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HomeMy WebLinkAbout2016-07-27 e-packet@6:32City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA Special Meeting Agenda Wednesday, July 27, 2016 6:32 PM Municipal Services Building, Council Chambers 33 Arroyo Drive, South San Francisco, CA Special City Council Special City Council Special Meeting Agenda July 27, 2016 NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of California, the City Council of the City of South San Francisco will hold a Special Meeting on Wednesday, July 27, 2016, at 6:32 p.m., in the City Council Chambers, Municipal Services Building, 33 Arroyo Drive, South San Francisco, California. Purpose of the meeting: Call to Order. Roll Call. Agenda Review. PRESENTATIONS 1. Presentation regarding resolution urging Union Pacific Railroad Cooperation with Republic - Metropolitan on Caltrain Station Development. (Rich Garbarino, Councilmember) Public Comments - comments are limited to items on the Joint Special Meeting Agenda. ADMINISTRATIVE BUSINESS 2. Report regarding Approval of Amendments, Home Regulatory Agreement, Note and Deed of Trust for the 1999 Willow Gardens Neighborhood Rehabilitation Project. (Ron Gerber, Economic Development and Housing Manager) 2a. Resolution approving amendments to the former Redevelopment Agency Regulatory Agreement, former Redevelopment Agency Deed of Trust, HOME Regulatory Agreement, and HOME Deed of Trust; approving the City entering into Community Development Block Grant /Section 108 Regulatory Agreement; and Approving a Promissory Note and Deed of Trust with Willow Gardens Housing Associates for the Willow Gardens Neighborhood Rehabilitation Project; and Authorizing the City Manager to execute said documents. Adjournment. City of South San Francisco Page 2 Printed on 8/2/2016 City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA Staff Report File Number: 16 -608 Agenda Date: 7/27/2016 Version: 1 Status: Agenda Ready - Presentations In Control: Special City Council File Type: Presentation Agenda Number: 1. Presentation regarding resolution urging Union Pacific Railroad Cooperation with Republic - Metropolitan on Caltrain Station Development. (Rich Garbarino, Councilmember) City of South San Francisco Page 1 Printed on 8/2/2016 RESOLUTION URGING UNION PACIFIC RAILROAD COOPERATION WITH REPUBLIC- METROPOLITAN ON CALTRAIN STATION DEVELOPMENT WHEREAS, the City of South San Francisco has expended money, time, and attention upon the reshaping and redevelopment of its downtown and nearby properties; and WHEREAS, such effort and attention have included the real property owned and operated by the Peninsula Corridor Joint Powers Authority ( Caltrain), specifically respecting plans for intersection of new downtown development and the Caltrain station, which include pedestrian passages and a new Caltrain station for the benefit and convenience of the public at large; and WHEREAS, improved connection of the City of South San Francisco with a new Caltrain station area will provide strong economic development opportunity for downtown South San Francisco; and WHEREAS, opportunity exists for a mutually productive public /private transit - oriented development with much - needed veterans and workforce housing on appropriate sites; and WHEREAS, Union Pacific Railroad owns a little -used spur of real property, particularly well- located for public /private transit - oriented development with veterans and workforce preference in residential development; and WHEREAS, Republic family of companies, through Republic - Metropolitan (ReMet) has devoted time and effort to working with the City of South San Francisco since 2015 to produce a model of a public /private transit- oriented development project, including veterans' housing preference, pursuant to a National Veterans Housing Initiative, whose Advisory Board is chaired by former United States Senator Robert Dole, NOW, Therefore, Be It Resolved, as follows: 11 Page The City of South San Francisco requests Union Pacific Railroad to work and cooperate with the City of South San Francisco and Republic - Metropolitan to effectuate such objectives; and Be It Further Resolved that such facts and information be communicated to Union Pacific Railroad so that as it pursues its plan to dispose of the aforementioned spur real property, it will do so in a manner which will take advantage of the foregoing time, effort, and money already applied to such downtown development and Caltrain station transit- oriented development by the City of South San Francisco and Republic - Metropolitan. Dated this 13th day of July, 2016 Mark Addiego, Mayor 21 Page City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) out San Francisco, CA Staff Report File Number: 16 -424 Agenda Date: 7/27/2016 Version: 1 Status: Agenda Ready - Administrative Business In Control: Special City Council File Type: Staff Report Agenda Number: 2. Report regarding Approval of Amendments, Home Regulatory Agreement, Note and Deed of Trust for the 1999 Willow Gardens Neighborhood Rehabilitation Project. (Ron Gerber, Economic Development and Housing Manager) ..label RECOMMENDATION It is recommended that the City Council adopt a resolution authorizing the City Manager to: 1) Execute amendments to the Redevelopment Agency (RDA) Regulatory Agreement, RDA Deed of Trust, HOME Regulatory Agreement and HOME Deed of Trust; 2) Enter into a CDBG /Section 108 Regulatory Agreement; and 3) Approve as to form a Promissory Note and Deed of Trust with Willow Gardens Housing Associates for the 1999 Willow Gardens Neighborhood Rehabilitation Project. BACKGROUND /DISCUSSION In 1999, the City's former Redevelopment Agency provided financing to assist MidPeninsula Housing Coalition (MidPen) to acquire and assemble nine buildings, a total of 36 units, over a six year period. The goals were to revitalize the Willow Garden neighborhood (Attachment 1), renovate dilapidated structures and increase the supply of affordable housing for low- income residents. Several of the transactions for this project involved receiving low- income housing funds from San Mateo County and Federal sources to replace the interim funding from the former Redevelopment Agency. When the permanent financing sources were secured, several regulatory agreements, related promissory notes and deeds of trust were not properly executed. The proposed actions for consideration will address these issues by authorizing the City Manager to amend and execute the appropriate agreements. The proposed actions will also enable the related notes and deeds of trust to be recorded. This rehabilitation project was realized between 1999 and 2005 with the City, the former Redevelopment Agency, and MidPen. The first phase of the assemblage began in January 1999, when the former Redevelopment Agency of the City of South San Francisco (RDA) entered into a $3.5 million loan agreement with Willow Gardens Housing Associates, a limited liability partnership created by MidPen, to acquire and rehabilitate 17 buildings in the Willow Gardens neighborhood and enter into a rent regulatory agreement to maintain all of the units affordable City of South San Francisco Page 1 Printed on 81212016 File Number: 16 -424 to low- income residents for 55 years. The City and MidPen also pursued County (HOME Investment Partnerships Program) and Federal (CDBG /Section 108) funds for the project. Over the course of six years, nine properties were acquired; seven properties were acquired with former RDA assistance and two were acquired with developers' in -lieu housing contributions. (Note: instead of providing Below Market Rate units on -site at their developments, two developers acquired and conveyed Willow Gardens properties to MidPen.) A summary of the funding distribution and listing of the seven sites is provided in Attachment 2. The seven properties acquired with former RDA assistance are the properties subject to the attached amendments. Pursuant to the City agreement with the San Mateo County HOME Consortium and the CDBG /Section 108 application, the City was responsible for executing the HOME 2nd Loan and CDBG /Section 108 loan and regulatory agreements for four of the properties in November 2002. However, staff recently discovered some of the amendments and documents were never fully executed and /or recorded during property acquisition. They were not recorded at the time because the HOME 2nd Loan and CDBG /Section 108 funds were not available at acquisition. A bridge loan was provided by the RDA to cover the gap and was fully repaid when the HOME 2nd Loan and CDBG /Section 108 funds were disbursed to the project. When the permanent financing sources were secured, the properties were already in operation as affordable housing and the documents were not updated and executed. Nevertheless, MidPen has continued to maintain and operate the units as affordable and deed - restricted. In an effort to update and correct the agreements and reflect current conditions, City staff has worked with MidPen to identify missing documents and draft new documents where appropriate. Below is a summary of the required documents needed to ensure all funding is secured against the applicable properties and that all units have property recorded rent regulatory agreements, securing the affordable restrictions as originally planned. The site numbers below are referenced in Attachment 2. 1. Amendment to the existing RDA Regulatory Agreement to include sites 4 through? 2. Amendment to the RDA Deed of Trust to include sites 4 through 7 3. Amendment to the HOME (1st Loan) Regulatory Agreement to include sites 2 through 7 4. Amendment to the HOME (1st Loan) Deed of Trust to include sites 2 through 3 5. New HOME (2nd Loan) Promissory Note for sites 4 through 7 6. New HOME (2nd Loan) Deed of Trust for sites 4 through 7 7. New CDBG /Section 108 Regulatory Agreement for sites 4 through? As the Housing Successor Agency to the former RDA, the City is now the beneficiary of the loans made by the former RDA, in addition to being the party responsible for administering the County HOME and CDBG /Section 108 loans. The loans for the properties are currently outstanding and in the process of maturing. Updating the documents to include all of the City of South San Francisco Page 2 Printed on 81212016 File Number: 16 -424 relevant properties, as well as recording the documents will appropriately secure all loan funds. In addition to the above clean up items needed to properly close out this transaction, MidPen has requested a letter clarifying the grant status of additional funds provided. In addition to the RDA, HOME Consortium and CDBG /Section 108 funds noted above, the City also provided $122,906 in CDBG Housing Rehabilitation program funds to rehabilitate several of the buildings. While the City booked the CDBG Housing Rehabilitation funds as a grant, MidPen has indicated that they and their auditors need additional documentation to support this classification for their accounting books. MidPen has requested a letter from the City explaining these funds were a grant and that MidPen is not expected to repay them. Upon approval of the loan documents, the City Manager's office will also deliver a letter to MidPen explaining the status of the CDBG Housing Rehabilitation funds. CONCLUSION It is recommended that the City Council approve a resolution authorizing the City Manager to 1) Execute amendments to the RDA Regulatory Agreement, RDA Deed of Trust, HOME Regulatory Agreement and HOME Deed of Trust, 2) Enter into a CDBG /Section 108 Regulatory Agreement, and 3) Approve as to form a Promissory Note and Deed of Trust, with Willow Gardens Housing Associates for the Willow Gardens Neighborhood Rehabilitation Project. Attachments: 1. Site Map of the Nine Acquired Properties 2. Summary of the funding distribution and listing of the seven Willow Gardens sites 3. Amendment to the existing RDA Regulatory Agreement for sites 4 -7 4. Amendment to the RDA Deed of Trust for sites 4 -7 5. Amendment to the HOME (1st Loan) Regulatory Agreement for sites 2 -7 6. Amendment to the HOME (1st Loan) Deed of Trust for sites 2 -3 7. New HOME (2nd Loan) Promissory Note for sites 4 -7 8. New HOME (2nd Loan) Deed of Trust for sites 4 -7 9. New CDBG /Section 108 Regulatory Agreement for sites 4 -7 City of South San Francisco Page 3 Printed on 81212016 Attachment 1: Site Map of the Nine Acquired Properties WILLOW GARDENS WILLOW AVENUE' 4 Site4 _ -- - -- - �T ite5 r xtlj itel. ' -.. .: ,- ' .. � �. __ ice- �. - _ _ _ _ _ •- • yl ,yI, F. � l jjl 1 l N.'• �E �T�ff � �. �-! 9i'� �� � �'_f :■ �� \p ~rR'i ♦ � �, 1 y1�3 �i: 1'j.y r. ♦ ��L �� + }! \. f� d •' '3 iii' i�'..,� '.� -..i. �• ` ~ .�vi F'y, 6 ; Willow Gardens - Site Map Attachment 2 In total, the RDA and the San Mateo County HOME Consortium provided $5,119,055 to the program. The tables below summarize the funds by source and for each of the seven properties that were assembled and acquired by MidPen. Public Fund Loans RDA $3,500,000 HOME (1st Loan) $619,055 HOME (2nd Loan) $500,000 CDBG /Section 108 $500,000 Site # Street Address Acquisition Funds Total RDA HOME 1st Loan HOME 2nd Loan CDBG/ Section 108 1 395 Susie Way 44,000.00 132,000.00 176,000.00 2 986 Nora Way 53,104.32 159,314.00 212,418.32 3 1 344 Susie Way 388,898.82 255,742.00 644,640.82 4 990 Brusco Way 501,392.00 125,000.00 626,392.00 5 986 Brusco Way 501,392.00 125,000.00 626,392.00 6 982 Brusco Way 241,392.00 125,000.00 260,000.00 626,392.00 7 976 Sandra Court 261,392.00 125,000.00 240,000.00 626,392.00 Attachment 3 Recording Requested by and When Recorded Mail to: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 MODIFICATION TO REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS This Modification to Regulatory Agreement and Declaration of Restrictive Covenants (the "Modification "), is dated , 2016, for reference purposes only, and is made and entered into by and between Willow Gardens Housing Associates, a California Limited Partnership (the "Borrower "), and the City of South San Francisco, a California municipal corporation as housing successor to the Redevelopment Agency of the City of South San Francisco (the "City "). RECITALS A. The Borrower is the owner of that certain real property located at 395 Susie Way, South San Francisco, California, identified as Assessor's Parcel No. 011- 270 -200, and legally described on Exhibit "A" attached hereto and made a part hereof (the "Original Property "). B. The Borrower is also the owner of the following real properties in South San Francisco, California which are legally described on Exhibit "B" attached hereto and made a part hereof (the "Additional Property "): 990 Brusco Way Assessor's Parcel No. 011- 270 -100 986 Brusco Way Assessor's Parcel No. 011- 270 -110 982 Brusco Way Assessor's Parcel No. 011- 270 -120 976 Sandra Court Assessor's Parcel No. 011- 271 -100 SSF - Willow Gardens - Modification to City 1999 RDA Reg Agmt - SSW comments C. The former Redevelopment Agency of the City of South San Francisco ( "Agency ") made a loan to the Borrower in the original principal amount of $3,500,000. In consideration for the loan Borrower executed that certain Regulatory Agreement and Declaration of Restrictive Covenants dated January 4, 1999, and recorded against the Original Property in the Official Records of San Mateo County on March 16, 1999, as Instrument No. 99- 045816 (the "Regulatory Agreement "). D. In June 2011, the California Legislature adopted Assembly Bill x1 26, which amended the California Community Redevelopment Law to dissolve all redevelopment agencies, including the Agency, as of February 1, 2012. The City elected to retain the housing assets and functions previously performed by the Agency and to assume all rights, powers, assets, liabilities, duties and obligations associated with the housing activities of the Agency in accordance with Health and Safety Code § 34176. Accordingly, the City is the Agency's successor in interest under the Regulatory Agreement. E. The parties are entering into this Modification to correct the number of restricted units and to include the Additional Property as property governed by the Regulatory Agreement as originally intended by the parties. The Original Property and the Additional Property are described together on the attached Exhibit "C" (the "New Legal Description "). Exhibit "C" replaces the Exhibit A attached to the Regulatory Agreement. AGREEMENT NOW, THEREFORE, for sufficient consideration which is hereby acknowledged, the parties agree as follows: 1. The foregoing Recitals are true and correct and included as part of this Modification. 2. Section 2.1 of the Regulatory Agreement shall be amended by adding at the end thereof the following: "The remaining fifty -one percent (51 %) of the Units shall be rented and occupied, or if vacant, available for rental and occupancy to households whose income does not exceed eighty percent (80 %) of area median income adjusted by household size (the "80% Units ")." 3. Paragraph a. of Section 2.2 of the Regulatory Agreement shall be amended by adding at the end thereof the following: ", and the Rent charged for the 80% Units shall not exceed one - twelfth of thirty percent (30 %) of eighty percent (80 %) of area median income adjusted by household size." SSF - Willow Gardens - Modification to City 1999 RDA Reg Agmt - SSW comments 2 4. Section 2.3 of the Regulatory Agreement shall be amended and restated as follows: "2.3 Lease Provisions. Owner shall include in each lease for all Low Income Units and 80% Units provisions which authorize Owner to immediately terminate the tenancy of any household if one or more members of such household misrepresented any fact materials as to the household's qualification for a Low Income Unit or an 80% Unit. Each lease or rental agreement of a Unit shall also provide that the household is subject to annual certification in accordance with Section 4.1 below." 5. The Regulatory Agreement is modified by replacing the legal description in Exhibit A of the Regulatory Agreement with the attached Exhibit "C ". 6. In all other respects not inconsistent with this Modification the terms of the Regulatory Agreement, which are incorporated herein by reference thereto, shall remain in full force and effect, and be binding on the parties. 7. This Modification shall inure to and bind the heirs, devisees, successors and assigns of the parties hereto. 8. This Modification may be executed in multiple counterparts, all of which together shall constitute a single instrument. SSF - Willow Gardens - Modification to City 1999 RDA Reg Agmt - SSW comments 3 IN WITNESS WHEREOF the parties hereby execute and enter into this Modification as of the date first set forth above and agree to be bound hereby: BORROWER: Willow Gardens Housing Associates, a California Limited Partnership By: Mid - Peninsula San Ramon Corporation, a California nonprofit public benefit corporation, its general partner By: Its: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On Date before me Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Place Notary Seal Above WITNESS my hand and official seal. Signature of Notary Public SSF - Willow Gardens - Modification to City 1999 RDA Reg Agmt - SSW comments 4 Signatures Continued on Following Page SSF - Willow Gardens - Modification to City 1999 RDA Reg Agmt - SSW comments CITY: City of South San Francisco, a California municipal corporation By: Its: ATTEST: Krista Martinelli, City Clerk APPROVED AS TO FORM: Jason Rosenberg, City Attorney A notary public or other officer completing this certificate verifies only the identity of the individual who signed the doe ument to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document, State of California County of On Date before me Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Place Notary Seal Above WITNESS my hand and official seal. Signature of Notary Public SSF - Willow Gardens - Modification to City 1999 RDA Reg Agmt - SSW comments 6 EXHIBIT "A" LEGAL DESCRIPTION OF THE ORIGINAL PROPERTY The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lot 11, Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. EXCEPTING THEREFROM water rights as lies beneath the surface of the earth, with no right of surface entry, as contained in that Quitclaim Deed from Pacific States Construction Company, a California corporation to California Water Service Company, a California corporation dated February 2, 1968 and recorded February 7, 1968 in Book 5428 Official Records, Page 590 (17429 -AB) of Official Records of San Mateo County, California. APN: 011- 270 -200 SSF - Willow Gardens - Modification to City 1999 RDA Reg Agmt - SSW comments EXHIBIT "B" LEGAL DESCRIPTION OF THE ADDITIONAL COLLATERAL The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lot 16 of Block 1, Lots 1, 2, 3 of Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. /_1,►A 011- 271 -100 (as to Lot 16, Block 1) 011- 270 -100 (as to Lot 1, Block 2) 011- 270 -110 (as to Lot 2, Block 2) 011- 270 -120 (as to Lot 3, Block 2) SSF - Willow Gardens - Modification to City 1999 RDA Reg Agmt - SSW comments EXHIBIT "C" NEW LEGAL DESCRIPTION The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lot 16 of Block 1, Lots 1, 2, 3 and 11 of Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. EXCEPTING FROM Lot 11, Block 2: All water rights as lies beneath the surface of the earth, with no right of surface entry, as contained in that Quitclaim Deed from Pacific States Construction Company, a California corporation to California Water Service Company, a California corporation dated February 2, 1968 and recorded February 7, 1968 in Book 5428 Official Records, Page 590 (17429 -AB) of Official Records of San Mateo County, California. I_1,►1 011- 271 -100 (as to Lot 16, Block 1) 011- 270 -100 (as to Lot 1, Block 2) 011- 270 -110 (as to Lot 2, Block 2) 011- 270 -120 (as to Lot 3, Block 2) 011- 270 -200 (as to Lot 11, Block 2) 2426158.1 SSF - Willow Gardens - Modification to City 1999 RDA Reg Agmt - SSW comments Attachment 4 Recording Requested by and When Recorded Mail to: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 MODIFICATION OF DEED OF TRUST AND ASSIGNMENT OF RENTS This Modification of Deed of Trust and Assignment of Rents (the "Modification "), is dated , 2016, for reference purposes only, and is made and entered into by and among Willow Gardens Housing Associates, a California Limited Partnership (the "Trustor "), and the City of South San Francisco, a California municipal corporation as housing successor to the Redevelopment Agency of the City of South San Francisco (the "Beneficiary ") and Old Republic Title Company ( "Trustee "). RECITALS A. The Trustor is the owner of that certain real property located at 395 Susie Way, South San Francisco, California, identified as Assessor's Parcel No. 011- 270 -200, and legally described on Exhibit "A" attached hereto and made a part hereof (the "Original Property "). B. The Trustor is also the owner of the following real properties in South San Francisco, California which are legally described on Exhibit "B" attached hereto and made a part hereof (the "Additional Collateral "): 990 Brusco Way Assessor's Parcel No. 011- 270 -100 986 Brusco Way Assessor's Parcel No. 011- 270 -110 982 Brusco Way Assessor's Parcel No. 011- 270 -120 976 Sandra Court Assessor's Parcel No. 011- 271 -100 C. The original principal dated Beneficiary's predecessor in amount of $3,500,000 evic _( "Note "). The Note is sec interest made a loan to the Trustor in the 3nced by that certain Promissory Note red by a Deed of Trust dated January 4, SSF- Willow Gardens -Modification to City 1999 RDA DOT - MN comments 1999, and recorded against the Original Property in the Official Records of San Mateo County on March 16, 1999, as Instrument No. 99- 045815 (the "Deed of Trust "). D. The parties are entering into this Modification to amend the legal description in Exhibit A of the Deed of Trust to add the Additional Collateral as security for repayment of the Note. The Original Property and the Additional Collateral are described together on the attached Exhibit "C" (the "New Legal Description "). AGREEMENT NOW, THEREFORE, for sufficient consideration which is hereby acknowledged, the parties agree as follows: 1. The foregoing Recitals are true and correct and included as part of this Modification. 2. The Deed of Trust is modified by replacing the legal description in Exhibit A, with Exhibit "C ". 3. The Trustor does hereby grant and convey the real property described in Exhibit "C" to Trustee under said Deed of Trust, together with power of sale and subject to each and all of the terms and conditions of the Deed of Trust, including this Modification and any supplements hereto. 4. In all other respects not inconsistent with this Modification the terms of the Deed of Trust, which are incorporated herein by reference thereto, shall remain in full force and effect, and be binding on the parties. 5. The Trustee is hereby authorized and directed to endorse a memorandum hereof upon said Deed of Trust and the Note. 6. This Modification shall inure to and bind the heirs, devisees, successors and assigns of the parties hereto. 7. This Modification may be executed in multiple counterparts, all of which together shall constitute a single instrument. SSF- Willow Gardens -Modification to City 1999 RDA DOT - MN comments 2 IN WITNESS WHEREOF the parties hereby execute and enter into this Modification as of the date first set forth above and agree to be bound hereby: TRUSTOR: Willow Gardens Housing Associates, a California Limited Partnership By: Mid - Peninsula San Ramon Corporation, a California nonprofit public benefit corporation, its general partner By: Its: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On Date before me , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Place Notary Seal Above WITNESS my hand and official seal. Signature of Notary Public SSF- Willow Gardens - Modification to City 1999 RDA DOT - MN comments 3 Signatures Continued on Following Page SSF- Willow Gardens -Modification to City 1999 RDA DOT - MN comments BENEFICIARY: City of South San Francisco, a California municipal corporation as housing successor to the Redevelopment Agency of the City of South San Francisco, By: Its: ATTEST: Krista Martinelli, City Clerk APPROVED AS TO FORM Jason Rosenberg, City Attorney A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On Date before me , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. SSF- Willow Gardens -Modification to City 1999 RDA DOT - MN comments 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. Place Notary Seal Above Signature of Notary Public TRUSTEE: Old Republic Title Company By: Its: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On Date before me Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Place Notary Seal Above SSF- Willow Gardens -Modification to City 1999 RDA DOT - MN comments 6 Signature of Notary Public SSF- Willow Gardens -Modification to City 1999 RDA DOT - MN comments EXHIBIT "A" LEGAL DESCRIPTION OF THE ORIGINAL PROPERTY The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lot 11, Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. EXCEPTING THEREFROM water rights as lies beneath the surface of the earth, with no right of surface entry, as contained in that Quitclaim Deed from Pacific States Construction Company, a California corporation to California Water Service Company, a California corporation dated February 2, 1968 and recorded February 7, 1968 in Book 5428 Official Records, Page 590 (17429 -AB) of Official Records of San Mateo County, California. APN: 011- 270 -200 SSF- Willow Gardens - Modification to City 1999 RDA DOT - MN comments EXHIBIT "B" LEGAL DESCRIPTION OF THE ADDITIONAL COLLATERAL The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lot 16 of Block 1, Lots 1, 2, 3 of Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. APN: 011- 271 -100 (as to 011- 270 -100 (as to 011- 270 -110 (as to 011- 270 -120 (as to Lot 16, Block 1) Lot 1, Block 2) Lot 2, Block 2) Lot 3, Block 2) SSF- Willow Gardens - Modification to City 1999 RDA DOT - MN comments EXHIBIT "C" NEW LEGAL DESCRIPTION The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lot 16 of Block 1, Lots 1, 2, 3 and 11 of Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. EXCEPTING FROM Lot 11, Block 2: All water rights as lies beneath the surface of the earth, with no right of surface entry, as contained in that Quitclaim Deed from Pacific States Construction Company, a California corporation to California Water Service Company, a California corporation dated February 2, 1968 and recorded February 7, 1968 in Book 5428 Official Records, Page 590 (17429 -AB) of Official Records of San Mateo County, California. I_1,►1 011- 271 -100 (as to Lot 16, Block 1) 011- 270 -100 (as to Lot 1, Block 2) 011- 270 -110 (as to Lot 2, Block 2) 011- 270 -120 (as to Lot 3, Block 2) 011- 270 -200 (as to Lot 11, Block 2) 2429423.1 SSF- Willow Gardens - Modification to City 1999 RDA DOT - MN comments 10 Attachment 5 Recording Requested by and When Recorded Mail to: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 MODIFICATION TO HOME INVESTMENT PARTNERSHIPS ( "HOME ") PROGRAM REGULATORY AGREEMENT This Modification to Regulatory Agreement (the "Modification "), is dated , 2016, for reference purposes only, and is made and entered into by and between Willow Gardens Housing Associates, a California Limited Partnership (the "Borrower "), and the City of South San Francisco, a California municipal corporation (the "City "). RECITALS A. The Borrower is the owner of that certain real property located at 395 Susie Way, South San Francisco, California, identified as Assessor's Parcel No. 011- 270 -200, and legally described on Exhibit "A" attached hereto and made a part hereof (the "Original Property "). B. The Borrower is also the owner of the following real properties in South San Francisco, California which are legally described on Exhibit "B" attached hereto and made a part hereof (the "Additional Property "): 986 Nora Way Assessor's Parcel No. 011- 264 -020 344 Susie Way Assessor's Parcel No. 011- 270 -360 990 Brusco Way Assessor's Parcel No. 011- 270 -100 986 Brusco Way Assessor's Parcel No. 011- 270 -110 982 Brusco Way Assessor's Parcel No. 011- 270 -120 976 Sandra Court Assessor's Parcel No. 011- 271 -100 SSF- Willow Gardens -Modification to City 1999 HOME Reg Agmt -SSW comments C. In 1999, the City made a loan to the Borrower in the original principal amount of $619,055. In addition, on November 19, 2002, the City made an additional loan of HOME program funds to the Borrower in the original principal amount of $500,000. D. In connection with the loans, the City and Borrower entered into that certain HOME Investment Partnerships ( "HOME ") Program Regulatory Agreement dated January 4, 1999, and recorded against the Original Property in the Official Records of San Mateo County on March 16, 1999, as Instrument No. 99- 045817 (the "Regulatory Agreement "). E. The parties desire to amend the Regulatory Agreement to add the Additional Property to the legal description to reflect the original intent of the parties that the Additional Property be governed by the Regulatory Agreement. The Original Property and the Additional Property are described together on the attached Exhibit "C" (the "New Legal Description "). Exhibit "C" replaces the legal description in Exhibit A attached to the Regulatory Agreement. AGREEMENT NOW, THEREFORE, for sufficient consideration which is hereby acknowledged, the parties agree as follows: 1. The foregoing Recitals are true and correct and included as part of this Modification. 2. The Regulatory Agreement is amended by replacing the legal description in Exhibit A of the Regulatory Agreement with the attached Exhibit "C ". 3. In all other respects not inconsistent with this Modification the terms of the Regulatory Agreement, which are incorporated herein by reference thereto, shall remain in full force and effect, and be binding on the parties. 4. This Modification shall inure to and bind the heirs, devisees, successors and assigns of the parties hereto. 5. This Modification may be executed in multiple counterparts, all of which together shall constitute a single instrument. SSF- Willow Gardens -Modification to City 1999 HOME Reg Agmt -SSW comments 2 IN WITNESS WHEREOF the parties hereby execute and enter into this Modification as of the date first set forth above and agree to be bound hereby: BORROWER: Willow Gardens Housing Associates, a California Limited Partnership By: Mid - Peninsula San Ramon Corporation, a California nonprofit public benefit corporation, its general partner By: Its: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On Date before me Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Place Notary Seal Above WITNESS my hand and official seal. Signature of Notary Public SSF- Willow Gardens -Modification to City 1999 HOME Reg Agmt -SSW comments 3 Signatures Continued on Following Page SSF- Willow Gardens -Modification to City 1999 HOME Reg Agmt -SSW comments CITY: City of South San Francisco, A California municipal corporation By: Its: ATTEST: Krista Martinelli, City Clerk APPROVED AS TO FORM: Jason Rosenberg, City Attorney A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On Date before me Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Place Notary Seal Above WITNESS my hand and official seal. Signature of Notary Public SSF- Willow Gardens -Modification to City 1999 HOME Reg Agmt -SSW comments 5 EXHIBIT "A" LEGAL DESCRIPTION OF THE ORIGINAL PROPERTY The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lot 11, Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. EXCEPTING THEREFROM water rights as lies beneath the surface of the earth, with no right of surface entry, as contained in that Quitclaim Deed from Pacific States Construction Company, a California corporation to California Water Service Company, a California corporation dated February 2, 1968 and recorded February 7, 1968 in Book 5428 Official Records, Page 590 (17429 -AB) of Official Records of San Mateo County, California. APN: 011- 270 -200 SSF- Willow Gardens -Modification to City 1999 HOME Reg Agmt -SSW comments EXHIBIT "B" LEGAL DESCRIPTION OF THE ADDITIONAL PROPERTY The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lots 2 and 16 of Block 1, Lots 1, 2, 3, and 27 of Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. EXCEPTING FROM Lot 2, Block 1: All water rights as lies beneath the surface of the earth, with no right of surface entry, as contained in that Quitclaim Deed from Pacific States Construction Company, a California corporation to California Water Service Company, a California corporation dated February 2, 1968 and recorded February 7, 1968 in Book 5428 Official Records, Page 590 (17429 -AB) of Official Records of San Mateo County, California. APN: 011- 264 -020 (as to 011- 271 -100 (as to 011- 270 -100 (as to 011- 270 -110 (as to 011- 270 -120 (as to 011- 270 -360 (as to Lot 2, Block 1) Lot 16, Block 1) Lot 1, Block 2) Lot 2, Block 2) Lot 3, Block 2) Lot 27, Block 2) SSF- Willow Gardens -Modification to City 1999 HOME Reg Agmt -SSW comments EXHIBIT "C" NEW LEGAL DESCRIPTION The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lots 2 and 16 of Block 1, Lots 1, 2, 3, 11 and 27 of Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. EXCEPTING FROM Lot 2, Block 1 and Lot 11, Block 2: All water rights as lies beneath the surface of the earth, with no right of surface entry, as contained in that Quitclaim Deed from Pacific States Construction Company, a California corporation to California Water Service Company, a California corporation dated February 2, 1968 and recorded February 7, 1968 in Book 5428 Official Records, Page 590 (17429 -AB) of Official Records of San Mateo County, California. APN: 011- 264 -020 (as to Lot 2, Block 1) 011- 271 -100 (as to Lot 16, Block 1) 011- 270 -100 (as to Lot 1, Block 2) 011- 270 -110 (as to Lot 2, Block 2) 011- 270 -120 (as to Lot 3, Block 2) 011- 270 -200 (as to Lot 11, Block 2) 011- 270 -360 (as to Lots 27, Block 2) 2426530.1 SSF- Willow Gardens - Modification to City 1999 HOME Reg Agmt - SSW comments /_itt:T 191"Itaiigl Recording Requested by and When Recorded Mail to: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 MODIFICATION OF DEED OF TRUST AND ASSIGNMENT OF RENTS This Modification of Deed of Trust and Assignment of Rents (the "Modification "), is dated , 2016, for reference purposes only, and is made and entered into by and among Willow Gardens Housing Associates, a California Limited Partnership (the "Trustor "), and the City of South San Francisco, a California municipal corporation (the "Beneficiary ") and Old Republic Title Company ( "Trustee "). RECITALS A. The Trustor is the owner of that certain real property located at 395 Susie Way, South San Francisco, California, identified as Assessor's Parcel No. 011- 270 -200, and legally described on Exhibit "A" attached hereto and made a part hereof (the "Original Property "). B. The Trustor is also the owner of the following real properties in South San Francisco, California which are legally described on Exhibit "B" attached hereto and made a part hereof (the "Additional Property "): 986 Nora Way Assessor's Parcel No. 011- 264 -020 344 Susie Way Assessor's Parcel No. 011- 270 -360 C. The Beneficiary has made a loan to the Trustor in the original principal amount of $619,055 evidenced by that certain Promissory Note dated , 1999 ( "Note "), which is secured by that certain Deed of Trust dated January 4, 1999, and recorded against the Original Property in the Official Records of San Mateo County on March 16, 1999, as Instrument No. 99- 045814 (the "Deed of Trust "). D. The parties are entering into this Modification to amend the legal description in Exhibit A of the Deed of Trust to add the Additional Property as security for repayment of the Note. The Original Property and the Additional Property are ssF- Willow Gardens -Modification to City 1999 HOME DOT- SSW Comments 1 described together on Exhibit "C" attached hereto and made a part hereof (the "New Legal Description "). AGREEMENT NOW, THEREFORE, for sufficient consideration which is hereby acknowledged, the parties agree as follows: 1. The foregoing Recitals are true and correct and included as part of this Modification. 2. The legal description in Exhibit A of the Deed of Trust is modified by replacing it with Exhibit "C ". 3. The Trustor does hereby grant and convey the real property described in Exhibit "C" to Trustee under said Deed of Trust, together with power of sale and subject to each and all of the terms and conditions of the Deed of Trust, including this Modification and any supplements hereto. 4. In all other respects not inconsistent with this Modification, the terms of the Deed of Trust, which are incorporated herein by reference thereto, shall remain in full force and effect, and be binding on the parties. 5. The Trustee is hereby authorized and directed to endorse a memorandum hereof upon said Deed of Trust and the Note. 6. This Modification shall inure to and bind the heirs, devisees, successors and assigns of the parties hereto. 7. This Modification may be executed in multiple counterparts, all of which together shall constitute a single instrument. ssF- Willow Gardens -Modification to City 1999 HOME DOT- SSW Comments 2 IN WITNESS WHEREOF the parties hereby execute and enter into this Modification as of the date first set forth above and agree to be bound hereby: TRUSTOR: Willow Gardens Housing Associates, a California Limited Partnership By: Mid - Peninsula San Ramon Corporation, a California nonprofit public benefit corporation, its general partner By: Its: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On Date before me , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Place Notary Seal Above WITNESS my hand and official seal. Signature of Notary Public ssF- Willow Gardens -Modification to City 1999 HOME DOT- SSW Comments 3 Signatures Continued on Following Page ssF- Willow Gardens -Modification to City 1999 HOME DOT- SSW Comments 4 BENEFICIARY: City of South San Francisco , a California municipal corporation By: Its: ATTEST: Krista Martinelli, City Clerk APPROVED AS TO FORM: Jason Rosenberg, City Attorney A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On Date before me Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Place Notary Seal Above Signature of Notary Public ssF- Willow Gardens -Modification to City 1999 HOME DOT- SSW Comments 5 TRUSTEE: Old Republic Title Company By: Its: A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On Date before me Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Place Notary Seal Above WITNESS my hand and official seal. Signature of Notary Public ssF- Willow Gardens -Modification to City 1999 HOME DOT- SSW Comments 6 EXHIBIT "A" LEGAL DESCRIPTION OF THE ORIGINAL PROPERTY The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lot 11, Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. EXCEPTING THEREFROM water rights as lies beneath the surface of the earth, with no right of surface entry, as contained in that Quitclaim Deed from Pacific States Construction Company, a California corporation to California Water Service Company, a California corporation dated February 2, 1968 and recorded February 7, 1968 in Book 5428 Official Records, Page 590 (17429 -AB) of Official Records of San Mateo County, California. APN: 011- 270 -200 ssF- Willow Gardens -Modification to City 1999 HOME DOT- SSW Comments 7 EXHIBIT "B" LEGAL DESCRIPTION OF THE ADDITIONAL PROPERTY The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lot 2 of Block 1, Lot 27 of Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. EXCEPTING FROM Lot 2, Block 1: All water rights as lies beneath the surface of the earth, with no right of surface entry, as contained in that Quitclaim Deed from Pacific States Construction Company, a California corporation to California Water Service Company, a California corporation dated February 2, 1968 and recorded February 7, 1968 in Book 5428 Official Records, Page 590 (17429 -AB) of Official Records of San Mateo County, California. APN: 011- 264 -020 (as to Lot 2, Block 1) 011- 270 -360 (as to Lot 27, Block 2) ssF- Willow Gardens -Modification to City 1999 HOME DOT- SSW Comments 8 EXHIBIT "C" NEW LEGAL DESCRIPTION The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lot 2 of Block 1, Lots 11 and 27 of Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. EXCEPTING FROM Lot 2, Block 1 and Lot 11, Block 2: All water rights as lies beneath the surface of the earth, with no right of surface entry, as contained in that Quitclaim Deed from Pacific States Construction Company, a California corporation to California Water Service Company, a California corporation dated February 2, 1968 and recorded February 7, 1968 in Book 5428 Official Records, Page 590 (17429 -AB) of Official Records of San Mateo County, California. I_1,►1 011- 264 -020 (as to Lot 2, Block 1) 011- 270 -200 (as to Lot 11, Block 2) 011- 270 -360 (as to Lot 27, Block 2) 2426092.1 ssF- Willow Gardens -Modification to City 1999 HOME DOT- SSW Comments 9 Attachment 7 $500,000 PROMISSORY NOTE HOME INVESTMENT PARTNERSHIPS PROGRAM SOUTH SAN FRANCISCO, CALIFORNIA FOR VALUE RECEIVED, WILLOW GARDENS HOUSING ASSOCIATES, A CALIFORNIA LIMITED PARTNERSHIP, (the "Maker ") promises to pay to the CITY OF SOUTH SAN FRANCISCO ( "Payee" or "City ") the principal sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000), or so much of such principal as may be advanced (the "Loan"). The loan shall bear simple interest of three percent (3 %) per annum. 1. The proceeds of the Loan were previously disbursed to Maker by Payee and were used by Maker for the rehabilitation of residential units ( "Project") on the Property (as defined in the Deed of Trust (defined below)). 2. Payment of this Note is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the "Deed of Trust ") dated as of the date hereof, executed by Maker for the benefit of Payee and encumbering the property described therein. City shall be entitled to the benefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants and agreements contained herein, in the Deed of Trust, and that certain HOME Investment Partnerships Program Regulatory Agreement by and between Maker and Payee, dated January 4, 1999 and recorded in the Official Records of San Mateo County as Document Number 99- 045817, as amended ( "Regulatory Agreement'). The Regulatory Agreement shall remain effective for the full term thereof and shall survive the repayment of this Note. This Note, the Regulatory Agreement and the Deed of Trust are hereinafter collectively referred to as the "City Documents." 3. This Note shall be due and payable in full forty (40) years from the date hereof. Beginning in 2015, Maker shall make annual payments of principal and interest to the Payee only from twenty -five percent (25%) of "Available Cash Flow" which is hereinafter defined from Payee's preceding fiscal year after the HOME loan in the original principal amount of $619,055 has been paid in full. Payment shall be made within one hundred twenty (120) days of the end of each calendar year. "Available Cash Flow" shall mean the sum of money computed as follows: All rents, revenues, consideration or income (of any form but excluding capital contributions) derived by Maker in connection with or relating to the ownership or operation of the Project, including any revenue derived from any refinancing of the Project, less all of the following: all customary and reasonable costs and expenses in connection with the operation and maintenance of the Project including all required debt service payments and the expenses of a resident property manager; amounts (previously approved by Payee) expended to restore the Project after a casualty loss or condemnation; amounts reasonably reserved by Maker as an operating contingency reserve account and replacement reserve account for the Project, tenant services including but not limited to a computer education program, and current and accrued partnership management fees with annual earnings not to exceed $20,000. Beginning in 2015, Maker shall deliver to Payee each year an annual audited financial statement to determine the amount of Available Cash Flow. Payee shall have the right to inspect and audit Maker's books and records concerning the calculation of Available Cash Flow. 4. Payment shall be made in lawful money of the United States to Payee at 400 Grand Avenue, P.O. Box 711, South San Francisco, California 94083. The place of payment may be changed from time to time as the Payee may from time to time designate in writing. 5. Maker shall have the right to prepay this Note in whole or in part without penalty or premium. 6. The occurrence of any of the following shall constitute an event of default ( "Event of Default ") under this Note: (i) Maker fails to pay any amount due hereunder within fifteen (15) days of its due date; (ii) any default by Maker under the Deed of Trust or the Regulatory Agreement; (iii) any sale, exchange, transfer, assignment or other conveyance of the Project or the Property to other than MidPen Housing Corporation or a wholly - controlled affiliate thereof; or (iv) a default arises under any debt instrument secured by a mortgage or deed of trust on the Project or the Property and remains uncured beyond any applicable cure period such that the holder of such instrument has the right to accelerate payment thereunder. Upon the occurrence of any Event of Default, or at any time thereafter, City may, at its option (i) by written notice to Maker, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under applicable law, and (iii) exercise any and all rights and remedies available to City under the City Documents, including without limitation the right to pursue foreclosure under the Deed of Trust. Maker shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys' fees, incurred in connection with City's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder and all such sums shall be a part of the indebtedness secured by the Deed of Trust. The rights and remedies of City under this Note shall be cumulative and not alternative. These options may be exercised by City at any time following the occurrence of an Event of Default, and the acceptance of one or more installments thereafter shall not constitute a waiver of such options with respect to any subsequent event. Payee's failure in the exercise of any other right or remedy hereunder or under any agreement which secures the indebtedness or is related thereto shall not affect any right or remedy and no single or partial exercise of any such right or remedy shall preclude any further exercise thereof. Upon the occurrence of an Event of Default, interest shall automatically be increased without notice to the lesser of ten percent (10 %) per annum or the maximum rate permitted by law (the "Default Rate "); provided however, if any payment due hereunder is not paid when due, the -2- E: \191 \043 \promnotehome Default Rate shall apply commencing upon the due date for such payment. When Maker is no longer in default, the Default Rate shall no longer apply, and the interest rate shall once again be the rate specified in the first paragraph of this Note. Notwithstanding the foregoing provisions, if the interest rate charged exceeds the maximum legal rate of interest, the rate shall be the maximum rate permitted by law. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent Payee from exercising any of its other rights or remedies. 7. Payee shall not exercise any right or remedy provided for herein because of any default of Maker unless, in the event of a monetary default, Maker shall have failed to pay the outstanding sums within a period of thirty (30) calendar days after notice that payment was due, or in the event of a nonmonetary default, Payee shall have first given written notice thereof to Maker and Maker shall have failed to cure the nonmonetary default within a period of thirty (30) days after the giving of such notice of such default; provided that if the nonmonetary default cannot be cured within thirty (30) days and Maker proceeds diligently with effort to cure such default until it shall be fully cured within no more than sixty (60) days after the giving of such notice, Payee shall not exercise any right or remedy provided for herein until such sixty (60) day period shall expire; provided, however, Payee shall not be required to give any such notice or allow any part of the grace period if Maker shall have filed a petition in bankruptcy or for reorganization or a bill in equity or otherwise initiated proceedings for the appointment of a receiver of its assets, or if Maker shall have made an assignment for the benefit of creditors, or if a receiver or trustee is appointed for Maker and such appointment or such receivership is not terminated within forty -five (45) days. With respect to any right to cure or cure period provided in this paragraph 7, performance of a cure by any entity or partner of Maker shall have the same effect as would like performance by Maker. 8. Maker and any endorsers hereof and all others who may become liable for all or any part of this obligation, severally waive presentment for payment, demand and protest and notice of protest, and of dishonor and nonpayment of this Note, and expressly consent to any extension of the time of payment hereof or of any installment hereof, to the release of any party liable for this obligation, and any such extension or release may be made without notice to any of said parties and without in any way affecting or discharging this liability. 9. Maker agrees to pay immediately upon demand all costs and expenses of Payee including reasonable attorneys' fees, (i) if after default this Note be placed in the hands of an attorney or attorneys for collection, (ii) if after a default hereunder or under the Deed of Trust or the Regulatory Agreement, Payee finds it necessary or desirable to secure the services or advice of one or more attorneys with regard to collection of this Note against Maker, any guarantor or any other party liable therefor or to the protection of its rights under this Note, the Deed of Trust, the Regulatory Agreement, or other loan document, or (iii) if Payee seeks to have the Project abandoned by or reclaimed from any estate in bankruptcy, or attempts to have any stay or injunction prohibiting the enforcement or collection of this Note or prohibiting the enforcement of the Deed of Trust or any other agreement evidencing or securing this Note lifted by any bankruptcy or other court. -3- E: \191 \043 \promnotehome 10. If Payee shall be made a party to or shall reasonably intervene in any action or proceeding, whether in court or before any governmental agency, affecting the Project, the Property or the title thereto or the interest of the Payee under the Deed of Trust, including without limitation, any form of condemnation or eminent domain proceeding, Payee shall be reimbursed by Maker immediately upon demand for all costs, charges, and attorneys' fees incurred by Payee in any such case, and the same shall be secured by the Deed of Trust as a further charge and lien upon the Project and the Property. 11. Any notices provided for in this Note shall be given by mailing such notice by certified mail, return receipt requested at the addresses set forth below or at such address as either party may designate by written notice. Maker and Payee shall mail notices to any limited partner of Maker provided Payee has received written notice of the name and address of such partner(s). Payee: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attention: City Manager Maker: Attention: 12. This Note shall be binding upon Maker, its successors and assigns. 13. This Note is nonrecourse and neither Maker nor any member, officer, partner or employee of Maker shall have any personal liability for repayment of the sums evidenced hereby, and the Payee must resort only to the Project and Property for repayment should the Maker fail to repay the sums evidenced hereby; provided however, nothing contained in the foregoing limitation of liability shall: (A) impair the enforcement against all such security for the Loan of all the rights and remedies of the City under the Deed of Trust and any financing statements Agency files in connection with the Loan as each of the foregoing may be amended, modified, or restated from time to time; (B) impair the right of City to bring a foreclosure action, action for specific performance or other appropriate action or proceeding to enable City to enforce and realize upon the Deed of Trust, the interest in the Project and the Property created thereby and any other collateral given to City in connection with the indebtedness evidenced hereby and to name the Maker as party defendant in any such action; (C) be deemed in any way to impair the right of the City to assert the unpaid principal E: \191 \043 \promnotehome amount of the Loan as a demand for money within the meaning of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; (D) constitute a waiver of any right which City may have under any bankruptcy law to file a claim for the full amount of the indebtedness owed to City hereunder or to require that the Project and Maker's interest in the Property shall continue to secure all of the indebtedness owed to City hereunder in accordance with this Note and the Deed of Trust; or (E) limit or restrict the ability of City to seek or obtain a judgment against Maker to enforce against Maker and its general partners to: (1) recover under Sections 7.11 or 7.13 of the Deed of Trust (pertaining to Borrower's indemnification obligations), or (2) recover from Maker and its general partners compensatory damages as well as other costs and expenses incurred by City (including without limitation attorney's fees and expenses) arising as a result of the occurrence of any of the following: (a) any fraud or material misrepresentation on the part of the Maker, any general partner thereof, or any officer, director or authorized representative of Maker or any general partner thereof in connection with the request for or creation of the Loan, or in any City Document, or in connection with any request for any action or consent by City in connection with the Loan; (b) any failure to maintain insurance on the Property and the Project as required pursuant to the City Documents; (c) failure to pay taxes, assessments or other charges which may become liens on the Property or the Project; (d) the presence of Hazardous Materials (as defined in Section 7.11 of the Deed of Trust) or other violation of the Maker's obligations under Section 7.11 of the Deed of Trust (pertaining to environmental matters); (e) the occurrence of any act or omission of Maker that results in waste to or of the Project or the Property and which has a material adverse effect on the value of the Project or the Property; (f) the material misapplication of the Loan proceeds; (g) the removal or disposal of any personal property or fixtures or the retention of rents, insurance proceeds, or condemnation awards in violation of the Deed of Trust; (h) the material misapplication of the proceeds of any insurance policy or award resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Project or the Property; and -5- E: \191 \043 \promnotehome (i) the failure of Maker to pay all amounts payable under this Note in full if Maker Transfers Maker's interest in the Property or the Project in violation of the City Documents. 14. This Note shall be construed in accordance with and be governed by the laws of the State of California without regard to principles of conflict of laws. Any legal action filed in connection with this Note shall be filed in the Superior Court of San Mateo County, California, or in the Federal District Court for the Northern District of California. 15. If any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. 16. Time is of the essence with respect to every provision of this Note. 17. There shall be no amendment to or modification of this Note except by written instrument executed by Maker and Payee. WIN E: \191 \043 \promnotehome WILLOW GARDENS HOUSING ASSOCIATES, a California Limited Partnership By: Mid - Peninsula San Ramon Corporation, a California nonprofit public benefit corporation, its general partner By: Its: 2426425.1 %- E: \191 \043 \promnotehome Attachment 8 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Executive Director EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 s use. DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Deed of Trust ") is made as of , 2016, by Willow Gardens Housing Associates, a California limited partnership ( "Trustor ") to Title Company as trustee ( "Trustee "), for the benefit of the City of South San Francisco, a California municipal corporation ( "Beneficiary "). RECITALS A. Trustor owns fee simple title to the land described in Exhibit A attached hereto and incorporated herein by this reference (the "Land "). Trustor owns and operates an affordable multifamily residential development (the "Project ") on the Land. B. Beneficiary has provided a loan to Trustor in the amount of Five Hundred Thousand Dollars ($500,000) (the "Loan ") for the purpose of rehabilitating the Project. Trustor has issued to Beneficiary a Secured Promissory Note dated as of the date hereof (the "Note ") toevidence Trustor's obligation to repay the Loan. C. As a condition precedent to the making of the Loan, Beneficiary has required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien and security interest in the Property (defined below) to secure repayment of the Note and performance of Trustor's obligations under the Note and that certain HOME Investments Partnerships Program Regulatory Agreement by and between Beneficiary and Trustor dated as of January 4, 1999 and recorded in the Official Records of San Mateo County as Document Number 99- 045817, as amended ( "Regulatory Agreement "). This Deed of Trust, the Note and the Regulatory Agreement are hereinafter collectively referred to as the "Loan Documents." NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows. 1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the 2426486.1 benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to the Land, and all of the following, whether presently owned or hereafter acquired: a. All buildings, structures, and improvements, now or hereafter located or constructed on the Land ( "Improvements "); b. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter owned or constructed or placed upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which may be in, under or produced from any part of the Land, and all water rights, rights of way, gores or strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and Improvements (collectively, "Appurtenances "); C. All machinery, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, "Equipment "); d. All existing and future leases, subleases, licenses, and other agreements relating to the use or occupancy of all or any portion of the Land or Improvements (collectively, "Leases "), all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but not limited to security deposits (collectively, "Rents "); e. All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances, Equipment, Leases, and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding ( "Proceeds "); f. All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor ( "Gross Revenues "); g. All architectural, structural and mechanical plans, specifications, design documents and studies produced in connection with development of the Land and construction of the Improvements (collectively, "Plans "); and h. All interests and rights in any private or governmental grants, subsidies, loans or other financing provided in connection with development of the Land and construction of the Improvements (collectively, "Financing "). 2426486.1 All of the above - referenced interests of Trustor in the Land, Improvements, Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the "Property." 2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the "Secured Obligations "): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Loan Documents; (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all obligations of Trustor to Beneficiary under all modifications, supplements, amendments, renewals, or extensions of any of the foregoing, whether evidenced by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's interests under this Deed of Trust or any other Loan Document as such may be modified, supplemented, amended, renewed or extended. 3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Beneficiary hereby confers upon Trustor a license to collect and retain such Rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary's right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or 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. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a "mortgagee in possession," shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the 2426486.1 3 Property. Absent Beneficiary's written consent, Trustor shall not accept prepayment of Rents for any rental period exceeding one month. 4. SecurityAgreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary. The parties acknowledge that some of the Property may be determined under applicable law to be personal property or fixtures. To the extent that any Property may be or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the "UCC "), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements. 5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it. Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the property conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the priority of Beneficiary's lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government. 2426486.1 4 6. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of San Mateo County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC. 7. Trustor's Representations, Warranties and Covenants; Rights and Duties of the Parties. 7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses and holds a fee simple interest in the Land and the Improvements, (ii) Trustor has good and marketable title to all of the Property; (iii) other than as limited by the Loan Documents, Trustor has the full and unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens permitted pursuant to the Loan Documents or otherwise approved in writing by Beneficiary ( "Permitted Encumbrances "), this Deed of Trust creates a valid lien on Trustor's entire interest in the Property; (v) except with respect to Permitted Encumbrances, Trustor owns the Property free and clear of all deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vi) there is no financing statement affecting the Property on file in any public office other than as disclosed in writing to Beneficiary; and (vii) the correct address of Trustor's chief executive office is specified in Section 10.2. 7.2 Condition of Property. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health code violation or violation of other governmental regulations concerning the Property that has not previously been corrected, and no condition on the Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Property or any portion thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could result in a material and adverse change in the condition of the Land; (vii) all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor's agents have disclosed to Beneficiary all material facts concerning the Property. 7.3 Authority. Trustor represents and warrants that this Deed of Trust and all other 2426486.1 documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c) do not violate the provisions of any agreement to which Trustor is a party or which affects the Property. Trustor further represents and warrants that there are no pending, or to Trustor's knowledge, threatened actions or proceedings before any court or administrative 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. which may adversely affect Trustor's ownership of the Property. 7.4 Payment and Performance of Secured Obligations. Trustor shall promptly pay when due the principal and any interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in connection with the Secured Obligations or the Loan Documents in accordance with the respective terms thereof. 7.5 Preservation and Maintenance of Property; Compliance with Laws. Trustor covenants that it shall keep the Land and Improvements in good repair and condition, and from time to time shall make necessary repairs, renewals and replacements thereto so that the Property shall be preserved and maintained. Trustor covenants to comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary's consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor. Trustor shall use the Land and the Improvements solely for purposes authorized by the Loan Documents, shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to the Loan Documents. 7.6 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default hereunder if the Property, any part thereof, or interest therein is sold, assigned, conveyed, transferred, hypothecated, leased, licensed, or encumbered ( "Transfer ") in violation of the Loan Documents. If any such Transfer shall occur in violation of such requirements, without limiting the provisions of Section 8 hereof, all obligations secured by this Deed of Trust, irrespective of the maturity dates of such obligations, shall at the option of Beneficiary, and without demand, immediately become due and payable, subject to any applicable cure period. 7.7 Inspections; Books and Records. Beneficiary and its agents and representatives shall have the right at any reasonable time upon reasonable notice to enter upon the Land and inspect the Property to ensure compliance with the Loan Documents. Trustor shall maintain complete and accurate books of account and other records (including copies of supporting bills and invoices) adequate to document the use of the Loan proceeds and the operation of the Property, together with copies of all written contracts, Leases and other instruments which affect the Property. The books, records, contracts, Leases and other instruments shall be subject to 2426486.1 6 examination and inspection by Beneficiary at any reasonable time following two business days prior notice. 7.8 Charges, Liens, Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor's expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property. Trustor shall immediately discharge or cause to be discharged any lien on the Property (other than encumbrances approved by Beneficiary as of the date hereof in writing). Trustor shall pay when due each obligation secured by or reducible to a lien, charge or encumbrance which now does or later may encumber or appear to encumber all or part of the Property or any interest in it, whether or not such lien, charge or encumbrance is or would be senior or subordinate to this Deed of Trust. Trustor shall not be required to pay any tax, levy, charge or assessment so long as its validity is being actively contested in good faith and by appropriate actions and/or proceedings. 7.9 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust. 7.10 Hazard, Liability and Workers' Compensation Insurance. At all times during the term hereof, at Trustor's expense, Trustor shall keep the Improvements and personal property now existing or hereafter located on the Property insured against loss by fire, vandalism and malicious mischief by a policy of standard fire and extended all -risk insurance. The policy shall be written on a full replacement value basis and shall name Beneficiary as loss payee as its interest may appear. The full replacement value of the improvements to be insured shall be determined by the company issuing the policy at the time the policy is initially obtained. Not more frequently than once every two (2) years, either the Trustor or the Beneficiary shall have the right to notify the other party that it elects to have the replacement value redetermined by the insurance company. Subject to the rights of any senior lienholder, the proceeds collected under any insurance policy may be applied by Beneficiary to any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary, the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding anything to the contrary set forth herein, provided that Trustor is not in default under any Loan Document, Trustor shall be permitted to use the proceeds of insurance to rebuild the Improvements. 7.10.1 Trustor shall at all times during the term hereof, maintain a comprehensive general liability insurance policy in an amount not less than One Million Dollars ($1,000,000) 2426486.1 7 each occurrence, Two Million Dollars ($2,000,000) annual aggregate, together with Three Million Dollars ($3,000,000) excess liability coverage or such other policy limits as Beneficiary may require in its reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Beneficiary as an additional insured. Trustor shall maintain workers' compensation insurance as required by law. 7.10.2 Trustor shall file with Beneficiary prior to the commencement of the term hereof, certificates (or such other proof as Beneficiary may require, including without limitation, copies of the required insurance policies) evidencing each of the insurance policies and endorsements thereto as required by this Section, and such certificates (or policies) shall provide that at least thirty (30) days' prior written notice shall be provided to Beneficiary prior to the expiration, cancellation or change in coverage under each such policy. 7.10.3 If any insurance policy required hereunder is canceled or the coverage provided thereunder is reduced, Trustor shall, within fifteen (15) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at Trustor's expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary. 7.10.4 The insurance policies required hereunder shall be issued by insurance companies authorized to do business in the State of California with a financial rating of at least A VII status as rated in the most recent edition of Best's Key Rating Guide. Each policy of insurance shall contain an endorsement requiring the insurer to provide at least 30 days written notice to Beneficiary prior to change in coverage, cancellation or expiration thereof. If any insurance policy required pursuant to the Loan Documents is canceled or the coverage provided thereunder is reduced, Trustor shall, within ten (10) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at Trustor's expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary. 7.11 Hazardous Materials. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any 2426486.1 8 other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor's possession or reasonably available to Trustor relating to the Land concerning Hazardous Materials. Trustor shall not cause or permit any Hazardous Material (as defined below) to be brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily used in connection with the construction, rehabilitation, repair, and operation of residential developments and in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws (as defined below). Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed officials, officers, agents and employees (collectively, "Indemnitees ") harmless from and against any and all loss, claim, liability, damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually "Claim" and collectively "Claims ") arising in connection with the breach of Trustor's covenants and obligations set forth in this Section 7.11 or otherwise arising in connection with the presence or release of Hazardous Materials in, on, under, or from the Property. The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials, all costs of determining whether the Land is in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources. Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost and expense, do all of the following: a. pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; b. reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and C. reimburse Indemnitees for any and all expenses, including without limitation out - of- pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Deed of Trust, or in monitoring and participating in any legal or administrative proceeding. 2426486.1 Trustor's obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure of Trustor to receive notice of or consideration for any of the following: (i) any amendment or modification of any Loan Document; (ii) any extensions of time for performance required by any Loan Document; (iii) any provision in any of the Loan Documents limiting Beneficiary's recourse to property securing the Secured Obligations, or limiting the personal liability of Trustor, or any other party for payment of all or any part of the Secured Obligations; (iv) the accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or any other party under any Loan Document, (v) the release of Trustor or any other person, by Beneficiary or by operation of law, from performance of any obligation under any Loan Document; (vi) the release or substitution in whole or in part of any security for the Secured Obligations; and (vii) Beneficiary's failure to properly perfect any lien or security interest given as security for the Secured Obligations. The provisions of this Section 7.11 shall be in addition to any and all other obligations and liabilities that Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without regard to whether Beneficiary or that Indemnitee has exercised any rights against the Property or any other security, pursued any rights against any guarantor or other party, or pursued any other rights available under the Loan Documents or applicable law. The obligations of Trustor to indemnify the Indemnitees under this Section shall survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust. Without limiting any of the remedies provided in this Deed of Trust, Trustor acknowledges and agrees that each of the provisions in this Section 7.11 is an environmental provision (as defined in Section 736(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the "Environmental Provisions "), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil Procedure ( "Section 736 ") for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure. "Hazardous Materials" means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by- product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a "hazardous substance ", "hazardous material ", "hazardous waste ", "toxic waste ", "toxic pollutant ", "toxic substance ", "solid waste" or "pollutant or contaminant" in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], 2426486.1 10 the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter - Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any "Superfund" or "Superlien" law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by- products. "Environmental Law" means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by- products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter - Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder. 7.12 Notice of Claims; Defense of Security; Reimbursement of Costs. a. Notice of Claims. Trustor shall provide written notice to Beneficiary of any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or property damage in excess of an aggregate of Fifty Thousand Dollars ($50,000) within three business days of the occurrence of such loss. Trustor shall ensure that Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document 2426486.1 11 or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice and allowing such right to cure shall be included in all such documents. Within three business days of Trustor's receipt thereof, Trustor shall provide Beneficiary with a copy of any notice of default Trustor receives in connection with any financing document secured by the Property or any part thereof. b. Defense of Security. At Trustor's sole expense, Trustor shall protect, preserve and defend the Property and title to and right of possession of the Property, the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims. C. Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. Trustor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or Trustee or both of them under Sections 7.18 and 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys' fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title. d. Notice of Changes. Trustor shall give Beneficiary prior written notice of any change in the address of Trustor and the location of any Property, including books and records pertaining to the Property. 7.13 Indemnification. Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold harmless the Trustee and the Indemnitees (as defined in Section 7.11) from and against all Claims arising directly or indirectly in any manner in connection with or as a result of (a) any breach of Trustor's covenants under any Loan Document, (b) any representation by Trustor in any Loan Document which proves to be false or misleading in any material respect when made, (c) injury or death to persons or damage to property or other loss occurring on the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, or any Loan Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, provided that no Indemnitee shall be entitled to indemnification under this Section for matters caused by such Indemnitee's gross negligence or willful misconduct. The obligations of Trustor under this Section shall survive the repayment of the Loan and shall be secured by this Deed of Trust. Notwithstanding any contrary provision contained herein, the obligations of Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust. 2426486.1 12 7.14. Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property after an Event of Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in this Section 7.14 and agrees that Trustor shall assert no claim related to any of the foregoing against Beneficiary. 7.15 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholders, any award of damages in connection with any condemnation for public use of, or injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply such moneys to any indebtedness secured hereby in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding the foregoing, so long as the value of Beneficiary's lien is not impaired, insurance and/or condemnation proceeds may be used to repair and/or restore the Project. 7.16 Release, Extension, Modification. At any time and 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, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations. 7.17 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been paid in €trfull and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor shall pay all fees of Trustee and all recordation fees related to such reconveyance. 7.18 Cure; Protection of Security. Either Beneficiary or Trustee may cure any breach or default of Trustor, and if it chooses to do so in connection with any such cure, Beneficiary or Trustee may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: appearing in and/or defending any action or proceeding which purports 2426486.1 13 to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary's or Trustee's sole judgment is or may be senior in priority to this Deed of Trust, such judgment of Beneficiary or Trustee to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary or Trustee. Beneficiary and Trustee may take any of the actions permitted under this Section 7.18 either with or without giving notice, except for notices required under applicable law. Any amounts disbursed by Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust. 7.19 Limited Partners Right to Cure. Trustor's limited partners shall have the right to cure any default of Trustor hereunder upon the same terms and conditions afforded to Trustor. Provided that Beneficiary has been given written notice of the address for delivery of notices to the limited partners, Beneficiary shall provide any notice of default hereunder to the limited partners concurrently with the provision of such notice to Trustor, and as to the limited partners, the cure periods specified herein shall commence upon the date of delivery of such notice in accordance with Section 10.2. 8. Default and Remedies. 8.1 Events of Default. Trustor acknowledges and agrees that an event of default ( "Event of Default ") shall occur under this Deed of Trust upon the occurrence of any one or more of the following events: a. Beneficiary's declaration of an Event of Default under any Loan Document, subject to the expiration of any applicable cure period set forth in such document; b. Trustor fails to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee; C. If Trustor's interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of Section 7.6 hereof and Trustor fails to rescind such conveyance or otherwise cure such breach within the time period specified in paragraph j below; d. Trustor fails to maintain the insurance coverage required hereunder or otherwise fails to comply with the requirements of Section 7.10 hereof and Trustor fails to cure such default within the time specified in Section 7.10; e. Subject to Trustor's right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay any other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure such default within 10 days. f. Any representation or warranty of Trustor contained in or made in 2426486.1 14 connection with the execution and delivery of this Deed of Trust or in any certificate or statement furnished pursuant hereto or in any other Loan Document proves to have been false or misleading in any material adverse respect when made; g. If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ( "Bankruptcy Law "), Trustor: (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or substantially all of Trustor's assets, (iii) orders the liquidation of Trustor, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. i. The holder of any other debt instrument secured by a mortgage or deed of trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder's documents; or j. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8. 1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary's reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than sixty (60) days following receipt of notice of default. 8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any Loan Document, and any other remedy existing at law or in equity or by statute. All of Beneficiary's rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys' fees and costs. a. Acceleration. Beneficiary may declare any or all of the Secured Obligations-,Obligations- -, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately. 2426486.1 15 b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. C. Entry. Beneficiary, in person, by agent or by court - appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing copies of all of Trustor's or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney -in -fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments. d. UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC. e. Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust. f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law. 8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this Deed of Trust. Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust. Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to 2426486.1 16 the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may, and at Beneficiary's request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary, may purchase at such sale. After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto. Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under the Loan Documents, and if in connection with such Event of Default Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other amounts due under the Note. At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law. Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations: a. First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section 7.12(c); and b. Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose. 8.4 Trustor's Right to Reinstate. Notwithstanding Beneficiary's acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under the Loan Documents if the Secured Obligations had no acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary's and Trustee's remedies as provided herein, including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such action as 2426486.1 17 Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary's interest in the Property and Trustor's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred. 9. Trustor's Waivers. To the fullest extent permitted by law, Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against Trustor by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind. 10. Miscellaneous Provisions. 10.1 Additional Provisions. The Loan Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the Property. 10.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also the mailing address of Trustor as debtor under the UCC. Beneficiary's address set forth below is the address for Beneficiary as secured party under the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: a. personal delivery, in which case notice shall be deemed delivered upon receipt; b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; C. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. Beneficiary: City of South San Francisco 400 Grand Avenue 2426486.1 18 South San Francisco, CA 94080 Attention: City Manager Trustor: Willow Gardens Housing Associates 303 Vintage Park Drive, Suite 250 Foster City, CA 94404 Attention: Trustee: 10.3 Binding on Successors. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided however this Section 10.3 does not waive the provisions of Section 7.6. 10.4 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of the Recorder of San Mateo County, it shall be conclusive evidence of the appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein. 10.5 Attorneys' Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys' fees. 10.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the "Property Jurisdiction "). The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the Loan Documents. Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In this Deed of Trust, whenever the context so requires, the singular number includes the plural. 10.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to 2426486.1 19 any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary's or Trustee's consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary's acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 10.8 Action by Beneficiary. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by Beneficiary's City Manager or by any person who shall have been designated by Beneficiary's City Manager, without further approval by the governing board of Beneficiary. Beneficiary shall use reasonable best efforts to respond to requests for any such approval, notice, direction, or consent in a timely manner. In any approval, consent, or other determination by Beneficiary required hereunder, Beneficiary shall act reasonably and in good faith. 10.9 Joint and Several Liability. If Trustor consists of more than one person or entity, each shall be jointly and severally liable for the faithful performance of all of Trustor's obligations under this Deed of Trust. Trust. 10.10 Time is of the Essence. Time is of the essence for each provision of this Deed of SIGNATURES ON FOLLOWING PAGE. 2426486.1 20 IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above. TRUSTOR: WILLOW GARDEN HOUSING ASSOCIATES, a California limited partnership By: Mid - Peninsula San Ramon Corporation, a California nonprofit public benefit corporation, its general partner By: Its: SIGNATURES MUST BE NOTARIZED. 2426486.1 21 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of ) On before me, Notary Public, a Notary Public in and for said State, personally appeared, , who proved to me the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his/her their authorized capacity(ies), and that by his/her /their signature (s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 2426486.1 22 Exhibit A The land referred to herein is situated in the County of San Mateo, City of South San Francisco, State of California, and is described as follows: Lot 16, Block 1 and Lots 1, 2, and 3 of Block 2, as delineated upon that certain map entitled "Willow Gardens, South San Francisco, San Mateo County, California ", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on December 29th, 1964 in Book 61 of Maps, at Pages 24 and 25. 011 - 271 -100 (as to Lot 16, Block 1) 011 - 270 -100 (as to Lot 1, Block 2) 011 - 270 -110 (as to Lot 2, Block 2) 011 - 270 -120 (as to Lot 3, Block 2) 2426486.1 23 Attachment 9 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 s use. AFFORDABLE HOUSING REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS by and between THE CITY OF SOUTH SAN FRANCISCO and WILLOW GARDENS HOUSING ASSOCIATES, A CALIFORNIA LIMITED PARTNERSHIP 191/043 Regulatory Agreement Willow Gardens Housing Associates This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this "Agreement ") is entered into effective as of October 24, 2013 ( "Effective Date ") by and between the City of South San Francisco, a municipal corporation ( "City ") and Willow Gardens Housing Associates, a California Limited Partnership ( "Participant "). City and Participant are hereinafter collectively referred to as the "Parties." RECITALS A. Participant owns certain real property located in the City of South San Francisco at 982, 986 and 990 Brusco Way and 976 Sandra Court, and known as San Mateo County Assessor's Parcel No. 011- 270 -120, 011- 270 -110, and 011- 270 -100, respectively and 011- 271 -100 as more particularly described in Exhibit A attached hereto (the "Property "). B. Participant has rehabilitated all sixteen (16) affordable apartment units (the "Project "). In connection with the Project, City gave Participant a loan in the amount of $500,000 ( "Loan "). The Loan is evidenced by a Secured Promissory Note executed by Participant and dated November 19, 2002 ( "Note ") and secured by a a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing ( "Deed of Trust ") dated as of November 19, 2002, executed by Participant for the benefit of the City and recorded in the Official Records of San Mateo County as Instrument Number C. As a condition to its agreement to provide the Loan to Participant, the City requires the Property to be subject to the terms, conditions and restrictions set forth herein. D. The Parties intended to enter into this Agreement concurrently with the execution of the note and deed of trust, and have agreed now, to correct the oversight and to enter into and record this Agreement in order to satisfy the conditions described in the foregoing Recitals. The purpose of this Agreement is to regulate and restrict the occupancy and rents of the Project's Restricted Units for the benefit of the Project occupants. The Parties intend the covenants set forth in this Agreement to run with the land and to be binding upon Participant and Participant's successors and assigns for the full term of this Agreement. NOW THEREFORE, in consideration of the foregoing, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows. 1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits. "Actual Household Size" means the actual number of persons in the applicable household. 2 191/043 Regulatory Agreement Willow Gardens Housing Associates "Adjusted for Family Size Appropriate for the Unit" shall be determined consistent with Section 50052.5(h) of the California Health and Safety Code and applicable federal rules (if any). "Affordable Rent" means the following amounts, less a utility allowance and such other adjustments as required pursuant to the U.S. Department of Housing and Urban Development ( "HUD "): for units that are restricted for rental to households with incomes of not more than eighty percent (80 %) of AMI ( "80% Units "), a monthly rent that does not exceed one - twelfth (1 /12) of thirty percent (30 %) of eighty percent (80 %) of Area Median Income, Adjusted for Family Size Appropriate for the Unit. "Area Median Income" or "AMI" means the median income for San Mateo County, California, adjusted for Actual Household Size, as determined by HUD pursuant to Section 8 of the United States Housing Act of 1937 and as published from time to time by the State of California Department of Housing and Community Development ( "HCD ") in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and Safety Code Section 50093(c). "Claims" is defined in Section 10. "Eligible Household" means a household for which gross household income upon initial occupancy does not exceed the maximum income level for a Restricted Unit as specified in Section 2.1. "Indemnitees" is defined in Section 10. "Low- Income" or "Lower Income" means an annual gross household income that is less than or equal to the qualifying limits for households of Lower Income adjusted for actual household size, as determined periodically by HUD on the basis of gross annual household income and published by HCD in the Regulations for San Mateo County. If HUD ceases to make such determination, "Lower Income" shall be defined as not greater than 80% of Area Median Income adjusted for actual household size, as published by HCD in the Regulations. If both HCD and HUD cease to make such determinations, City in its reasonable discretion may designate another definition of "Lower Income" used by any other federal or state City so long as such definition is no more restrictive than that set forth herein. "Restricted Unit" means a dwelling unit which is reserved for occupancy at an Affordable Rent by a household of not more than a specified household income in accordance with and as set forth in Sections 2.1 and 2.2. 2. Use and Affordability Restrictions. Participant hereby covenants and agrees, for itself and its successors and assigns, that the Property shall be used solely for the operation of an affordable multifamily rental housing development in compliance with the requirements set forth herein. Participant represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the 3 191/043 Regulatory Agreement Willow Gardens Housing Associates occupancy and affordability restrictions set forth in this Agreement, and Participant covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City. 2.1 Affordability Requirements. For a term of fifty -five (55) years commencing upon the Effective Date not less than all of the residential units in the Project shall be occupied (or if vacant, available for occupancy) by Eligible Households whose income is less than or equal to eighty percent (80 %) of AMI and the rents charged for such units shall not exceed the amounts set forth in Section 2.2 . 2.2 Rents for Restricted Units. Rents for Restricted Units shall be limited to Affordable Rents for households of the applicable income limit in accordance with Section 2.1. 2.2.1 Intentionally omitted. 2.2.2 If upon recertification of tenant incomes, Participant determines that a tenant has a household income exceeding the maximum qualifying income for such tenant's unit, the tenant shall be permitted to continue to occupy the unit, and upon expiration of the tenant's lease and upon sixty (60) days' written notice, Participant may increase the rent for such unit to the lesser of one - twelfth of thirty percent (30 %) of the tenant's actual household income or the fair market rent. Notwithstanding the above, the Participant may not renew a tenant's lease if the tenant's household income exceeds eighty percent (80 %) of AMI. 2.2.3 In the event of inconsistency between the provisions of Section 2.2.1 and the rules applicable to the Project in connection with financing provided by HUD, the rules applicable pursuant to such financing source shall prevail. 2.3 No Condominium Conversion. Participant shall not convert the Project to condominium or cooperative ownership or sell condominium or cooperative rights to the Project or any part thereof during the term of this Agreement. 2.4 Non - Discrimination; Compliance with Fair Housinq Laws. 2.4.1 Intentionally Omitted. 2.4.2 Fair Housinq. Participant shall comply with applicable state and federal fair housing laws in the marketing and rental of the units in the Project. Participant shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto. 2.4.3 Non - Discrimination. Participant shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Participant 4 191/043 Regulatory Agreement Willow Gardens Housing Associates covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Participant or any person claiming under or through Participant establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or part thereof. 2.5 Relocation. Persons residing on the Property as of the Effective Date shall not be displaced before suitable replacement housing is available in comparable replacement housing. Participant shall ensure that all occupants of the Property receive all notices, benefits and assistance to which they are entitled in accordance with California Relocation Assistance Law (Government Code Section 7260 et seq.), all state and local regulations implementing such law, and all other applicable local, state and federal laws and regulations (collectively "Relocation Laws ") relating to the displacement and relocation of eligible persons as defined in such Relocation Laws. Any and all costs incurred in connection with the temporary and /or permanent displacement and /or relocation of occupants of the Property, including without limitation payments to a relocation consultant, moving expenses, and payments for temporary and permanent relocation benefits pursuant to Relocation Laws shall be paid by Participant. Participant shall indemnify, defend (with counsel approved by City) and hold harmless the Indemnitees (defined in Section 10) from and against any and all Claims (defined in Section 10) arising in connection with the breach of Participant's obligations set forth in this Section except to the extent such Claims arise from the gross negligence or willful misconduct of the Indemnitees. Participant's indemnification obligations set forth in this Section 2.5 shall survive the expiration or earlier termination of this Agreement. 3. Reportinq Requirements. 3.1. Tenant Certification. Participant or Participant's authorized agent shall obtain from each household prior to initial occupancy of each Restricted Unit, and on every anniversary thereafter, a written certificate containing all of the following in such format and with such supporting documentation as City may reasonably require: (a) The identity of each household member; (b) The total gross household income; Participant shall retain such certificates for not less than three (3) years, and upon City's request, shall provide copies of such certificates to City and make the originals available for City inspection. 5 191/043 Regulatory Agreement Willow Gardens Housing Associates 3.2 Annual Report; Inspections. By not later than April 30 of each year during the term of this Agreement, Participant shall submit an annual report ( "Annual Report ") to the City in form satisfactory to City, together with a certification that the Project is in compliance with the requirements of this Agreement. The Annual Report shall, at a minimum, include the following information for each dwelling unit in the Project: (i) unit number; (ii) number of bedrooms; (iii) current rent and other charges; (iv) dates of any vacancies during the previous year; (v) number of people residing in the unit; (vi) total gross household income of residents. The Annual Report shall conform to the format requested by City; provided however, during such time that the Project is subject to a regulatory agreement restricting occupancy and /or rents pursuant to requirements imposed in connection with the use of state or federal low- income housing tax credits or tax - exempt financing, Participant may satisfy the requirements of this Section by providing City with a copy of compliance reports required in connection with such financing. Participant shall permit representatives of City to enter and inspect the Property and the Project during reasonable business hours in order to monitor compliance with this Agreement upon 48 -hours advance notice of such visit to Participant or to Participant's management agent. 4. Term of Agreement. 4.1 Term of Restrictions. This Agreement shall remain in effect through the 55th anniversary of the Effective Date unless the term is extended by mutual agreement of the Parties. 4.2 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This Agreement shall remain effective and fully binding for the full term hereof, as such may be extended pursuant to Section 4.1, regardless of (i) any sale, assignment, transfer, or conveyance of the Property or the Project or any part thereof or interest therein, (ii) any payment, prepayment or extinguishment of the Loan or Note, or (iii) any reconveyance of the Deed of Trust. 4.3 Reconveyance. Upon the termination of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided, however, the execution and recordation of such instruments shall not be necessary or a prerequisite to the termination of this Agreement upon the expiration of the term as such may be extended pursuant to Section 4.1. 5. Bindinq Upon Successors; Covenants to Run with the Land. Participant hereby subjects its interest in the Property and the Project to the covenants and restrictions set forth in this Agreement. The City and Participant hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of Participant and City, regardless of any sale, assignment, conveyance or transfer of the 6 191/043 Regulatory Agreement Willow Gardens Housing Associates Property, the Project or any part thereof or interest therein. Any successor -in- interest to Participant, including without limitation any purchaser, transferee or lessee of the Property or the Project (other than the tenants of the individual dwelling units within the Project) shall be subject to all of the duties and obligations imposed hereby for the full term of this Agreement. Each and every contract, deed, ground lease or other instrument affecting or conveying the Property or the Project or any part thereof, shall conclusively be held to have been executed, delivered and accepted subject to the covenants, restrictions, duties and obligations set forth herein, regardless of whether such covenants, restrictions, duties and obligations are set forth in such contract, deed, ground lease or other instrument. If any such contract, deed, ground lease or other instrument has been executed prior to the date hereof, Participant hereby covenants to obtain and deliver to City an instrument in recordable form signed by the parties to such contract, deed, ground lease or other instrument pursuant to which such parties acknowledge and accept this Agreement and agree to be bound hereby. Participant agrees for itself and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Property and the Project in favor of City. 6. Property Management; Repair and Maintenance; Marketing. 6.1 Management Responsibilities. Participant shall be responsible for all management functions with respect to the Property and the Project, including without limitation the selection of tenants, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. City shall have no responsibility for management or maintenance of the Property or the Project. 6.2 Intentionally omitted 6.3 Repair, Maintenance and Security. Throughout the term of this Agreement, Participant shall at its own expense, maintain the Property and the Project in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations. Participant shall prevent and /or rectify any physical deterioration of the Property and the Project and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. 6.3.1 City's Right to Perform Maintenance. In the event that Participant breaches any of the covenants contained in Section 6.3, and such default continues for a period of ten (10) days after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from City (with respect to 7 191/043 Regulatory Agreement Willow Gardens Housing Associates landscaping, building improvements and general maintenance), then City, in addition to any other remedy it may have under this Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and the landscaped areas on the Property. All costs expended by City in connection with the foregoing, shall constitute an indebtedness secured by the Deed of Trust, and shall be paid by Participant to City upon demand. All such sums remaining unpaid thirty (30) days following delivery of City's invoice therefor shall bear interest at the lesser of 10% per annum or the highest rate permitted by applicable law. Notwithstanding anything to the contrary set forth in this Section, City agrees that it will provide Participant with not less than thirty (30) days' written notice prior to undertaking any work for which Participant will incur a financial obligation. 6.4 Intentionally omitted. 6.5 Intentionally omitted. 6.6 Fees, Taxes, and Other Levies. Participant shall be responsible for payment of all fees, assessments, taxes, charges, liens and levies applicable to the Property or the Project, including without limitation possessory interest taxes, if applicable, imposed by any public entity, and shall pay such charges prior to delinquency. However, Participant shall not be required to pay any such charge so long as (a) Participant is contesting such charge in good faith and by appropriate proceedings, (b) Participant maintains reserves adequate to pay any contested liabilities, and (c) on final determination of the proceeding or contest, Participant immediately pays or discharges any decision or judgment rendered against it, together with all costs, charges and interest. 6.7 Insurance Coverage. Throughout the term of this Agreement Participant shall comply with the insurance requirements set forth in Exhibit B, and shall, at Participant's expense, maintain in full force and effect insurance coverage as specified in Exhibit B. 6.8 Property Damaqe or Destruction. If any part of the Project is damaged or destroyed, Participant shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced within one hundred twenty (120) days after the damage or loss occurs and shall be completed within one year thereafter or as soon as reasonably practicable, provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financially feasible. During such time that lenders or low- income housing tax credit investors providing financing for the Project impose requirements that differ from the requirements of this Section the requirements of such lenders and investors shall prevail. 7. Recordation; Subordination. This Agreement shall be recorded in the Official Records of San Mateo County. Participant hereby represents, warrants and covenants 8 191/043 Regulatory Agreement Willow Gardens Housing Associates that with the exception of existing liens on the Property, absent the written consent of City, this Agreement shall not be subordinated in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, or other interest in the Property or the Project. 8. Transfer and Encumbrance. 8.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to this Agreement, Participant shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, "Transfer ") of the whole or any part of the Property, the Project, or the improvements located on the Property, without the prior written consent of the City, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement , Participant shall not undergo any significant change of Participant structure without the prior written approval of City. For purposes of this Agreement, a "significant change of Participant structure" shall mean a transfer of the beneficial interest of more than twenty -five percent (25 %) in aggregate of the present Participant structure and /or control of Participant, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision. 8.2 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of temporary easements or permits to facilitate development of the Property; ; (ii) the lease of individual dwelling units to tenants for occupancy as their principal residence in accordance with this Agreement; (iii) Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; (iv) a Transfer to an entity which is under the direct control of MidPen Housing Corporation, a California nonprofit public benefit corporation ( "Controlled Affiliate ") provided that the instrument of Transfer provides for the development and operation of the Property in a manner consistent with this Agreement; (v) the admission of limited partners and any transfer of limited partnership interests in accordance with Participant's agreement of limited partnership (the "Partnership Agreement "), in the event Participant is in a limited partnership, provided that the Partnership Agreement and /or the instrument of Transfer provides the for development and operation of the Property in a manner consistent with this Agreement; (v) the removal of the general partner by the investor limited partner for a default under the Partnership Agreement, provided the replacement general partner is reasonably satisfactory to City; or (vi) the transfer of the general partner's interest to a nonprofit entity that is tax - exempt under Section 501(c)(3) of the Internal Revenue Code of 1986 as amended, provided such replacement general partner is reasonably satisfactory to City. In addition, City shall not withhold its consent to the sale, transfer or other disposition of the Property in whole or in part, provided that (1) the Property is and shall 9 191/043 Regulatory Agreement Willow Gardens Housing Associates continue to be operated in compliance with this Agreement; (2) the transferee expressly assumes all obligations of Participant imposed by this Agreement; (3) the transferee executes all documents reasonably requested by the City with respect to the assumption of the Participant's obligations under this Agreement, and upon City's request, delivers to the City an opinion of its counsel to the effect that such document and this Agreement are valid, binding and enforceable obligations of such transferee; and (4) either (A) the transferee has at least three years' experience in the operation and management of low- income multifamily rental housing projects of similar size to that of the Property, without any record of material violations of nondiscrimination provisions or other state or federal laws or regulations applicable to such projects, or (B) the transferee agrees to retain a property management firm with the experience and record described in subclause (A). Consent to any proposed Transfer may be given by the City Manager unless the City Manager, in his or her discretion, refers the matter of approval to the City Council. If a proposed Transfer has not been approved by City in writing within thirty (30) days following City's receipt of written request by Participant, it shall be deemed rejected. Participant shall reimburse City for all City costs, including but not limited to reasonable attorneys' fees, incurred in reviewing instruments and other legal documents proposed to affect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City's delivery of an invoice detailing such costs. 8.3 Encumbrances. Participant agrees to use best efforts to ensure that all deeds of trust or other security instruments recorded after the effective date against the Property, the Project or part thereof for the benefit of a lender other than City ("Third - Party Lender ") shall contain each of the following provisions: (i) Third -Party Lender shall use its best efforts to provide to City a copy of any notice of default issued to Participant concurrently with provision of such notice to Participant; (ii) City shall have the reasonable right, but not the obligation, to cure any default by Participant within the same period of time provided to Participant for such cure extended by an additional 90 days; (iii) provided that City has cured any default under Third -Party Lender's deed of trust and other loan documents, City shall have the right to foreclose City's Deed of Trust and take title to the Project without acceleration of Third -Party Lender's debt; and (iv) City shall have the right to transfer the Project without acceleration of Third -Party Lender's debt to a nonprofit corporation or other entity which shall own and operate the Project as an affordable rental housing Project, subject to the prior written consent of the Third -Party Lender. Participant agrees to provide to City a copy of any notice of default Participant receives from any Third -Party Lender within three (3) business days following Participant's receipt thereof. 8.4 Mortqaqee Protection. No violation of any provision contained herein shall defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon all or any portion of the Project or the Property, and the purchaser at any trustee's sale or foreclosure sale shall not be liable for any violation of any provision 10 191/043 Regulatory Agreement Willow Gardens Housing Associates hereof occurring prior to the acquisition of title by such purchaser. Such purchaser shall be bound by and subject to this Agreement from and after such trustee's sale or foreclosure sale. Promptly upon determining that a violation of this Agreement has occurred, City shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Project or the Property that such violation has occurred. 9. Default and Remedies. 9.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder ( "Event of Default "): (a) The occurrence of a Transfer in violation of Section 8 hereof; (b) Participant's failure to maintain insurance on the Property and the Project as required hereunder, and the failure of Participant to cure such default within ten (10) days; (c) Subject to Participant's right to contest the following charges, Participant's failure to pay taxes or assessments due on the Property or the Project or failure to pay any other charge that may result in a lien on the Property or the Project, and Participant's failure to cure such default within thirty (30) days of delinquency; (d) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan; (e) An event of default has been declared under the Note or the Deed of Trust which continues beyond expiration of applicable notice and cure periods; (f) Participant's default in the performance of any term, provision or covenant under this Agreement (other than an obligation enumerated in this Subsection 9.1 ), and unless such provision specifies a shorter cure period for such default, the continuation of such default for ten (10) days in the event of a monetary default or thirty (30) days in the event of a non - monetary default following the date upon which City shall have given written notice of the default to Participant, or if the nature of any such non - monetary default is such that it cannot be cured within 30 days, Participant's failure to commence to cure the default within thirty (30) days and thereafter prosecute the curing of such default with due diligence and in good faith. The limited partners of Participant, if any, shall have the right to cure any default of Participant hereunder upon the same terms and conditions afforded to Participant. Provided that City has been given written notice of the address for delivery of notices to the limited partners, City shall provide any notice of default hereunder to the limited partners concurrently with the provision of such notice to Participant, and as to the limited partners, the cure periods specified herein shall commence upon the date of delivery of such notice in accordance with Subsection 11.3. 11 191/043 Regulatory Agreement Willow Gardens Housing Associates 9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, City may proceed with any of the following remedies: A. Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and /or enjoining, abating, or preventing any violation of such terms and conditions, and /or seeking declaratory relief; B. Accelerate and declare the balance of the Note and interest accrued thereon immediately due and payable and proceed with foreclosure under the Deed of Trust; C. For violations of obligations with respect to rents for Restricted Units, impose as liquidated damages a charge in an amount equal to the actual amount collected in excess of the Affordable Rent; D. Pursue any other remedy allowed at law or in equity. Each of the remedies provided herein is cumulative and not exclusive. The City may exercise from time to time any rights and remedies available to it under applicable law or in equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this Agreement. 10. Indemnity. To the fullest extent permitted by law, Participant shall indemnify, defend (with counsel approved by City) and hold City and its elected and appointed officers, officials, employees, agents, and representatives (collectively, the "Indemnitees ") harmless from and against all liability, loss, cost, expense (including without limitation attorneys' fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively "Claims ") arising directly or indirectly, in whole or in part, as a result of or in connection with Participant's construction, management, or operation of the Property and the Project or any failure to perform any obligation as and when required by this Agreement. Participant's indemnification obligations under this Section 10 shall not extend to Claims resulting solely from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 10 shall survive the expiration or earlier termination of this Agreement. It is further agreed that City does not and shall not waive any rights against Participant that it may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or the deposit with City by Participant, of any of the insurance policies described in this Agreement or the Loan Agreement. 11. Miscellaneous. 11.1 Amendments. This Agreement may be amended or modified only by a 12 191/043 Regulatory Agreement Willow Gardens Housing Associates written instrument signed by both Parties. 11.2 No Waiver. Any waiver by City of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by City to take action on any breach or default hereunder or to pursue any remedy allowed under this Agreement or applicable law. No failure or delay by City at any time to require strict performance by Participant of any provision of this Agreement or to exercise any election contained herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach of the same or any other provision hereof or a relinquishment for the future of such election. 11.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first -class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. City: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: Community Development Director Participant: Willow Gardens Housing Associates, a California Limited Partnership 303 Vintage Park Drive, Suite 250 Foster City, CA 94404 Attn: Matthew Franklin 11.4 Further Assurances. The Parties shall execute, acknowledge and deliver 13 191/043 Regulatory Agreement Willow Gardens Housing Associates to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement. 11.5 Parties Not Co- Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co- venturers, or principal and agent with one another. 11.6 Action by the City. Except as maybe otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by the City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City Manager or by any person who shall have been designated by the City Manager, without further approval by the City Council. 11.7 Non - Liability of City and City Officials, Employees and Agents. No member, official, employee or agent of the City shall be personally liable to Participant or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Participant or its successor or for any obligation of City under this Agreement. 11.8 Headings; Construction. The headings of the sections and paragraphs of this Agreement are for convenience only and shall not be used to interpret this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. 11.9 Time is of the Essence. Time is of the essence in the performance of this Agreement. 11.10 Governinq Law. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. 11.11 Attorneys' Fees and Costs. If any legal or administrative action is brought to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover all reasonable attorneys' fees and costs incurred in such action. 11.12 Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby. 11.13 Entire Agreement; Exhibits. This Agreement, together with the Note anc the Deed of Trust contains the entire agreement of Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto. Exhibits A and B, attached hereto are incorporated herein by this reference. 11.14 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one 14 191/043 Regulatory Agreement Willow Gardens Housing Associates agreement. SIGNATURES ON FOLLOWING PAGE. 15 191/043 Regulatory Agreement Willow Gardens Housing Associates IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above. CITY: THE CITY OF SOUTH SAN FRANCISCO, A MUNICIPAL CORPORATION By: Name: Mike Futrell Title: City Manager ATTEST: Krista Martinelli, City Clerk APPROVED AS TO FORM: so Jason Rosenberg, City Attorney PARTICIPANT WILLOW GARDENS HOUSING ASSOCIATES, A CALIFORNIA LIMITED PARTNERSHIP By: Mid - Peninsula San Ramon Corporation, a California nonprofit public benefit corporation, its general partner Bv: Name: Matthew O. Franklin Its: Assistant Secretary SIGNATURES MUST BE NOTARIZED A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of On before me, Notary Public, a Notary Public in and for said State, personally appeared, , proved to me 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 /hertheir authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of ) On before me, Notary Public, a Notary Public in and for said State, personally appeared, , proved to me 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 /hertheir authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature Exhibit A PROPERTY (Attach legal description) Exhibit B INSURANCE REQUIREMENTS Prior to initiating work on the Project and continuing through throughout the term of this Agreement, Participant shall obtain and maintain the following policies of insurance: (a) a commercial general liability policy in the amount of One Million Dollars ($1,000,000) combined single limit, Two Million Dollars ($2,000,000) annual aggregate, together with Five Million Dollars ($5,000,000) umbrella liability coverage, or such other policy limits as City may require in its reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds. (b) a comprehensive automobile liability coverage in the amount of One Million Dollars ($1,000,000), combined single limit including coverage for owned and non -owned vehicles and shall furnish or cause to be furnished to City evidence satisfactory to City that Participant and any contractor with whom Participant has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. Automobile liability policies shall name the Indemnitees as additional insureds. (c) Upon commencement of construction and continuing until issuance of a Certificate of Completion, Participant and all contractors working on behalf of Participant shall maintain a policy of builder's all -risk insurance in an amount not less than the full insurable cost of the Project on a replacement cost basis naming City as loss payee. (d) Participant shall maintain property insurance covering all risks of loss (other than earthquake), including flood (if required) for 100% of the replacement value of the Project with deductible, if any, in an amount acceptable to City, naming City as loss payee. (e) Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance shall be placed with insurers with a current A.M. Best's rating of no less than A: VII. The Commercial General Liability and comprehensive automobile policies required hereunder shall name the Indemnitees as additional insureds. Builder's Risk and property insurance shall name City as loss payee as its interests may appear. (f) Prior to commencement of construction, Participant shall furnish City with certificates of insurance in form acceptable to City evidencing the required insurance coverage and duly executed endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify City of any material adverse change, cancellation, termination or non - renewal of the coverage at least thirty (30) days in advance of the effective date of any such material adverse change, cancellation, termination or non - renewal. (g) If any insurance policy or coverage required hereunder is canceled or reduced, Participant shall, within fifteen (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, City may, without further notice and at its option, procure such insurance coverage at Participant's expense, and Participant shall promptly reimburse City for such expense upon receipt of billing from City. (h) Coverage provided by Participant shall be primary insurance and shall not be contributing with any insurance, or self- insurance maintained by City, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the City. Participant shall furnish the required certificates and endorsements to City prior to the commencement of construction of the Project, and shall provide City with certified copies of the required insurance policies upon request of City. 2429458.1 City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA Staff Report File Number: 16 -426 Agenda Date: 7/27/2016 Version: 1 Status: Passed In Control: Special City Council File Type: Resolution Agenda Number: 2a. Resolution approving amendments to the former Redevelopment Agency Regulatory Agreement, former Redevelopment Agency Deed of Trust, HOME Regulatory Agreement, and HOME Deed of Trust; approving the City entering into Community Development Block Grant /Section 108 Regulatory Agreement; and Approving a Promissory Note and Deed of Trust with Willow Gardens Housing Associates for the Willow Gardens Neighborhood Rehabilitation Project; and Authorizing the City Manager to execute said documents. WHEREAS, in January 1999, the former Redevelopment Agency of the City of South San Francisco ( "former RDA ") provided financing and entered into a loan agreement with Willow Gardens Housing Associates, a California limited partnership affiliated with Mid - Peninsula Housing Coalition (the "Developer ") in the amount of $3.5 million ( "RDA Loan ") to acquire and rehabilitate affordable housing units in the Willow Gardens Neighborhood (the "Project "); and WHEREAS, the City and Developer also applied for County (HOME Investment Partnerships Program) and federal (Community Development Block Grant (CDBG) /Section 108) funding to offset the costs of the Project; and WHEREAS, between 1999 and 2005, the Developer acquired seven (7) properties solely with the RDA Loan funds and an additional bridge loan provided by the RDA because no County or federal funding had been granted at the time of acquisition of the properties; and WHEREAS, when the HOME and CDBG /Section 108 funding were eventually disbursed to the Project, the funding was used to repay the RDA bridge loan but the applicable financing documents were not amended and re- executed to reflect the new County and federal financing encumbrances on the properties; and WHEREAS, City staff discovered that the applicable financial documents need to be updated to reflect the existing loan encumbrances and affordability restrictions on all City of South San Francisco Page 1 Printed on 81212016 File Number: 16 -426 seven (7) properties and to fully secure all funding against the properties; and WHEREAS, in an effort to update and correct the agreements and reflect current conditions, City staff has worked with the Developer to identify the missing documents and draft new documents where appropriate. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco that the City Council hereby authorizes the City Manager or his designee to take the following actions: 1. Amend the existing RDA Regulatory Agreement to include sites 4 through 7, as identified on the Willow Gardens Site Map, attached hereto as Exhibit A. 2. Amend the RDA Deed of Trust to include sites 4 through 7, as identified on the Willow Gardens Site Map, attached hereto as Exhibit A. 3. Amend the HOME (1 st Loan) Regulatory Agreement to include sites 2 through 7, as identified on the Willow Gardens Site Map, attached hereto as Exhibit A. 4. Amend the HOME (1st Loan) Deed of Trust to include sites 2 and 3, as identified on the Willow Gardens Site Map, attached hereto as Exhibit A. 5. Enter into a new HOME (2nd Loan) Promissory Note for sites 4 through 7, as identified on the Willow Gardens Site Map, attached hereto as Exhibit A. 6. Enter into a new HOME (2nd Loan) Deed of Trust for sites 4 through 7, as identified on the Willow Gardens Site Map, attached hereto as Exhibit A. 7. Enter into a new CDBG /Section 108 Regulatory Agreement for sites 4 through 7, as identified on the Willow Gardens Site Map, attached hereto as Exhibit A. 8. Draft a letter to the Developer explaining the grant status of the CDBG Housing Rehabilitation funds. BE IT FURTHER RESOLVED, by the City Council of the City of South San Francisco that the City Council hereby authorizes the City Manager or his designee to take execute the documents approved by this Resolution, subject as to approval as to form by the City Attorney, and to take such other actions reasonably necessary to carry out the intent of this Resolution. City of South San Francisco Page 2 Printed on 81212016 Attachment 8: Site Map of the Nine Acquired Properties WILLOW GARDENS WILLOW AVENUE' 4 Site4 _ -- - -- - �T ite5 r xtlj itel. ' -.. .: ,- ' .. � �. __ ice- �. - _ _ _ _ _ •- • yl ,yI, F. � l jjl 1 l N.'• �E �T�ff � �. �-! 9i'� �� � �'_f :■ �� \p ~rR'i ♦ � �, 1 y1�3 �i: 1'j.y r. ♦ ��L �� + }! \. f� d •' '3 iii' i�'..,� '.� -..i. �• ` ~ .�vi F'y, 6 ; Willow Gardens - Site Map