercial and Escrow of Title Insurance Company Companies, Inc. Title Services, Inc. Hawaii, Ltd. Company J Old Republic Title Old Republic Title Old Republic Title Old Republic Title Old Republic Title Company of Conroe Company of Indiana Old Republic Title Company of Nevada Old Republic Title Company of Oklahoma Company of Oregon Old Republic Title, Ltd. Old Republic Title Old Republic Title Company of St. Louis Company of Information Concepts Insurance Agency, Inc. Tennessee RamQuest Software, Republic Abstract & Sentry Abstract Surety Title Agency, The Title Company of Inc. Settlement, LLC Company Inc. North Carolina Trident Land Transfer Company, LLC Updated: January 1, 2020 Privacy Notice for California Consumers This Privacy Notice for California Consumers supplements the information contained in the Master Privacy Notice for Old Republic Title and applies to consumers that reside in the State of California. The terms used in this Privacy Notice have the same meaning as the terms defined in the California Consumer Privacy Act ("CCPA"). What Personal Information We Collect In accordance with the CCPA, personal information is information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household. Personal information does not include: Information outside the scope of the CCPA such as: • Health or medical information covered by the Health Insurance Portability Act of 1996 (HIPAA) and the California Confidentiality of Medical Information Act (CMIA). • Personal Information covered by the Gramm -Leach -Bliley Act (GLBA), the Fair Credit Reporting Act (FCRA), the California Financial Information Privacy Act (FIPA), and the Driver's Privacy Protection Act of 1994, ■ Publicly available information that is available from federal, state, or local government records, and • De -identified or aggregated consumer information. Please see the chart below to learn what categories of personal information we may have collected about California consumers within the preceding twelve months, the sources of and business purposes for that collection and the third parties with whom the information is shared, if any. Category I Examples Identifiers Real name, alias, postal address, unique personal identifier, online identifier, Internet protocol address, email address, account name, social security number, driver's license number, passport number or other similar identifiers Collected Yes Sources Consumers, Lenders, Brokers, Attorneys, Real Estate Agents, and Title Agents associated with the transaction Business Purpose for Collection Underwriting or providing other products or services, responding to policyholder/consu mer claims, inquiries or complaints, detecting security incidents, protecting against malicious. Categories of Third Parties with Whom Information is Shared Service providers associated with the transaction for a business purpose FBI Personal information described in California Customer Records statute (Cal. Civ. Code § 1798.80(e)) Characteristics of protected classifications under California or federal law Name, signature, social security number, physical characteristics or description, address, telephone number, passport number, driver's license or state identification card number, insurance policy number, education, employment, employment history, bank account number, credit card number, debit card number, or any other financial information, medical information, or health insurance information. "Personal information" does not include publicly available information that is lawfully made available to the general public from federal, state, or local government records. Age (40 years or older), race, color, ancestry, national origin, citizenship, religions or creed, marital status, medical condition, physical or mental disability, sex (including gender, gender identity, gender expression, pregnancy or childbirth and related Yes Consumers, Lenders, Brokers, Attorneys, Real Estate Agents, and Title Agents associated with the transaction Consumers, Lenders, Brokers, Attorneys, Real Estate Agents, and Title Agents associated with the transaction deceptive, fraudulent, or illegal activity. Other audit or operational purposes. Underwriting or providing other products or services, responding to policyholder/consu mer claims, inquiries or complaints, detecting security incidents, protecting against malicious, deceptive, fraudulent, or illegal activity. Other audit or operational purposes. Underwriting or providing other products or services, responding to policyholder/consu mer claims, inquiries or complaints. Other audit or operational purposes. Service providers associated with the transaction for a business purpose Service providers associated with the transaction for a business purpose Internet or medical conditions), sexual orientation, veteran or military status, or genetic information (including familial genetic information). Browsing history, Yes Consumers, To provide access Not Disclosed other search history, Lenders, to certain online electronic information about a Brokers, services. To network consumer's activity interaction with a Attorneys, understand the website, application, Real Estate interests of visitors or advertisement. Agents, and to our online Title Agents services, to associated support certain with the features of our transaction site, for navigation and to display certain features more effectively. Detecting security incidents, protecting against malicious, deceptive, fraudulent, or illegal activity. Other audit or operational purposes. Geolocation Geographic tracking Yes Consumers, To provide access Not Disclosed data data, physical Lenders, to certain online location and Brokers, services. To movements Attorneys, understand the Real Estate interests of visitors Agents, and to our online Title Agents services, to associated support certain with the features of our transaction site, for navigation and to display certain features more effectively. Other audit or operational purposes. What Persona! Information We Share and Why We Share It The CCPA requires us to tell you what categories of personal information we "sell" or "disclose." We do not sell and will not sell your personal information as that term is commonly understood. We also do not sell and will not sell your personal information, including the personal information of persons under 16 years of age, as that term is defined by the CCPA. When it is necessary for a business purpose, we share or disclose your personal information with a service provider, and we enter a contract with the service provider that limits how the information may be used and requires the service provider to protect the confidentiality of the information. In the preceding twelve months, we have disclosed the following categories of personal information for the following business purposes. Where the personal information is shared with third parties, as that term is defined in the CCPA, the category of the third party is indicated. Category Examples Identifiers Real name, alias, postal address, unique personal identifier, online identifier, internet protocol address, email address, account name, social security number, driver's license number, passport number or other similar identifiers Personal Name, signature, social security information number, physical characteristics or described in description, address, telephone California number, passport number, driver's Customer license or state identification card Records number, insurance policy number, statute (Cal. education, employment, employment Civ. Code § history, bank account number, credit 1798.80(e)) card number, debit card number, or any other financial information, medical information, or health insurance information. "Personal information" does not include publicly available information that is lawfully made available to the general public from federal, state, or local government records. Business Purpose for Disclosure Underwriting or providing other products or services, responding to policyholder/consumer claims, inquiries or complaints, detecting security incidents, protecting against malicious, deceptive, fraudulent, or illegal activity. Other audit or operational purposes. Underwriting or providing other products or services, responding to policyholder/consumer claims, inquiries or complaints, detecting security incidents, protecting against malicious, deceptive, fraudulent, or illegal activity. Other audit or operational purposes. Categories of Third Parties with Whom Information is Shared Service providers associated with the transaction for a business purpose Service providers associated with the transaction for a business purpose Characteristics of protected classifications under California or federal law Internet or other electronic network activity Geolocation data Age (40 years or older), race, color, ancestry, national origin, citizenship, religions or creed, marital status, medical condition, physical or mental disability, sex (including gender, gender identity, gender expression, pregnancy or childbirth and related medical conditions), sexual orientation, veteran or military status, or genetic information (including familial genetic information). Browsing history, search history, information about a consumer's interaction with a website, application, or advertisement. Geographic tracking data, physical location and movements Underwriting or providing other products or services, responding to policyholder/consumer claims, inquiries or complaints. Other audit or operational purposes. To provide access to certain online services. To understand the interests of visitors to our online services, to support certain features of our site, for navigation and to display certain features more effectively. Detecting security incidents, protecting against malicious, deceptive, fraudulent, or illegal activity. Other audit or operational purposes. To provide access to certain online services. To understand the interests of visitors to our online services, to support certain features of our site, for navigation and to display certain features more effectively. Other audit or operational purposes. Service providers associated with the transaction for a business purpose Not Disclosed Not Disclosed We may also transfer to a third party the personal information of a consumer as an asset that is part of a merger, acquisition, bankruptcy, or other transaction in which the third party assumes control of all or part of the business. Your Rights and Choices The CCPA provides California consumers with certain rights regarding their personal information. This chart describes those rights and certain limitations to those rights. Right What This Means Notice At or before the time your personal information is collected, you will be given written notice of the categories of personal information to be collected and the purposes for which the categories of personal information will be used. Access At your verifiable request, but no more than twice in a twelve month period, we shall disclose to you: 1) the categories of personal information we have collected about you, 2) the categories of sources for the personal information we collected about you, 3) our business and commercial purpose for collecting or selling your personal information, 4) the categories of third parties with whom we share your personal information, 5) The specific pieces of information we have collected about you, 6) the categories of personal information disclosed for a business purpose, and 7) If we sold personal information, the categories of personal information sold and the categories of third parties to whom it was sold. Deletion You have the right to request that we delete any of your personal information that we collected from you, subject to certain exceptions. Once we receive and verify your request, we will delete (and direct our service providers to delete) your personal information from our records unless an exception applies. We may deny your request if retention of the information is necessary for us or our service providers to: Opt -Out of Sale Opt -In to Sale • Complete the transaction for which we collected the personal information, provide a good or service that you requested, take actions reasonably anticipated within the context of our ongoing business relationship with you, or otherwise perform our contract with you. ■ Detect security incidents, protect against malicious, deceptive, fraudulent, or illegal activity, or prosecute those responsible for such activities. • Debug products to identify and repair errors that impair existing intended functionality. • Exercise free speech, ensure the right of another consumer to exercise their free speech rights, or exercise another right provided for by law. • Comply with the California Electronic Communications Privacy Act (Cal. Penal Code §1546 et seq.) ■ Engage in public or peer reviewed scientific, historical, or statistical research in the public interest that adheres to all other applicable ethics and privacy laws, when the information's deletion may likely render impossible or seriously impair the research's achievement, if you previously provided informed consent. • Enable solely internal uses that are reasonably aligned with consumer expectations based on your relationship with us. • Comply with a legal obligation. • Make other internal and lawful uses of that information that are compatible with the context in which you provided it. • Or if it is the type of personal information that falls outside the scope of the CCPA, (HIPAA, CIMA, GLBA, or publicly available information) With some limitations, you may direct a business that sells personal information to third parties not to sell the personal information to these third parties. A business may not sell the personal information of persons less than sixteen years of age without their affirmative consent, and in the case of those less than thirteen years of age, the consent must come from a parent. Non -Discrimination We will not discriminate against you for exercising your rights under the CCPA. Unless otherwise permitted by the CCPA we will not: • Deny you goods or service • Charge you different prices or rates for goods or services, including through granting discounts or other benefits, or imposing penalties Provide a different level or quality of goods or services Suggest that you will receive a different price or rate for goods or services or a different level or quality of goods or services To Exercise Your Rights To Opt -out of the Sale of Your Personal Information The CCPA gives consumers the right to direct a business that sells personal information about the consumer to third parties not to sell the consumer's personal information. We do not sell and will not sell your personal information as that term is commonly understood. We also do not sell and will not sell your personal information, as that term is defined by the CCPA. To Request Access to or Deletion of Your Personal Information To exercise your access or deletion rights described above, please submit a verifiable consumer request to us by either: Calling us at 1-855-557-8437 or contacting us through our website CCPA Consumer Request. Only you or your representative that you authorize to act on your behalf (Authorized Agent) can make a verifiable consumer request for your personal information. You may also make a request for your minor child. The verifiable request must provide enough information that allows us to reasonably verify you are the person about whom we collected personal information. We cannot respond to your request or provide you with personal information if we cannot verify your identity or authority to make the request and to confirm the personal information relates to you. We work to respond to a verifiable consumer request within 45 days of its receipt. If we require additional time, we will inform you of the extension period (up to an additional 45 days), and the reason for the extension in writing. If you have an account with us, we will deliver our response to that account. If you do not have an account with us, we will deliver our response by mail or electronically, depending on your preference. The response we provide will also explain any reasons why we cannot comply with a request. You may only make a consumer request for access twice within a twelve-month period. Any disclosures we provide will apply to the twelve-month period preceding the consumer request's receipt. Contact Us If you have any questions regarding our Privacy Notice or practices, please contact us via phone at 1- 855-557-8437 or send your written request to: CCPA[a)oldrepublictitle.com, or Old Republic Title c/o CCPA Consumer Request Group, 275 Battery Street, Suite1500, San Francisco, CA 94111-3334. Exhibit C 144\76\3108678.1 OAK #4812-6430-1550 v18 Exhibit D TCAC RIDER oto be attached] Exhibit D 144\76\3108678.1 OAK #4812-6430-1550 V18 Free recording in accordance with California Government Code Section 27383 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: California Tax Credit Allocation Committee 915 Capitol Mall, Rm 485 Sacramento, CA 95814 CALIFORNIA TAX CREDIT ALLOCATION COMMITTEE LEASE RIDER AGREEMENT (TAX CREDITS) Ground Lease TCAC NUMBER CA - PROJECT NAME THIS LEASE RIDER AGREEMENT (the "Lease Rider Agreement") is dated this day of , and is made and entered into for reference purposes only, by and among (the "Lessor"), (the "Lessee"), and the California Tax Credit Allocation Committee, a public agency of the State of California established under Section 50199.8 of the Health and Safety Code ("TCAC") in consideration of the following facts and circumstances: A. Lessor is the fee simple owner of that certain real property described in ExNbit A attached hereto and incorporated herein (the "Property"); B. [OPTION A: PRIVATE LESSOR] Lessor and Lessee entered into the following ground lease of the Property: that certain ground lease dated and recorded in the official records of County, California (the "Official Records") as Instrument No. [and as amended by that certain First Lease Addendum dated and recorded as Instrument No. ] (the "Lease"); [OPTION B: PUBLIC AGENCY LESSOR]: Lessor and Lessee entered into the following ground lease of the Property: that certain ground lease, which is on file with the Lessor as a public record (the "Lease") and a memorandum of which was recorded in the official records of County, California, as Instrument No. (the "Memorandum of Lease") [and as amended by that certain First Lease Addendum dated and recorded as Instrument No. ) ("Memorandum of First Lease Amendment")]; C. Pursuant to the Lease, Lessee has agreed to acquire a leasehold in the Property for a term described below in Paragraph 2.f. which is at least as long as the TCAC Regulatory Agreement and to [develop, acquire, refinance, construct, rehabilitate], own, operate and manage a rental housing development on the Property consisting of not less than TCAC Regulatory Agreement Lease Rider 10-10-17 residential rental units [and nonresidential space(s) approved by TCAC]. During the term of the Lease, Lessee is the owner of all of those certain buildings, improvements and fixtures now or hereafter erected on the Property described in the lease, and all appurtenances thereto now or hereafter affixed to, placed upon or used in connection with such real property and owned by Lessee or in which Lessee has an interest, together with all additions to, substitutions for, changes in and replacements of the whole or any part of said articles of property (collectively, the "Improvements"). Collectively, the Lessee's leasehold interest in the Property and its interest in the Improvements constructed pursuant to the Lease are hereinafter sometimes referred to as the Development (the "Development"); D. TCAC has authorized an allocation of federal [and state] low-income housing tax credits by a Reservation Letter dated (the "Allocation") to Lessee to finance, in part, the Development, pursuant to the Low Income Housing Tax Credit Program ("Program"). The Allocation is subject to numerous terms and conditions, including without limitation, the execution and delivery of this Lease Rider Agreement and the TCAC Regulatory Agreement which sets forth certain use restrictions affecting the Development, which TCAC Regulatory Agreement is to be recorded in County, as required by Section 42 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (collectively, "Section 42"); E. As a further condition of the Allocation and pursuant to the requirements of the Program, Lessee and TCAC [have entered] [will enter] into a Regulatory Agreement, including any amendments thereto (the "Regulatory Agreement"), securing performance related to the Allocation, and governing the use, occupancy, operation, management and ownership of the Development. Consistent with the provisions of Section 17 hereof, Lessor and Lessee have agreed to waive any such provisions of the Lease in conflict with or which would frustrate Lessee's compliance with the Regulatory Agreement in favor of the terms of the Regulatory Agreement; F. In order to induce TCAC to make the Allocation, Lessor and Lessee have agreed to enter into and record this Lease Rider Agreement for the benefit of TCAC, its successors, and assigns; and G. It is the intent of TCAC that, except in unique circumstances, it will exercise its rights and remedies under this Lease Rider Agreement only after written notice of any Lease defaults have been provided to Lessor, any Senior Lender, the Tax Credit Partner, and any other party known by TCAC to have either an ownership or other equitable interest in the Development. In addition, it is the intent of TCAC that the exercise of its rights and remedies under this Lease Rider Agreement generally shall be undertaken as part of a judicial action in a court of competent jurisdiction unless Lessor and any Senior Lenders otherwise agree. NOW THEREFORE, in consideration of the foregoing recitals and the mutual covenants hereinafter contained, TCAC, Lessee and Lessor hereby agree as follows: TCAC Regulatory Agreement Lease Rider 10-10-17 1. Definitions and Lease Rider Term. a. As used herein, "Leasehold" means all of Lessee's leasehold interest in the Property described in Exhibit A, in the Development, in the Improvements now or hereafter located on the Property, all options contained in the Lease or granted in connection with the Lease, all other rights of Lessee under the Lease, and all subleases entered into in connection with the Lease (the "Subleases"). b. For the purposes of this Lease Rider Agreement, if Lessor is a corporate or governmental entity, the obligation to assert facts related to the "Lessor's knowledge" shall include a duty [for the chief executive of the agency or corporation] to perform or otherwise be responsible for pursuit of reasonably diligent efforts to ascertain the existence or nonexistence of the facts asserted, contemporaneous to the assertion. This duty may be fulfilled by use of an estoppel agreement executed by the Lessee. c. For the purposes of this Lease Rider Agreement, the holders of all mortgage liens set forth in the Report and any other lenders approved by TCAC and all successors and assigns thereof including the holders of any mortgage lien against the Improvements or Lessee's interest in the Leasehold are collectively referred to as "Senior Lenders." d. Lease Rider Agreement Term. This Lease Rider Agreement becomes effective on the date the TCAC Regulatory Agreement is recorded and remains in effect for at least the term of the Regulatory Agreement. Upon the expiration or sooner termination of the TCAC Regulatory Agreement, this Lease Rider Agreement shall terminate and be of no further force or effect. 2. Representations and Warranties of Lessor and Lessee. Lessor and Lessee hereby represent and warrant to TCAC as of the date of this Lease Rider Agreement as follows: a. Title. (1) By Lessor: Lessor warrants and represents to TCAC that, to the best of Lessor's knowledge, Lessor's fee interest in the Property is free and clear of all liens, encumbrances, covenants, easements, licenses, judgments, or other matters of record except those shown as affecting the fee interest of the Property in that certain Policy of Title Insurance Final Report or, if one has not been issued, Preliminary Report regarding the Property issued on by , Order # , Policy No. (the "Report"). Lessor has not required or permitted, and has no knowledge of any other matters of record to be recorded that are not contained in the Report. (2) By Lessee: [If applicable, OPTION 1:] Lessee has entered into an agreement with ("the Agreement") dated for a loan of $ to further assist the Development which will be secured by , all as more fully described under the Agreement. The Agreement provides for to be provided with a security interest as to the Development. Lessee warrants and represents that it [has provided/will provide] TCAC with a copy of the Agreement [which is subject to TCAC approval] [which previously was approved by TCAC] [and TCAC acknowledges receipt of such Agreement] prior to execution of this Lease Rider Agreement. TCAC Regulatory Agreement Lease Rider 10-10-17 [If applicable, OPTION 2]: Lessee has entered into one or more loan agreements ("the Agreement(s)") which will be secured as more fully described in the Agreement(s). Lessee warrants and represents that it [will provide/has provided] a true and correct copy of said Agreement(s) to TCAC as part of TCAC's placed in service review, for which the issuance of the IRS Form 8609 shall constitute approval. b. Priority. Lessor warrants and represents to TCAC that [except as otherwise referenced in the Report,] the Lease is superior to any and all mortgage liens on the Property and nothing encumbers fee title of the Property which would interfere with Lessee's ability to construct and operate the Development on the Property. c. Transfers by Lessor. Lessor warrants and represents to the best of Lessor's knowledge that it has not assigned, mortgaged, or otherwise hypothecated or transferred, or agreed to assign, mortgage or otherwise hypothecate or transfer, its interest in the Property in whole or in part, except as referenced in the Report and except as security for any loans or any other liens, conditions, covenants, or restrictions on the Property identified in the Report and approved in writing by TCAC. d. Status of Lease. Lessor warrants and represents that: (1) Lessor is the current Lessor under the Lease. To the best of Lessor's knowledge, the Lease is in full force, the Lease is not void, voidable or terminable as of the date hereof without an uncured default by Lessee except pursuant to Section 5 at the option of any party thereto or of any other person or entity claiming an interest in or to such Lease or the Development, and to the best of Lessor's knowledge, there has been no default thereunder on the part of Lessee nor has any event occurred which, with the giving of notice or the passage of time, or both, would be an event of default thereunder. Lessor has not given notice of any violation under the Lease to Lessee. Lessor has not been informed of and has not otherwise received notice from Lessee or from any other person or entity concerning any alleged default on the part of Lessor under the Lease. To the best of Lessor's knowledge, there exist no defenses or offsets to enforcement of the Lease by Lessee. [Optional, if applicable: Pursuant to the terms of the Lease, Lessor has waived its right to terminate the Lease during the Compliance Period (as defined in the Lease) for a non - monetary default by Lessee without the prior written consent and approval of the Tax Credit Partner and the Senior Lenders.] (2) Any consent or approval of any third party (including any lender or government agency) that is required in order for Lessor to deliver this Lease Rider Agreement has been obtained. (3) To the best of Lessor's knowledge, no alterations, improvements or additions now exist on the Property that have not been approved by the Lessor. 4 TCAC Regulatory Agreement Lease Rider 10-10-17 e. Other Agreements. All terms and conditions of the Lessee's tenancy under the Lease are set forth in the Lease and Lessor and Lessee each certify to the best of its knowledge that there have been no other agreements and no further or other supplements, amendments, modifications or extensions thereof except those submitted to and approved by TCAC. f. Lease Term. The date of the commencement of the Lease term is and will end on unless terminated sooner pursuant to its terms and consistent with this Lease Rider Agreement. All conditions precedent to the effectiveness of the Lease or the exercise of any of Lessee's rights thereunder at the effective date of the Lease have been fully satisfied. g. Development. To the best of Lessor's knowledge, the Improvements constructed, or to be constructed, by Lessee on the Property satisfy or are expected to satisfy all requirements affecting the design, use or characteristics of such Improvements imposed by Lessor under the Lease or otherwise, including a requirement by Lessor for Lessee to comply with any and all applicable provisions of federal, state and local laws, and all agreements with any public entities concerning the Development, as amended from time to time. h. Insurance. All notices, certificates, binders, endorsements, copies of policies, and receipts required under the Lease have been delivered to and approved by Lessor. 3. Cancellation. Transfer of Interest. a. [Subject to matters of record referenced in the Report, the rights of Senior Lenders and the Tax Credit Partner and the matters of record on the Lessee's Leasehold interest and only to the extent necessary or appropriate pursuant to such matters of record,] Lessor and Lessee agree that so long as TCAC, its successor or assigns holds the Regulatory Agreement encumbering the Development, no termination of the Lease or efforts by Lessor to terminate the Lease except a termination consistent with Section 5, and no subordination, cancellation, surrender, amendment or modification of the Lease shall be effective without the prior written consent of TCAC, which consent shall be in TCAC's reasonable discretion and may be conditioned upon the satisfaction of such terms and conditions as TCAC may reasonably prescribe. TCAC shall have 30 days after its receipt of such a notice and any clarifications thereof requested by TCAC to consent to or deny any such variation from those obligations. Failure by TCAC to act within such a 30 -day period shall constitute consent to such a variation. Any attempt by Lessor to take such action shall be void without TCAC's prior written consent or implied consent as provided for in this Section 3.a. b. [Subject to matters of record referenced in the Report, the rights of Senior Lenders and the Tax Credit Partner, and the matters of record on the Lessee's Leasehold interest and only to the extent necessary or appropriate pursuant to TCAC Regulatory Agreement Lease Rider 10-10-17 such matters of record,] Lessor agrees that it shall not transfer, convey, sell, hypothecate, assign, encumber or permit any liens against its interest, or any portion thereof, in the Property or the Development unless Lessor requires, and any purchaser, assignee, or transferee agrees, that the purchaser, assignee, or transferee will expressly assume all obligations of Lessor under the Lease and this Lease Rider Agreement by a written instrument recordable in the Official Records. Any variation from those obligations shall require prior written approval of TCAC, which consent shall be in TCAC's reasonable discretion, and may be conditioned upon the satisfaction of such terms and conditions as TCAC may reasonably prescribe. If Lessor or Lessor's successor is seeking a variation from these obligations, Lessor or Lessor's successors and assigns shall provide TCAC with copies of all documents related to the transfer, conveyance, sale, hypothecation, assignment, encumbrance or lien at least 30 days prior to the effective date of that transaction and TCAC shall have 30 days after its receipt to reasonably consent or deny any such variation from those obligations. Failure by TCAC to act within such a 30 -day period shall constitute consent to such a variation. c. Foreclosure. Nothing contained in this Lease Rider Agreement shall prevent a Senior Lender from foreclosing on its security interest or accepting a conveyance in lieu of foreclosure. d. No Merger. There shall be no merger of the Lease or any interest in the Lease, nor of the Leasehold interest, with the fee estate in the Property if the Lease or such interest therein, or such Leasehold interest may be directly or indirectly held by or for the account of any person who shall hold the fee estate in the Property, or any interest in such fee estate, nor shall there be such a merger by reason of the fact that all or any part of the Leasehold interest created thereby may be conveyed or mortgaged in a leasehold mortgage, deed of trust, or other security instrument to a leasehold mortgagee that shall hold the fee estate in the Property or any interest of the Lessor under the Lease. 4. Consent to Assignment Payment of Rent. a. [Subject to any matters of record as referenced in the Report, the rights of Senior Lenders, and the matters of record on the Lessee's Leasehold interest and only to the extent necessary or appropriate pursuant to such matters of record,] Lessor hereby consents to and approves the following to the extent such consents or approvals are required under the Lease: (1) Lessee's encumbering the Lease, the Leasehold and the Development by the Regulatory Agreement; possession of the Leasehold and any Development thereon by TCAC or by a receiver under the Regulatory Agreement; and sale of the Leasehold and the Development pursuant to a court order or other agreement enforcing the Regulatory Agreement; (2) Assignments to TCAC or its designee of any subleases and any and all rents from such subleases; and 6 TCAC Regulatory Agreement Lease Rider 10-10-17 (3) Sale or assignment of all or any part of any interest in the Leasehold to any purchaser or transferee pursuant to a court order or other agreement enforcing the Regulatory Agreement (such purchaser or transferee, including TCAC, is collectively referred to as the "Transferee"), and to any subsequent transfers (all such assignments, transfers, and subsequent transfers referred to in this Lease Rider Agreement as the "Transfer"). b. Nothing in this Lease Rider Agreement, in the Regulatory Agreement or in the Lease shall impose on TCAC the obligations of Lessee under the Lease or require TCAC to assume the Lease unless TCAC takes possession or ownership of the Development pursuant to a court order or other agreement under the Regulatory Agreement, or becomes the lessee under the Lease or a New Lease (defined in Section 5, below). 5. Notice of Defaults; Termination Notice. a. Notice and Cure. Lessor shall provide concurrently to TCAC a written copy of all notices and demands, including, without limitation, notices of default or breach which Lessor gives, delivers, or sends to Lessee under the Lease. No notice or demand under the Lease shall be effective as to TCAC unless and until a copy of such notice is provided to TCAC as provided herein. Any notice of default under the Lease or this Lease Rider Agreement shall describe the default(s) with reasonable detail. TCAC shall have the right, but not the obligation, to cure any breach or default within the time period given in the Lease; provided that, if such notice to TCAC is not given or is delayed for any reason, the period of time within which TCAC may cure any such breach or default shall commence upon receipt by TCAC of such notice. Lessor and Lessee authorize TCAC to enter the Property and Improvements after reasonable prior written notice or pursuant to a court order for the purpose of mitigating defaults or exercising its right to cure and any other powers given TCAC under the Regulatory Agreement, this Lease Rider Agreement or the Lease. b. Termination Notice. After the expiration of the grace period given Lessee under the Lease to cure a default, Lessor shall not terminate the Lease on account of such default but shall give TCAC a written notice (the "Termination Notice") that Lessee has failed to cure the default within the grace period and that, on account thereof, Lessor intends to terminate the Lease, which notice shall set a termination date not earlier than ninety (90) days after TCAC's receipt of the Termination Notice, provided that Lessor agrees to extend such termination date for a reasonable period if TCAC reasonably requires additional time to accommodate TCAC's taking possession of the Development where possession is necessary to cure Lessee's default, all of which is subject to any Senior Lender's security instruments. In the event the default results in the existence of an immediate or imminent serious health and safety threat to the residents or the public, Lessor may request TCAC to approve a shorter termination date which shall not be unreasonably denied. In addition, TCAC may waive its right to the 90 -day period to TCAC Regulatory Agreement Lease Rider 10-10-17 cure under the Termination Notice after its receipt of the Termination Notice if TCAC determines that it will not take action to effect a cure for the default. No Termination Notice shall become effective to terminate the Lease if: (1) Except as provided in Section 5.c., within ninety (90) days after receipt of the Termination Notice, TCAC cures all defaults which can be cured by payment or expenditure of money or without possession of the Development; or provides reasonable assurance and undertakings for the cure of such default. To effect a cure of Lessee's default, TCAC may, subject to the rights of all Senior Lenders, make any repair of improvement, do any other act or thing required of Lessee under the Lease, or do any act or thing which may be necessary or proper to prevent termination of the Lease. TCAC and its agents and contractors, subject to the rights of all Senior Lenders, shall have full access to the Property and Improvements for purposes of accomplishing the curing of defaults under the Lease. Any of the foregoing done by TCAC shall be as effective to prevent a termination of the Lease as the same would have been if done by Lessee; or (2) TCAC commences and diligently pursues judicial and/or administrative proceedings commenced under the Regulatory Agreement to cure a default. (3) If TCAC has not cured a default upon the expiration of such Termination Notice pursuant to Subsection (1) above or fails to commence and diligently pursue a cure pursuant to Subsection (2) above, and subject to compliance with other provisions of this Section 5.b.and any limitations on termination in the Lease, Lessor may terminate the Lease and pursue such other remedies as are available under the terms of the Lease. c. Defaults Not Susceptible to TCAC Cure. TCAC shall not be required to perform any act which is not susceptible to performance by TCAC, such as to cure a filing or condition of bankruptcy or insolvency or to cure or commence the cure of any default which is Lessee's failure to pay or comply with any lien, charge or encumbrance which is junior in priority to the Regulatory Agreement, or to pay any amount owed under an indemnity of Lessor by Lessee based on an event occurring prior to TCAC's possession of the Development. If any such act not susceptible to performance by TCAC constitutes a breach under the Lease, Lessor may resort to any and all of its remedies for such breach under the Lease. d. Reimbursement of Lessor's Payment of Arrears. Lessor agrees that if Lessor cures Lessee's failure to make any payment due under the Lease or any loan identified in Section 2.a., it shall seek reimbursement of amounts so paid solely from Lessee and TCAC shall have no obligation to pay such amounts to Lessor. e. Waiver of Breach or Default. Subject to the rights of Senior Lenders, on transfer of the Leasehold interest pursuant to a court order or other agreement enforcing the Regulatory Agreement, all violations, defaults and breaches by Lessee under the Lease occurring prior to such transfer, including, without TCAC Regulatory Agreement Lease Rider 10-10-17 limitation, nonpayment of rent or other amounts payable under the Lease, shall be deemed personal obligations of Lessee, and TCAC or other Transferee shall be entitled to the New Lease as described in Section 6 below without incurring or assuming any liability or obligation of, or claim against, Lessee under the Lease. However, upon transfer of the Leasehold interest, TCAC or the Transferee, as applicable, shall be responsible for correcting all defaults in existence at the time of the transfer; Lessor may exercise its rights under Section 5.b. if TCAC or the Transferee fails to correct any such default within a reasonable time. Nothing in this section shall be deemed a waiver of any claim by Lessor, TCAC, or other Transferee against Lessee under the Lease. f. Enforcement Not a Breach. Any action taken by TCAC to enforce its rights under this Lease Rider Agreement with respect to Lessee with respect to any of the documents governing the Allocation including, without limitation, any actions taken to collect any amounts due and owing to TCAC or any action to appoint a receiver for the Development or to otherwise ensure compliance with the Regulatory Agreement, shall not constitute or result in a breach or violation of the Lease. g. Status Quo Ante. Any default by Lessee shall not prejudice TCAC if TCAC chooses to cure such default within the applicable grace period specified by this Lease Rider Agreement or the Lease, and Lessor acknowledges and agrees that upon TCAC's cure of any such default, the Lease shall be restored status quo ante. 6. New Lease. a. Conditions. Section 5 hereof notwithstanding, [and subject to the rights of Senior Lenders as provided in their security instruments,] Lessor agrees to comply with the requirements of Section 6.b. if the following conditions specified in this Section 6.a. apply: (1) The Lessee's Lease or a Transferee's New Lease is terminated for any reason whatsoever and TCAC or a subsequent Transferee acquires possession or ownership of the Development as a result of TCAC enforcing its remedies authorized by the Regulatory Agreement; and (2) TCAC or other Transferee, whether or not such party has assumed the Lease, requests Lessor in writing pursuant to Section 6.b. to enter into a new lease (the "New Lease") of the Property within ninety (90) days after TCAC or the Transferee takes possession or ownership of the Development either as a result of a court order or other agreement under the Regulatory Agreement. The New Lease shall be at the rent of, and consistent with, the terms, provisions, covenants, options and agreements contained in the terminated Lease, [as amended,] or granted by the Lessor in connection with the Lease, all as modified or supplemented by this Lease Rider Agreement unless Lessor agrees to lower rent or less restrictive terms and conditions. 9 TCAC Regulatory Agreement Lease Rider 10-10-17 b. Obligations. If the conditions specified in Section 6.a. have been satisfied, [and subject to the provisions of matters of record as referenced in the Report and the rights of Senior Lenders in their security instruments,] Lessor shall: (1) upon receipt of the request for New Lease described in Section 6.a.(2) above, enter into a New Lease of the Property with TCAC, its nominee, or its successor -in -interest or other Transferee, for the remainder of the term of the Lease, effective as of the date of the termination of the Leasehold or conveyance of the Development pursuant to a court order or other agreement under the Regulatory Agreement; (2) convey to TCAC, its nominee or its successor -in -interest or other Transferee, all title and interest of the Lessee to the Improvements and Leasehold encumbered by the Regulatory Agreement, if any, which may become or have become vested in Lessor as a result of any termination of the Lease or conveyance by court order or other agreement under the Regulatory Agreement, so long as the New Lease contains provisions that require TCAC, its nominee, or its successor -in -interest or other Transferee to reconvey all title and interest conveyed by Lessor's grant deed in the Improvements at the termination of the term of the New Lease; and (3) assign to TCAC, its nominee, or its successor -in -interest or other Transferee, all of Lessor's interest as landlord, if any, in all existing Subleases of all or any part of the Development and all attornments given by the sublessees under such Subleases, provided that TCAC, its nominee, or its successor -in - interest shall reconvey all such title and interest conveyed by Lessor in all existing Subleases in all or any part of the Development at the termination of the New Lease. c. Priority. The Leasehold interest and any other interest (if any) in the Development granted to TCAC, its nominee or its successor -in -interest or other Transferee under this Section 6 shall be prior to any mortgage or other lien, charge or encumbrance on the Development created by Lessor or Lessee, except for the liens of Senior Lenders or as approved in writing by TCAC or as referenced in the Report. 7. Successors to TCAC. Subject to Section 4 hereof, if the Leasehold is transferred pursuant to a court order or other agreement enforcing the Regulatory Agreement, Lessor shall recognize the Transferee as the tenant under the Lease, subject to the liens of Senior Lenders. Anything in the Lease notwithstanding, the rights and benefits of TCAC under this Lease Rider Agreement shall benefit and may be exercised by any Transferee. The holder of any mortgage or deed of trust which may be given to secure a portion of the purchase price in any sale by TCAC or its successor(s) after TCAC acquires the Leasehold interest or enters into a New Lease under this Lease Rider Agreement shall be entitled to rely on continuation of the same rights and benefits of TCAC under this Lease Rider Agreement. 10 TCAC Regulatory Agreement Lease Rider 10-10-17 8. Diligence of TCAC. So long as TCAC is prevented by any process or injunction issued by any court or by any statutory stay, or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving Lessor or Lessee, from commencing or prosecuting its remedies under the Regulatory Agreement or other appropriate proceedings in the nature thereof, or undertaking or completing any of TCAC's rights or remedies under the Lease or this Lease Rider Agreement, TCAC shall not be deemed for that reason to have failed to commence such proceedings or to have failed to prosecute diligently such proceedings, provided, however, that TCAC shall use reasonable efforts to contest and appeal the issuance or continuance of any such process, stay or injunction. 9. Certificates. (a) Certificate by Lessor. Within fifteen (15) calendar days after written request made by TCAC, Lessor shall execute and deliver to TCAC, or to any proposed purchaser, transferee, or encumbrancer of Lessee's Leasehold interest, a certificate declaring, to the best of Lessor's knowledge, (i) the existence and validity of the Lease, or New Lease as the case may be, and amendments thereto, if any, and that such Lease or New Lease remains in full force and effect; (ii) that all conditions under the Lease, or New Lease, have been satisfied, and that there are no defaults under the Lease or New Lease, or if there has been a default under the Lease or New Lease, a description of the nature of such default; (iii) any other information relating to the condition of the Property reasonably requested by TCAC; and iv) that Lessor understands the recipient will rely on the certificate and that the Lessor will describe in reasonable detail any exceptions to the foregoing statements. (b) Certificate by Lessee. Within fifteen (15) calendar days after written request made by TCAC, Lessee shall execute and deliver to TCAC, or to any proposed purchaser, transferee, or encumbrancer of Lessee's Leasehold interest, a certificate declaring to the best of Lessee's knowledge (i) the existence and validity of the Lease, or New Lease as the case may be, and amendments thereto, if any, and that such Lease or New Lease remains in full force and effect; (ii) that all conditions under the Lease, or New Lease, have been satisfied, and that there are no defaults under the Lease or New Lease, or if there has been a default under the Lease or New Lease, a description of the nature of such default; (iii) any other information relating to the condition of the Property, Leasehold or the Development reasonably requested by TCAC; and (iv) that Lessee understands the recipient will rely on the certificate and that the Lessee will describe in reasonable detail any exceptions to the foregoing statements. 10. Notices. Notices and other communications required by this Lease Rider Agreement shall be delivered by messenger to the addresses provided below or sent by U.S Postal Service certified mail, return receipt requested, postage prepaid, addressed as follows: To TCAC: California Tax Credit Allocation Committee 915 Capitol Mall, Room 485 Sacramento, CA 95814 Attn. Executive Director 11 TCAC Regulatory Agreement Lease Rider 10-10-17 To Lessor: To Lessee: These addresses may be changed by a written notice given by any party hereto to the other parties in the same manner provided in this Section. Notices shall be effective on receipt. 11. TCAC's Rights A ainst Lessee. Nothing in this Lease Rider Agreement shall limit or restrict TCAC's rights and remedies under the Regulatory Agreement, or any other agreement between TCAC and Lessee. 12. Successors and Assigns. This Lease Rider Agreement shall inure to the benefit of and bind the successors and assigns of TCAC, Lessor and Lessee. 13. Uninsured Hazard. Lessor agrees that neither TCAC nor any person acquiring the Development, or a portion of the Leasehold pursuant to a court order or other agreement enforcing the Regulatory Agreement, nor the lessee under a New Lease pursuant to Section 5 hereof, nor any successive owner of a portion of the Development after such transfer or New Lease shall have any obligation hereunder or under the Lease or New Lease to repair or reconstruct any damage or loss to the Development which occurred prior to such transfer or New Lease and which is due to a hazard not required to be covered by insurance under the Lease or New Lease. However, if the damage or loss is not corrected and constitutes a breach of the Lease or New Lease, Lessor may exercise its rights under Section 5. 14. Duty to Repair. Lessor agrees that if TCAC, its nominee, or its successor -in -interest succeeds to Lessee's Leasehold interest in the Property and if the Development shall have been or becomes materially damaged before or after the date of such acquisition, TCAC's, its nominee's, or its successor -in -interest's obligation, if any, to repair, replace or reconstruct the Development shall in any such event be limited to the greater of: i) the amount of the net insurance proceeds received by TCAC, its nominee, or its successor -in - interest by reason of that damage or ii) the amount TCAC, its nominee, or its successor -in - interest would be entitled to if in compliance with the minimum insurance requirements of Lessee under the Lease. However, if the damage or loss is not corrected and constitutes a breach of the Lease or New Lease, Lessor may exercise its rights under Section 5. 15. Options. Lessor and Lessee agree that TCAC or its successor -in -interest or other Transferee, after its acquisition of the Leasehold, may exercise any option to extend the 12 TCAC Regulatory Agreement Lease Rider 10-10-17 term of the Lease or New Lease or to purchase any interest in the Property which is granted to Lessee under or in connection with the Lease or the New Lease. 16. Limitation on Liability. If TCAC agrees to be bound by the terms of the Lease, or in the event of any Transfer to a Transferee, then unless so ordered by a court or as agreed to by TCAC, any Transferee, and any secured creditors, neither TCAC nor Transferee shall have any obligation under the Lease or the New Lease with respect to any liabilities, obligations, losses, damages, fines, penalties, claims, demands, suits, actions, causes of actions, charges, judgments, costs, and expenses (including architects' and attorneys' fees and court costs) arising out of or resulting from acts, omissions, circumstances or events occurring before or existing at the time of such Transfer or TCAC's agreement to be bound by the Lease or the New Lease except for matters of record identified in the Report at the time of execution of this Lease Rider Agreement or any breach in existence at the time of acquisition of the Leasehold. Nothing in this Lease Rider Agreement or in the Lease or New Lease shall impose on TCAC any liability to perform the obligations of Lessee under the Lease or New Lease or require TCAC to assume the Lease or New Lease unless and until TCAC acquires the Development pursuant to a court order or other agreement enforcing the Regulatory Agreement. After acquiring the Development in such a manner, TCAC shall be liable to perform Lessee's obligations only until TCAC assigns or transfers the Leasehold. TCAC shall not, however, be required to cure Lessee's defaults occurring before TCAC's acquisition of the Development in such a manner except that TCAC or the Transferee must cure any defaults in existence at the time of transfer within a reasonable period of time. 17. Conflict With Lease. The provisions herein are intended to be supplementary to, and not in derogation of, the parties' rights and obligations contained in the Lease (including all of TCAC's rights under the Lease as a party with a recorded encumbrance). In the event of any conflict or inconsistency between the terms of the Lease and the terms of this Lease Rider Agreement, except for any term expressly excluded or modified by Section 21, the terms of this Lease Rider Agreement shall govern and control, and the Lease shall be deemed to be modified hereby. Notwithstanding the foregoing, nothing contained herein shall affect the rights of Senior Lenders or the Tax Credit Partner, nor shall anything contained herein subordinate the lien of any Senior Lender to any rights of TCAC hereunder. 18. Regulatory Agreement Remedies. Nothing in this Lease Rider Agreement is intended to create enforcement rights under the Regulatory Agreement that do not otherwise exist in the Regulatory Agreement. 19. Enforcement. Notwithstanding anything to the contrary in the Lease and notwithstanding the fact that the Lease Rider Agreement is recorded against the Leasehold interest in the Property, Lessor hereby expressly agrees that during the term of the Regulatory Agreement, any violation of the Lease Rider Agreement, including but not limited to any termination, subordination, cancellation, surrender, amendment or modification of the Lease in violation of Section 3 of this Lease Rider Agreement, shall be deemed ineffective. Lessor further agrees, that during the term of the Regulatory Agreement, TCAC shall have standing to enforce and preserve TCAC's rights under the 13 TCAC Regulatory Agreement Lease Rider 10-10-17 terms of this Lease Rider Agreement and the Regulatory Agreement. 20. Subordination. Notwithstanding anything to the contrary contained elsewhere herein, the parties hereto hereby agree that this Lease Rider Agreement (and all amendments. modifications and supplements hereto) is hereby irrevocably and unconditionally made subject and subordinate in all respects to (a) all existing and future deeds of trust and mortgages approved by TCAC now or hereafter encumbering all or any part of the Lessee's right, title and interest under the Lease (and to all amendments, modifications and supplements thereto), and (b) all rights granted to any holder of any such deed of trust or mortgage under any term or provision of the Lease. Each existing and future holder of any such deed of trust or mortgage (all of whom shall also constitute "Senior Lenders" for all purposes of this Lease Rider Agreement) is hereby made an express third—party beneficiary of the foregoing sentence. [Optional: TCAC hereby approves [insert references to existing or concurrently recorded deeds of trust and mortgages encumbering the leasehold].]. 20. Additional Provisions. [Intentionally left blank] [Insert additional provision(s)] 21. Acknowledgment. Lessor and Lessee acknowledge that TCAC is relying on the foregoing representations, warranties, covenants and agreements of the undersigned in allocating the allocation of low income housing tax credits to Lessee, and warrants and affirms to and for the benefit of TCAC that each of their respective representations set forth herein is true, correct and complete as of this date. TCAC: CALIFORNIA TAX CREDIT ALLOCATION COMMITTEE, a public agency of the State of California Executive Director 14 TCAC Regulatory Agreement Lease Rider 10-10-17 LESSOR: 15 TCAC Regulatory Agreement Lease Rider 10-10-17 LESSEE. 16 TCAC Regulatory Agreement Lease Rider 10-10-17 EXHIBIT A Legal Description 17 TCAC Regulatory Agreement Lease Rider 10-10-17 Exhibit E SCHEDULE OF PERFORMANCE Construction Financing Closing Start of Construction Construction Complete On or about October 2021 Within 30 days after Construction Financing Closing Anticipated to be Nov 30, 2022, but no later than December 31, 2023 Exhibit E 144\76\3108678.1 OAK #4812-6430-1550 08 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: ► ►. Exhibit F Space Above This Line For Recorder's Use To be recorded without fee per Government Code Section 27383 Exempt from Building Homes and Jobs Acts fee Per Government Code Section 27388.1(a)(2) THE UNDERSIGNED DECLARES: DOCUMENTARY TRANSFER TAX IS $ Computed on full value of property conveyed, or Computed on full value less liens and encumbrances remaining at time of sale. Unincorporated area X City of San Rafael MEMORANDUM OF GROUND LEASE This Memorandum of Ground Lease is made and entered into as of this day of , 2021 by and between the CITY OF SAN RAFAEL, a municipal corporation ("Lessor") and CENTERTOWN II, LP, a California limited partnership ("Lessee"), RECITALS A. Lessor is the owner of all that certain real property (the "Land") situated in the City of San Rafael, County of Marin, California, commonly known as 855 "C" Street, and more particularly described in Exhibit A attached hereto. B. Lessor wishes to lease to Lessee and Lessee wishes to lease from Lessor the Land together with all rights, privileges and easements appurtenant to the Land. AGREEMENT NOW, THEREFORE, Lessor and Lessee hereby agree as follows: 1. Upon the covenants and conditions and for the consideration set forth in that certain unrecorded Ground Lease of even date herewith by and between Lessor and Lessee (hereinafter referred to as the "Ground Lease"), Lessor does hereby lease the Land to Lessee, and Lessee does hereby lease the Land from Lessor. By this reference the Ground Lease is incorporated in this instrument and made a part hereof. 2. The term of the Ground Lease shall commence on the date this Memorandum of Ground Lease is recorded in the Official Records of Marin County California, and shall terminate at midnight 99 years thereafter, unless the term is sooner terminated under Exhibit F OAK #4812-6430-1550 v18 the Ground Lease. 3. Fee simple title to all buildings, structures and improvements that now, or may from time to time be situated upon, the Land and all equipment, partitions, machinery and fixtures that are now or may from time to time be used or intended to be used in connection with such improvements shall be and remain in Lessee throughout the term of the Ground Lease. 4. Lessee shall pay to Lessor during the term of the Ground Lease certain rent described more particularly in the Ground Lease. 5. Section 7.4 of the Ground Lease titled "Lessee's Right of First Refusal" grants Lessee the right of first refusal to purchase the property described in the Ground Lease. Reference is made to the Ground Lease for further particulars relating to Lessee's right of first refusal. Notice is hereby given that Lessee's right may be assigned to certain Leasehold Mortgagees defined in the Ground Lease. 6. This Memorandum of Ground Lease shall not be deemed to modify, alter or amend the Ground Lease. In the event any conflict exists between the Ground Lease and this instrument, the Ground Lease shall for all purposes govern and determine the relationship between Lessor and Lessee and their respective rights and duties. 7. This Memorandum may be executed in several counterparts, each of which shall be deemed an original, and all such counterparts together shall constitute one and the same agreement. IN WITNESS WHEREOF, the undersigned have executed this Memorandum of Ground Lease effective as of the date first above written. [SIGNATURE PAGES FOLLOW] Exhibit F OAK #4812-6430-1550 v18 Approved as to Form: LESSOR: Lessor's Attorney CITY OF SAN RAFAEL, a municipal corporation By: Kate Colin, Mayor Attest: Lindsay Lara, City Clerk Exhibit F OAK #4812-6430-1550 v18 LESSEE: CENTERTOWN II, LP., a California limited partnership Centertown II, LLC, a California limited liability company, its managing general partner By: BRIDGE Housing Corporation, a California nonprofit public benefit corporation, its managing member By: Smitha Seshadri, Executive Vice President By: EAH Inc., a California nonprofit public benefit corporation, its managing member By: Welton Jordan, Assistant Secretary and Chief Real Estate Development Officer Exhibit F OAK #4812-6430-1550 v18 NOTARY A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On before me, (here insert name and title of the officer), 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) NOTARY A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On before me, (here insert name and title of the officer), 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) Exhibit F OAK #4812-6430-1550 08 Exhibit A LAND LEGAL DESCRIPTION [same as Exhibit A above] APN: 011-254-19 Exhibit F OAK #4812-6430-1550 08 OAK #4837-4231-5000 v4 CITY OF SAN RAFAEL NOTICE OF PUBLIC HEARING The City Council of the City of San Rafael will hold a public hearing: PURPOSE: Public Hearing: To consider adoption of an ordinance approving a Ground Lease of real property at 855 C Street, to Centertown II, LP, a California limited partnership, for 99 years. This Lease is the next stage of the transaction contemplated by Resolution No. 14851, adopted by the City Council of the City of San Rafael on August 17, 2020, which approved an agreement granting an option to lease the property to Centertown II, LLC, which is an affiliate of Centertown II, LP. DATE/TIME/PLACE: Monday, September 13, 2021 at 7:00 p.m. Consistent with Executive Orders No.-25-20 and No. N-29-20 from the Executive Department of the State of California and the Marin County Shelter in Place Order, the San Rafael City Council hearing of September 13, 2021 will not be physically open to the public and the meeting will be streamed live to YouTube at www.youtube.com/cityofsanrafael. Instructions on how to participate online will be available on the YouTube channel. You will also be able to listen/speak by telephone. The number will be provided on agenda. WHAT WILL HAPPEN: You may comment on the proposed Lease Agreement ordinance. The City Council will consider all public testimony and will then decide whether to pass the Lease to print. IF YOU CANNOT ATTEND: You may send a letter to City Clerk, City of San Rafael, 1400 Fifth Avenue, Room 209, San Rafael, CA 94903 or by email Lindsay.Lara@cityofsanrafael.org. FOR MORE INFORMATION: You may contact Danielle O’Leary, Director of Economic Development and Innovation, at (415) 485-3460 or Danielle.OLeary@cityofsanrafael.org. Office hours are Monday through Friday, 8:30 a.m. to 5:00 p.m. SAN RAFAEL CITY COUNCIL /s/ LINDSAY LARA LINDSAY LARA, City Clerk