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HomeMy WebLinkAboutCD 999 Third Street - Eden Housing-Vivalon Healthy Aging Center____________________________________________________________________________________ FOR CITY CLERK ONLY Council Meeting: March 7, 2022 Disposition: Accepted Report approving Staff’s recommendation Agenda Item No: 5.f Meeting Date: March 7, 2022 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Community Development Prepared by: Alicia Giudice, Director Alexis Captanian, Housing Analyst Jacob Noonan, Housing Manager City Manager Approval: ______________ TOPIC: 999 THIRD STREET – EDEN HOUSING/VIVALON HEALTHY AGING CENTER SUBJECT: APPROVE STAFF RECOMMENDATION FOR TERMS OF A BELOW MARKET RATE (“BMR”) AGREEMENT IMPOSING AFFORDABILITY RESTRICTIONS ON THE PROPERTY LOCATED AT 999 THIRD STREET BEING DEVELOPED AS THE VIVALON HEALTHY AGING CENTER EXECUTIVE SUMMARY: On March 23, 2020, the City Council adopted Resolution No. 14776, which granted Environmental and Design Review and other land use entitlements to applicants BioMarin, Vivalon and Eden Housing for development of property owned by BioMarin at 999 Third Street as a research and development building for BioMarin and a 67-unit 100% affordable senior housing and healthy aging center for Vivalon and Eden Housing. A condition of approval of the Vivalon/Eden Housing project requires that prior to the issuance of a building permit, a City-approved Below Market Rate Agreement (“BMR Agreement”) must be recorded against the property, restricting the rent for the residential units in the project to affordable levels. The City’s typical BMR Agreement restricts “affordable units” to low-income levels at occupancy according to percentage of the Area Median Income (AMI) as determined by the United States Department of Housing and Urban development (HUD). In connection with financing requirements imposed on the Vivalon/Eden Housing project by their lenders, the City is in the process of negotiating a slightly different form of BMR Agreement that would phase-in affordability restrictions as follows: •Phase 1: During construction, the project would be subject to affordability restrictions at 80% Area Median Income (AMI) using the rent schedule established by the California Tax Credit Allocation Committee (TCAC), which would not meet HUD’s low-income standard. •Phase 2: At occupancy and thereafter for the 55-year term, the project would be subject to affordability restrictions at very low and low income rents established by TCAC, which would meet HUD’s low-income standard and the requirements for density bonuses granted pursuant to the State Density Bonus Law and the City’s Municipal Code. Specifically, the proposed BMR Agreement would ensure that, at occupancy following the completion of construction, the project SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 would be subject to affordability restrictions based on TCAC which will require 14 units rented at 30% AMI, 16 units rented at 40% AMI, and the remaining 36 affordable units rented at 60% AMI. For comparison, 60% AMI using TCAC is approximately 80% AMI using HUD. Therefore, the project would comply with State Density Bonus Law which allows up to 80% of the units at 80% AMI using HUD rents. Staff recommends using this phased agreement as Staff believes this approach satisfies the City’s affordability requirements and the density bonus provisions in state law, while providing the flexibility the applicants require for their financing. Therefore, Staff is seeking City Council concurrence in this approach by acceptance of this report and approval of the Staff recommendation. RECOMMENDATION: Accept report approving Staff’s recommendation to permit a phased BMR Agreement as described in the report. BACKGROUND: On March 23, 2020, the City Council adopted Resolution No. 14776, which approved Environmental and Design Review and other land use entitlements to applicants BioMarin, Vivalon and Eden Housing for development of property owned by BioMarin at 999 Third Street as a research and development building for BioMarin and a 67-unit 100% affordable senior housing and healthy aging center for Vivalon and Eden Housing. Pursuant to that approval, the property was subsequently subdivided, and BioMarin conveyed a parcel at the northwestern corner of the property (now designated as 999 Third Street) to Vivalon. Vivalon and Eden housing have agreed that Eden Housing will construct the approved building and related improvements, and that Vivalon will own the first two floors, to be occupied by the healthy aging center, and Eden Housing will own the third through fifth floors, which will hold one manager’s unit and 66 affordable residential rental units for seniors. Condition 29 of the Environmental and Design Review approval required Vivalon/Eden Housing to record a City-approved BMR Agreement against their property prior to construction, restricting the rent for the residential units in the project to affordable levels. At the time of the approvals, the governing law allowed 25 units on the project site. Prior to amendments to the San Rafael Municipal Code (“SRMC”) adopted in early March of 2021, SRMC Section 14.16.030 required development projects with residential units to reserve 20 percent (20%) of the units for rental at rents affordable to and occupied by households earning “very low” and “low” income. The City has traditionally used the rent schedules maintained by the Marin Housing Authority and based on the median income for Marin County as calculated by the United States Department of Housing and Urban Development (“HUD”). Therefore, when this project was processed, to achieve the 100% affordable housing project, the housing project sponsor (Eden Housing) requested and received a density bonus under the State Density Bonus Law in California Government Code Sections 65915 et seq. The sponsor also requested two discretionary concessions/waivers which were considered major concessions and subject to SRMC Section 14.16.030.H.3.b.v, which allowed the City Council, in its sole discretion, to approve the concessions if the applicant demonstrated through a financial pro forma the concessions were needed to make the project financially feasible. The applicant provided the financial pro forma demonstrating the need for the approximate additional 130-percent bonus (in addition to the state law allowed 35-percent bonus), and the additional 4-feet of height to achieve the proposed 70-feet height for the building in order to achieve the 66 affordable units and one manager unit proposed. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3 ANALYSIS: As discussed above, City Council Resolution No. 14776 approved the BioMarin/Vivalon/Eden Housing project. The Vivalon/Eden Housing project included a 67-unit affordable senior housing project. The zoning at the time allowed 25 units on the project site. Vivalon/Eden Housing requested a 35% density bonus and two concessions in exchange for meeting the City’s 20% low income affordability requirements. The requested concessions included: 1. Additional units to achieve a total of 67 2. A height bonus to allow the additional height In making the findings for approval of the project the City Council concluded that the project met the City’s affordable housing requirements because they committed to 100 percent of the units as affordable or “below market rate” which was above the 20% required by the City. In addition, the applicant demonstrated that they qualified for a bonus of 35% under State Density Bonus Law by having at least 20% of the units dedicated to low income. Environmental and Design Review Permit condition of approval 29 recognizes that the applicant effectively received and the City approved a density bonus beyond what was required by the State Density Bonus Law and also required the applicant to enter into a BMR Agreement that would commit the units as affordable to seniors at low and very low income levels. There was no indication as to the number of units to be required of each and no indication as to the source of the data to be used to qualify the units as low and very low. However, according to State Density Bonus Law, for 100% affordable housing developments, at occupancy, the rent for at least 20% of the units must meet the rent standards of Health and Safety Code Section 50053, and the remaining units may instead meet Low Income Housing Tax Credit rent standards (also known as TCAC). Health and Safety Code Section 50053 uses HUD as the source of rent standards. The City’s BMR Agreements are typically recorded right before occupancy, which is when the State Density Bonus Law requires recordation. However, in line with condition of approval 29, and because the City has approved a loan for this project, staff is requiring recordation of a BMR Agreement prior to signing off on the loan documents. Upon recordation, the lien of the BMR Agreement would be in first place, also referred to as “senior position”, and will be ahead of all other financing liens and restrictions on the property. To support the applicant in securing funding from other sources, the applicant is requesting that the City allow the affordability restrictions to be eased during the construction phase to 80% AMI using TCAC rent schedules. This would translate to approximately 100% AMI using HUD rent schedules, which is classified as moderate income rather than low income under the HUD definitions. However, as noted above, more restrictive TCAC rents (14 units rented at 30% AMI, 16 units rented at 40% AMI, and the remaining 36 affordable units rented at 60% AMI) will apply at completion of construction and prior to occupancy, which is when State Density Bonus Law restrictions must apply and when City restrictions typically apply. Additionally, the project will include HOME funding, and subject to the HOME program’s regulatory agreement a certain number of units will be restricted at affordable income levels following the HUD rent schedule, which will provide yet a deeper level of affordability. Layered on the two sets of restrictions, all affordable units in the project will receive a project-based voucher from the Marin Housing Authority. These subsidy vouchers will provide an even deeper level of affordability in the project by providing a portion of the rent paid by each tenant, allowing the project to support tenants who earn incomes lower than the 30%, 40%, and 60% AMI limit provided by TCAC. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4 Thus, while the proposed phased BMR Agreement is a departure from the City’s usual practice, staff believes that a BMR Agreement with the proposed phasing-in of restrictions as described above is consistent with the approvals under Resolution No. 14776 and with State Density Bonus Law requirements. Since this approach will satisfy the applicant’s other funding sources, staff is recommending that the City agree to this phased approach and by this report seeks the City Council’s concurrence with staff’s recommendation. Approval of the recommendation would be through acceptance of this report. COMMUNITY OUTREACH: Extensive community outreach was conducted by the applicant and the City while the project was under review and during the City approval process. The BMR Agreement satisfies a condition of that project approval. FISCAL IMPACT: There is no fiscal impact to the city. OPTIONS: The City Council has the following options to consider on this matter: 1. Accept Report approving staff’s recommendation to proceed with negotiations for a phased BMR Agreement. 2. Reject Report and direct staff to proceed with a BMR Agreement using prior procedures. This could jeopardize the project’s funding. RECOMMENDATION: Accept the report approving Staff’s recommendation to permit a phased BMR Agreement as described. w� �f APR J G0,110fiIiYDUELOK;Eifl ir�TM, EI Cil! 4E svi F,,vf a LOAN AGREEMENT (CITY OF SAN RAFAEL AFFORDABLE HOUSING LOAN PROGRAM) By and Between THE CITY OF SAN RAFAEL, a municipal corporation, and SAN RAFAEL SENIOR, L.P. a California limited partnership for VIVALON HEALTHY AGING CAMPUS 999 Third Street, San Rafael HOUSING IN -LIEU FEE FUND: $1,825,000 Dated as of April 1, 2022 CH&W/999 Third St Loan Agt Final A� i-� i=i':7 i'• 'F1: Ti'ru''11 TABLE OF CONTENTS ARTICLE 1 DEFINITION 2 1.1 Defined Terms 2 1.2 Interpretation 7 ARTICLE 2 FUNDING 8 2.1 Funding Amount 8 2.2 Use of Funds 8 2.3 Accounts; Interest 8 2.4 Records 8 2.5 Conditions to Additional Financing 8 ARTICLE 3 TERMS 8 3.1 Maturity Date 9 3.2 Compliance Term; Declaration of Restrictions 9 3.6 Changes In Funding Streams 9 3.7 Notification and Repayment of Net Excess Proceeds 9 3.11 Additional City Approvals 9 ARTICLE 4 CLOSING; DISBURSEMENTS 10 4.1 Generally 10 4.2 Closing 10 4.3 Conditions Precedent to Closing 10 4.4 Disbursement of Funds 11 ARTICLE 5 CONSTRUCTION OF THE PROJECT 11 5.1 Commencement and Completion of Project 11 5.2 Construction Standards; Reporting 11 ARTICLE 6 MARKETING 12 6.1 Marketing and Tenant Selection Plan 12 6.2 Affirmative Marketing Elements 12 6.3 Marketing and Tenant Selection Plan & Tenant Screening Criteria Requirements 12 6.4 Marketing Records 13 6.5 Waiting List 13 ARTICLE 7 AFFORDABILITY AND OTHER LEASING RESTRICTIONS 13 7.1 Term of Leasing Restrictions 13 Table of Contents 7.2 Borrower's Covenant 7.3 Rent Restrictions 7.4 Certification 7.5 Form of Lease API, 1 201:2 f ^Oi"'IDEPA?If,iEiNI QTS',' CF SAf! F(,FtiEL 7.6 Nondiscrimination 7.7 Security Deposits ARTICLE 8 MAINTENANCE AND MANAGEMENT OF THE PROJECT 8.1 Borrower's Responsibilities 8.2 Contracting With Management Agent 8.3 Borrower Management ARTICLE 9 GOVERNMENTAL APPROVALS AND REQUIREMENTS 9.1 Approvals 9.2 Borrower Compliance ARTICLE 10 PROJECT MONITORING, REPORTS, BOOKS AND RECORDS 10.1 Generally 10.2 Monthly Reporting 10.3 Annual Reporting 10.4 Capital Reserves 10.5 Project Completion Report 10.6 Response to Inquiries 10.7 Delivery of Records 10.8 Access to the Project and Other Project Books and Records 10.9 Records Retention ARTICLE 11 USE OF INCOME FROM OPERATIONS 11.1 Project Operating Account ARTICLE 12 REQUIRED RESERVES 12.1 Replacement Reserve Account 12.2 Operating Reserve Account ARTICLE 13 DISTRIBUTIONS 13.1 Definition 13.2 Conditions to Distributions 13.3 Prohibited Distributions Table of Contents 14 15 15 15 15 16 16 16 16 17 17 17 17 17 17 18 18 18 18 19 19 19 19 19 20 20 20 20 20 20 21 Table of Contents i r _ APR 13.4 Residual Receipts 21 13.5 Borrower's Use of Residual Receipts 21 ARTICLE 14 RESERVED 21 ARTICLE 15 DEVELOPER FEES 22 ARTICLE 16 TRANSFERS 22 16.1 Permitted Transfers/Consent 22 ARTICLE 17 INSURANCE AND BONDS; INDEMNITY 22 17.1 Borrower's Insurance 22 17.2 Borrower's Indemnity Obligations 22 17.4 No Limitation 24 ARTICLE 18 HAZARDOUS SUBSTANCES 24 18.1 Borrower's Representations 24 18.2 Covenant 24 18.3 Survival 25 ARTICLE 19 DEFAULT 25 19.1 Event of Default 25 19.2 Remedies 27 19.3 Force Majeure 28 ARTICLE 20 REPRESENTATIONS AND WARRANTIES 28 20.1 Borrower Representations and Warranties 28 ARTICLE 21 NOTICES 29 21.1 Written Notice 29 21.2 Required Notices 30 21.3 Notices to Limited Partner 30 ARTICLE 22 GENERAL PROVISIONS 31 22.1 Subordination 31 22.2 No Third Party Beneficiaries 31 22.3 No Claims by Third Parties 31 22.4 Entire Agreement 31 22.5 City Obligations 31 22.6 Borrower Solely Responsible 31 22.7 No Inconsistent Agreements 32 Table of Contents Ae 17— PR A _u� CGP,acPJ:`!iTTP,1L1'T UI Y OF SAN RAFAEL 22.8 Inconsistencies in City Documents 32 22.9 Governing Law 32 22.10 Joint and Several Liability 32 22.11 Successors 32 22.12 Attorneys' Fees 32 22.13 Severability 32 22.14 Time 33 22.15 Further Assurances 33 22.16 Binding Covenants 33 22.17 Consent 33 22.18 Counterparts 33 22.19 Borrower's Personnel 33 22.20 Borrower's Board of Directors 33 22.23 Exhibits 33 Table of Contents ;l APR i gi 2022 I .: COMIMUJil (HWLO, i iPIT GE11"AR DENT CITY OF Sa19 CAFRFL I=YWIRITS A Schedules of Income and Rent Restrictions B-1 Table of Sources and Uses of Funds B-2 Annual Operating Budget B-3 15 -Year Cash Flow Proforma C Form of Tenant Income Certification D Governmental Requirements E Form of Annual Monitoring Report F [Reserved] G [Reserved] H Insurance Requirements Exhibits APR2 H22 CiV LOAN AGREEMENT (City of San Rafael Affordable Housing Loan Program) Vivalon Healthy Aging Center (999 Third Street) THIS LOAN AGREEMENT ("Agreement") is entered into as of April 1, 2022, by and between the CITY OF SAN RAFAEL, a municipal corporation (the "City"), and SAN RAFAEL SENIOR, L.P., a California limited partnership ("Borrower"). RECITALS A. Under the Affordable Housing Program set forth in Sections 14.16.030 et seq. of the San Rafael Municipal Code and City Council Ordinance 1990 the Housing In -Lieu Fee Fund receives payments from developers of market -rate housing who opt to provide a fee payment in -lieu of providing the otherwise required affordable deed - restricted units in the residential project, and payments from developers of certain non- residential and residential institutional projects to off -set the need for affordable housing created by the new project ("Fees") to satisfy the requirements of the Inclusionary Affordable Housing Program. The City may use the Fees received by the Housing In - Lieu Fee Fund (the "Funds") to finance housing affordable to qualifying households. The City administers the Funds pursuant to City Council Ordinance 1990 and enforces agreements relating to them. Funds provided from the Housing In -Lieu Fee Fund under this Agreement shall be referred to herein as the "Funds." B. Borrower owns a fee interest in the real property located at 999 Third Street, San Rafael, California (the "Site"). Borrower desires to use the Funds to construct a 67 -unit (including one manager's unit) multifamily rental housing development affordable to lower-income households for seniors] (the "Project"). The Project is part of an air -rights subdivision, of which Vivalon, a California nonprofit public benefit corporation will own one of the parcels and operate a "Healthy Aging Center," which together with the Project, will be known as the Vivalon Healthy Aging Center. C. The City has reviewed Borrower's application for Funds and, in reliance on the accuracy of the statements in that application, has agreed to make a loan of Funds to Borrower (the "Loan") in the amount of One Million Eight Hundred Twenty -Five Thousand and No/100 Dollars ($1.825,000.00) (the "Funding Amount") under this Agreement to fund certain costs related to the Project. D. Borrower has secured financing for the Project as set forth in Exhibit B-1, Table of Sources and Uses of Funds. CH&W/999 Third St City Loan Agt Final AGREEMENT APR 112022 CONINI LAITY UVE1 OP°ENT DEPARTi"JENT CITY OF SAN NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement, the parties agree as follows: ARTICLE 1 DEFINITIONS, 1.1 Defined Terms. As used in this Agreement, the following words and phrases have the following meanings: "Accounts" means any or all of the Operating Reserve Account, the Replacement Reserve Account, and all depository accounts, including reserve and trust accounts, required or authorized by TCAC. "Agreement" means this Loan Agreement. "Agreement Date" means the date first written above. "Annual Monitoring Report" has the meaning set forth in Section 10.3. "Annual Operating Budget" means an annual operating budget for the Project attached hereto as Exhibit B-2. "Approved Plans" has the meaning set for in Section 5.2. "Approved Specifications" has the meaning set forth in Section 5.2. "Borrower" means San Rafael Senior, L.P., a California limited partnership whose general partner is San Rafael Senior LLC, a California limited liability company, and its authorized successors and assigns. "Building Inspection" has the meaning set forth in Section 5.2. "CFR" means the Code of Federal Regulations. "Charter Documents" means: (a) in the case of a corporation, its articles of incorporation and bylaws; (b) in the case of a limited partnership, its limited partnership agreement and its certificate of limited partnership; and (c) in the case of a limited liability company, its operating agreement and its articles of organization. The Charter Documents must be delivered to the City in their original form and as amended from time to time and be accompanied by a certificate of good standing for Borrower issued by the California Secretary of State and, if Borrower is organized under the laws of a state other than California, a certificate of good standing issued by the Secretary of State of the state of organization, issued no more than ninety (90) days before the Agreement Date. 2 CH&W/999 Third St City Loan Agt Final T -rr-i1!1- "City" means the City of San Rafael, a municipal corporation. Whenever this Agreement provides for a submission to the City or an approval or action by the City, this Agreement refers to submission to or approval or action by the City Manager unless otherwise indicated. "City Documents" means this Agreement, the Note, the Deed of Trust, the Declaration of Restrictions and any other documents executed or delivered in connection with this Agreement. "Completion Date" has the meaning set forth in Section 5.6. "Compliance Term" has the meaning set forth in Section 3.2. "Construction Contract" has the meaning set forth in Section 5.2. "Control of the Site" means Borrower's acquisition of fee ownership or a leasehold interest in the Site (or a portion thereof). "Conversion Date" means the date on which construction financing for the Project is converted into permanent financing, if applicable. "Declaration of Restrictions" means a recorded declaration of restrictions in form and substance acceptable to the City that requires Borrower and the Project to comply with the use restrictions in this Agreement for the Compliance Term, even if the Loan is repaid or otherwise satisfied, this Agreement terminates, or the Deed of Trust is reconveyed. "Deed of Trust" means the deed of trust executed by Borrower granting the City a lien on the Site and the Project to secure Borrower's performance under this Agreement and the Note, in form and substance acceptable to the City. "Developer" means Eden Development, Inc., a California nonprofit public benefit corporation, and its authorized successors and assigns. "Development Expenses" means all costs incurred by Borrower and approved by the City in connection with the development of the Project, including: (a) hard and soft development costs; (b) deposits into required capitalized reserve accounts; (c) costs of converting Project financing, including bonds, into permanent financing; (d) the expense of a cost audit; and (e) allowed Developer Fees. "Development Proceeds" means the sum of: (a) funds contributed or to be contributed to Borrower by Borrower's limited partner as capital contributions, equity or for any other purpose under Borrower's limited partnership agreement; and (b) the proceeds of all other financing for the Project. "Disbursement" means the disbursement of all or a portion of the Funding Amount by the City as described in Article 4. 3 CH&W/999 Third St City Loan Agt Final "Distributions" has the meaning set forth in Section 13.1. "Environmental Activity" means any actual, proposed or threatened spill, leak, pumping, discharge, leaching, storage, existence, release, generation, abatement, removal, disposal, handling or transportation of any Hazardous Substance from, under, into or on the Site. "Environmental Laws" means all present and future federal, state, local and administrative laws, ordinances, statutes, rules and regulations, orders, judgments, decrees, agreements, authorizations, consents, licenses, permits and other governmental restrictions and requirements relating to health and safety, industrial hygiene or the environment or to any Hazardous Substance or Environmental Activity, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (commonly known as the "Superfund" law) (42 U.S.C. §§ 9601 et seq.), the Resource Conservation and Recovery Act of 1976, as amended by the Solid Waste and Disposal Act of 1984 (42 U.S.C. §§ 6901 et seq.); the California Hazardous Substance Account Act (also known as the Carpenter -Presley -Tanner Hazardous Substance Account Law and commonly known as the "California Superfund" law) (Cal. Health & Safety Code §§ 25300 et seq.); and the Safe Drinking Water and Toxic Enforcement Act of 1986 (commonly known as "Proposition 65") (Cal. Health & Safety Code §§ 25249.2 et seq.); and Sections 25117 and 25140 of the California Health & Safety Code. "Escrow Agent" has the meaning set forth in Section 4.2. "Event of Default" has the meaning set forth in Section 19.1. "Net Excess Proceeds" means Development Proceeds remaining after payment of Development Expenses. For the purposes of determining Net Excess Proceeds, no allowed Project Expenses may be included in Development Expenses. "Expenditure Request" means a written request by Borrower for a Disbursement from the Funding Amount, which must certify that the Project costs covered by the Expenditure Request have been paid or incurred by Borrower. "Funding Amount" has the meaning set forth in Recital C. "Funds" has the meaning set forth in Recital A. "GAAP" means generally accepted accounting principles in effect on the date of this Agreement and at the time of any required performance. "General Partner" means San Rafael Senior LLC, a California limited partnership. 4 CH&W/999 Third St City Loan Agt Final I I ryry y ! "Governmental Agency" means: (a) any government or municipality or political subdivision of any government or municipality; (b) any assessment, improvement, community facility or other special taxing district; (c) any governmental or quasi - governmental agency, authority, board, bureau, commission, corporation, department, instrumentality or public body; or (d) any court, administrative tribunal, arbitrator, public utility or regulatory body. "Gross Revenue" has the meaning set forth in the Note. "Hazardous Substance" means any material that, because of its quantity, concentration or physical or chemical characteristics, is deemed by any Governmental Agency to pose a present or potential hazard to human health or safety or to the environment. Hazardous Substance includes any material or substance listed, defined or otherwise identified as a "hazardous substance," "hazardous waste," "hazardous material," "pollutant," "contaminant," "pesticide" or is listed as a chemical known to cause cancer or reproductive toxicity or is otherwise identified as "hazardous" or "toxic" under any Environmental Law, as well as any asbestos, radioactive materials, polychlorinated biphenyls and any materials containing any of them, and petroleum, including crude oil or any fraction, and natural gas or natural gas liquids. Materials of a type and quantity normally used in the construction, operation or maintenance of developments similar to the Project will not be deemed "Hazardous Substances" for the purposes of this Agreement if used in compliance with applicable Environmental Laws. "Income Restrictions" means the maximum household income limits for Qualified Tenants, as set forth in Exhibit A. "Indemnitee" means, individually or collectively, (i) City and all commissions, departments, agencies and other subdivisions of City; (ii) City's elected officials, directors, officers, employees, agents, successors and assigns; and (iii) all persons or entities acting on behalf of any of the foregoing. "Laws" means all statutes, laws, ordinances, regulations, orders, writs, judgments, injunctions, decrees or awards of the United States or any state, county, municipality or Governmental Agency. "Loan" has the meaning set forth in Recital C - "Marketing and Tenant Selection Plan" has the meaning set forth in Section 6.1. "Maturity Date" has the meaning set forth in Section 3.1. "Median Income" means the 100% maximum income levels for Marin County adjusted for household size published annually by the California Tax Credit Allocation Committee. "Monthly Project Update" has the meaning set forth in Section 10.2. CH&W/999 Third St City Loan Agt Final "Note" means the promissory note executed by Borrower in favor of the City in the original principal amount of the Funding Amount, in form and substance acceptable to the City. "Official Records" means the official records of Marin County. "Operating Expenses" has the meaning set forth in the Note. "Operating Reserve Account" has the meaning set forth in Section 12.2. "Payment Date" means the first June 1St- following the Conversion Date and each succeeding June 1St until the Maturity Date. "Permitted Exceptions" means liens in favor of the City, real property taxes and assessments that are not delinquent, and any other liens and encumbrances the City expressly approves in writing in its escrow instructions. "Project" means the development described in Recital B. If indicated by the context, "Project" means the Site and the improvements developed on the Site. "Project Operating Account" has the meaning set forth in Section 11.1. "Qualified Tenant" means a Tenant household earning no more than the maximum permissible annual income level allowed under this Agreement as set forth in Exhibit A. The term "Qualified Tenant" includes each category of Tenant designated in Exhibit A. "Rent" means the aggregate annual sum charged to Tenants for rent and utilities in compliance with Article 7 and Exhibit A, "Replacement Reserve Account" has the meaning set forth in Section 12.1. "Residual Receipts" has the meaning set forth in the Note. "Retention" has the meaning set forth in Section 4.7. "Senior Lien" has the meaning set forth in Section 22.1. "Site" means the real property described in Recital B of this Agreement. "Table" means: (a) the Table of Sources and Uses, (b) the Annual Operating Budget, and (c) the 15 -Year Cash Flow Proforma. rel CH&W/999 Third St City Loan Agt Final i :•� lI 1fUna.iah:: i r "Note" means the promissory note executed by Borrower in favor of the City in the original principal amount of the Funding Amount, in form and substance acceptable to the City. "Official Records" means the official records of Marin County. "Operating Expenses" has the meaning set forth in the Note. "Operating Reserve Account" has the meaning set forth in Section 12.2. "Payment Date" means the first June 1St- following the Conversion Date and each succeeding June 1St until the Maturity Date. "Permitted Exceptions" means liens in favor of the City, real property taxes and assessments that are not delinquent, and any other liens and encumbrances the City expressly approves in writing in its escrow instructions. "Project" means the development described in Recital B. If indicated by the context, "Project" means the Site and the improvements developed on the Site. "Project Operating Account" has the meaning set forth in Section 11.1. "Qualified Tenant" means a Tenant household earning no more than the maximum permissible annual income level allowed under this Agreement as set forth in Exhibit A. The term "Qualified Tenant" includes each category of Tenant designated in Exhibit A. "Rent" means the aggregate annual sum charged to Tenants for rent and utilities in compliance with Article 7 and Exhibit A, "Replacement Reserve Account" has the meaning set forth in Section 12.1. "Residual Receipts" has the meaning set forth in the Note. "Retention" has the meaning set forth in Section 4.7. "Senior Lien" has the meaning set forth in Section 22.1. "Site" means the real property described in Recital B of this Agreement. "Table" means: (a) the Table of Sources and Uses, (b) the Annual Operating Budget, and (c) the 15 -Year Cash Flow Proforma. rel CH&W/999 Third St City Loan Agt Final "Table of Sources and Uses" means a table of sources and uses of funds attached hereto as Exhibit B-1, including a line item budget for the use of the Funding Amount, which table may not be adjusted without the City's prior written approval. "TCAC" means the California Tax Credit Allocation Committee. "Tenant" means any residential household in the Project, whether or not a Qualified Tenant. "Title Policy" means an ALTA extended coverage lender's policy of title insurance in form and substance satisfactory to the City, issued by an insurer selected by Borrower and satisfactory to the City, together with any endorsements and policies of coinsurance and/or reinsurance required by the City, in a policy amount equal to the Funding Amount, insuring the Deed of Trust and indicating the Declaration of Restrictions as valid liens on the Site, each subject only to the Permitted Exceptions. 15 -Year Cash Flow Proforma" means the 15 -year cash flow proforma for the Project attached as Exhibit B-3. "Unit" means a residential rental unit within the Project. 1.2 Interpretation. The following rules of construction will apply to this Agreement and the other City Documents. (a) The masculine, feminine or neutral gender and the singular and plural forms include the others whenever the context requires. The word "include(s)" means "include(s) without limitation" and "include(s) but not limited to," and the word "including" means "including without limitation" and "including but not limited to" as the case may be. No listing of specific instances, items or examples in any way limits the scope or generality of any language in this Agreement. References to days, months and years mean calendar days, months and years unless otherwise specified. References to a party mean the named party and its successors and assigns. (b) Headings are for convenience only and do not define or limit any terms. References to a specific City Document or other document or exhibit mean the document, together with all exhibits and schedules, as supplemented, modified, amended or extended from time to time in accordance with this Agreement. References to Articles, Sections and Exhibits refer to this Agreement unless otherwise stated. (c) Accounting terms and financial covenants will be determined, and financial information must be prepared, in compliance with GAAP as in effect on the date of performance. References to any Law, specifically or generally, will mean the Law as amended, supplemented or superseded from time to time. (d) The terms and conditions of this Agreement and the other City Documents are the result of arms' -length negotiations between and among CH&W/999 Third St City Loan Agt Final sophisticated parties who were represented by counsel, and the rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not apply to the construction and interpretation of the City Documents. The language of this Agreement must be construed as a whole according to its fair meaning. ARTICLE 2 FUNDING. 2.1 Funding Amount. The City agrees to lend to Borrower a maximum principal amount equal to the Funding Amount in order to finance the construction of the Units. The funding shall not be used to complete the shell of the commercial space which is to be completed as part of the development of the project. The Funding Amount will be disbursed according to the terms and subject to the conditions set forth in this Agreement. 2.2 Use of Funds. Borrower acknowledges that the City's agreement to make the Loan is based in part on Borrower's agreement to use the Funds solely for the purpose set forth in Section 2.1 and agrees to use the Funds solely for that purpose in accordance with the approved Table of Sources and Uses. Notwithstanding anything to the contrary contained herein, City will not approve expenditure of Funds for expenses incurred by Borrower prior to the Agreement Date. The parties anticipate that the entire amount of the Loan will be disbursed at the closing of the construction financing based on evidence submitted by Developer of prior incurred expenses and to pay City fees. 2.3 Accounts; Interest. Each Account to be maintained by Borrower under this Agreement must be held in a bank or savings and loan institution as required by TCAC as a segregated account that is insured by the Federal Deposit Insurance Corporation or other comparable federal insurance program. With the exception of tenant security deposit trust accounts, any interest earned on funds in any Account must be used for the benefit of the Project. 2.4 Records. Borrower must maintain for five (5) years and provide to the City upon request records that accurately and fully show the date, amount, purpose and payee of all expenditures from each Account authorized under this Agreement or by the City in writing and keep all estimates, invoices, receipts and other documents related to expenditures from each Account. In addition, Borrower must provide to the City promptly following Borrower's receipt, complete copies of all monthly bank statements, together with a reconciliation, for each Account until all funds (including accrued interest) in each Account have been disbursed for eligible uses. 2.5 Conditions to Additional Financing. City may grant or deny any application by Borrower for additional financing for the Project in its sole discretion. ARTICLE 3 TERMS. Borrower's repayment obligations with respect to the Funding Amount will be evidenced and governed by the Note, which will govern in the event of any conflicting provision in this Agreement. CH&W/999 Third St City Loan Agt Final 3.1 Maturity Date. Borrower must repay all amounts owing under the City Documents on the date that is the later of (a) the Fifty-seventh (57th (anniversary of the date the Deed of Trust is recorded in the Recorder's Office of Marin County or (b) the Fifty-fifth (55th) anniversary of the Conversion Date (the "Maturity Date"). 3.2 Compliance Term; Declaration of Restrictions. Borrower must comply with all provisions of the City Documents relating to the use of the Site and the Project as set forth in the Declaration of Restrictions to be recorded in the Official Records, for the period commencing on the date the Deed of Trust is recorded in the Official Records and continue until the Maturity Date (the "Compliance Term"), even if the Loan is repaid or otherwise satisfied or the Deed of Trust is reconveyed before the end of the Compliance Term. 3.6 Changes In Funding Streams. The City's agreement to make the Loan on the terms set forth in this Agreement and the Note is based in part on Borrower's projected sources and uses of all funds for the Project, as set forth in the Table of Sources and Uses. 3.7 Notification and Rega ment of Net Excess Proceeds. Borrower must notify the City in writing within thirty (30) days after the later of the date on which Borrower receives its Form 8609 from the California Tax Credit Allocation Committee or the date on which Borrower receives Net Excess Proceeds from its limited partner or other financing sources. Subject to consent of Borrower's investor limited partner and any senior lender, Borrower may use the Net Excess Proceeds to paydown the $4,000,0000 loan from the Housing Trust of Silicon Valley and then shall use any remaining Net Excess Proceeds to paydown this Loan, unless the City has elected to waive such payment. The City must use such Net Excess Proceeds to reduce the balance of the Loan. 3.8 Additional City Approvals._ Borrower understands and agrees that City is entering into this Agreement in its proprietary capacity and not as a regulatory agency with certain police powers. Borrower understands and agrees that neither entry by City into this Agreement nor any approvals given by City under this Agreement shall be deemed to imply that Borrower will obtain any required approvals from City departments, boards or commissions which have jurisdiction over the Property. By entering into this Agreement, City is in no way modifying or limiting the obligations of Borrower to develop the Property in accordance with all local laws. Notwithstanding anything to the contrary in this Agreement, no party is in any way limiting its discretion or the discretion of any department, board or commission with jurisdiction over the Project, including but not limited to a party hereto, from exercising any discretion available to such department, board or commission with respect thereto. 9 CH&W/999 Third St City Loan Agt Final ARTICLE 4 CLOSING: DISBURSEMENTS. 4.1 Generally. Subject to the terms of this Agreement, the City will make Disbursements in an aggregate sum not to exceed the Funding Amount to or for the account of Borrower in accordance with this Agreement and the approved line item budget contained in the Table of Sources and Uses. 4.2 Closing. Unless otherwise agreed by the City and Borrower in writing, Borrower will establish an escrow account with the title company issuing the Title Policy, or any other escrow agent Borrower chooses, subject to the City's approval (the "Escrow Agent"). The parties will execute and deliver to the Escrow Agent written instructions consistent with the terms of this Agreement. In the event the escrow does not close on or before the expiration date of escrow instructions signed by the City, or any other mutually agreed date, the City may declare this Agreement to be null and void. 4.3 Conditions Precedent to Closing. The City will authorize the close of the Loan upon satisfaction of the conditions in this Section. (a) Borrower must have delivered to the City fully executed (and for documents to be recorded, acknowledged) originals of the following documents, in form and substance satisfactory to the City: (i) the Note; (ii) this Agreement; (iii) the Deed of Trust; (iv) the Declaration of Restrictions; (v) the Authorizing Resolutions; and (vi) any other City Documents reasonably requested by the City. (b) Borrower must have delivered to the City: (i) Borrower's Charter Documents; and (ii) a comprehensive maintenance and operating plan for the Project that includes, but is not limited to, plans for emergencies and emergency maintenance, vacant unit turnover, preventive maintenance and inspection schedule, and marketing and resident selection. (c) Borrower must have delivered to the City insurance endorsements and, if requested by the City, copies of policies for all insurance required under Exhibit H of this Agreement. Notwithstanding the foregoing, if Borrower is in compliance with the insurance requirements of the lender with the first lien position mortgage, Borrower may request that City accept the senior lender's insurance requirements as satisfaction of City's insurance requirements, such request not to be unreasonably denied. (d) Borrower must have delivered to the City satisfactory evidence that Borrower has obtained commitments for any additional financing that may be required for the Project, in amounts and from lenders or investors satisfactory to the City in its sole discretion. (e) Borrower must have delivered to the City a preliminary report on title for the Site dated no earlier than thirty (30) days before the Agreement Date. 10 CH&W/999 Third St City Loan Agt Final (f) Borrower must have submitted a "Phase I" environmental report for the Site, or any other report reasonably requested by the City, prepared by a professional hazardous materials consultant acceptable to the City. (g) The Declaration of Restrictions and Deed of Trust must have been recorded as valid liens in the official records of Marin County, subject only to the Permitted Exceptions. (h) The Escrow Agent must have committed to provide to the City the Title Policy in form and substance satisfactory to the City. 4.4 Disbursement of Funds. Following satisfaction of the conditions in Section 4.3, the City will authorize the Escrow Agent to disburse Funds as provided in the City's escrow instructions. ARTICLE 5 CONSTRUCTION OF THE PROJECT. 5.1 Commencement and Completion of Prosect. Unless otherwise extended in writing by the City, Borrower must: (a) commence demolition, rehabilitation or construction by a date no later than July 1, 2022; (b) complete demolition, rehabilitation or construction by a date no later than September 1, 2024, in accordance with the plans and specifications approved by the City, as evidenced by a certificate of occupancy or equivalent certification provided by the City's Community Development Department, and an architect's or engineer's certificate of completion (the "Completion Date"); and (c) achieve occupancy of one hundred percent (100%) of the Units by a date no later than March 31, 2025. 5.2 Construction Standards; Reporting. All construction must be performed in a first-class manner, substantially in accordance with final plans and specifications approved by the City and in accordance with all applicable codes. During construction Developer shall submit monthly reports as set forth at Section 10.2. 11 CH&W/999 Third St City Loan Agt Final ARTICLE 6 MARKETING. 6.1 Marketinq and Tenant Selection Plan. No later than six (6) months before the Completion Date, Borrower must deliver to the City for the City's review and approval an affirmative plan for initial and ongoing marketing of the Units and a written Tenant selection procedure for initial and ongoing renting of the Units, which plan shall be based on the marketing and tenant selection plan adopted or approved by TCAC (the "Marketing and Tenant Selection Plan"), all in compliance with the restrictions set forth in Exhibit A and in form and substance acceptable to the City. Borrower must obtain the City's approval of reasonable alterations to the Marketing and Tenant Selection Plan. Borrower must market and rent the Units in the manner set forth in the Marketing and Tenant Selection Plan, as approved by the City. 6.2 Affirmative Marketing and Tenant Selection Plan Requirements. Borrower's Marketing and Tenant Selection Plan must address how Borrower intends to market vacant Units and any opportunity for placement on the Waiting List, as defined in 6.5. The Marketing and Tenant Selection Plan shall include as many of the following elements as are appropriate to the Project, as determined by the City: (a) A reasonable accommodations policy (b) Advertising in local neighborhood newspapers, community -oriented radio stations, on the internet and in other media that are likely to reach low-income households. All advertising must display the Equal Housing Opportunity logo. (c) Notices to neighborhood -based, nonprofit housing corporations and other low-income housing advocacy organizations that maintain waiting lists or make referrals for below -market -rate housing. (d) Notices to Marin Housing Authority, as appropriate. (e) Notices to the City of San Rafael Housing Division. (f) An acknowledgement that, with respect to vacant Units, the marketing elements listed above shall only be implemented if there are no qualified applicants interested or available from the Waiting List. Developer may maintain a Waiting List with an adequate number of households potentially eligible to become Qualified Tenants. 6.3 Marketing and Tenant Selection Plan & Tenant Screening Criteria Reauirements: (a) The Project has been awarded Section 8 project based vouchers; Borrower's Marketing and Tenant Selection Plan shall comply with the requirements of those vouchers. In the event that the Project loses its project based vouchers, Borrower 12 CH&W/999 Third St City Loan Agt Final shall notify City within sixty (60) days after receipt of a notice that the Section 8 project based voucher agreement will be terminated. Within thirty (30) days thereafter, Borrower shall submit to City for its review and approval its proposed tenant selection plan. (b) Borrower's tenant screening criteria must conform with the tenant screening policy established in connection the Section 8 project based vouchers. 6.4 Marketing Records. Borrower must keep records of: (a) activities implementing the Marketing and Tenant Selection Plan; (b) advertisements; and (c) other community outreach efforts. 6.5 _Waiting List. Borrower's Marketing and Tenant Selection Plan must contain, at a minimum, policies and criteria that provide for the selection of tenants from a written waiting list that complies with the Marketing and Tenant Selection Plan (the "Waiting List"). The Marketing and Tenant Selection Plan may allow an applicant to refuse an available Unit for good cause without losing standing on the Waiting List but shall limit the number of refusals without cause as approved by the City. Borrower shall at all times maintain the Waiting List. Upon the vacancy of any Unit, Borrower shall first attempt to select the new Tenant for such Unit from the Waiting List, and shall only market the Unit to the general public after determining that no applicants from the Waiting List qualify for such Unit. The Waiting List must be kept on file at the Project at all times. ARTICLE 7 AFFORDABILITY AND OTHER LEASING RESTRICTIONS. 7.1 Term of Leasing_ Restrictions. Borrower acknowledges and agrees that the covenants and other leasing restrictions set forth in this Article will remain in full force and effect: (a) for the Compliance Term and survive the prior repayment or other satisfaction of the Loan, termination of this Agreement or reconveyance of the Deed of Trust; (b) for any Unit that has been subject to a regulatory agreement with TCAC, for a period ending three (3) years after the date of any transfer of the Project by foreclosure or deed -in -lieu of foreclosure; and (c) with respect to any Unit occupied by a Qualified Tenant at expiration of either the Compliance Term or the 3 -year period referred to in Subsection (b) above, until the Qualified Tenant voluntarily vacates his/her Unit or is evicted lawfully for just cause. The requirements to comply with the provisions of Internal Revenue Code Section 42, including Section 42(h)(6)(E)(ii), are hereby acknowledged. 7.2 Borrower's Covenant. (a) Borrower covenants to rent the restricted Units (as set forth in Exhibit A) at all times to households certified as Qualified Tenants at initial occupancy.. (b) A Tenant who is a Qualified Tenant at initial occupancy may not be required to vacate the Unit due to subsequent rises in household income, except as 13 CH&W/999 Third St City Loan Agt Final provided in Section 7.3. After the over -income Tenant vacates the Unit, the vacant Unit must be rented only to Qualified Tenants as provided in this Article 7. 7.3 Rent Restrictions. (a) Rent charged to each Qualified Tenant may not exceed the amounts set forth in Exhibit A, provided that Rents may be adjusted annually, subject to the limitations below. (b) Rents for all Units may be increased once annually up to the maximum monthly rent by unit type. (c) With the City's prior written approval, Rent increases for Units exceeding the amounts permitted under Section 7.3(b) may be permitted once annually in order to recover increases in approved Project Expenses, provided that: (i) in no event may single or aggregate increases exceed ten percent (10%) per year unless such an increase is contemplated in a City -approved temporary relocation plan or is necessary due to the expiration of Section 8 or other rental subsidies and (ii) Rents for each Unit may in no event exceed the maximum Rent permitted under Section 7.3(a). City approval for such Rent increases that are necessary to meet all approved Project Expenses shall not be unreasonably withheld. (d) For any Qualified Tenant participating in a Rent or operating subsidy program where the Rent charged is calculated as a percentage of household income, adjustments to Rent charged may be made according to the rules of the relevant subsidy program. There is no limit on the increase/decrease in Rent charged under this provision, as long as it does not exceed the maximum Rent permitted under Section 7.3(a). There is no limit on the number of Rent adjustments that can be made in a year under this provision. (e) For any Qualified Tenant that becomes ineligible to continue participating in a rent or operating subsidy program, there is no limit on the increase in Rent charged as long as it does not exceed the maximum Rent permitted under Section 7.3(a). (f) Unless prohibited under any applicable Laws, including without limitation Section 42 of the Internal Revenue Code of 1986, as amended, if the household income of a Qualified Tenant exceeds the maximum permissible income during occupancy of a Unit, then, upon no less than thirty (30) days' prior written notice to the Tenant or as otherwise required under the Tenant's lease or occupancy agreement, Borrower may adjust the charges for Rent for the previously Qualified Tenant to be equal to thirty percent (30%) of the Tenant's adjusted household income. Rents charged under this provision may exceed the Maximum Rent permitted under Section 7.3(a). 14 CH&W/999 Third St City Loan Agt Final 7.4 Certification. (a) As a condition to initial occupancy, each person who desires to be a Qualified Tenant in the Project must be required to sign and deliver to Borrower a certification in the form required by TCAC. (b) Each Qualified Tenant in the Project must recertify his/her household income to Borrower in accordance with tax credit requirements. (c) Income certifications with respect to each Qualified Tenant who resides in a Unit or resided therein during the immediately preceding calendar year must be maintained on file at Borrower's principal office, and Borrower must file or cause to be filed copies thereof with the City promptly upon request by the City. 7.5 Form of Lease. The form of lease for Tenants must provide for termination of the lease and consent to immediate eviction for failure to qualify as a Qualified Tenant if the Tenant has made any material misrepresentation in the initial income certification. 7.6 Nondiscrimination. Borrower agrees not to discriminate against or permit discrimination against any person or group of persons because of race, color, creed, national origin, ancestry, age, sex, sexual orientation, disability, gender identity, height, weight, source of income or acquired immune deficiency syndrome (AIDS) or AIDS related condition (ARC) in the operation and use of the Project except to the extent permitted by law or required by any other funding source for the Project. Borrower agrees not to discriminate against or permit discrimination against Tenants using Section 8 certificates or vouchers or assistance through other rental subsidy programs. 7.7 Security Deposits. Security deposits may be required of Tenants only in accordance with federal regulations, state law and this Agreement. Any security deposits collected must be segregated from all other funds of the Project in an Account held in trust for the benefit of the Tenants and disbursed in accordance with California law. The balance in the trust Account must at all times equal or exceed the aggregate of all security deposits collected plus accrued interest thereon, less any security deposits returned to Tenants. 15 CH&W/999 Third St City Loan Agt Final Gell S'N1�51, L (a) As a condition to initial occupancy, each person who desires to be a Qualified Tenant in the Project must be required to sign and deliver to Borrower a certification in the form required by TCAC. (b) Each Qualified Tenant in the Project must recertify his/her household income to Borrower in accordance with tax credit requirements. (c) Income certifications with respect to each Qualified Tenant who resides in a Unit or resided therein during the immediately preceding calendar year must be maintained on file at Borrower's principal office, and Borrower must file or cause to be filed copies thereof with the City promptly upon request by the City. 7.5 Form of Lease. The form of lease for Tenants must provide for termination of the lease and consent to immediate eviction for failure to qualify as a Qualified Tenant if the Tenant has made any material misrepresentation in the initial income certification. 7.6 Nondiscrimination. Borrower agrees not to discriminate against or permit discrimination against any person or group of persons because of race, color, creed, national origin, ancestry, age, sex, sexual orientation, disability, gender identity, height, weight, source of income or acquired immune deficiency syndrome (AIDS) or AIDS related condition (ARC) in the operation and use of the Project except to the extent permitted by law or required by any other funding source for the Project. Borrower agrees not to discriminate against or permit discrimination against Tenants using Section 8 certificates or vouchers or assistance through other rental subsidy programs. 7.7 Security Deposits. Security deposits may be required of Tenants only in accordance with federal regulations, state law and this Agreement. Any security deposits collected must be segregated from all other funds of the Project in an Account held in trust for the benefit of the Tenants and disbursed in accordance with California law. The balance in the trust Account must at all times equal or exceed the aggregate of all security deposits collected plus accrued interest thereon, less any security deposits returned to Tenants. 15 CH&W/999 Third St City Loan Agt Final fIFi f I ARTICLE 8 MAINTENANCE AND MANAGEMENT OF THE PROJECT. 8.1 Borrower's Responsibilities. (a) Subject to the rights set forth in Section 8.2, Borrower will be specifically and solely responsible for causing all maintenance, repair and management functions performed in connection with the Project, including selection of tenants, recertification of income and household size, evictions, collection of rents, routine and extraordinary repairs and replacement of capital items. Borrower must maintain or cause to be maintained the Project, including the Units and common areas, in a safe and sanitary manner in accordance with local health, building and housing codes, California Health and Safety Code 17920.10 . (b) Prior to and during construction Borrower must take prudent measures to ensure the security of the Site. Measures may include erecting a fence; covering and securing all openings in any vacant building and hiring security guards, as appropriate for the circumstances. 8.2 Contracting With Management Agent. (a) Borrower may contract or permit contracting with a management agent for the performance of the services or duties required in Section 8.1(a), subject to the City's prior written approval of both the management agent and, at the City's discretion, the management contract between Borrower and the management agent, provided, however, that the arrangement will not relieve Borrower of responsibility for performance of those duties. Any management contract must contain a provision allowing Borrower to terminate the contract without penalty upon no more than thirty (30) days' notice. City hereby approved Eden Housing, Inc. as the property manager. (b) The City will provide written notice to Borrower of any determination that the contractor performing the functions required in Section 8.1(a) has failed to operate and manage the Project in accordance with this Agreement. If the contractor has not cured the failure within a reasonable time period, as determined by the City, Borrower must exercise its right of termination immediately and make immediate arrangements for continuous and continuing performance of the functions required in Section 8.1(a), subject to the City's approval. 8.3 Borrower Management. Borrower may manage the Project itself only with the City's prior written approval. The City will provide written notice to Borrower of any determination that Borrower has failed to operate and manage the Project in accordance with this Agreement, in which case, the City may require Borrower to contract or cause contracting with a management agent to operate the Project, or to make other arrangements the City deems necessary to ensure performance of the functions required in Section 8.1(a). 16 CH&W/999 Third St City Loan Agt Final ARTICLE 9 GOVERNMENTAL APPROVALS AND REQUIREMENTS . 9.1 Approvals. Borrower covenants that it has obtained or will obtain in a timely manner and comply with all federal, state and local governmental approvals required by Law to be obtained for the Project. Subject to Section 17.2, this Section does not prohibit Borrower from contesting any interpretation or application of Laws in good faith and by appropriate proceedings. 9.2 Borrower Compliance. Borrower must comply, and where applicable, require its contractors to comply, with all applicable Laws governing the use of Funds for the construction, rehabilitation and/or operation of the Project. Borrower acknowledges that its failure to comply with any of these requirements will constitute an Event of Default under this Agreement. Subject to Section 17.2, this Section does not prohibit Borrower from contesting any interpretation or application of Laws in good faith and by appropriate proceedings. ARTICLE 10 PROJECT MONITORING, REPORTS, BOOKS AND RECORDS. 10.1 Generally. (a) Borrower understands and agrees that it will be monitored by the City from time to time to assure compliance with all terms and conditions in this Agreement and all Laws. Borrower acknowledges the City may also conduct periodic on-site inspections of the Project. Borrower must cooperate with the monitoring by the City and ensure full access to the Project and all information related to the Project as reasonably required by the City. (b) Borrower must keep and maintain books, records and other documents relating to the receipt and use of all Funds, including all documents evidencing any Gross Revenue and Project Expenses. Borrower must maintain records of all income, expenditures, assets, liabilities, contracts, operations, tenant eligibility and condition of the Project. All financial reports must be prepared and maintained in accordance with GAAP as in effect at the time of performance. (c) Borrower must provide written notice of the replacement of its executive director, director of housing development, director of property management and/or any equivalent position within thirty (30) days after the effective date of such replacement. 10.2 Monthly Reporting_ Prior to the Completion Date, Borrower must submit monthly reports (the "Monthly Project Update") describing progress toward developing the Project with respect to obtaining necessary approvals from other City departments and agencies, procuring architects, consultants and contractors, changes in scope, cost or schedule and significant milestones achieved in the past month and expected to be achieved in the coming month. The Monthly Project Update must be submitted by email 17 CH&W/999 Third St City Loan Agt Final in substantially the form approved by the City until such time as the Project Completion Report is submitted to the City pursuant to Section 10.5 below. 10.3 Annual Reporting. From and after the Completion Date, Borrower must file with the City annual report forms (the "Annual Monitoring Report") that include audited financial statements with an income and expense statement for the Project covering the applicable reporting period, a statement of balances, deposits and withdrawals from all Accounts, line item statements of Project Expenses, Gross Revenue, Project Fees (if any), Residual Receipts and any Distributions made, evidence of required insurance, a description of marketing activities and a rent roll, no later than one hundred fifty (150) days after the end of Borrower's fiscal year. The Annual Monitoring Report must be in substantially the form attached as Exhibit E or as later modified during the Compliance Term. Notwithstanding the foregoing, the Annual Monitoring Report may be in the same form as required by TCAC. 10.4 Capital Reserves . Borrower shall establish, fund and maintain capital replacement reserves as required by TCAC. Borrower's Annual Monitoring Report shall include balances and activity of the capital replacement reserve account. 10.5 Project Completion Report. Within the specific time periods set forth below after the completion of construction, the lease -up and/or permanent financing of the Project, as applicable, Borrower must provide to the City the reports listed below certified by Borrower to be complete and accurate. Subsequent to the required submission of the reports listed below, Borrower must provide to the City information or documents reasonably requested by the City to assist in the City's review and analysis of the submitted reports: (a) Upon request by the City and after the Completion Date, a draft cost certification (or other similar project audit performed by an independent certified public accountant identifying the sources and uses of all Project funds including the Funds); (b) within ninety (90) days after seventy-five percent (75%) occupancy, and one hundred percent (100%) occupancy, respectively, a report on the lease -up of the Units including number of leases by race, ethnicity and single -headed household by gender, to the extent available, and also indicating the Units by income category; and 10.6 Response to Inquiries. At the request of the City, its agents, employees or attorneys, Borrower must respond promptly and specifically to questions relating to the income, expenditures, assets, liabilities, contracts, operations and condition of the Project, the status of any mortgage encumbering the Project and any other requested information with respect to Borrower or the Project. 18 CH&W/999 Third St City Loan Agt Final r '_' ('.i� Or Snf1 i in substantially the form approved by the City until such time as the Project Completion Report is submitted to the City pursuant to Section 10.5 below. 10.3 Annual Reporting. From and after the Completion Date, Borrower must file with the City annual report forms (the "Annual Monitoring Report") that include audited financial statements with an income and expense statement for the Project covering the applicable reporting period, a statement of balances, deposits and withdrawals from all Accounts, line item statements of Project Expenses, Gross Revenue, Project Fees (if any), Residual Receipts and any Distributions made, evidence of required insurance, a description of marketing activities and a rent roll, no later than one hundred fifty (150) days after the end of Borrower's fiscal year. The Annual Monitoring Report must be in substantially the form attached as Exhibit E or as later modified during the Compliance Term. Notwithstanding the foregoing, the Annual Monitoring Report may be in the same form as required by TCAC. 10.4 Capital Reserves . Borrower shall establish, fund and maintain capital replacement reserves as required by TCAC. Borrower's Annual Monitoring Report shall include balances and activity of the capital replacement reserve account. 10.5 Project Completion Report. Within the specific time periods set forth below after the completion of construction, the lease -up and/or permanent financing of the Project, as applicable, Borrower must provide to the City the reports listed below certified by Borrower to be complete and accurate. Subsequent to the required submission of the reports listed below, Borrower must provide to the City information or documents reasonably requested by the City to assist in the City's review and analysis of the submitted reports: (a) Upon request by the City and after the Completion Date, a draft cost certification (or other similar project audit performed by an independent certified public accountant identifying the sources and uses of all Project funds including the Funds); (b) within ninety (90) days after seventy-five percent (75%) occupancy, and one hundred percent (100%) occupancy, respectively, a report on the lease -up of the Units including number of leases by race, ethnicity and single -headed household by gender, to the extent available, and also indicating the Units by income category; and 10.6 Response to Inquiries. At the request of the City, its agents, employees or attorneys, Borrower must respond promptly and specifically to questions relating to the income, expenditures, assets, liabilities, contracts, operations and condition of the Project, the status of any mortgage encumbering the Project and any other requested information with respect to Borrower or the Project. 18 CH&W/999 Third St City Loan Agt Final 10.7 Delivery of Records. At the request of the City, made through its agents, employees, officers or attorneys, Borrower must provide the City with copies of each of the following documents, certified in writing by Borrower to be complete and accurate: (a) all tax returns filed with the United States Internal Revenue Service, the California Franchise Tax Board and/or the California State Board of Equalization on behalf of Borrower and any general partner or manager of Borrower; (b) all certified financial statements of Borrower and, if applicable, its general partner or manager, the accuracy of which must be certified by an auditor satisfactory to the City; and (c) any other records related to Borrower's ownership structure and the use and occupancy of the Site. 10.8 Access to the Project and Other Project Books and Records. In addition to Borrower's obligations under Sections 2.4, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6 and 10.7 and any other obligations to provide reports or maintain records in any City Document, Borrower agrees that duly authorized representatives of the City will have: (a) access to the Project throughout the Compliance Term to monitor the progress of work on the Project and compliance by Borrower with the terms of this Agreement; and (b) access to and the right to inspect, copy, audit and examine all books, records and other documents Borrower is required to keep at all reasonable times, following reasonable notice, for the retention period required under Section 10.9. 10.9 Records Retention. Borrower must retain all records required for the periods required under applicable Laws. ARTICLE 11 USE OF INCOME FROM OPERATIONS. 11.1 Project Operating Account. (a) Borrower must deposit all Gross Revenue promptly after receipt into a segregated depository account (the "Project Operating Account") established exclusively for the Project. Withdrawals from the Project Operating Account may be made only in accordance with the provisions of this Agreement and the approved Annual Operating Budget, as it may be revised from time to time with the City's approval. Borrower may make withdrawals from the Project Operating Account solely for the payment of Project Expenses and Project Fees. Withdrawals from the Project Operating Account (including accrued interest) for other purposes may be made only with the City's express prior written approval. (b) Borrower must keep accurate records indicating the amount of Gross Revenue deposited into and withdrawn from the Project Operating Account and the use of Gross Revenue. Borrower must provide copies of the records to the City upon request. 19 CH&W/999 Third St City Loan Agt Final ;a A �', ��_ i'�'�'� , ! ARTICLE 12 REQUIRED RESERVES, 12.1 Replacement Reserve Account. (a) Borrower shall establish and maintain a Replacement Reserve Account on the same terms and conditions as required by TCAC. Borrower must -make monthly deposits from Gross Revenue into the Replacement Reserve Account in the amount necessary to meet the requirements of this Section. The City may review the adequacy of deposits to the Replacement Reserve Account periodically and require adjustments as it deems necessary. (b) If the Project is unable to make a required replacement reserve deposit due to unavailable cash flow, the Borrower must submit a plan for review and approval by the City that addresses the cash flow shortfall. (c) Borrower may withdraw funds from the Replacement Reserve Account solely to fund capital improvements for the Project, such as replacing or repairing structural elements, furniture, fixtures or equipment of the Project that are reasonably required to preserve the Project. Borrower may not withdraw funds (including any accrued interest) from the Replacement Reserve Account for any other purpose without the City's prior written approval. 12.2 Operating Reserve Account. Borrower shall establish and maintain an Operating Replacement Reserve Account on the same terms and conditions as required by TCAC. The City may review the adequacy of deposits to the Operating Reserve Account periodically and require adjustments as it deems necessary. Borrower may not withdraw funds (including any accrued interest) from the Operating Reserve Account for any other purpose without the City's prior written approval. Notwithstanding the foregoing, the City approval shall not be required for withdrawals from the Operating Reserve Account during the time period that the investor limited partner is a limited partner of the Borrower. ARTICLE 13 DISTRIBUTIONS. 13.1 Definition. "Distributions" refers to cash or other benefits received as Gross Revenue from the operation of the Project and available to be distributed to Borrower or any party having a beneficial interest in the Project after the payment of Project Expenses, but does not include reasonable payments for property management, partnership and/or asset management or other services performed in connection with the Project. 13.2 Conditions to Distributions. The 15 -Year Cash Flow Proforma attached hereto as Exhibit B-3 includes projections of annual Distributions. Exhibit B-3 is not intended to impose limits on the amounts to be annually distributed. Distributions for a 20 CH&W/999 Third St City Loan Agt Final particular fiscal year may be made only following: (a) City approval of the Annual Monitoring Report submitted for that year; (b) the City's determination that Borrower is not in default under this Agreement or any other agreement entered into with the City of Rafael for the Project; and (c) the City's determination that the amount of the proposed Distribution satisfies the conditions of this Agreement. The City will be deemed to have approved Borrower's written request for approval of a proposed Distribution unless the City delivers in writing its disapproval or request for more information to Borrower within thirty (30) business days after the City's receipt of the request for approval. 13.3 Prohibited Distributions. No Distribution may be made in the following circumstances: (a) when a written notice of default has been issued by any entity with an equitable or beneficial interest in the Project, including when the City determines that Borrower or Borrower's management agent has failed to comply with this Agreement, and the default is not cured within the applicable cure periods; or (b) if required debt service on all loans secured by the Project and all Operating Expenses have not been paid current; or (c) if the Replacement Reserve Account, Operating Reserve Account or any other reserve account required for the Project is not fully funded as required by Borrower's limited partnership agreement; or (d) if the Loan is to be repaid from Residual Receipts, Borrower failed to make a payment when due on a Payment Date and the sum remains unpaid; or (e) during the pendency of an uncured Event of Default (including Borrower's failure to provide its own funds at any time the City determines the Loan is out of balance) under any City Document. 13.4 Residual Receipts . Fifty Percent (50%) of the Residual Receipts shall be distributed as set forth in the Note. 13.5 Borrower's Use of Residual Receipts . To the extent that making a Distribution is not inconsistent with any other financing agreement for the Project, and subject to the provisions in the Note, Borrower may use 50% of Residual Receipts to make payments on the Sponsor Loan until paid in full and once paid in full, Borrower may distribute its 50% of Residual Receipts in accordance with Borrower's limited partnership agreement. Borrower acknowledges that the City may withhold its consent to a Distribution in any year in which Residual Receipts are insufficient to meet Borrower's payment obligations under the Note. ARTICLE 14 (Reserved). 21 CH&W/999 Third St City Loan Agt Final ARTICLE 15 (Reserved). ARTICLE 16 TRANSFERS. 16.1 Permitted Transfers/Consent. Borrower may not cause or permit any voluntary transfer, assignment or encumbrance of its interest in the Site or Project or of any ownership interests in Borrower, or lease or permit a sublease on all or any part of the Project, other than: (a) leases, subleases or occupancy agreements to occupants of Units in the Project; (b) security interests for the benefit of lenders securing loans for the Project as approved by the City on terms and in amounts as approved by City in its reasonable discretion; (c) transfers from Borrower to a limited partnership or limited liability company formed for the tax credit syndication of the Project, where Borrower or an affiliated nonprofit public benefit corporation is the sole general partner or manager of that entity or is the manager of a limited liability company that is the sole general partner or manager of that entity; (d) transfers of the general partnership or manager's interest in Borrower to a nonprofit public benefit corporation approved in advance by the City; (e) transfers of any limited partnership interest in Borrower; (f) the grant or exercise of an option agreement or right of first refusal between Borrower and Borrower's general partner or manager or any of its affiliates in connection with the tax credit syndication of the Project as set forth in the Borrower's limited partnership agreement; or (g) to remove or replace the General Partner in accordance with the terms of Borrower's limited partnership agreement, a transfer of any general partnership interest to a new general partner approved in advance by the City. Any other transfer, assignment, encumbrance or lease without the City's prior written consent will be voidable and, at the City's election, constitute an Event of Default under this Agreement. The City's consent to any specific assignment, encumbrance, lease or other transfer will not constitute its consent to any subsequent transfer or a waiver of any of the City's rights under this Agreement. ARTICLE 17 INSURANCE AND BONDS: INDEMNITY. 17.1 Borrower's Insurance. Subject to approval by the City's Risk Manager of the insurers and policy forms, Borrower must obtain and maintain, or cause to be obtained and maintained, insurance and bonds as set forth in Exhibit H from the date the Deed of Trust is recorded in the Recorder's Office of the County of Marin until the expiration of the Compliance Term at no expense to the City. Notwithstanding the foregoing, if Borrower is in compliance with the insurance requirements of the lender with the first lien position mortgage, Borrower may request that City accept the senior lender's insurance requirements as satisfaction of City's insurance requirements, such request not to be unreasonably denied. 17.2 Borrower's Indemnity Obligations. Borrower must indemnify, protect, defend and hold harmless each of the Indemnitees from and against any and all Losses arising out of: (a) any default by Borrower in the observance or performance of any of Borrower's obligations under the City Documents (including those covenants set forth in Article 18 below); (b) any failure of any representation by Borrower to be correct in all 22 CH&W/999 Third St City Loan Agt Final respects when made; (c) from and after the date Borrower acquires Control of the Site, injury or death to persons or damage to property or other loss occurring on or in connection with the Site or the Project, whether caused by the negligence or any other act or omission of Borrower or any other person or by negligent, faulty, inadequate or defective design, building, construction, rehabilitation or maintenance or any other condition or otherwise; (d) from and after the date Borrower acquires Control of the Site, any claim of any surety in connection with any bond relating to the construction or rehabilitation of any improvements or offsite improvements; (e) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee that relates to or arises out of the City Documents, the Loan, the Site (from and after the date Borrower acquires Control of the Site), or the Project or any transaction contemplated by, or the relationship between Borrower and the City or any action or inaction by the City under, the City Documents; (f) the occurrence, from and after the date Borrower acquires Control of the Site, until the expiration of the Compliance Term, of any Environmental Activity or any failure of Borrower or any other person to comply with all applicable Environmental Laws relating to the Project or the Site; (g) the occurrence, after the Compliance Term, of any Environmental Activity resulting directly or indirectly from any Environmental Activity occurring from and after the date Borrower acquires Control of the Site and before the expiration of the Compliance Term; (h) any liability of any nature arising from Borrower's contest of or relating to the application of any Law, including any contest permitted under Sections 9.1, 9.2 and 18.2; or (i) any claim, demand or cause of action, or any investigation, inquiry, order, hearing, action or other proceeding by or before any Governmental Agency, whether meritorious or not, that directly or indirectly relates to, arises from or is based on the occurrence or allegation of any of the matters described in clauses (a) through (h) above, provided that no Indemnitee will be entitled to indemnification under this Section for matters caused solely by its own gross negligence or willful misconduct. 17.3 Dutv to Defend. Borrower acknowledges and agrees that its obligation to defend the Indemnitees under Section 17.2: (a) is an immediate obligation, independent of its other obligations hereunder; (b) applies to any Loss which actually or potentially falls within the scope of Section 17.2, regardless of whether the allegations asserted in connection with such Loss are or may be groundless, false or fraudulent; and (c) arises at the time the Loss is tendered to Borrower by the Indemnitee and continues at all times thereafter. In the event any action or proceeding is brought against an Indemnitee by reason of a claim arising out of any Loss for which Borrower has indemnified the Indemnitees, upon written notice, Borrower must answer and otherwise defend the action or proceeding using counsel approved in writing by the Indemnitee at Borrower's sole expense. Each Indemnitee will have the right, exercised in its sole discretion, but without being required to do so, to defend, adjust, settle or compromise any claim, obligation, debt, demand, suit or judgment against the Indemnitee in connection with the matters covered by this Agreement. The Indemnitee must give Borrower prompt notice of any Loss and Borrower has the right to defend, settle and compromise any such Loss; provided, however, that the Indemnitee has the right to retain its own counsel at the expense of Borrower if representation of such 23 CH&W/999 Third St City Loan Agt Final Indemnitee by the counsel retained by Borrower would be inappropriate due to conflicts of interest between such Indemnitee and Borrower. An Indemnitee's failure to notify Borrower promptly of any Loss does not relieve Borrower of any liability to such Indemnity under Section 17.2, unless such failure materially impairs Borrower's ability to defend such Loss. Borrower must seek the Indemnified Party's prior written consent to settle or compromise any Loss if Borrower contends that such Indemnitee shares in liability with respect thereto. 17.4 No Limitation. Borrower's obligations under Section 17.2 are not limited by the insurance requirements under this Agreement. 17.5 Survival. The provisions of this Section will survive the repayment of the Loan and/or termination of this Agreement. ARTICLE 18 HAZARDOUS SUBSTANCES. 18.1 Borrower's Representations. Borrower represents and warrants to the City that, to the best of Borrower's actual knowledge, without independent investigation or inquiry as of the Agreement Date, the following statements are true and correct except as disclosed in that certain i) Vapor Intrusion Mitigation Plan, dated November 15, 2021 and prepared by GSI Environmental Inc., (ii) Phase I Environmental Site Assessment, dated January 25, 2022 and prepared by Resolution Environmental Services, (iii) Site Management Plan, dated January 26, 2022 prepared by GSI Environmental Inc., (iv) Geotechnical Investigation dated February 22, 2022 as Project No. 20-1849 prepared by Rockridge Geotechnical and (v) letter from GSI Environmental dated January 21, 2022 regarding Comments Regarding Titel Document Items 4 through 12 Preliminary Report: Old Republic Title Company Order No. 1117024562, Property Address: 999 Third Street, San Rafael, CA, Further Vivalon Healthy Ageing Campus & Senior Housing Site, or otherwise in writing: (a) the Site is not in violation of any Environmental Laws; and (b) the Site does not consist of any landfill or contain any underground storage tanks. Borrower shall deliver to City copies of all reports and clearances received from the California Department of Toxic Substances Control within ten (10) days after receipt. 18.2 Covenant. Unless the City otherwise consents in writing, at all times from and after the date of this Agreement, at its sole expense, Borrower must: (a) comply with all applicable Environmental Laws relating to the Site and the Project, and not engage in or otherwise permit the occurrence of any Environmental Activity in violation of any applicable Environmental Laws or that is not customary and incidental to the intended use of the Site, provided that nothing contained in this Section will prevent Borrower from contesting, in good faith and by appropriate proceedings, any interpretation or application of Environmental Laws; and (b) deliver to the City notice of the discovery by Borrower of any event rendering any representation contained in this Section incorrect in any respect promptly following Borrower's discovery. 24 CH&W/999 Third St City Loan Agt Final 18.3 Survival . Borrower and City agree that this Article 18 is intended as City's written request for information (and Borrower's response) concerning the environmental condition of the Site as security as required by California Code of Civil Procedure § 726.5; and each provision in this Article (together with any indemnity applicable to a breach of any such provision) with respect to the environmental condition of the Site as security is intended by City and Borrower to be an "environmental provision" for purposes of California Code of Civil Procedure § 736, and as such it is expressly understood that Borrower's duty to indemnify City hereunder shall survive: (a) any judicial or non -judicial foreclosure under the Deed of Trust, or transfer of the Property in lieu thereof, (b) the release and reconveyance or cancellation of the Deed of Trust; and (c) the satisfaction of all of Borrower's obligation under the City Documents. ARTICLE 19 DEFAULT. 19.1 Event of Default. Any material breach by Borrower of any covenant, agreement, provision or warranty contained in this Agreement or in any of the City Documents that remains uncured upon the expiration of any applicable notice and cure periods contained in any City Document will constitute an "Event of Default," including the following: (a) Borrower fails to make any payment required under this Agreement within ten (10) days after the date when due; or (b) Any lien is recorded against all or any part of the Site or the Project without the City's prior written consent, whether prior or subordinate to the lien of the Deed of Trust or Declaration of Restrictions, and the lien is not removed from title or otherwise remedied to the City's satisfaction within thirty (30) days after Borrower's receipt of written notice from the City to cure the default, or, if the default cannot be cured within a 30 -day period, Borrower will have sixty (60) days to cure the default, or any longer period of time deemed necessary by the City, provided that Borrower commences to cure the default within the 30 -day period and diligently pursues the cure to completion; or (c) Borrower fails to perform or observe any other term, covenant or agreement contained in any City Document, and the failure continues for thirty (30) days after Borrower's receipt of written notice from the City to cure the default, or, if the default cannot be cured within a 30 -day period, Borrower will have sixty (60) days to cure the default, or any longer period of time deemed necessary by the City, provided that Borrower commences to cure the default within the 30 -day period and diligently pursues the cure to completion; or (d) Any representation or warranty made by Borrower in any City Document proves to have been incorrect in any material respect when made; or (e) All or a substantial or material portion of the improvements on the Site are damaged or destroyed by fire or other casualty, and the City has determined 25 CH&W/999 Third St City Loan Agt Final upon restoration or repair that the security of the Deed of Trust has been impaired or that the repair, restoration or replacement of the improvements in accordance with the requirements of the Deed of Trust is not economically practicable or is not completed within two (2) years of the receipt of insurance proceeds; or all or a substantial or material portion of the improvements is condemned, seized or appropriated by any non - City Governmental Agency or subject to any action or other proceeding instituted by any non -City Governmental Agency for any purpose with the result that the improvements cannot be operated for their intended purpose; or (f) Borrower is dissolved or liquidated or merged with or into any other entity; or, if Borrower is a corporation, partnership, limited liability company or trust, Borrower ceases to exist in its present form and (where applicable) in good standing and duly qualified under the laws of the jurisdiction of formation and California for any period of more than ten (10) days; or, if Borrower is an individual, Borrower dies or becomes incapacitated; or all or substantially all of the assets of Borrower are sold or otherwise transferred except as permitted under Section 16.1; or (g) Without the City's prior written consent, Borrower assigns or attempts to assign any rights or interest under any City Document, whether voluntarily or involuntarily, except as permitted under Section 16.1; or (h) Without the City's prior written consent, Borrower voluntarily or involuntarily assigns or attempts to sell, lease, assign, encumber or otherwise transfer all or any portion of the ownership interests in Borrower or of its right, title or interest in the Project or the Site except as permitted under Article 16; or (i) Without the City's prior written consent, Borrower uses the funds in the Replacement Reserve Account for purposes other than expressly authorized in Section 12.1; or Q) Either the Deed of Trust or the Declaration of Restrictions ceases to constitute a valid and perfected lien on the Site and improvements, subject only to Permitted Exceptions; or (k) Borrower is subject to an order for relief by the bankruptcy court, or is unable or admits in writing its inability to pay its debts as they mature or makes an assignment for the benefit of creditors; or Borrower applies for or consents to the appointment of any receiver, trustee or similar official for Borrower or for all or any part of its property (or an appointment is made without its consent and the appointment continues undischarged and unstayed for sixty (60) days); or Borrower institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceeding relating to Borrower or to all or any part of its property under the laws of any jurisdiction (or a proceeding is instituted without its consent and continues undismissed and unstayed for more than sixty (60) days); or any judgment, writ, warrant of attachment or execution or similar process is issued or levied against the Site, the CH&W/999 Third St City Loan Agt Final improvements or any other property of Borrower and is not released, vacated or fully bonded within sixty (60) days after its issue or levy; or (1) Borrower fails to make any payments or disbursements required to bring the Loan in balance after the City determines that the Loan is out of balance; or (n) Before a certificate of occupancy or equivalent certification is issued for the Project, Borrower ceases rehabilitation or construction of the Project for a period of forty days (40) consecutive calendar days, and the cessation is not excused under Section 19.3; or (o) Borrower is in default of its obligations with respect to any funding obligation (other than the Loan) for the Project, and the default remains uncured following the expiration of any applicable cure periods; or (p) Borrower is in default of its obligations under any other agreement entered into with the City of Rafael, and the default remains uncured following the expiration of any applicable cure periods. 19.2 Remedies. During the pendency of an uncured Event of Default, the City may exercise any right or remedy available under this Agreement or any other City Document or at law or in equity. All of the City's rights and remedies following an Event of Default are cumulative, including: (a) The City at its option may declare the unpaid principal balance of the Note, together with default interest as provided in the Note and any other charges due under the Note and the other City Documents, immediately due and payable without protest, presentment, notice of dishonor, demand or further notice of any kind, all of which Borrower expressly waives. (b) The City at its option may terminate all commitments to make Disbursements, or, without waiving the Event of Default, the City may determine to make further Disbursements or to release all or any part of the Site from the Deed of Trust or Declaration of Restrictions upon terms and conditions satisfactory to the City in its sole discretion. (c) The City may perform any of Borrower's obligations in any manner, in the City's reasonable discretion. (d) The City, either directly or through an agent or court-appointed receiver, may take possession of the Project and enter into contracts and take any other action the City deems appropriate to complete or construct all or any part of the improvements, subject to modifications and changes in the Project the City deems appropriate. 27 CH&W/999 Third St City Loan Agt Final (e) The City may apply to any court of competent jurisdiction for specific performance, or an injunction against any violation, of this Agreement or for any other remedies or actions necessary or desirable to correct Borrower's noncompliance with this Agreement. (f) Upon the occurrence of an Event of Default described in Section 19.1(k), the unpaid principal balance of the Note, together with default interest as provided in the Note and any other charges due under the Note and the other City Documents, will become due and payable automatically. (g) All costs, expenses, charges and advances of the City in exercising its remedies or to protect the Project will be deemed to constitute a portion of the principal balance of the Note, even if it causes the principal balance to exceed the face amount of the Note, unless Borrower reimburses the City within ten (10) days of the City's demand for reimbursement. 19.3 Force Majeure. The occurrence of any of the following events will excuse performance of any obligations of the City or Borrower rendered impossible to perform while the event continues: strikes; lockouts; labor disputes; acts of God; inability to obtain labor, materials or reasonable substitutes for either; governmental restrictions, regulations or controls; judicial orders; enemy or hostile governmental actions; civil commotion; fire or other casualty and other causes beyond the control of the party obligated to perform. The occurrence of a force majeure event will excuse Borrower's performance only in the event that Borrower has provided notice to the City within thirty (30) days after the occurrence or commencement of the event or events, and Borrower's performance will be excused for a period ending thirty (30) days after the termination of the event giving rise to the delay. If Borrower's performance cannot be performed within that 30 -day period in the City's judgment, the cure period may be extended for a period not to exceed ninety (90) days following termination of the event causing the delay, provided that Borrower recommences performance promptly following the termination of the event and diligently pursues performance to completion. ARTICLE 20 REPRESENTATIONS AND WARRANTIES. 20.1 Borrower Representations and Warranties. As a further inducement for the City to enter into this Agreement, Borrower represents and warrants as follows: (a) The execution, delivery and performance of the City Documents will not contravene or constitute a default under or result in a lien upon assets of Borrower under any applicable Law, any Charter Document of Borrower or any instrument binding upon or affecting Borrower, or any contract, agreement, judgment, order, decree or other instrument binding upon or affecting Borrower. (b) When duly executed, the City Documents will constitute the legal, valid and binding obligations of Borrower. Borrower hereby waives any defense to the enforcement of the City Documents related to alleged invalidity of the City Documents. 28 CH&W/999 Third St City Loan Agt Final (c) No action, suit or proceeding is pending or threatened that might affect Borrower or the Project adversely in any material respect. (d) Borrower is not in default under any agreement to which it is a party, including any lease of real property. (e) None of Borrower, Borrower's principals or Borrower's general contractor has been suspended or debarred by the Department of Industrial Relations or any Governmental Agency, nor has Borrower, any of its principals or its general contractor been suspended, disciplined or prohibited from contracting with any Governmental Agency (f) The Loan is in balance, and the Funding Amount, together with all other committed sources of financing for the Project, are sufficient to complete the Project in accordance with this Agreement. (g) All statements and representations made by Borrower in connection with the Loan remain true and correct as of the date of this Agreement. (h) The Borrower is duly organized and in good standing under applicable laws of the State of California and is qualified to do business in the City of Rafael. ARTICLE 21 NOTICES. 21.1 Written Notice. All notices required by this Agreement must be made in writing and may be communicated by personal delivery, by a nationally recognized courier that obtains receipts, facsimile (if followed within one (1) business day by first class mail) or by United States certified mail, postage prepaid, return receipt requested. Delivery will be deemed complete as of the earlier of actual receipt (or refusal to accept proper delivery) or five (5) days after mailing, provided that any notice that is received after 5 p.m. on any day or on any weekend or holiday will be deemed to have been received on the next succeeding business day. Notices must be addressed as follows: To the City: Community Development Department 1400 Fifth Avenue, 3rd Floor San Rafael, CA 94901 Attn: Director To Borrower: San Rafael Senior, L.P. 22645 Grand Street Hayward, California 94541 Attention: Andrea Osgood, Senior Vice President of Real Estate Development 29 CH&W/999 Third St City Loan Agt Final Raymond James Housing Opportunities Fund 72 L.L.C. c/o Raymond James Affordable Housing Investments, Inc. 880 Carillon Parkway St. Petersburg, Florida 33716 Attention: Steven J. Kropf, President Email Address: Steve.Kropf@RaymondJames.com With copies to: Bocarsly Emden Cowan Esmail & Arndt LLP 633 W. 5th Street, 64th Floor Los Angeles, California 90071 Attention: Kyle Arndt Email Address: Karndt@bocarsly.com or any other address a party designates from time to time by written notice sent to the other party in manner set forth in this Section. 21.2 Required Notices. Borrower agrees to provide notice to the City in accordance with Section 21.1 of the occurrence of any change or circumstance that: (a) will have an adverse effect on the physical condition or intended use of the Project; (b) causes the Loan to be out of balance; or (c) will have a material adverse effect on Borrower's operation of the Property or ability to repay the Loan. 21.3 Notice to Limited Partner. The City agrees to deliver a copy of any notice of default to Borrower's limited partner at the address set forth below at the same time and in the same manner as notice is delivered to Borrower. The City's failure to deliver notice under this Section will not affect or impair the City's right to enforce its rights at law or in equity arising by reason of an Event of Default. Borrower's limited partner has the right but not the obligation to cure an Event of Default on behalf of Borrower and the City agrees to accept such cure on the same basis as if tendered by Borrower. To: Raymond James Housing Opportunities Fund 72 L.L.C. c/o Raymond James Affordable Housing Investments, Inc. 880 Carillon Parkway St. Petersburg, Florida 33716 Attention: Steven J. Kropf, President Email Address: Steve.Kropf@RaymondJames.com With copies to: Bocarsly Emden Cowan Esmail & Arndt LLP 633 W. 5th Street, 64th Floor Los Angeles, California 90071 Attention: Kyle Arndt Email Address: Karndt@bocarsly.com 30 CH&W/999 Third St City Loan Agt Final ARTICLE 22 GENERAL PROVISIONS, 22.1 Subordination. The Deed of Trust may be subordinated to other financing secured by and used for development of the Project (in each case, a "Senior Lien"), but only if City of Rafael determines in its sole discretion that subordination is necessary to secure adequate acquisition, construction, rehabilitation and/or permanent financing to ensure the viability of the Project. Following review and approval by City of Rafael and approval as to form by the City Attorney's Office, the City Manager will be authorized to execute any approved subordination agreement without the necessity of any further action or approval. 22.2 No Third Party Beneficiaries. Nothing contained in this Agreement, nor any act of the City, may be interpreted or construed as creating the relationship of third party beneficiary, limited or general partnership, joint venture, employer and employee, or principal and agent between the City and Borrower or Borrower's agents, employees or contractors. 22.3 No Claims by Third Parties. Nothing contained in this Agreement creates or justifies any claim against the City by any person or entity with respect to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the Project. Borrower must include this requirement as a provision in any contracts for the development of the Project. 22.4 Entire Agreement. This Agreement and its Exhibits incorporate the terms of all agreements made by the City and Borrower with regard to the subject matter of this Agreement. No alteration or variation of the terms of this Agreement will be valid unless made in writing and signed by the parties hereto. No oral understandings or agreements not incorporated herein will be binding on the City or Borrower. 22.5 City Obligations. The City's sole obligation under this Agreement is limited to providing the Funds as described in this Agreement, up to the Funding Amount. Under no circumstances, including breach of this Agreement, will the City be liable to Borrower for any special or consequential damages arising out of actions or failure to act by the City in connection with any of the City Documents. 22.6 Borrower Solely Responsible. Borrower is an independent contractor with the right to exercise full control of employment, direction, compensation and discharge of all persons assisting in the performance contemplated under this Agreement. Borrower is solely responsible for: (a) its own acts and those of its agents, employees and contractors and all matters relating to their performance, including compliance with Social Security, withholding and all other Laws governing these matters and requiring that contractors include in each contract that they will be solely responsible for similar matters relating to their employees; (b) any losses or damages incurred by Borrower, any of its contractors or subcontractors and the City and its officers, representatives, agents and employees on account of any act, error or omission of Borrower in the performance of this Agreement or any other City Document and the development and 31 CH&W/999 Third St City Loan Agt Final r I- 1� r operation of the Project; and (c) all costs and expenses relating to Borrowers performance of obligations under the City Documents, the delivery to the City of documents, information or items under or in connection with any of the City Documents and taxes, fees, costs or other charges payable in connection with the execution, delivery, filing and/or recording of any City Document or document required under any City Document. 22.7 No Inconsistent Agreements. Borrower warrants that it has not executed and will not execute any other agreement(s) with provisions materially contradictory or in opposition to the provisions of this Agreement. 22.8 Inconsistencies in City Documents. In the event of any conflict between the terms of this Agreement and any other City Document, the terms of this Agreement control unless otherwise stated; provided, however, that any provision in this Agreement in conflict with any Law will be interpreted subject to that Law. 22.9 Governing Law. This Agreement is governed by California law without regard to its choice of law rules. 22.10 Joint and Several Liabil�. If Borrower consists of more than one person or entity, each is jointly and severally liable to the City for the faithful performance of this Agreement. 22.11 Successors. Except as otherwise limited herein, the provisions of this Agreement bind and inure to the benefit of the undersigned parties and their heirs, executors, administrators, legal representatives, successors and assigns. This provision does not relieve Borrower of its obligation under the City Documents to obtain the City's prior written consent to any assignment or other transfer of Borrower's interests in the Loan, the Site or the ownership interests in Borrower. 22.12 Attorneys' Fees. If any legal action is commenced to enforce any of the terms of this Agreement or rights arising from any party's actions in connection with this Agreement, the prevailing party will have the right to recover its reasonable attorneys' fees (including allocated fees of the City Attorney's Office) and costs of suit from the other party, whether incurred in a judicial, arbitration, mediation or bankruptcy proceeding or on appeal. For the purposes of this Agreement, reasonable fees of attorneys in the City Attorney's office will be based on the fees regularly charged by private attorneys with the equivalent number of years of experience in the subject matter of law for which the City Attorney's services were rendered, who practice in the City of San Francisco in law firms with approximately the same number of attorneys as employed by the City Attorney's Office. An award of attorneys' fees and costs will bear interest at the default rate under the Note from the date of the award until paid. 22.13 Severability. The invalidity or unenforceability of any one or more provisions of this Agreement will in no way affect any other provision. 32 CH&W/999 Third St City Loan Agt Final 22.14 Time. Time is of the essence in this Agreement. Whenever the date on which an action must be performed falls on a Saturday, Sunday or federal holiday, the date for performance will be deemed to be the next succeeding business day. 22.15 Further Assurances. Borrower agrees to: (a) pursue in an effective and continuous manner; (b) use best efforts to achieve; and (c) take all actions reasonably required by the City from time to time to confirm or otherwise carry out the purpose of this Agreement. 22.16 Binding Covenants. The provisions of the City Documents constitute covenants running with the land and will be binding upon Borrower and Borrower's successors and assigns, and all parties having or acquiring any right, title or interest in whatever form, including leasehold interests (other than Tenants and approved commercial tenants), in or to any part of the Property, except that the same will terminate and become void automatically at the expiration of the Compliance Term of this Agreement. Any attempt to transfer any right, title or interest in the Property in violation of these covenants will be void. 22.17 Consent. Except as expressly provided otherwise, whenever consent or approval of a party is required in any City Document, that party agrees not to withhold or delay its consent or approval unreasonably. 22.18 Counterparts. This Agreement may be executed in any number of counterparts, all of which will constitute but one agreement. 22.19 Borrower's Personnel. The Project shall be implemented only by competent personnel under the direction and supervision of Borrower. 22.20 Borrower's Board of Directors. Borrower, or Borrower's manager or general partner, as applicable, shall at all times be governed by a legally constituted and fiscally responsible board of directors. Such board of directors shall meet regularly and maintain appropriate membership, as established in the bylaws and other governing documents of Borrower, Borrower's manager or Borrower's general partner, as applicable, and shall adhere to applicable provisions of federal, state and local laws governing nonprofit corporations. Such board of directors shall exercise such oversight responsibility with regard to this Agreement as is necessary to ensure full and prompt performance by Borrower of its obligations under this Agreement. 22.21 Exhibits. The following exhibits are attached to this Agreement and incorporated by reference: EXHIBITS A Schedules of Income and Rent Restrictions B-1 Table of Sources and Uses of Funds B-2 Annual Operating Budget 33 CH&W/999 Third St City Loan Agt Final B-3 15 -Year Cash Flow Proforma C Form of Tenant Income Certification D Governmental Requirements E Form of Annual Monitoring Report F Reserved G Reserved H Insurance Requirements 34 CH&W/999 Third St City Loan Agt Final IN WITNESS WHEREOF, the parties hereto have executed this Agreement at San Francisco, California as of the date first written above. THE CITY: CITY OF RAFAEL, a municipal corporation � r f BORROWER: San Rafael Senior, L.P., a California limited partnership By: San Rafael Senior LLC, a California limited liability company, its general partner Schultz By: Eden Development, Inc., a City Manager I �A,California nonprofit public benefit dv cl-' �SSF•rporation, its sole member/manager ATTEST: Lindsay Lara, City Clerk APPROVED AS TO FORM: Robert Epstein City Attorney By: Assistant City Attars y By: Andrea Osgood, Senior Vice President of Real Estate Development Signature page 999 Third Street City Loan Agreement A ' 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 �i COUNTY OF MARIN .' /V0 On 19PI7 J+��- , Wore me, �Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the pers n whose name i a subs ed to the within instrument and a €cnowledged to me that e h ltiy executed a same in sr to tloir authorized capacity(i , and that byy th r signatureVon the instrument e person or the entity upon behalf of which the persoq) 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. b*. N.u,., Name: Notary Public so I Y, BRENNA KATHLEEN NURMI Notary Public • California ` . = Marin County x Commission # 2297544 °"�� My Comm. Expires Jul 18, 2023 IN WITNESS WHEREOF, the parties hereto have executed this Agreement at San Francisco, California as of the date first written above. THE CITY: CITY OF RAFAEL, a municipal corporation Jim Schultz City Manager ATTEST: Lindsay Lara, City Clerk APPROVED AS TO FORM: Robert Epstein City Attorney 0 Assistant City Attorney BORROWER: San Rafael Senior, L.P., a California limited partnership By: San Rafael Senior LLC, a California limited liability company, its general partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its sole memb anager By: Andr s ood, Senior 'ce President of Real Estate Development Signature page 999 Third Street City Loan Agreement EXHIBIT A Schedules of Income and Rent Restrictions 1. Income and Rent Restrictions. Maximum rent is 30% of maximum income level. As used in this Agreement, the term "Qualified Tenant" includes each category of Tenant included below: Unit f No. of Maximum Income Level Size Units Studio 16 60% of Median Income 1 -Bed 16 60% of Median Income 2. Sixty-six (66) Units must qualify as "senior citizen housing" as defined in Section 51.3 and Section 51.12 of the California Civil Code. Exhibit A Page 1 EXHIBIT B-1 Table of Sources and Uses of Funds (Behind this page) Exhibit B-1 �'sssmms'8m_�amsosess_'s_- ago 0. S8 �_�sm W $p4� U � �< - 0 0 2 ?�����2�g;,�3"A�o . vz YE {{�� 8yaa o 8 c f 3 wi $$ fi S S E S• °' L J sE� �� �E e�� ��"��F�`��ii�� ��`e•�� EXHIBIT B-2 Annual Operating Budget (Behind this page) Exhibit B-2 /&J ^^ m oom oSmm8m m .... To m.-MUiR s�oo'�R ma �4t2 �g mW __ 2m-. 8 � 'Rm^� m mm S^m �¢ry^mgm mRor�oo8e� $ o000 °$8�m moi&os8o �R�Bao�m o$��� �m�m6�8o&p� mmmm �m m6m888m� r Mfe� 929 ��x N qr I I 0 < m88m�R BomNo ��omRa mm �_� �Somm S moon mo N R8 8� oA ogF&o - r mai �m _ 220 Qm _ �m86md Id W8 Vim_ ��m ems moon m�°�g<�080�80 �m22m- REV, a RBFmlmm gmq ��n mmmnR m m8Q�8m�_ m l8 mmm ^RRR�m�m8mm8ee� rySnon"-''o o�N� m 0000 �om$8��R �os�om$moo a% AS% 208 mw^ mmm mmm 8m mmo n^� m em m _ m �i_msio�n�oc ^��So �m�ommNONv1Oin $ 0000 0 �omg8�ma nus m�noa mo�u�om 2nu4 ��^ym $o mReam$� mSBoo�0e� 25.omn$o� � Doom �o �$m88�m doBPo r(o u`"i g � _ nwn ANm __ nnQ mmQ �R.R— Rom" SPH ^V;; m��m� em��e ��� R mmoo ���8��� $o oryallo e _ ^wm e si$ K _RDs Ras � a e �� vmr m ��ry vmn m E $Su4 S� 'y oRR 80 m �$SJ oRRae t�a'R * 88 rnr Nnn N „m X88 880 8 ___ ___ m 888 m oo 8888iRR ^8m8R.m_ F a 3 L E T4 3>e �o aLL - _ F.= U ESE f w ��ss �mmN�a �m47 D 'Hill _mmm 2 11 giHi EXHIBIT B-3 15 -Year Cash Flow Proforma [This Proforma includes the same line items as the Annual Operating Budget shown in Exhibit B-2.] (Behind this page) Exhibit B-3 UW: /CYJ VIE q oaq .8 a �� o�N��� �veg� vaoaa eaeea �g �n ���m`N°Flo�� �v _m 04_ eevea avavv �g m� R o Q _ e�rg_lNg� Soo�a evvev eveee �8 �� - m�rg�ne-m S �R 12 ��n�n mSo vagG9 eeoee mg n�� ���Sim �o ee0ep eggqq o�N4 �m��mrm8iv o'� ve v aq qq qqo sj � �� yyggrv��ry QQm 7v'Fi��rvo�7fim qso 22ry55� eeevv eeevv �g y 3 n�nNm`�iN v � n�Qi4��rygo 5b�iim �oo�Q vv a eo vvvad �gy JPF.' _nrviififi n ��i �g ����m R�rt�nC��m eaves vvpaa �g � n Sc��as�8o go 00000 gvvve oS��� e8 as a vv qv v vv z eS& m�S mr GiRog �$ mn����,m veeev veaaa S8 �� eeevv avvvv go op rygB��mQ�� oo a aq P 4? -f0&��25QQr r $�gr nmmo7fi mm� � 2 P n kk ���08880 o o LT 0 Is �8; so$ �aasaaz EXHIBIT C Tenant Income Certification Form (Behind this page) Exhibit C loxoWnt] I 10 HOUSEHOLD INCOME CERTIFICATION SAN RAFAEL BELOW MARKET RATE RENTAL MONITORING PROGRAM Project Name: Date: APARTMENT NUMBER # NUMBER OF BEDROOMS MONTHLY RENT $ OCCUPANT/HOUSEHOLD NAME: TOTAL GROSS ANNUAL INCOME OF ELIGIBLE HOUSEHOLD: Total household income is the combined, gross, pre-tax income of all occupants of the household including any co -signors on the lease. Income includes all wages, salaries, governmental assistance, as reported as gross income for federal income tax; or verified by pay stubs, bank account records, governmental assistance records or other relevant documentation. Attached hereto are the tax returns, pay stubs or other evidence of the income of the persons listed below: Name of household member Relationship to head of household Age Place of Employment/Source of income I/We understand and have read and answered fully, frankly and personally each of the above questions under penalty of perjury and do hereby swear they are true. I/We further understand that failure to provide this form will result in termination of the Below Market rent. Occupant -Head of Household Date: PROPERTY OWNER TO MAINTAIN THIS DOCUMENT FOR FIVE YEARS FOR INSPECTION PURSUANT TO AGREEMENT WITH THE CITY EXHIBIT D Governmental Requirements ,�, I •jS�•)�) s�J • y1 q 1. Environmental Review. The Project must meet the requirements of the California Environmental Quality Act (Cal. Pub. Res. Code §§ 2100 et seq.) and implementing regulations. 2. Conflict of Interest. (a) Except for approved eligible administrative or personnel costs, no employee, agent, consultant, officer or official of Borrower or the City who exercises or has exercised any function or responsibilities with respect to activities assisted by Funds, in whole or in part, or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a financial interest in or benefit from the activities assisted under this Agreement, or have an interest, direct or indirect, in any contract, subcontract or agreement with respect thereto, or in the proceeds thereunder either for himself/herself or for those with whom he/she has family or business ties, during his/her tenure and for one year thereafter. In order to carry out the purpose of this Section, Borrower must incorporate, or cause to be incorporated, in all contracts, subcontracts and agreements relating to activities assisted under the Agreement, a provision similar to that of this Section. Borrower will be responsible for obtaining compliance with conflict of interest provisions by the parties with whom it contracts and, in the event of a breach, Borrower must take prompt and diligent action to cause the breach to be remedied and compliance to be restored. (b) Borrower represents that it is familiar with the provisions of Sections 1090 through 1097 and 87100 et seq. of the California Government Code, all of which relate to prohibited conflicts of interest in connection with government contracts. Borrower certifies that it knows of no facts that constitute a violation of any of these provisions and agrees to notify the City immediately if Borrower at any time obtains knowledge of facts constituting a violation. (c) In the event of any violation of the conflict of interest prohibitions, Borrower agrees that the City may refuse to consider any future application for funding from Borrower or any entity related to Borrower until the violation has been corrected to the City's satisfaction, in the City's sole discretion. 3. Disability Access. Borrower must comply with all applicable disability access Laws, including the Americans with Disabilities Act (42 U.S.C. §§ 1201 et seq.), Section 504 of the Rehabilitation Act (29 U.S.C. § 794) and the Fair Housing Amendments Act (42 U.S.C. §§ 3601 et seq.). Borrower is responsible for determining which disability access Laws apply to the Project, including those applicable due to the use of Funds. In addition, before occupancy of the Project, Borrower must provide to the City a written reasonable Exhibit D Page 1 accommodations policy that indicates how Borrower will respond to requests by disabled individuals for accommodations in Units and common areas of the Project. 4. Lead -Based Paint. Borrower must satisfy the requirements of the Lead -Based Paint Poisoning Prevention Act (42 U.S.C. §§ 4821 et seq.) and implementing regulations at 24 CFR part 35. Borrower must also comply with the provisions contained in 17 CCR 350000 et seq., and 8 CCR 1532.1 and all other applicable Laws governing lead-based hazards. 5. Relocation. Borrower must meet any applicable requirements of the California Relocation Assistance Act (Cal. Gov. Code §§ 7260 et seq.) and implementing regulations in Title 25, Chapter 6 of the California Administrative Code in addition to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. §§ 4601 et seq.) and implementing regulations at 49 CFR part 24 and similar Laws. 6. Submitting False Claims; Monetary Penalties. Any borrower, grantee, contractor, subcontractor or consultant who submits a false claim shall be liable to the City for the statutory penalties set forth in that section. A borrower, grantee, contractor, subcontractor or consultant will be deemed to have submitted a false claim to the City if the borrower, grantee, contractor, subcontractor or consultant: (a) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (b) knowingly makes, uses or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (c) conspires to defraud the City by getting a false claim allowed or paid by the City; (d) knowingly makes, uses or causes to be made or used a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the City; or (e) is a beneficiary of an inadvertent submission of a false claim to the City, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City within a reasonable time after discovery of the false claim. 7. Graffiti Removal. Graffiti is detrimental to the health, safety and welfare of the community in that it promotes a perception in the community that the laws protecting public and private property can be disregarded with impunity. This perception fosters a sense of disrespect of the law that results in an Exhibit D Page 2 increase in crime; degrades the community and leads to urban blight; is detrimental to property values, business opportunities and the enjoyment of life; is inconsistent with the City's property maintenance goals and aesthetic standards; and results in additional graffiti and in other properties becoming the target of graffiti unless it is quickly removed from public and private property. Graffiti results in visual pollution and is a public nuisance. Graffiti must be abated as quickly as possible to avoid detrimental impacts on the City and its residents, and to prevent the further spread of graffiti. (a) Borrower shall remove all graffiti from any real property owned or leased by Borrower in the City of Rafael within forty-eight (48) hours of the earlier of Borrower's (a) discovery or notification of the graffiti or (b) receipt of notification of the graffiti from the City. This section is not intended to require a Borrower to breach any lease or other agreement that it may have concerning its use of the real property. The term "graffiti" means any inscription, word, figure, marking or design that is affixed, marked, etched, scratched, drawn or painted on any building, structure, fixture or other improvement, whether permanent or temporary, including by way of example only and without limitation, signs, banners, billboards and fencing surrounding construction sites, whether public or private, without the consent of the owner of the property or the owner's authorized agent, and which is visible from the public right-of-way. "Graffiti" shall not include: (1) any sign or banner that is authorized by, and in compliance with, the applicable requirements of the City; or (2) any mural or other painting or marking on the property that is protected as a work of fine art under the California Art Preservation Act (California Civil Code Sections 987 et seq.) or as a work of visual art under the Federal Visual Artists Rights Act of 1990 (17 U.S.C. §§ 101 et seq.). (b) Any failure of Borrower to comply with this section of this Agreement shall constitute an Event of Default of this Agreement. Exhibit D Page 3 EXHIBIT E Form of Annual Monitorinq Report (Behind this page) Exhibit E LL m X W N m U) U P m z iri U N N N '� a U it O c O o L a� E al a> > o� as � L C 7 a3 — N > w L O N T N U co a) a) r 0 z a (D a) E O U � 0 E a E c L 7 _ N 7 3 2 0 0` w Q C � N O N O *k v N - 7 U) O Q' 2 T U a5 a7 CL (o U U O O- U) 'O C N a7 co> Cl)cr N 7 C � a) � L U CO G al rn2 a� LY 0 c N Ji co 0 U ) CD o � U CL O a) H � E L C m m Q Ul U N m C m O C (D U) c m L N L O N N O C N Ul co L cn a) m U C a N a� CD t C. U7 � U to .— (6 Ocg¢w a) N N C U C 3 o O Q Q +. N � O � 'O N E O O N � O C 'O O 7 v � O � U C U] � � O s m U �p C N o � 4 E E X m Ul U N m C m O C (D U) c m L N L O N N O C N Ul co L cn a) m U C a N a� CD t C. U7 � U to .— (6 Ocg¢w EXHIBIT F [Reserved] Exhibit F EXHIBIT G rReservedl Exhibit G EXHIBIT H Insurance Requirements Subject to approval by the City's Risk Manager of the insurers and policy forms, Borrower must obtain and maintain, or caused to be maintained, the insurance and bonds as set forth below from the date of this Agreement or other applicable date set forth below throughout the Compliance Term at no expense to the City: 1. Liability Insurance. Borrower must obtain and maintain, or cause its contractors, subcontractors, property managers and/or agents, as appropriate for each, to obtain and maintain, insurance and bonds as follows: (a) to the extent Borrower or its contractors and subcontractors have "employees" as defined in the California Labor Code, workers' compensation insurance with employer's liability limits not less than One Million Dollars ($1,000,000) each accident, injury or illness; (b) commercial general liability insurance, with limits no less than Two Million Dollars ($2,000,000) combined single limit per occurrence and Four Million Dollars ($4,000,000) annual aggregate limit for bodily injury and property damage, including coverage for contractual liability; personal injury; fire damage legal liability; advertisers' liability; owners' and contractors' protective liability; products and completed operations; broad form property damage; and explosion, collapse and underground (XCU) coverage during any period in which Borrower is conducting any activity on, alteration or improvement to the Site with risk of explosions, collapse, or underground hazards; (c) business automobile liability insurance, with limits not less than One Million Dollars ($1,000,000) each occurrence, combined single limit for bodily injury and property damage, including owned, hired and non -owned auto coverage, as applicable; (d) professional liability insurance of no less than One Million Dollars ($1,000,000) per claim and One Million Dollars ($1,000,000) annual aggregate limit covering all negligent acts, errors and omissions of Borrower's architects, engineers and surveyors. If the professional liability insurance provided by the architects, engineers, or surveyors is "Claims made" coverage, Borrower shall assure that these minimum limits are maintained for no less than three (3) years beyond completion of the constructions or remodeling. Any deductible over Fifty Thousand Dollars ($50,000) each claim must be reviewed by Risk Management; and (e) if the Borrower has officers and/or employees, a crime policy or fidelity bond covering Borrower's officers and employees against dishonesty with respect to the Funds of no less than Seventy Five Thousand Dollars ($75,000) each loss, with any deductible not to exceed Five Thousand Dollars ($5,000) each loss, including the City as additional obligee or loss payee; Exhibit H Page 1 (f) as applicable, pollution liability and/or asbestos pollution liability covering the work being performed with a limit no less than Two Million Dollars ($2,000,000) per claim or occurrence and Two Million Dollars ($2,000,000) annual aggregate per policy. This coverage shall be endorsed to include Non -Owned Disposal Site coverage. This policy may be provided by the Borrower's contractor, provided that the policy must be "claims made" coverage and Borrower must require Borrower's contractor to maintain these minimum limits for no less than three (3) years beyond completion of the construction or remodeling. 2. Property Insurance. Borrower must maintain, or cause its contractors and property managers, as appropriate for each, to maintain, insurance and bonds from the date Borrower acquires Control of the Site as follows: (a) Prior to construction (i) Property insurance, excluding earthquake and flood, in the amount no less than One Hundred Percent (100%) of the replacement value of all improvements prior to commencement of construction and City property in the care, custody and control of the Borrower or its contractor, including coverage in transit and storage off-site; the cost of debris removal and demolition as may be made reasonably necessary by such perils, resulting damage and any applicable law, ordinance or regulation; start up, testing and machinery breakdown including electrical arcing; and with a deductible not to exceed Ten Thousand Dollars ($10,000) each loss, including the City and all subcontractors as loss payees. (b) During the course of construction: (i) Builder's risk insurance, special form coverage, excluding earthquake and flood, for one hundred percent (100%) of the replacement value of all completed improvements and City property in the care, custody and control of the Borrower or its contractor, including coverage in transit and storage off-site; the cost of debris removal and demolition as may be made reasonably necessary by such covered perils, resulting damage and any applicable law, ordinance or regulation; start up, testing and machinery breakdown including electrical arcing, copy of the applicable endorsement to the Builder's Risk policy, if the Builder's Risk policy is issued on a declared -project basis; and with a deductible not to exceed Twenty Five Thousand Dollars ($25,000) each loss, except, One Hundred Fifty Thousand Dollars($150,000) each Water Damage loss and Fifty Thousand Dollars ($50,000) each Windstorm, Hail and Named Windstorm loss. Builders Risk policy will include the City and all subcontractors as loss payees. (ii) Performance and payment bonds of contractors, each in the amount of One Hundred Percent (100°/x) of contract amounts, naming City and Borrower as dual obligees or other completion security approved by City in its sole discretion. Exhibit H Page 2 (c) Upon completion of construction: (i) Property insurance, excluding earthquake and flood, in the amount no less than One Hundred Percent (100%) of the replacement value of all completed improvements and City property in the care, custody and control of the Borrower or its contractor. For rehabilitation/construction projects that are unoccupied by residential or commercial tenants, Tenant must obtain Property Insurance by the date that the project receives a Certificate of Substantial Completion. (ii) Boiler and machinery insurance, comprehensive form, covering damage to, loss or destruction of machinery and equipment located on the Site that is used by Borrower for heating, ventilating, air-conditioning, power generation and similar purposes, in an amount not less than one hundred percent (100%) of the actual replacement value of such machinery and equipment with a deductible not to exceed Ten Thousand Dollars ($10,000) each loss, including the City as loss payee. The following notice is provided in accordance with the provisions of California Civil Code Section 2955.5: Under California law, no lender shall require a borrower, as a condition of receiving or maintaining a loan secured by real property, to provide hazard insurance coverage against risks to the improvements on that real property in an amount exceeding the replacement value of the improvements on the property. 3. General Requirements. (a) General and automobile liability policies of Borrower, contractors, commercial tenants and property managers must include City, including its Boards, commissions, officers, agents and employees, as an additional insured by endorsement acceptable to the City. (b) All policies required by this Agreement must be endorsed to provide no less than thirty (30) days' written notice to City before cancellation or intended non- renewal is effective. The endorsement must provide the City with the same rights as the named insured in the event of cancellation or intended non -renewal. (c) With respect to any property insurance, Borrower hereby waives all rights of subrogation against City to the extent of any loss covered by Borrower's insurance, except to the extent subrogation would affect the scope or validity of insurance. (d) Approval of Borrower's insurance by City will not relieve or decrease the liability of Borrower under this Agreement. (e) Any and all insurance policies called for herein must contain a clause providing that City and its officers, agents and employees will not be liable for any required premium. Exhibit H Page 3 (f) City reserves the right to require an increase in insurance coverage in the event City determines that conditions show cause for an increase, unless Borrower demonstrates to City's satisfaction that the increased coverage is commercially unreasonable and unavailable to Borrower. (g) All liability policies must provide that the insurance is primary to any other insurance available to the additional insureds with respect to claims arising out of this Agreement, and that insurance applies separately to each insured against whom claim is made or suit is brought and that an act of omission of one of the named insureds that would void or otherwise reduce coverage will not void or reduce coverage as to any other insured, but the inclusion of more than one insured will not operate to increase the insurer's limit of liability. (h) Any policy in a form of coverage that includes a general annual aggregate limit or provides that claims investigation or legal defense costs are included in the general annual aggregate limit must be in amounts that are double the occurrence or claims limits specified above. (i) All claims based on acts, omissions, injury or damage occurring or arising in whole or in part during the policy period must be covered. If any required insurance is provided under a claims -made policy, coverage must be maintained continuously for a period ending no less than three (3) years after recordation of a notice of completion for builder's risk or the Compliance Term for general liability and property insurance. Q) Borrower must provide City with copies of endorsements for each required insurance policy and make each policy available for inspection and copying promptly upon request. Exhibit H Page 4 I PR. APR 1: 2 202? I SECURED PROMISSORY NOTEDE'TL0P[v'j <-�,EPARr�': N'T (Affordable Housing Program) N o�=S,AP! .'TU'� Principal Amount: $ 1,825,000 San Rafael, CA Date: April 1, 2022 FOR VALUE RECEIVED, the undersigned, SAN RAFAEL SENIOR, L.P., a California limited partnership ("Maker"), hereby promises to pay to the order of the CITY OF SAN RAFAEL, a municipal corporation, or holder ("Holder" or "Lender"), the principal sum of One Million Eight Hundred Twenty -Five Thousand and Noll 00 Dollars ($1,825,000.00) (the "Funding Amount"), or so much of the Funding Amount as may be disbursed from time to time pursuant to the Agreement described in Section 1 below, together with interest thereon, as provided in this Note. 1. Agreement. This Secured Promissory Note ("Note") is given under the terms of a Loan Agreement by and between Maker and Holder (the "Agreement") dated as of the date set forth above, which Agreement is incorporated herein by reference. Maker's obligations under this Note and the Agreement are secured by that certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of the date of this Note, made by Maker for the benefit of Halder. Definitions and rules of interpretation set forth in the Agreement apply to this Note. In the event of any inconsistency between the Agreement and this Note, this Note will control. 2. Interest. Interest will accrue on the principal balance outstanding under this Note from time to time at the rate of three percent (3.0%) per annum, simple interest, from the date of disbursement of funds by Holder through the Maturity Date (as defined in the following sentence) at which time all amounts owing hereunder and under the City Documents shall be due. The "Maturity Date" shall be the later of (a) the Fifty- seventh (571h) anniversary of the date the Deed of Trust is recorded in the Recorder's Office of Marin County or (b) the Fifty-fifth (55th) anniversary of the Conversion Date (as defined in Section 4.1). Interest will be calculated on the basis of actual days elapsed and a 360 -day year. 3. Default Interest Rate. Upon the occurrence of an Event of Default under any City Document, interest will be deemed to have accrued on the outstanding principal balance of the Loan at a compounded annual rate equal to the lesser of: (a) ten percent (10%); or (b) the maximum lawful rate of interest, commencing on the date the Funding Amount is disbursed through the earlier of: (x) the date on which the Event of Default is cured; or (y) the date on which all amounts due under the City Documents are paid to Holder. Maker acknowledges and agrees that the default interest that must be paid in the event of an Event of Default pursuant to this Section represents a reasonable sum considering all the circumstances existing on the date of this Note and represents a fair and reasonable estimate of the costs that will be sustained by Holder if Maker defaults. Maker further agrees that proof of actual damages would be costly and inconvenient and that default interest will be paid without prejudice to Holder's right to collect any other amounts to be paid or to exercise any of its other rights or remedies under any City Document. 4. Repayment of Funding Amount. 4.1 Maker must make annual payments of principal and interest (each, a "Payment") in an amount equal to Lender's Proportionate Share of the Residual Receipts (as each capitalized term is defined below), if any, attributable to the prior 999 Third Street City Note Final APR 12 70,2 C.0M1�*IUf,9iY r''E IIL Pi,FEPi l C�PF Tf,iEI�T calendar year beginning on the first June 1St after the end of the calendar ye r-vf-th�ILII'_II'II `"-,ir, date that the construction loan for the Property converts to a permanent loan (the "Conversion Date"), and continuing each June 1St thereafter up to and including the Maturity Date, as defined below (each, a "Payment Date"). Section 4: 4.2 The following special definitions shall apply for purposes of this (i) "Gross Revenue" with respect to a particular calendar year shall mean all revenue, income, receipts and other consideration received from the operation and leasing of the Property (including income from the project based section 8 vouchers). Gross Revenue shall not include tenants' security deposits. (ii) "Lender's Proportionate Share" is defined as Lender's pro - rata share of 50% of the Residual Receipts based on the total outstanding principal amount due under the loans made by Lender, Housing Trust Silicon Valley ("HTSV") and Marin County, at the time of determination of Lender's Proportionate Share. As of the date hereof, the pro -rata shares for the Lender and the other lenders are as follows: Lender: 27.94% HTSV 61.22% Marin County: 10.86% (iii) "Net Cash Flow" shall mean the amount by which Gross Revenue exceeds Operating Expenses for such period. (iv) "Operating Expenses" shall mean all expenses and costs reasonably and actually incurred for operation and maintenance of the Property, including property taxes and assessments imposed on the Property; debt service currently due on a non -optional basis (excluding debt service due from residual receipts or Net Cash Flow of the Property) under any other loans encumbering the Property which are senior to the Deed of Trust; property management fees and reimbursements, not to exceed fees and reimbursements which are standard in the industry for affordable housing properties; partnership management fees of $35,000/year escalating 3%/year, asset management fee of $7,000/year escalating 3%/year, fees and other amounts owed to the Limited Partner pursuant to Borrower's Partnership Agreement; payments of deferred developer fees, residential services fee, DTSC monitoring fees ($18,700/year, with a 3% escalation), HTSV monitoring fees ($10,000/year), City of San Rafael monitoring fee of $50/unit/year, premiums for property damage and liability insurance; utility services not paid for directly by tenants, including water, hot water, sewer, and trash collection; maintenance and repair; security services; cash deposited into reserves for capital replacements and/or operations, but only to the extent such reserves do not exceed the amounts required by any Senior Lender or are approved by Lender in its reasonable discretion; and any 2 999 Third Street City Note Final extraordinary operating costs specifically approved by Lender in reasonable discretion. rE? Fe - la APR 19 2r`22 I s (iv) "Residual Receipts" shall mean any positive Net Cash Flow for the Project for a particular year as documented in independently audited financial statements. 4.3 The Residual Receipts Payments, upon receipt by Lender, will be applied first towards the payment of accrued interest hereunder and then towards the reduction of the outstanding principal of this Note. The entire outstanding principal balance of this Note, together with interest accrued thereon and all other sums accrued hereunder shall be payable in full on the Maturity Date. 4.4 No later than December 1 st of each year following the Conversion Date, Borrower will provide to Lender a projected budget for the following calendar year, which shall include an estimate of Residual Receipts, accompanied by such supporting documentation as Lender may reasonably request. No later than May 1 st of each year, Borrower will provide to Lender Borrower's calculation of Residual Receipts for the previous calendar year, accompanied by such documentation as Lender may reasonably request, including, without limitation, an independent audit prepared for the Project by a certified public accountant (the "Residual Receipts Package"). The information set forth in each Residual Receipts Package shall be certified as true and correct by either the chief executive officer or chief financial officer of a general partner or sole member of a general partner of Borrower. 4.5 Lender shall have the right to inspect and audit Borrower's books and records concerning the calculation of Residual Receipts from time to time, and to object within sixty (60) days from receipt of the report. Failure to timely object shall be deemed acceptance of the report. If Lender does object, Borrower shall have thirty (30) days to reconcile any disapproved items. 4.6 While the dates of Residual Receipts Payments and submittal of the projected budget in this Section 4 are absolute, Lender may in its sole discretion adjust these dates annually on a case-by-case basis provided Borrower has submitted a written request prior to the May 1 st deadline and Lender has provided a one-time waiver in writing prior to June 30tH 4.7 In the event there is negative Net Cash Flow, no annual payment on behalf of Borrower shall be due under this Note. 4.8 Any Payment Date, including the Maturity Date, that falls on a weekend or holiday will be deemed to fall on the next succeeding business day. Trust. 5. Security. Maker's obligations under this Note are secured by the Deed of 6. Terms of Payment. 6.1 All Payments must be made in currency of the United States of America then lawful for payment of public and private debts. 6.2 All Payments must be made payable to Holder and mailed or delivered in person to Holder's office at 1400 Fifth Avenue, San Rafael, CA 94901, or to any other place Holder from time to time designates. 6.3 In no event will Maker be obligated under the terms of this Note to pay interest exceeding the lawful rate. Accordingly, if the payment of any sum by Maker pursuant to the terms of this Note would result in the payment of interest exceeding the amount that Holder may charge legally under applicable state and/or federal law, the 3 999 Third Street City Note Final MEM APR COI', DEVEi cul:,rL1,7r- amount by which the payment exceeds the amount payable at the lawful interest rate will be deducted automatically from the principal balance owing under this Note. 6.4 Maker waives the right to designate how Payments will be applied pursuant to California Civil Code Sections 1479 and 2822. Holder will have the right in its sole discretion to determine the order and method of application of Payments to obligations under this Note. 6.5 Except as otherwise set forth herein or in the Agreement, no prepayment of this Note shall be permitted without Holder's prior written consent. 7. Default. 7.1 Any of the following will constitute an Event of Default under this Note: (a) Maker fails to make any Payment required under this Note within ten (10) days of the date it is due; or (b) the occurrence of any other Event of Default under the Agreement or other instrument securing the obligations of Maker under this Note or under any other agreement between Maker and Holder with respect to the Project. 7.2 Upon the occurrence of any Event of Default, without notice to or demand upon Maker, which are expressly waived by Maker (except for notices or demands otherwise required by applicable laws to the extent not effectively waived by Maker and any notices or demands specified in the City Documents), Holder may exercise all rights and remedies available under this Note, the Agreement or otherwise available to Holder at law or in equity. Maker acknowledges and agrees that Holder's remedies include the right to accelerate the Maturity Date by declaring the outstanding principal balance of the Loan, together with all accrued and unpaid interest and unpaid fees and costs incurred, due and payable immediately, in which case, the Maturity Date will be superseded and replaced by the date established by Holder. 8. Waivers, 8.1 Maker expressly agrees that the term of this Note or the date of any payment due hereunder may be extended from time to time with Holder's consent, and that Holder may accept further security or release any security for this Note, all without in any way affecting the liability of Maker. 8.2 No extension of time for any Payment made by agreement by Holder with any person now or hereafter liable for the payment of this Note will operate to release, discharge, modify, change or affect the original liability of Maker under this Note, either in whole or in part. 8.3 The obligations of Maker under this Note are absolute, and Maker waives any and all rights to offset, deduct or withhold any Payments or charges due under this Note for any reason whatsoever. 4 999 Third Street City Note Final ii ,I iIl APR a.9 2���2 C01'r i�d'J�I1TY DEVELGOMIE`1T OEPA?M ENT CITY OF SAN' Pw','TL 9. Miscellaneous Provisions. 9.1 All notices to Holder or Maker must be given in the manner and at the addresses set forth in the Agreement, or to the addresses Holder and/or Maker hereafter designate in accordance with the Agreement. 9.2 In the event of any legal proceedings arising from the enforcement of or a default under this Note or in any bankruptcy proceeding of Maker, the non - prevailing party promises to pay all reasonable costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in the proceeding, as provided in the Agreement. 9.3 This Note may be amended only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought. 9.4 This Note is governed by and must be construed in accordance with the laws of the State of California, without regard to the choice of law rules of the State. 9.5 Time is of the essence in the performance of any obligations hereunder. (Remainder of page intentionally left blank) 999 Third Street City Note Final "MAKER" LU APR ?X22 COMf,;UNl,Y DEVELOPMENT CEPARTl.iENT CITY Or SAN I',�.E;;EL San Rafael Senior, L.P., a California limited partnership By: San Rafael Senior LLC, a California limited liability company, its general partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its sole memb manager By: Andr s ood Senior V President of Real Estate Development Signature page 999 Third Street City Promissory Note Recorded at the Request of Old Republic Title Company - 1114az4,5G2— RECORDING REQUESTED By and WHEN RECORDED MAIL TO: City of San Rafael Attn: City Clerk 1400 Fifth Avenue San Rafael Ca 94901 Attn: City Clerk No fee for recording pursuant to Government Code Section 27383 IINlI I!Ili IIIII IIIII I!II!illll II!!III!II!!Ili IIIII III!i III!! illi!III 20 t-001.514 ' Recorded Official Records County of hAerin SHELLY w OTT Anse4&or- RL corder County Ceri: 0 :a�ohq 0e APr- n22 REC FEE Q. -Du CONFORMED CCWY 0.00 Gil PeLge i of d REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS c o fee per Gith concurrent recorded i r (100% Affordable Housing Project) connection with concurrent transfer subject to imposition of documentary transfer tax Development Name: Vivalon Healthy Aging Center Location: 999 3rd STREET, SAN RAFAEL, CA 94901 Property Owner: San Rafael Senior, L.P., a California limited partnership This Regulatory Agreement and Declaration of Restrictive Covenants (the "Agreement") is made and entered into this 1 st day of April, 2022, between the CITY OF SAN RAFAEL, a municipal corporation ("City") and SAN RAFAEL SENIOR, L.P., a California limited partnership, or any successor in interest ("Owner" and collectively with City, the "Parties"). RECITALS A. Owner is the owner of that certain real property situated within the corporate limits of the City of San Rafael, commonly known as 999 3rd Street, which real property is more particularly described in Exhibit "A" attached hereto (the "Property"). B. The City has adopted Affordable Housing Requirements in accordance with the provisions of the Housing Element of its General Plan and Zoning Ordinance Section 14.16.030 of the San Rafael Municipal Code (the "Affordable Housing Requirements"). C. As reflected in that certain Development Agreement dated April 13, 2020, and recorded in the Official Records as instrument number 2021-0001996, and as provided in the discretionary approval received from the City on March 23, 2020 (Resolution No. 14776, Project Page I 1 /CH&W/999 3rd St (BMR Deed Restriction) Final Nos. GPA19-001, ZO18-003, ZC18-002, DA19-001, U]P18-034, ED18-087, S18-001, SP18-006) Owner intends to construct a total of sixty-six (66) affordable residential units (the "Affordable Units") and one, unrestricted manager's unit and related common area on the Property (the "Development"). D. The Eden Housing component of the Project complied with the City's affordable housing requirement, pursuant to SRMC Section 14.16.030, by providing 100% of the 66 units as "affordable" or Below -Market- Rate (BMR) units, and one unit reserved for an on-site manager. By meeting the City's affordable housing requirement, the Project was automatically eligible for a twelve- foot (12') height bonus under both the General Plan and SRMC Section 14.16.190, from 54' to 66'. E. The Project proposed two (2) discretionary concessions/ waivers: (1) To achieve the proposed 67 units, a concession was requested for proposed density above the base total of 34 units (including a 35 percent density bonus) and (2) to achieve the proposed 70 -foot height, a concession was requested for proposed height increase from maximum height of 66 ft (based on 54 -ft base height, plus 12 -ft bonus). The additional density above the 35% and the 4 additional feet above the 12 ft. established height bonus were considered major concessions (SRMC14.16.030.H.3.b.v) and therefore subject to approval by the City Council. F. Pursuant to SRMC Section 14.16.030.H.2, the City, at its sole discretion, granted a density bonus exceeding the state minimum requirements where the applicant agreed to construct a greater number of affordable housing units than required pursuant to subsection (13)(2) of that section and necessary to qualify for the density bonus under that section. The additional density bonus was granted by the City and accepted by the applicant, and the additional density bonus shall be considered an additional concession or incentive for purposes of California Government Code Section 65915. Given that the project proposed 100% of the 66 units as affordable for seniors, the City found that the 100% affordability provides a significant public benefit and granted the additional density. G. In consideration of certain valuable land use and economic benefits conferred by the City upon the Property, Owner, for itself, its successors, grantees and assigns, hereby agrees to comply with the requirements of City's development approvals for the Property. H. Owner agrees to the continued affordability of the Affordable Units for the Affordability Term. To ensure their continued affordability for the Affordability Term, this Agreement shall be executed and recorded in the Official Records prior to issuance of any building permit for the Development. 1. Owner acknowledges and agrees that the Project Approvals provided adequate and proper notice pursuant to Government Code Section 66020 of Owner's right to protest any requirements for fees, dedications, reservations, and other exactions as may be included in this Agreement, that no. protest in compliance with Section 66020 was made within ninety (90) days Page 12 /CH&W/999 V St (BMR Deed Restriction) Final of the date that notice was given, and that the period has expired in which Owner may protest any and all fees, dedications, reservations, and other exactions as may be included in this Agreement. J. The project has been awarded tax credits from the California Tax Credit Allocation Committee and once completed it is anticipated the project will be restricted by the TCAC regulatory agreement to provide units at rents affordable to households earning 30% AMI, 40% AMI, and 60% AMI per the TCAC income and rent limits table for a term equal to the term of this agreement. NOW THEREFORE, it is hereby agreed by and between the Parties hereto as follows: AGREEMENT The Parties agree and acknowledge that the above recitals are true and accurate and are incorporated into this Agreement by this reference. 1. Definitions and Exhibits 1.1 Definitions. In addition to those terms defined in the Recitals and in other sections of this Agreement, the following terms are specially defined for the purposes of this Agreement: A. "Affordable Monthly Rent" means all amounts paid by a Tenant for rent, determined in a manner consistent with Section 42(g)(2) of the Code and set forth in the TCAC Income and Rent Limits Table. If the Tenant pays utilities directly, Affordable Monthly Rent shall include any utility allowance prescribed by the Secretary. B. "Affordability Term" is the period that commences when the City issues a temporary or final certificate of occupancy for the Project and that terminates (i) fifty-five (55) years thereafter or (ii) if the date of the temporary or final certificate of occupancy is not known or cannot be determined, fifty-seven (57) years from the date this Agreement is recorded in the Official Records C. "Area Median Income" means the median gross income of Marin County as determined by the Secretary for purposes of Section 42 of the Code, including adjustments for family size. D. "Code" means those provisions of the Internal Revenue Code of 1986, as amended, and regulations promulgated pursuant thereto. E. "Eligible Household" is a household which has been determined to be eligible to rent an Affordable Unit in compliance with this Agreement. Page 13 /CH&W/999 3'a St (BMR Deed Restriction) Final F. "Household Income" means the income of the household determined in a manner consistent with the requirements of Section 142(d)(2)(B) of the Code. G. "Incentives" is defined in the Recitals, paragraph [E], and refers to the regulatory incentives provided by the City pursuant to the Density Bonus Law. H. "Low Income Household" means a household earning up to eighty percent (80%) of Area Median Income as set forth in TCAC Income and Rent Limits Table. I. "Official Records" means the official records of Marin County. J. "TCAC" means the California Tax Credit Allocation Committee. K. "TCAC Income and Rent Limits Table" means the table of income and rent limits created by TCAC and posted on its website. L. "TCAC Regulatory agreement" means the regulatory agreement between TCAC and the Owner that will be recorded in the Official Records after the permanent loan conversion that will impose affordability restrictions on the Project in accordance with the provisions of that certain TCAC Reservation Letter dated October 20, 2021 (CA -21-164) and Section 42 of the Code. M. "Tenant" is a household who was an Eligible Household and is occupying an Affordable Unit pursuant to a valid lease or rental agreement with the Owner. N. "Tenant Lease" is defined in Section 3.4. 1.2 Exhibits. The following exhibits are attached to and incorporated into this Agreement: Exhibit A Legal Description of the Property Exhibit B Household Income Certification Exhibit C Certificate of Continuing Compliance 2. construction of Development and Affordable Units 2.1 Satisfaction of Affordable Housing Requirement. The Affordable Housing Requirements shall be satisfied with respect to the Property if: (a) the Owner constructs or causes to be constructed the Affordable Units and (b) Owner offers for rent, and rents, the Affordable Units to Eligible Households in compliance with Section 3 below. 2.2 Affordable Units. To satisfy Owner's affordable housing requirements for the Development under the project approval, at initial occupancy of the Development, Owner shall rent sixty-six (66) units to Low Income Households at an Affordable Monthly Rent for the Page 14 /CH&W/999 3rd St (BMR Deed Restriction) Final Affordability Term. One unit shall be unrestricted provided the unit is occupied by the on-site building manager. 2.3 Appearance and Maintenance of Affordable Units. The design, square footage, appearance, and general quality of the Affordable Units shall be consistent with the designs provided for the Project Approvals. Owner shall allocate and assign parking spaces, bicycle storage, storage lockers, and other spaces in an equitable manner, and Tenants shall have equal access to the Development's common areas and any fee charged for use of common areas or for spaces reserved for individual Units shall be included in the Tenant's Rent. 2.4 Vacancies. Once completed, the Affordable Units shall not be kept vacant or used for any purpose except for residential use and shall be offered for rent to Eligible Households at Affordable Monthly Rents. 3. Rent Re:zulatory Provisions The provisions of this Section 3 are applicable until the expiration of the Affordability Term. 3.1 Allowable Rent Rent Increases and Occu:)ancy Covenants. A. Occupangy OccupancyRequirements. Subject to the provisions of Section 3.2 below, the Affordable Units shall be rented to and occupied by or, if vacant, available for occupancy by Low Income Households. B. Certification. As a condition to initial occupancy, each person who desires to be an Eligible Household in the Project must be required to sign and deliver to Owner a certification in the form shown in Exhibit "B" in which the prospective Eligible Household certifies that their household qualifies as an Eligible Household. In addition, each prospective Tenant will be required to provide any other information, documents or certifications deemed necessary by the City to substantiate the prospective Tenant's income. Certifications provided to and accepted by the Marin Housing Authority will satisfy this requirement. Notwithstanding the foregoing, the City will accept the certifications Owner is required to provide to TCAC. C. Allowable Rent. The maximum rent paid by Tenants of the Affordable Units shall not exceed Affordable Monthly Rent. The Affordable Monthly Rent shall be the absolute maximum price that the Owner or its representative may receive from a Tenant as compensation for the rental of an Affordable Unit, including all fees for housing services, parking, utilities and other services. The Owner may not charge a Tenant any additional compensation for an Affordable Unit. (i) If the Project is subject to income limitations from two or more regulatory agreements recorded in the Official Records, the Owner must comply with all such regulatory agreements encumbering the Project. Notwithstanding the foregoing, Owner's compliance with the TCAC Regulatory Agreement shall be deemed compliance with this Page 15 /CH&W/999 Yd St (BMR Deed Restriction) Final Agreement, and to the extent there are any conflicts between this Agreement and the TCAC Regulatory Agreement, the TCAC Regulatory Agreement shall govern. (ii) Notwithstanding the foregoing, if a subsidy program under Section 8 of the Housing Act of 1937, as amended, or any other comparable subsidy program, is available to a Tenant or prospective Tenant, Owner must accept and participate in the subsidy program (voucher), and rent the Affordable Unit at the rental rate established by and permitted under the program as defined by the United States Department of Housing and Urban Development ("HUD"), as adjusted for household size. The Tenant's portion of the Rent shall not exceed the maximum Affordable Monthly Rent set forth in Section 3.1 C. above, however the Tenant's portion can be less. The amount of rent Owner may receive through the subsidy program may exceed the maximum Affordable Monthly Rent set forth in Section 3.1 C., however it shall not be less. (iii) For any Eligible Household that becomes ineligible to continue participating in a rent or operating subsidy program, this Agreement does not limit the increase in Rent charged as long as it does not exceed the Affordable Monthly Rent permitted under Section 3.1 C. (iv) Unless prohibited under any applicable Laws, including without limitation Section 42 of the Code, if the household income of a Eligible Household exceeds the maximum permissible income during occupancy of a Unit, then, upon no less than thirty (30) days' prior written notice to the Tenant or as otherwise required under the Tenant's lease or occupancy agreement, Owner shall adjust the charges for Rent for the previously Eligible Household to be equal to thirty percent (30%) of the Tenant's adjusted household income. Rents charged under this provision may exceed the Affordable Monthly Rent permitted under this Section and Section 3.1 C. D. If the Owner increases Rent or offers a vacant unit for rent at a rate that exceeds the provisions in this Agreement, the resulting excess rent charged will be due to the Tenant who was overcharged. E. Approval of Rents. Initial Rent for the Affordable Units shall be approved by the City to confirm that the Initial Rent paid by the tenant does not exceed the Affordable Monthly Rent prior to occupancy at the time the Owner submits the marketing plan required by Section 4.2 below. The City shall review all proposed Rent increases to determine whether the proposed increases are not in excess of the Affordable Monthly Rent. Owner shall certify to City that Owner is not charging any fee other than Affordable Monthly Rent to Tenants of the Affordable Units for all of the components of Rent defined in Section 1.1 J. above. F. Rent Schedule. The rents shall be the Affordable Monthly Rent, Page 16 /CH&W/999 3`d St (BMR Deed Restriction) Final G. Rent Increases. Rent can be increased once in a 12 -month period but shall not exceed the Affordable Monthly Rent for the Household. If, upon annual recertification of a Tenant Household Income, Owner determines that a Tenant's Income has increased and exceeds the qualifying income for the Affordable Monthly Rent, upon expiration of the lease and after thirty (30) days written notice to the Tenant, the Tenant's Rent may be increased consistent with income. H. If Owner determines that a Household's Income has decreased below the category for which the tenant originally qualified, the Household shall have the right to continue to reside in the Affordable Unit, provided the tenant pays the rent established at the onset of the tenancy plus any subsequent increases and performs its other obligations to Owner. 3.2 Lease Provisions. The Owner shall use a form of Tenant lease (the "Tenant Lease") approved by the City for the Affordable Units. The City shall not withhold approval from any form that: A. provides that the Tenant's Household Income is subject to annual certification; B. provides for termination of the lease for failure: (1) to provide any information required under this Agreement or reasonably requested by Owner to establish or recertify the Tenant's qualification, or the qualification of the Tenant's household, as an Eligible Household in accordance with this Agreement, or (2) to qualify as an Eligible Household as a result of any material misrepresentation made by such Tenant with respect to the Household Income computation or certification; C. prohibits subleasing of the Affordable Unit or any portion of the Affordable Unit or any spaces reserved for the use of the Tenant, and/or contains nondiscrimination provisions, and/or includes the Tenant's obligation to inform Owner of any need for maintenance or repair; and D. includes reasonable rules of conduct consistent with California law. 4. Marketing, Income Certification, Re ortincr, and Annual Fee. 4.1 Required Ci Approvals. At least ninety (90) days before any units receive a final inspection or certificate of occupancy, Owner shall notify City of the availability of the Affordable Units and provide City with the proposed form of Tenant Lease to confirm conformance with the provisions of Section 3.2 above; and proposed Affordable Monthly Rent for the Affordable Units, all for City review and approval. Page 17 /CH&W/999 3rd St (BMR Deed Restriction) Final 4.2 Marketing. A. Prohibition on Income Discrimination. Owner shall accept payments for tenants in whole or in part in the form of third -party checks from social service and other support agencies. B. Marketing Materials. The marketing materials shall include information regarding the amount of any application screening fee to be imposed by Owner, and information on the conditions and restrictions applicable to occupancy of the Affordable Units, current Affordable Monthly Rent, maximum qualifying Household Income for an Eligible Household, requirement for annual Household Income recertification, preferences. 4.3 Income Certification. Upon initial occupancy and annually thereafter, the Owner will obtain, complete and maintain on file Household Income certifications (Exhibit "B"), or a similar form as may be approved by the City, for each Tenant renting an Affordable Unit. Owner shall make a good faith effort to verify that the Household Income certification provided by a Tenant is accurate by taking two or more of the following steps as a part of the verification process for all members of the Tenant household age eighteen (18) or older: (a) obtaining a minimum of the three (3) most current pay stubs; (b) obtaining an income tax return for the most recent tax year including copies of any income tax returns where the Tenant is claimed as a dependent; (c) conducting a credit agency or similar search; (d) obtaining the three (3) most current savings and checking account bank statements; (e) obtaining an income verification form from a current employer; (f) obtaining an income verification form from the Social Security Administration and/or the California Department of Social Services if an adult member of the Tenant's household receives assistance from either of such agencies; or (g) if the Tenant is unemployed and has no such tax return, obtain another form of independent verification. The Owner shall collect copies of annual household income certifications, maintain that form on file for a minimum of five years and permit the City or its designee to inspect the income certification records at the Owner's office upon not less than three days' notice. The Owner shall provide any additional information reasonably requested by the City or its designee. Notwithstanding the foregoing, the City will accept the income certifications Owner is required to provide to TCAC. 4.4 Annual Report. The Owner shall submit to the City by June 30 of each year a report, in a form prescribed by or otherwise acceptable to the City, verifying compliance by Owner with the terms of this Agreement and certified as correct by the Owner under penalty of perjury. The Certification of Continuing Compliance (Exhibit "C"), or a similar form as may be approved by the City, may be used to meet this requirement. The annual report shall include without limitation the following information: A. Certifications of eligibility for all Tenants of the Affordable Unit at the time of initial occupancy and upon the yearly anniversary of their continuing tenancies. Page 18 /CH&W/999 P St (BMR Deed Restriction) Final B. Verified Household Income statements. Owner shall retain in the Tenant's file all verifications of Tenant's Household Income. C. Number of persons in each Affordable Unit. D. Certification of the amount of Rent charged for the year for the Affordable Unit. E. Certification that Owner is not charging any fee other than Affordable Monthly Rent to Tenants of the Affordable Unit for all of the components of Rent defined in Section 1.1 J. above. F. Other information reasonably required by the City. 4.5 Other Reports. Within fifteen (15) days after receipt of a written request, Owner shall provide any other information or completed forms requested by the City to ensure compliance with this Agreement. 4.6 Records. The Owner shall maintain complete, accurate, and current records pertaining to compliance under this Agreement for a period of not less than five (5) years after creating such records and shall permit any duly authorized representative of the City to inspect and copy such records on five (5) business days' written notice, including the records pertaining to Tenant Rent, Household Income and household size of Tenant households. The City shall be entitled to monitor compliance with this Agreement, and Owner shall cooperate with City monitoring, including obtaining Tenant Rent and Household Income verification upon request of the City 4.7 Annual Monitoring fee. Owner agrees to pay to the City during the Affordability Term an annual monitoring fee payable on or before June 30 of each year as established by the City. The initial annual monitoring fee is $50/unit/year as shown on Exhibit C. The annual monitoring fee is intended to recover City's actual cost for monitoring compliance with this agreement. The City may utilize a 3rd party to monitor the Project. 5. Management of Property and Proper Maintenance. 5.1 Management Res onsibiiities. The Owner is responsible for all management functions with respect to the Development, including, without limitation, the annual recertification of household size and Household Income (subject to review by the City or its assignee), selection of Tenants, maintenance of a waiting list for the Affordable Units, evictions, collection of Rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The City shall have no responsibility over management of the Development. Page 19 /CH&W/999 3rd St (BMR Deed Restriction) Final 5.2 Property Maintenance. The City places prime importance on quality maintenance to ensure that all developments within the City which include affordable housing units are not allowed to deteriorate due to below-average maintenance. The Owner agrees to maintain all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. 5.3 Remedies. In the event that the Owner breaches any of the covenants contained in this Section 5 and such default continues for a period of ten (10) days after written notice from the City specifying the nature of the breach with respect to graffiti, debris, waste material, or a health or safety violation, or thirty (30) days after written notice from the City specifying the nature of the breach with respect to general maintenance, landscaping and building improvements (or such longer period of time as is reasonably necessary, as determined by the City Manager in his or her reasonable, good faith judgment, to cure the breach), then the City, in addition to whatever other remedy it may have at law or in equity, shall have the right (but is not required) to enter upon the Property after ten (10) days' prior written notice to the Owner describing the nature of the City's intended actions and to perform or cause to be performed all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, as specified in a correction plan approved by the City, and to attach a lien on the Property, or to assess the Property, in the amount of the expenditures incurred by the City or its agents arising from such acts and work of protection, maintenance, and preservation by the City and/or costs of such cure, plus an administrative charge equal to fifteen percent (15%) of the amount of such expenditures (the expenditures plus the administrative charges are the "Correction Costs"). Any amounts not paid within 30 days after Owner's receipt of City's invoice shall bear interest at the rate of 10% per annum from the due date until paid. Any such lien or assessment shall be subject and subordinate to the lien of any deed of trust encumbering the Development. 5.4 Taxes and Assessments. Owner shall pay all real and personal property taxes, assessments, if any, and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Owner shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event Owner exercises its right to contest any tax, assessment, or charge against it, Owner, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest. 5.5 Darnaize or Destruction of Development. If all of the units on the Property are demolished, and Owner does not wish to rebuild the Project subject to this Agreement, then at Page 110 /CH&W/999 31d St (BMR Deed Restriction) Final the Owner's election, the Incentives granted to Owner shall terminate and the Affordability Terms of this Agreement shall terminate and be of no further force and effect. 6. Enforcement 6.1 Covenants Running with the Land. The City and Owner hereby declare their express intent that the covenants and restrictions set forth in this Agreement shall apply to and bind Owner and its heirs, executors, administrators, successors, transferees, and assignees having or acquiring any right, title or interest in or to any part of the Property and shall run with and burden such portions of the Property until terminated in accordance with Section 6.2. Until all or portions of the Property are expressly released from the burdens of this Agreement, each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof shall be held conclusively to have been executed, delivered, and accepted subject to such covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument. In the event of foreclosure or transfer by deed -in -lieu of all or any portion of the Property prior to completion and sale of the Affordable Units, title to all or any portion of the Property shall be taken subject to this Agreement. Owner acknowledges that compliance with this Agreement is a requirement of the Project Approvals, and that no event of foreclosure or trustee's sale may remove these requirements from the Property. 6.2 Release of Property from Agreement. A. Prior to the expiration of the Affordability Term, Owner shall provide all notifications required by Government Code Sections 65 863. 10 and 65863.11 or successor provisions and any other notification required by any state, federal, or local law. B. Upon the expiration of the Affordability Term, City shall execute and record a release of the Development, the Property, and each Unit in the Development from the burdens of this Agreement within thirty (30) days following written notice from the Owner, if at the time the Owner is in compliance with all terms of this Agreement. 6.3 Default. Failure of the Owner to satisfy any of Owner's obligations under the terms of this Agreement within sixty (60) days after the delivery of a notice of default (or such longer period of time as is reasonably necessary to cure the default as determined by the City Manager in his or her good faith judgment) from the City will constitute a default under this Agreement and a failure to satisfy the Project Approvals. In addition to remedies for breach of this Agreement, the City may exercise any and all remedies available to it, including but not limited to: A. withholding, conditioning, suspending or revoking any permit, license, subdivision approval or map, or other entitlement for the Development, including without limitation final inspections for occupancy and/or certificates of occupancy; Page 111 /CH&W/999 31d St (BMR Deed Restriction) Final B. instituting against the Owner, or other parties, a civil action for declaratory relief, injunction or any other equitable relief, or relief at law, including without limitation an action to rescind a transaction and/or to require repayment of any funds received in connection with such a violation; C. where one or more persons have received financial benefit as a result of violation of this Agreement, instituting legal action to recover as necessary, a penalty in any amount up to and including the amount of financial benefit received, in addition to recovery of the benefit received; D. requiring the Owner or his/her successors in interest to the Property to pay the City any rent or any other payment received by the Owner for the Affordable Unit from the date of any unauthorized use of the Affordable Unit or in excess of Affordable Monthly Rent; or E. Any other means authorized under the City of San Rafael Municipal Code, Density Bonus Law, or any other federal or state statute. 6.4 Remedies Cumulative. No right, power, or remedy given to the City by the terms of this Agreement is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of this Agreement, or by any statute or ordinance or otherwise against Owner and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. 6.5 _Attorney's Fees and Costs. If either party initiates an action to enforce its rights under the Agreement, and elects at the initiation of the action to seek the recovery of attorneys' fees, the prevailing party in such an action shall be entitled to an award of reasonable attorneys' fees and costs in addition to any other recovery under this Agreement. 7. General Provisions 7.1 Appointment of Other Agencies. At its sole discretion, the City may designate, appoint or contract with any other public agency, for-profit or non-profit organization to perform some or all of the City's obligations under this Agreement. 7.2 Nondiscrimination. The Affordable Units shall be available for occupancy to members of the general public. The Owner shall not give preference to any particular class or group of persons in renting the Affordable Units, except to the extent that the Affordable Units are required to be rented to Eligible Households and as required by this Agreement, including, without limitation, as set forth in Section 3 above; provided, however, there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, source of income Page 112 /CH&W/999 3rd St (BMR Deed Restriction) Final (e.g., SSI), age (except for lawful senior housing), ancestry, or disability, in the leasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor shall the Owner or any person claiming under or through the Owner, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of Tenants of any Unit or in connection with the employment of persons for the construction, operation and management of the Development. 7.3 Hold Harmless. Owner will indemnify and hold harmless (without limit as to amount) City and their elected officials, officers, employees and agents in their official capacity (hereinafter collectively referred to as "Indemnitees"), and any of them, from and against all loss, all risk of loss and all damage (including expense) sustained or incurred because of or by reason of any and all claims, demands, suits, actions, judgments and executions for damages of any and every kind and by whomever and whenever made or obtained, allegedly caused by, arising out of or relating in any manner to the Development, the Affordable Units, or Owner's performance or non-performance under this Agreement, including claims pursuant to California Labor Code Section 1720 et sea., and shall protect and defend Indemnitees, and any of them with respect thereto, except to the extent arising from the active negligence, sole negligence or willful misconduct of the Indemnitees. The provisions of this Section shall survive expiration or other termination of this Agreement or any release of part or all of the Property from the burdens of this Agreement, and the provisions of this Section shall remain in full force and effect. 7.4 Notices. All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, to the Party to receive such notice at the addressed set forth below: To the City: City of San Rafael Community Development Department 1400 Fifth Avenue San Rafael, CA 94901 To the Owner: San Rafael Senior, L.P. 22645 Grand Street Hayward, California 94541 Attention: Andrea Osgood, Senior Vice President of Real Estate Development Raymond James Housing Opportunities Fund 72 L.L.C. c/o Raymond James Affordable Housing Investments, Inc. 880 Carillon Parkway St. Petersburg, Florida 33716 Attention: Steven J. Kropf, President Page 113 /CH&W/999 3rd St (BMR Deed Restriction) Final With copies to: Email Address: Steve.Kropf@RaymondJames.com Bocarsly Emden Cowan Esmail & Arndt LLP 633 W. 5th Street, 64th Floor Los Angeles, California 90071 Attention: Kyle Arndt Email Address: Kamdt@bocarsly.com Any party may change the address to which notices are to be sent by notifying the other parties of the new address, in the manner set forth above. 7.5 Integrated Agreement. This Agreement constitutes the entire Agreement between the Parties and no modification hereof shall be binding unless reduced to writing and signed by the Parties hereto. The Parties agree that this Agreement reflects the intent of all conditions of approval related to the Affordable Units for the Development. 7.6 Each P='s Role in Drafting the Agreement. Each Party to this Agreement has had an opportunity to review the Agreement, confer with legal counsel regarding the meaning of the Agreement, and negotiate revisions to the Agreement. Accordingly, neither Party shall rely upon Civil Code Section 1654 in order to interpret any uncertainty in the meaning of the Agreement. 7.7 Amendment of Agreement - A rovals and Consents. A. Amendments to this Agreement, including any proposal to change any condition of the Project Approvals, shall be subject to the review and approval of the decision- making body which approved the Development. No amendment may be approved that is inconsistent with State law, the San Rafael Municipal Code, or any adopted affordable housing guidelines. Upon approval, a new Agreement or amendments to this Agreement, as appropriate, shall be executed and recorded. B. The City has authorized the City Manager to execute this Agreement and has authorized the City Manager to deliver such approvals or consents as are required by this Agreement. Any consents or approvals required under this Agreement shall not be unreasonably withheld or made, unless it is specifically provided that a sole discretion standard applies. C. This Agreement, and any section, subsection, or covenant contained herein, may be amended only upon the written consent of the City and the Owner. 7.8 No Claims. Nothing contained in this Agreement shall create or justify any claim against the City by any person that Owner may have employed or with whom Owner may have Page 114 /CH&W/999 3'd St (BMR Deed Restriction) Final contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the Property or the construction of the Development or construction of the Affordable Units. 7.9 Applicable Law and Venue. This Agreement shall be governed by California law. Venue for any dispute arising out of this Agreement shall be Marin County. 7.10 Waivers. Any waiver by the City of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by the City to take action on any breach or default of Owner or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to Owner to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the City to any act or omission by Owner shall not be construed to be consent to any other or subsequent act or omission or to waive the requirement the City's written consent to future waivers. 7.11 Title of Parts and Sections. Any titles of the sections, subsections, or subparagraphs of this Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions. 7.12 Multiple Originals; Counterpart. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts. 7.13 Recording of Agreement. This Agreement shall be recorded against the Property in the Official Records prior to the issuance of any building permit for the Development. 7.14 Severability. In the event any limitation, condition, restriction, covenant, or provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining portions of this Agreement shall nevertheless be and remain in full force and effect. (Remainder of page intentionally left blank) Page 115 /CH&W/999 3" St (BMR Deed Restriction) Final IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. [11VATKI Do San Rafael Senior, L.P., a California limited partnership By: San Rafael Senior LLC, a California limited liability company, its general partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its sole4sg er By: AndSeni)It of Real Estate Development CITY: City of San Rafael, a municipal corporation executed in counterpar-I Jim Schutz, City Manager ATTEST: executed in counterpar, Lindsay Lara, City Clerk APPROVED AS TO FORM: executed in counterpart Robert F. Epstein, City Attorney Signature page 999 3rd Street (BMR Deed Restriction) ACKNOWLEDGMENT 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 Alameda 7 On March 30, 2022 before me, L.S. Hix , Notary Public (insert name and title of the officer) personally appeared Andrea Osgood 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. *my L.S. HIX Notary Public • California xAlameda County Commission # 2345555 Comm. Expires Feb 7, 2025 Signature • jl (Seal) L.S. Hix IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. OWNER: CITY: City of San Rafael, a municipal corporation San Rafael Senior, L.P., a California limited partnership By: S By: San Rafael Senior LLC, �z r .l m utz, City Manager a California limited liability company, Cle S 4i K , A ` ( I #,Aj ot— ASS - its general partner J ATTEST: By: Eden Development, Inc., a California nonprofit public benefit. corporation, _. its sole member/manager Lindsay Lara, City Clerk executed in counterpart By: Andrea Osgood, Senior Vice President of Real Estate APPROVED AS TO FORM: Development By: ,Robert F. Epstein, City Atorney Signature page 999 31d Street (BMR Deed Restriction) 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 MARIN , ,� On before me /)flo - � Gi' '"Nota y > � ry c� it Public, Pers nally appeared ,who proved to me on the basis of satisfactory evidence to be the pers n whose name i subscribed to the within instrument and acknowledged t} e that el h tYy executed the same in�lt�r authorized canacitv6e/ and that by s& Iti r sienature�on the instrument t e nerson(sYor the entity upon behalf of which the pers6n 6 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. Name: Notary Public e. BRENNA KATHLEEN NURMI Notary Public - California Marin County Commission b 2297544 My Comm. Expires Jul 13, 2023 ORDER NO.: 1117024562 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: Parcels 2, 3 and 4, of Parcel Map Book 2022 page 58 recorded March 25, 2022, Marin County Records. APN: portion 011-265-03 PARCEL TWO: Non-exclusive easements, appurtenant to Parcel One above, for the use, management and maintenance for access, shared building areas and improvements, utilities, structural support, encroachments, emergency exits, common walls, ceilings and floors, ingress and egress, facilities and general easement rights, upon the terms and provisions contained in the Instrument entitled Reciprocal Easement and Maintenance Agreement, recorded March 31, 2022, Instrument No. 2022-13895 of Official Records, Marin County records. EXHIBIT B HOUSEHOLD INCOME CERTIFICATION SAN RAFAEL BELOW MARKET RATE RENTAL MONITORING PROGRAM Project Name: Date: APARTMENT NUMBER # NUMBER OF BEDROOMS MONTHLY RENT $ OCCUPANT/HOUSEHOLD NAME: TOTAL GROSS ANNUAL INCOME OF ELIGIBLE HOUSEHOLD: Total household income is the combined, gross, pre-tax income of all occupants of the household including any co -signors on the lease. Income includes all wages, salaries, governmental assistance, as reported as gross income for federal income tax; or verified by pay stubs, bank account records, governmental assistance records or other relevant documentation. Attached hereto are the tax returns, pay stubs or other evidence of the income of the persons listed below: Name of household member Relationship to head of household Age Place of Employment/Source of income I/We understand and have read and answered fully, frankly and personally each of the above questions under penalty of perjury and do hereby swear they are true. I/We further understand that failure to provide this form will result in termination of the Below Market rent. Occupant -Head of Household Date: PROPERTY OWNER TO MAINTAIN THIS DOCUMENT FOR FIVE YEARS FOR INSPECTION PURSUANT TO AGREEMENT WITH THE CITY U F- m 2 X W U) L: N } rn O c Z N 5D 0¢ c �IIII nll IU C E 0 U N O Z c N E a� m am L c_ v m c (6 L N N Recorded at the Request of Old Republic Title Company - 4-62L15t-2 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Rafael 1400 Fifth Avenue, I" Floor San Rafael, CA 94901 Attn: City Clerk No fee per GC27388.1; recorded in connection with concurrent transfer subject to imposition of documentary transfer tax iiiiiiiiliii iiiii!iiliili!1►ii!iii!i! iiiii!!ii! ii!iiiliii i!!li ilil!ii Recorded zfficiel Records i nunty of Mzrin SHELLY SORT -r Assessor -Recorder Count%( Oert 02:33FKA 4&Apr- Q__ above for Recorder's Use SUBORDINATION AGREEMENT g� RE£ FEE 2 6 00 C CONF0RffED COP`r' 0.00 GJ Page i ❑iF 9 THIS SUBORDINATION AGREEMENT RESULTS IN THE LIEN OF A DEED OF TRUST AND CERTAIN RESTRICTIVE COVENANTS ON THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. This Subordination Agreement is dated for references purposes as of April 1, 2022, by and between Eden Housing, Inc., a California nonprofit public benefit corporation ("Junior Lender"), and San Rafael Senior, L.P., a California limited partnership ("Borrower"), in favor of City of San Rafael, a municipal corporation ("City"). RECITALS A. City has agreed to make a loan to Borrower in the principal amount of One Million Eight Hundred Fifty Thousand Dollars ($1,850,000) (the "Senior Loan") pursuant to the terms of a loan agreement. In connection with the Senior Loan, Borrower has executed or will execute a deed of trust (the "Senior Deed of Trust") dated as of the date hereof, to Old Republic Title Company, as trustee, in favor of City, as beneficiary, to be recorded concurrently herewith in the Official Records of Marin County, California, to secure repayment of a promissory note in the principal amount of the Senior Loan in favor of City (the "Note"). The Deed of Trust encumbers certain real property commonly known as 999 311 St., San Rafael, CA 94901, as fully described in Exhibit A attached hereto and incorporated herein by reference. Borrower has also executed a Declaration of Restrictions dated as of the date hereof (the "Use Restrictions") to be recorded concurrently herewith. B. Junior Lender has made or agreed to make a loan to Borrower in the amount of Seven Hundred Thirty Seven Thousand Two Hundred Eight Seven Dollars ($737,287) (the "Junior Loan"). In connection with the Junior Loan, Borrower has duly executed and delivered to Junior Lender a promissory note evidencing Borrower's Junior Loan repayment obligations and a deed of trust securing Borrower's obligations to Junior Lender (the "Junior Deed of Trust") to be recorded concurrently herewith. naO - 04 - ;r- -e -z-a, f 1,.,S-frAL X 2- 2 C. A condition to the Senior Loan is that the lien of the Deed of Trust and the Use Restrictions unconditionally be and remain at all times superior and prior to Junior Lender's lien under the Junior Deed of Trust (the "Subordinated Lien"). 999 Third Street Subordination Agreement — City -Eden Housing Final AGREEMENT NOW, THEREFORE, Borrower and Junior Lender agree for the benefit of City as follows: 1. The liens of the Deed of Trust and Use Restrictions unconditionally will be and remain at all times liens prior and superior to Junior Lender's lien under the Subordinated Lien. Junior Lender's lien under the Subordinated Lien will be and remain subordinate and inferior to the lien of the Deed of Trust and the Use Restrictions and any and all renewals, modifications, extensions or advances made to or pursuant to them. Agreement. City would not make the loan secured by the Deed of Trust without this Subordination Junior Lender consents to and approves of all provisions of the Note and Deed of Trust. 4. Junior Lender intentionally and unconditionally subordinates its interests under the Subordinated Lien in favor of the lien of the Deed of Trust and understands that in reliance upon, and in consideration of, this subordination, a specific loan will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into that would not be made or entered into but for this subordination. 5. This Subordination Agreement may be executed in two or more counterparts, each of which will be deemed an original and all of which, when taken together, will constitute one and the same instrument. (Remainder of page intentionally left blank) 999 Third Street Subordination Agreement — City -Eden Housing Final IN WITNESS WHEREOF, the undersigned have executed this Subordination Agreement as of the day and year first above written. BORROWER: San Rafael Senior, L.P., a California limited partnership By: San Rafael Senior LLC, a California limited liability company, its general partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its sole member er By: Andr O ood Senior Vi P sides Real Estate Development JUNIOR LENDER: Eden Housing, Inc., a California nonprof public benefit corporation By: Andrea OsVcod, Senior ViCt President o eal Estate Development /Aff signralurei_mum be acknnivlc�rll�c�rl1 Signature page 999 Third Street Subordination Agreement— City -Eden Housing ACKNOWLEDGMENT 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 Alameda On March 30, 2022 before me, personally appeared Andrea Osgood L.S. Hix , Notary Public (insert name and title of the officer) 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. L.S. HIX WITNESS my hand and official seal. Z Notary Public. California - Alameda County A Commission X 2345555 My Comm. Expires Feb 7, 2025 Signature (Seal) L.S. Hix ORDER NO.: 1117024562 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: Parcels 2, 3 and 4, of Parcel Map Book 2022 page 58 recorded March 25, 2022, Marin County Records. APN: portion 011-265-03 PARCEL TWO: Non-exclusive easements, appurtenant to Parcel One above, for the use, management and maintenance for access, shared building areas and improvements, utilities, structural support, encroachments, emergency exits, common walls, ceilings and floors, ingress and egress, facilities and general easement rights, upon the terms and provisions contained in the Instrument entitled Reciprocal Easement and Maintenance Agreement, recorded March 31, 2022, Instrument No. 2022-13895 of Official Records, Marin County records. Recorded at the Request of Old Republic Title Company - V RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) ) City of San Rafael ) 1400 Fifth Avenue, I` Floor ) San Rafael, CA 94901 ) Attn: City Clerk ) No fee per GC27388,1; recorded in !I!lII911iI1!!11l1I!!!IIlii!!!I!!I!II!!I!!!1!!I!!Illll!!!!II!!!IIII!! .2-022-0C-) 15 -1633 Retarded t7ff{clai Rprmr6s CounW of h4�nnn SMELLY SC0Tr Assessor -Recorder ro nq-7erp- oZ:?BPh4 Qe Apr_o?r Space above for Recorder's Use connection with concurrent transfer SUBORDINATION AGREEMENT subject to imposition of documentary transfer tax REC FEE 82.00 C€NF0RHED COPY 0.00 G3 Page i of THIS SUBORDINATION AGREEMENT RESULTS IN THE LIEN OF A DEED OF TRUST ON THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. This Subordination Agreement is dated for references purposes as of April 1, 2022, by and between COUNTY OF MARIN, a political subdivision of the state of California ("County"), and San Rafael Senior, L.P., a California limited partnership ("Borrower"), in favor of City of San Rafael, a municipal corporation ("City"). RECITALS A. City has agreed to make a loan to Borrower in the principal amount of One Million Eight Hundred Twenty Five Thousand Dollars ($1,825,000) (the "Senior Loan") pursuant to the terms of a loan agreement. In connection with the Senior Loan, Borrower has executed or will execute a deed of trust (the "Senior Deed of Trust") dated as of the date hereof, to Old Republic Title Company, as trustee, in favor of City, as beneficiary, to be recorded concurrently herewith in the Official Records of Marin County, California, to secure repayment of a promissory note in the principal amount of the Senior Loan in favor of City (the "Note"). The Deed of Trust encumbers certain real property commonly known as 999 3rd St., San Rafael, CA 94901, as fully described in Exhibit A attached hereto and incorporated herein by reference. Borrower has also executed a Declaration of Restrictions and Affordable Housing Convenants dated as of the date hereof (the "Use Restrictions") to be recorded concurrently herewith. B. County has made or agreed to make a loan to Borrower in the amount of Seven Hundred Nine Thousand and Eighty -Four dollars ($709,084) (the "County Loan"). In connection with the County Loan, Borrower and County have entered into a loan agreement dated as of April 1, 2022, and Borrower has duly executed and delivered to County a promissory note evidencing Borrower's County Loan repayment obligations and a deed of trust securing Borrower's obligations to County (the "County Deed of Trust") to be recorded concurrently herewith. T]0.4,p = 04 — o (mss{ 2o22 - C. A condition to the Senior Loan is that the lien of the Deed of Trust unconditionally be and remain at all times superior and prior to County's lien under the County Deed of Trust (the "Subordinated Lien"). AGREEMENT NOW, THEREFORE, Borrower and County agree for the benefit of City as follows: 1. The lien of the Deed of Trust unconditionally will be and remain at all times lien prior and superior to County's lien under the Subordinated Lien. County's lien under the Subordinated Lien will be and Subordination Agreement — City -County Final 81 remain subordinate and inferior to the lien of the Deed of Trust and any and all renewals, modifications, extensions or advances made to or pursuant to them. This condition does not apply to the County's Regulatory Agreement. 2. City would not make the loan secured by the Deed of Trust without this Subordination Agreement. County consents to and approves of all provisions of the Note and Deed of Trust. 4. County intentionally and unconditionally subordinates its interests under the Subordinated Lien in favor of the lien of the Deed of Trust and understands that in reliance upon, and in consideration of, this subordination, a specific loan will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into that would not be made or entered into but for this subordination. 5. This Subordination Agreement may be executed in two or more counterparts, each of which will be deemed an original and all of which, when taken together, will constitute one and the same instrument. (Remainder of page intentionally left blank) Subordination Agreement - City -County Final IN WITNESS WHEREOF, the undersigned have executed this Subordination Agreement as of the day and year first above written. BORROWER: San Rafael Senior, L.P., a California limited partnership By: San Rafael Senior LLC, a California limited liability company, its general partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its sole member rta By: Andr s a , Sen' r Vic resident of I Estate Development COUNTY: COUNTY OF MARIN, a political subdivision of the state of California By: Katie Rice, President Board of Supervisors ATTEST: Deputy Clerk executed in counterpart executed in counterpart jAll shwhires must be rrckrrorulerlrlcr[( Signature page 999 Third Street Subordination Agreement— City -County IN WITNESS WIEREOF, the undersigned have executed this Subordination Agreement as of the day and year first above written. BORROWER: San Rafael Senior, L.P., a California limited partnership By: San Rafael Senior LLC, a California limited liability company, its general partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its sole member/manager By: executed in counterpart Andrea Osgood, Senior Vice President of Real Estate Development COUNTY: COUNTY OF MARIN, a political subdivision of the state of California By: Katie Rice, President Board of Supervisors F."M M6 puty Cl rk 1A11 signatures niust be arknowled edl Signature page 999 Third Street Subordination Agreement— City -County 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 Marin On March 31, 2 02 2, before me, Crystal Semara Martinez , Notary Public, personally appeared Katie Rice 1 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. •� �� r CRYSTAL SEMARA MAVINE7 Kv[aryPuhliC-Caiiigrnia x Name: Crysta Semara Martinez ty Camra "1" .12 6155j2Q � Notary Public `•t,=a••'` My Comm. Exp+res Jun 15, ACKNOWLEDGMENT 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 Alameda On March 30, 2022 before me, L.S. Hix , Notary Public (insert name and title of the officer) personally appeared Andrea Osgood 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. SHIX WITNESS my hand and official seal. = ^`�^ Notary Public - Californias z Alameda County r Commission x 2345555 My Comm. Expires Feb 7, 2025 Signature (Seal) L.S. Hix ORDER NO.: 1117024562 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: I�_1:Z�1���7►1� Parcels 2, 3 and 4, of Parcel Map Book 2022 page 58 recorded March 25, 2022, Marin County Records. APN: portion 011-265-03 PARCEL TWO: Non-exclusive easements, appurtenant to Parcel One above, for the use, management and maintenance for access, shared building areas and improvements, utilities, structural support, encroachments, emergency exits, common walls, ceilings and floors, ingress and egress, facilities and general easement rights, upon the terms and provisions contained in the Instrument entitled Reciprocal Easement and Maintenance Agreement, recorded March 31, 2022, Instrument No. 2022-13895 of Official Records, Marin County records. City of San Rafael 1440 Fifth Avenue San Rafael, California 94901 Attn: City Clerk Address: 999 Third Street San Rafael, CA 94901 -------------------------Space Above This Line for Recorder's Use ---- No fee per GC27388.1; recorded in connection with concurrent transfer subject to imposition of DECLARATION OF RESTRICTIONS AND documentary transfer tax AFFORDABLE HOUSING COVENANTS 999 Third Street, San Rafael, California THIS DECLARATION OF RESTRICTIONS AND AFFORDABLE HOUSING CONVENANTS (this "Declaration") is made as of April 1, 2022, by SAN RAFAEL SENIOR, L.P., a California limited partnership ("Borrower") in favor of the CITY OF SAN RAFAEL ("City"). RECITALS A. The City is making a loan (the "Loan") to Borrower from the Affordable Housing Trust Funds to finance costs associated with the development of the real property described in Exhibit A attached hereto and incorporated herein by reference (the "Property") as lower-income affordable housing (the "Project"). The Loan is evidenced by, among other documents, a Loan Agreement between the City and Borrower dated as of the date of this Declaration, as it may be amended from time to time (the "Agreement"). The Agreement is incorporated by reference in this Declaration as though fully set forth in this Declaration. Definitions and rules of interpretation set forth in the Agreement apply to this Declaration. B. Pursuant to the Agreement, Borrower has agreed to comply with certain affordability covenants and other use and occupancy restrictions set forth in the Agreement (collectively, the "Regulatory Obligations"), commencing on the date the Deed of Trust is recorded in the Official Records of the County of Marin, and continuing for fifty-five years (the "Compliance Term") even if the Loan is repaid or otherwise satisfied or the Deed of Trust is reconveyed. CH&W/999 Third St City DOR Final "f Recorded at the Request of 2022-0015152 Old Republic Title Company - Recorded REQ= FEE 0.00 X gakiand 1 lG2 'Officiol Reco I l _0 Z4 ofrds CONFORMED COF'Y 0.00 MLnri Free Recording Requested Pursuant to 5HELl.Y SK„TT I Government Code Section 27383 A4 Count Merle e` b k 6] Recording requested by and when recorded mail to: City of San Rafael 1440 Fifth Avenue San Rafael, California 94901 Attn: City Clerk Address: 999 Third Street San Rafael, CA 94901 -------------------------Space Above This Line for Recorder's Use ---- No fee per GC27388.1; recorded in connection with concurrent transfer subject to imposition of DECLARATION OF RESTRICTIONS AND documentary transfer tax AFFORDABLE HOUSING COVENANTS 999 Third Street, San Rafael, California THIS DECLARATION OF RESTRICTIONS AND AFFORDABLE HOUSING CONVENANTS (this "Declaration") is made as of April 1, 2022, by SAN RAFAEL SENIOR, L.P., a California limited partnership ("Borrower") in favor of the CITY OF SAN RAFAEL ("City"). RECITALS A. The City is making a loan (the "Loan") to Borrower from the Affordable Housing Trust Funds to finance costs associated with the development of the real property described in Exhibit A attached hereto and incorporated herein by reference (the "Property") as lower-income affordable housing (the "Project"). The Loan is evidenced by, among other documents, a Loan Agreement between the City and Borrower dated as of the date of this Declaration, as it may be amended from time to time (the "Agreement"). The Agreement is incorporated by reference in this Declaration as though fully set forth in this Declaration. Definitions and rules of interpretation set forth in the Agreement apply to this Declaration. B. Pursuant to the Agreement, Borrower has agreed to comply with certain affordability covenants and other use and occupancy restrictions set forth in the Agreement (collectively, the "Regulatory Obligations"), commencing on the date the Deed of Trust is recorded in the Official Records of the County of Marin, and continuing for fifty-five years (the "Compliance Term") even if the Loan is repaid or otherwise satisfied or the Deed of Trust is reconveyed. CH&W/999 Third St City DOR Final AGREEMENT Now, therefore, in consideration of the City providing the Loan in accordance with the City Documents, Borrower agrees as follows: 1. Borrower will comply with the Regulatory Obligations and this Declaration through the expiration of the Compliance Term, regardless of any reconveyance of the Deed of Trust. Specifically, Borrower agrees as follows, subject to additional terms as set forth in the Agreement: 1.1 Thirty-two of the Units in the Project will at all times be rented to Qualified Tenants at initial occupancy, specifically: Unit Size No. of Units Studio 16 1 -bed 16 1.2 "Qualified Tenant" means a household earning up to sixty percent (60%) of Area Median Income as set forth in the table of income and rent limits created by the California Tax Credit Advisory Committee ("TCAC") and posted on its website (the "TCAC Table of Income and Rent Limits") - 1.3 Sixty-six (66) Units must qualify as "senior citizen housing" as defined in Section 51.3 of the California Civil Code. 1.4 The total amount for rent and utilities (with the maximum allowance for utilities determined by TCAC) charged to a Qualified Tenant may not exceed thirty percent (30%) of the applicable maximum income level as shown on the TCAC Table of Income and Rent Limits, adjusted for household size; or 1.5 For the avoidance of any doubt, notwithstanding any repayment of the Loan or otherwise satisfied or if the Deed of Trust is reconveyed, Borrower will comply with the applicable terms of the Agreement as if fully set forth herein, including, without limitation, Article 6 (Marketing), Article 7 (Affordability and Other Leasing Restrictions), Article 8 (Maintenance and Management of the Project), Article 9 (Governmental Approvals and Requirements), Article 10 (Project Monitoring, Reports, Books and Records), Article 11 (Use of Income From Operations), Article 12 (Required Reserves), Article 16 (Transfers), Article 17 (Insurance and Bonds; Indemnity), Article 18 (Hazardous Substances), and Article 19 (Default). 2. Borrower hereby subjects the Property to the covenants, reservations and restrictions set forth in this Declaration and the Agreement. This Declaration and the Regulatory Obligations constitute covenants running with the land and bind successors and assigns of Borrower and will pass to and be binding upon Borrower's successors in CH&W/999 Third St City DOR Final m title to the Property. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof will conclusively be held to have been executed, delivered and accepted subject to the covenants, reservations and restrictions in this Declaration, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instruments. 3. If Borrower fails to (i) comply with the Regulatory Obligations and this Declaration to City's satisfaction, in its sole discretion, and (ii) cure such default as set forth in Section 19.1(c) of the Agreement, City will have the right to pursue any available remedy at equity or in law, including as set forth in Section 19.2 of the Agreement, to enforce this Declaration. During the Compliance Term, City may rely on the Deed of Trust and/or this Declaration, in City's discretion, to enforce any of City's rights under the City Documents. Borrower will pay City's reasonable costs in connection with City's enforcement of the terms of this Declaration and Regulatory Obligations, including, without limitation, City's attorneys' fees and costs. (Remainder of page intentionally left blank) 3 CH&W/999 Third St City DOR Final Borrower has executed this Declaration as of the date first written above. "BORROWER" San Rafael Senior, L.P., a California limited partnership By: San Rafael Senior LLC, a California limited liability company, its general partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its sole member/man r By: Andrea sg❑ , Senior Vice resid Real Estate Development [ALL SIGNATURES MUST BE NOTARIZED.] Signature page 999 Third Street City Declaration of Restrictions ACKNOWLEDGMENT 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 Alameda On March 30, 2022 before me, L.S. Hix , Notary Public (insert name and title of the officer) personally appeared Andrea Osgood 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 m hand and official seal. " L.S. Hlx y :� Notary Public -California Alameda County Commission # 2345555 My Comm. Expires Feb 7, 2025 r Signature f (Seal) ORDER NO.: 1117024562 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: Parcels 2, 3 and 4, of Parcel Map Book 2022 page 58 recorded March 25, 2022, Marin County Records. APN: portion 011-265-03 PARCEL TWO: Non-exclusive easements, appurtenant to Parcel One above, for the use, management and maintenance for access, shared building areas and improvements, utilities, structural support, encroachments, emergency exits, common walls, ceilings and floors, ingress and egress, facilities and general easement rights, upon the terms and provisions contained in the Instrument entitled Reciprocal Easement and Maintenance Agreement, recorded March 31, 2022, Instrument No. 2022-13895 of Official Records, Marin County records. IN Recorded at the Request of Old R6public Title Company - ti-�5Gz No fee per GC27388.1: recorded in connection with concurrent transfer subject to imposition of documentary transfer tax Free Recording Requested Pursuant to Government Code Section 27383 and 27388.1 When recorded, mail to: City of San Rafael 1400 Fifth Avenue, Rm. 209 San Rafael, California 94901 Attn: City Clerk ii�v!i�iilil�ilicii�i�il.�iiil�ii�liiib�liili�i�►!liii��l�ii��i!1ii��l 10222_00 5 Recorded Clfficial Record4 County of Muir SHELLY £0371' A%%e44or-Recorder County Oerk U 33Fh! Qe--Apr-_n'= REC FEE L1.0U CONFORMED _SPY 01 0 PMge i of i3 Space Above This Line for Recorder's Use --------------------- APN: 011-265-03 (portion) DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (Property Address: 999 Third Street, San Rafael, CA) THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ("Deed of Trust") is made as of April 1, 2022, by SAN RAFAEL SENIOR, L.P., a California limited partnership ("Trustor"), whose address is c/o Eden Housing, Inc., 22645 Grand Street, Hayward, California 94541, to OLD REPUBLIC TITLE COMPANY ("Trustee"), whose address is 555 12th Street, Suite 2000, Oakland, CA 94607, for the benefit of the CITY OF SAN RAFAEL, a municipal corporation ("Beneficiary"). This Deed of Trust is executed pursuant to a Loan Agreement by and between Trustor and Beneficiary dated as of the date hereof, as it may be amended from time to time (the "Agreement"), the provisions of which are incorporated herein by reference. Definitions and rules of interpretation set forth in the Agreement apply to this Deed of Trust. 1. Grant in Trust. For valuable consideration, Trustor hereby grants, transfers and assigns to Trustee, in trust, with power of sale, for the benefit of Beneficiary, all right, title and interest Trustor now has or may have in the future in the following (all or any part of the following, or any interest in all or any part of it, as the context requires, the "Property"): (a) that real property situated in the City of San Rafael, State of California, described in Exhibit A attached hereto and incorporated herein by reference (the "Land"), on which Trustor intends to construct a 67 -unit multifamily rental housing development affordable to lower-income households, and to construct the commercial shell of a senior daycare facility which will be known as the Vivalon Healthy Aging Campus (the "Project"); and CH&W/999 Third St DoT Final (b) all buildings, structures and other improvements now or in the future located or to be constructed on the Land (the "Improvements"); and (c) all existing and future leases, subleases, tenancies, subtenancies, licenses, occupancy agreements and concessions, and any guarantees thereof ("Leases") relating to the use and enjoyment of all or any part of the Land and Improvements, and any and all guaranties and other agreements relating to or made in connection with any of the Leases; and (d) except for personal property and removable fixtures installed by tenants or subtenants, all goods, materials, supplies, chattels, furniture, fixtures, equipment and machinery now or later to be attached to, placed in or on, or used in connection with the use, enjoyment, occupancy or operation of all or any part of the Land and Improvements, whether stored on the Land or elsewhere, including all pumping plants, engines, pipes, ditches and flumes, and also all gas, electric, cooking, heating, cooling, air conditioning, lighting, refrigeration and plumbing fixtures and equipment, all of which will be considered to the fullest extent of the law to be real property for purposes of this Deed of Trust; and (e) all building materials, equipment, work in process or other personal property of any kind, whether stored on the Land or elsewhere, that have been or later will be acquired for the purpose of being delivered to, incorporated into or installed in or about the Land or Improvements; and (f) all Loan funds, whether disbursed or not, and all funds now or in the future on deposit in the Replacement Reserve Account, the Operating Reserve Account and any other account required or authorized for the Project; and (g) all proceeds, including proceeds of all present and future fire, hazard or casualty insurance policies and all condemnation awards or payments now or later to be made by any public body or decree by any court of competent jurisdiction for any taking or in connection with any condemnation or eminent domain proceeding, and all causes of action and their proceeds for any damage or injury to the Land, Improvements or the other property described above or any part of them, or breach of warranty in connection with the construction of the Improvements; and (h) all books and records pertaining to any and all of the property described above, including records relating to tenants under any Leases, the qualifications of any tenants and any certificates, vouchers and other documents in any way related thereto and records relating to the application and allocation of any federal, state or local tax credits or benefits; and (i) all rents, revenues, issues, royalties, proceeds, profits, income, reimbursements, royalties, receipts and similar items, including prepaid rent and 2 CH&W/999 Third St DoT Final security deposits, in whatever form (including, but not limited to, cash, checks, money orders, credit card receipts or other instruments for the payment of money) paid or payable in connection with the Property ("Rents"), from the Land and the Improvements, subject to: (i) Trustor's right to collect and retain the same as they become due and payable; and (ii) Beneficiary's rights under Section 3 below; and Q) all intangible personal property and rights relating to the Property or its operation or used in connection with it, including, without limitation, permits, licenses, plans, specifications, construction contracts, subcontracts, bids, soils reports, engineering reports, land planning maps, drawings, construction contracts, notes, drafts, documents, engineering and architectural drawings, deposits for utility services, installations, refunds due Trustor, trade names, trademarks, and service marks; and (k) all proceeds of, interest accrued on, additions and accretions to, substitutions and replacements for, and changes in any of the property described above. 2. Obligations Secured. This Deed of Trust is given for the purpose of securing the following (collectively, the "Secured Obligations"): (a) performance of all present and future obligations of Trustor set forth in the Agreement, specifically compliance with certain restrictions on the use of the Property recited in that certain Declaration of Restrictions executed by Trustor, dated as of the date of and being recorded concurrently with this Deed of Trust, as it may be amended from time to time, and the promissory note dated the date of this Deed of Trust, made by Trustor to the order of Beneficiary (as it may be amended from time to time, the "Note") and performance of each agreement incorporated by reference, contained therein, or entered into in connection with the Agreement; (b) payment of the indebtedness evidenced by the Agreement and the Note in the original principal amount of One Million Eight Hundred Twenty -Five Thousand and No/100 Dollars ($1,825,000.00), with interest, according to the terms of the Agreement and the Note; and (c) payment of any additional sums Trustor may borrow or receive from Beneficiary, when evidenced by another note (or any other instrument) reciting that payment is secured by this Deed of Trust. 3. Assignment of Rents. (a) Assignment as Additional Security. Trustor hereby irrevocably grants, transfers, and assigns to Beneficiary all of its right, title, and interest in and to the Rents as additional security for the Secured Obligations. Subject to the provisions of subsection 3(d) below, Beneficiary hereby confers upon Trustor a license ("License") 3 CH&W/999 Third St DoT Final to collect and retain the Rents as they become due and payable, so long as no Event of Default exists and is continuing. If an Event of Default has occurred and is continuing, Beneficiary shall have the right, which it may choose to exercise in its sole discretion, to terminate this License without notice to or demand upon Trustor, and without regard to the adequacy of Beneficiary's security under this Deed of Trust. (b) Collection and Application of Rents. Subject to the License granted to Trustor under subsection 3(a) above, Beneficiary has the right, power, and authority to collect any and all Rents. Subject to the License granted to Trustor under subsection 3(a) above, Trustor hereby appoints Beneficiary its attorney-in-fact to perform any and all of the following acts, if and at the times when Beneficiary in its sole discretion may so choose: 1. Demand, receive, and enforce payment of any and all Rents; or 2. Give receipts, releases, and satisfactions for any and all Rents; or 3. Sue either in the name of Trustor or in the name of Beneficiary for any and all Rents. Beneficiary's right to the Rents does not depend on whether or not Beneficiary takes possession of the Property. In Beneficiary's sole discretion, it may choose to collect Rents either with or without taking possession of the Property. Beneficiary shall apply all Rents collected by it in the manner provided under this Deed of Trust. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. (c) Beneficiary Not Responsible. Under no circumstances shall Beneficiary have any duty to produce Rents from the Property. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Real Property and Improvements, Beneficiary is not and shall not be deemed to be: 1. A "mortgagee in possession" for any purpose; or 2. Responsible for performing any of the obligations of the lessor under any lease; or 3. Responsible for any waste committed by lessees or any other parties, any dangerous or defective condition of the Property, or any negligence in the management, upkeep, repair, or control of the Property; or 4. Liable in any manner for the Property or the use, occupancy, enjoyment or operation of all or any part of it. (d) Election by Beneficiary. Upon the occurrence and during the continuance of an Event of Default, Beneficiary, at its option, may exercise its rights 4 CH&W/999 Third St DoT Final under this Section or otherwise provided under applicable law (including, but not limited to, under Section 2938 of the California Civil Code). 4. Trustor's Covenants. To protect the security of this Deed of Trust, Trustor agrees as follows: (a) to perform the Secured Obligations in accordance with their respective terms; (b) to keep the Land and the Improvements in good condition and repair, normal wear and tear and acts of God excepted; not to remove or demolish any Improvements without Beneficiary's prior written consent; to complete or restore promptly and in good and workmanlike manner any Improvement constructed, damaged or destroyed on the Land; to pay when due all claims for labor performed and materials furnished therefor, subject to Trustor's right to contest any claim in good faith; to comply with all laws affecting the Project, subject to Trustor's right to contest any claim in good faith; not to commit or permit waste with respect to the Land or the Improvements; not to commit, suffer or permit any act upon the Land or the Improvements in violation of law, including Environmental Laws; and to do all other acts made reasonably necessary by the character or use of the Land and the Improvements; (c) to provide, maintain and deliver to Beneficiary property and liability insurance as required under the Agreement and apply any insurance proceeds as provided below; (d) to appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and reasonable attorneys' fees and costs incurred in any such action or proceeding in which Beneficiary or Trustee may appear and in any suit brought by Beneficiary to foreclose this Deed of Trust following an Event of Default; (e) to pay in accordance with the Agreement, but in each case prior to delinquency: (i) all taxes and assessments affecting the Property, including assessments on appurtenant water stock; and (ii) all encumbrances, charges and liens, with interest, on the Property or any part thereof that appear to be prior or superior hereto; (f) should Trustor fail to make any payment or to do any act as herein provided, then, without: (i) obligation to do so; (ii) notice to or demand upon Trustor; or (iii) releasing Trustor from any obligation hereof, Beneficiary or Trustee may: (A) make or do the same in any manner and to the extent as it deems necessary to protect the security hereof; (B) appear in and defend any action or proceeding purporting to affect CH&W/999 Third St DoT Final the security hereof or the rights or powers of Beneficiary or Trustee; (C) pay, purchase, contest or compromise any encumbrance, charge or lien that in its judgment appears to be prior or superior hereto; and (D) in exercising these powers, pay necessary expenses, employ counsel and pay reasonable attorneys' fees and costs, and Trustor consents to Beneficiary's and/or Trustee's entry upon the Land and Improvements for any purpose set forth in this Subsection, including Beneficiary's exercise of its rights under California Code of Civil Procedure Section 564(c); and (g) to reimburse within five (5) days of demand all sums expended by Beneficiary or Trustee pursuant to this Deed of Trust, with interest at an annual rate of interest equal to the lesser of: (i) ten percent (10%); or (ii) the maximum lawful rate from date of expenditure to the date of payment. 5. Security Agreement and Fixture _ LILMg. (a) Grant of Security Interest. Without limiting any of the other provisions of this Deed of Trust, to secure the payment, performance and observance of the Secured Obligations, Trustor, as debtor (referred to in this Section 5 as "Debtor"), expressly grants to Beneficiary, as secured party (referred to in this Section 5 as "Secured Party"), a continuing security interest in all the Property (including now and hereafter existing) to the full extent that any portion of the Property may be subject to the Uniform Commercial Code. For purposes of this Section 5, "Collateral" means the personal property (tangible or intangible) and fixtures included in the Property. (b) Debtor's Covenants Representations, and Warranties. (i) Debtor covenants and agrees with Secured Party that: (1) In addition to any other remedies granted in this Deed of Trust to Secured Party or Trustee (including specifically, but not limited to, the right to proceed against the Property in accordance with the rights and remedies in respect of the Property that is real property under the Uniform Commercial Code), Secured Party may, if an Event of Defaults occurs and is continuing, proceed under the Uniform Commercial Code as to all or any part of the Collateral, and shall have and may exercise with respect to the Collateral all the rights, remedies, and powers of a secured party under the Uniform Commercial Code. (2) Without limiting the foregoing, Secured Party shall have the right upon any public sale or sales, and, to the extent permitted by law, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in Debtor. Debtor further agrees to allow Secured Party to use or occupy the Property, without charge, for the purpose of effecting any of Secured Party's remedies in respect of the Collateral. (3) To the extent permitted by applicable law, Debtor waives all claims, damages, and demands against Secured Party arising out of the repossession, retention, or sale of the Collateral, except for claims, damages, and R1 CH&W/999 Third St DoT Final demands due to the active gross negligence or willful misconduct of Secured Party in dealing with such Collateral. Trustor agrees that Secured Party need not give more than five (5) days' notice of the time and place of any public sale or of the time at which a private sale will take place and that such notice is reasonable notification of such matters. Secured Party may disclaim any warranties that might arise in connection with the sale, lease, license, or other disposition of the Collateral and have no obligation to provide any warranties at such time. Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. (4) To the extent permitted by law, Debtor hereby specifically waives all rights of redemption, stay, or appraisal which it has or may have under any law now existing or hereafter enacted. (ii) Debtor hereby authorizes Secured Party to file financing and continuation statements with respect to the Collateral as Secured Party may reasonably require. (iii) Debtor hereby represents and warrants that no financing statement is on file in any public office except as authorized by Secured Party. Debtor will at its own cost and expense, upon demand, furnish to Secured Party such further information and will execute and deliver to Secured Party financing statements and other documents in form reasonably satisfactory to Secured Party and will do all such acts that Secured Party may at any time or from time to time reasonably require to establish and maintain a perfected security interest in the Collateral as security for the Secured Obligations, subject only to liens or encumbrances approved by or benefiting Secured Party. Debtor will pay the actual expense of filing or recording such financing statements or other documents, and this instrument, as and where reasonably required by Secured Party. (iv) To the extent permitted by applicable law, the security interest created hereby is specifically intended to cover all rents, royalties, issues and profits, and all inventory accounts, accounts receivable and other revenues of the Property. (c) Fixture Filing. Certain of the Collateral is or will become "fixtures" (as that term is defined in the Uniform Commercial Code). This Deed of Trust, upon being filed for record in the real estate records of San Francisco County, shall operate also as a financing statement and fixture filing upon such of the Collateral that is or may become fixtures under the Uniform Commercial Code. Debtor's name and type and jurisdiction of entity are set forth in the introductory paragraph hereof. Debtor's address is set forth above. Secured Party's name and mailing address are set forth above. 7 CH&W/999 Third St DoT Final 6. Insurance and Condemnation Proceeds. (a) Trustor hereby assigns to Beneficiary any award of damages arising from the condemnation of all or any part of the Property for public use and any insurance proceeds arising from injury to all or any part of the Property or the Project. (b) Any condemnation award or insurance proceeds must be paid to Beneficiary or, if Beneficiary has consented to subordinate the lien of this Deed of Trust to the lien of another lender for the Project, according to the provisions in the senior lender's loan documents. (c) If a condemnation award or insurance proceeds are paid to Beneficiary, Beneficiary will release or authorize the release of funds to Trustor, provided that the funds will be used for the reconstruction of the Project in accordance with: (i) projections demonstrating that reconstruction is economically feasible; and (ii) Trustor's construction budget, each of which must be satisfactory to Beneficiary in its reasonable discretion. In all other cases, Beneficiary may choose in its discretion to apply funds to Trustor's obligations under the Note and the Agreement or to any senior obligations, in accordance with the respective priorities of the approved lienholders as their interests may appear of record, with the remaining funds, if any, released to Trustor. (d) Trustor agrees that Beneficiary's application or release of funds pursuant to this Section will not cure or waive any default or Notice of Default (as defined below) or invalidate any act by Beneficiary performed following a default pursuant to any City Document unless the default has been cured by the application or release of funds. 7. Further Agreements. Trustor further acknowledges and agrees as follows: (a) Beneficiary does not waive its right either to require prompt payment when due of all other sums secured by this Deed of Trust or to declare Trustor in default for failure to pay timely by accepting payment of any sum secured hereby after its due date. (b) Trustee may reconvey any part of the Property at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note for endorsement without affecting the liability of any entity or person for payment of the indebtedness secured hereby. (c) Upon: (i) written request of Beneficiary stating that all obligations secured hereby have been paid or performed; (ii) Beneficiary's surrender of this Deed of Trust and the Note to Trustee for cancellation and retention or other disposition as 8 CH&W/999 Third St DoT Final Trustee in its sole discretion may choose; and (iii) payment of its fees, if any, Trustee shall reconvey the Property then held hereunder without covenant or warranty. (d) Any voluntary or involuntary conveyance, sale, encumbrance, pledge or other transfer of all or any interest in the Property or in Trustor, including a security interest, in violation of the Agreement will constitute an Event of Default (as defined below) giving Beneficiary the right to exercise its remedies at law or in equity. (e) For the purposes of this Deed of Trust, Beneficiary from time to time may substitute a successor or successors to Trustee named herein or acting hereunder by instrument in writing executed by Beneficiary and duly acknowledged and recorded in the office of the recorder of Marin County, which instrument shall be conclusive proof of proper substitution of a successor trustee or trustees. Without conveyance from Trustee, any successor or substitute trustee will succeed to all title, estate, rights, powers, and duties of Trustee. The instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the recording information for this Deed of Trust and the name and address of the new Trustee. (f) This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns, provided that this subsection does not constitute Beneficiary's consent to any transfer in violation of this Deed of Trust. The term Beneficiary shall mean the holder of the Note, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or the neuter, and the singular number includes the plural. (g) Trustee accepts this Trust when this duly executed and acknowledged Deed of Trust is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. 8. Beneficiary's Rights Following Default. Upon any default by Trustor in performance of the Secured Obligations following expiration of any applicable notice and cure periods ("Event of Default"): (a) Trustor's license to collect and retain Rents will terminate automatically. (b) Trustor consents to Beneficiary's entry upon and taking possession of the Property or any part thereof, at any time after the occurrence of an Event of Default without notice, either in person, by agent or by a receiver to be appointed by a court without regard to the adequacy of any security for the indebtedness hereby secured to sue for or otherwise collect and apply Rents, less E CH&W/999 Third St DoT Final costs and expenses of operation and collection, including those of the Property, in its own name or in the name of Trustor. Beneficiary's collection and application of Rents shall not cure or waive any Event of Default or Notice of Default or invalidate any act done pursuant to any notice. (c) Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold the Property ("Notice of Default"), and: i. Trustee shall cause the Notice of Default to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note and all documents evidencing expenditures secured hereby. ii. After the lapse of time then required by law following the recordation of a Notice of Default, and notice of sale ("Notice of Sale") having been given as then required by law, Trustee without demand on Trustor may sell the Property at the time and place fixed in the Notice of Sale either as a whole or in separate parcels in any order at public auction to the highest bidder for cash in lawful money of the United States payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at the time and place of sale and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to any purchaser a trustee's deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the trustee's deed of any matters of facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. iii. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: (A) all sums expended under the terms of this Deed of Trust not then repaid, with accrued interest at the highest rate allowed by law in effect at the date hereof; (B) all other sums then secured hereby; and (C) the remainder, if any, to the person or persons legally entitled thereto. 9. Notice of Default to Trustor. The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to it at its address set forth above or any succeeding address given by notice in accordance with the Agreement. Remainder of Page Intentionally Left Blank, Signatures Appear On Following Page 10 CH&W/999 Third St DoT Final "TRUSTOR:" San Rafael Senior, L.P., a California limited partnership By: San Rafael Senior LLC, a California limited liability company, its general partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its sole member/manager By: AndreaeiVrQee-nt od Senior of Real Estate Development ALL SIGNATURES MUST BE NOTARIZED Signature page 999 Third Street City Deed of Trust ACKNOWLEDGMENT I 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 Alameda On March 30, 2022 before me, personally appeared Andrea Osgood L.S. Hix , Notary Public (insert name and title of the officer) 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. `•' L.S. HIX WITNESS my hand and official seal. Notary Public - Catlfornla x _ ¢ Alameda County y Commission # 2345555 My Comm. Expires Feb 7, 2025 Signature , d (Seal) L.S. Hix ORDER NO.: 1117024562 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: Parcels 2, 3 and 4, of Parcel Map Book 2022 page 58 recorded March 25, 2022, Marin County Records. APN: portion 011-265-03 PARCEL TWO: Non-exclusive easements, appurtenant to Parcel One above, for the use, management and maintenance for access, shared building areas and improvements, utilities, structural support, encroachments, emergency exits, common walls, ceilings and floors, ingress and egress, facilities and general easement rights, upon the terms and provisions contained in the Instrument entitled Reciprocal Easement and Maintenance Agreement, recorded March 31, 2022, Instrument No. 2022-13895 of Official Records, Marin County records. Amendment to Secured Promissory Note (Affordable Housing Program) $1,825,000 April 1, 2022 WHEREAS, San Rafael Senior, L.P., a California limited partnership ("Maker") executed a Promissory Note dated April 1, 2022 (the "Note") payable to the City of San Rafael, a municipal corporation ("Holder" or "Lender") in the amount of $1,825,000 (the "Loan"); WHEREAS, the Loan was made and the Note was given under the terms of a Loan Agreement by and between Maker and Holder (the "Loan Agreement") and secured by a certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of the date of the Note (the "Deed of Trust"); WHEREAS, the Note erroneously excluded a provision stating that repayment of the Loan is non-recourse to the Maker and its partners; and WHEREAS, the parties wish to amend the Note to add the language set forth herein in order to properly reflect the intention of the parties. NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the Note is hereby amended as follows, with such amendment to be effective as of the date of the Note: A new paragraph 9.6 is hereby added to the Note as follow: "9.6 Repayment of this Note shall be non-recourse to the Borrower and Borrower's general and limited partners, and Lender's sole recourse with respect to the Loan shall be the right to foreclose under the Deed of Trust." 2. Except as set forth hereinabove, all terms and conditions in the Note shall remain in full force and effect, and are the valid and continuing obligations of the Borrower. SAN RAFAEL SENIOR, L.P., a California limited partnership By: San Rafael Senior LLC, a California limited liability company, its general partner By: Eden Development, Inc., a California nonprofit public benefit corporation, its sole mem IM 60012364.2 Andrea Osgood, Senior Vice President of Real Estate Development 60012364,2