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HomeMy WebLinkAboutItem No. 19 Affordable Housing Bridge Loan Agreement Mission Cottages, LPCity Council Agenda Report City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: ID# 19-798 Agenda Date: 12/8/2020 Status: Approval FinalVersion: 1 File Type: Council Consent Calendar In Control: City Council / Successor Agency Agenda Number: 19) Affordable Housing Bridge Loan Agreement by and between the City of Lake Elsinore and Mission Cottages, LP (Cottages at Mission Trail) Approve an Affordable Housing Bridge Loan Agreement and related documents by and between the City of Lake Elsinore and Mission Cottages, LP in substantially the form attached, and authorize the City Manager to execute the agreement and all other documents necessary to implement the agreement in such final form as approved by the City Attorney. Page 1 City of Lake Elsinore Printed on 12/3/2020 REPORT TO CITY COUNCIL To: Honorable Mayor and Members of the City Council From: Grant Yates, City Manager Prepared By: Barbara Leibold, City Attorney Date: December 8, 2020 Subject: Affordable Housing Bridge Loan Agreement by and between the City of Lake Elsinore and Mission Cottages, LP (Cottages at Mission Trail) Recommendation Approve an Affordable Housing Bridge Loan Agreement and related documents by and between the City of Lake Elsinore and Mission Cottages, LP in substantially the form attached, and authorize the City Manager to execute the agreement and all other documents necessary to implement the agreement in such final form as approved by the City Attorney. Background Pursuant to the Amended and Restated Disposition and Development Agreement (DDA) dated March 8, 2011 by and among the former Redevelopment Agency, Summerly and Civic Partners- Elsinore LLC, certain funds equal to 20% of the property tax revenues generated from Developer and Master Developer properties (Pledged Housing Funds) are pledged to Civic Partners- Elsinore LLC for affordable housing purposes. This pledge constitutes a recognized enforceable obligation and has been included on the Successor Agency ROPS. The Pledged Housing Funds are administered by the City as the housing successor to the former Redevelopment Agency. On June 13, 2017, the City Council approved a Loan Commitment Letter for the Cottages at Mission Trail Project (Project), and on March 26, 2019 the City Council approved a Disposition, Development and Loan Agreement (DDLA), Addendum to Commitment Letter and related Project documents. City financial assistance under the DDLA and Addendum to the Loan Commitment Letter was funded from (i) Pledged Housing Funds under DDA, (ii) Low and Moderate Income Housing Asset Funds (LMIHAF), and (iii) City’s Affordable Housing In Lieu Fund 106. The Project is a 143-unit work force housing rental project restricted to occupancy by households earning up to 60% of area median income with an approximately 55,000 square foot park/recreation area including a 2,200 square foot recreation building, a children’s play area, open lawn, picnic area, meandering walkways and a 6.97-acre flood storage basin with a 1,312 linear foot, circular walking/running path around the basin. The Project is located on an approximately 19.46 acre site located at the intersection of Mission Trail & Sedco Boulevard in the City’s East Lake Specific Plan as depicted on the attached Vicinity Map (Attachment 1). Disposition, Development and Loan Agreement Addendum to Commitment Letter - Cottages at Mission Trail March 26, 2019 Page 2 Discussion The Project developer obtained City approval of all necessary land use entitlements, approval by the California Department of Fish and Wildlife of a Section 1602 Lake Alteration Agreement to mitigate project impacts on fish and wildlife resources, secured commitments for Low Income Housing Tax Credits and Multi-Family Housing Revenue Bond proceeds and is in compliance with the conditions of the DDLA. Construction is underway and Project completion is anticipated the second quarter of 2021. The Project developer has identified a short-term gap in funding due to the requirement that the construction contract be repaid in full prior to or concurrent with the funding of the permanent financing. The Project developer requires the financial assistance of the City by way of a Bridge Loan in the amount of Nine Hundred Fifty Thousand Dollars ($950,000) to repay the construction contract in a timely manner. Due to an anticipated increase in the amount of the Project’s permanent loan, the Project developer will be able to repay the City’s Bridge Loan in full upon conversion to permanent financing. Under the terms of the proposed Affordable Housing Bridge Loan Agreement, the City will provide the requested Bridge Loan from available LMIHAF. Repayment is anticipated to occur in April 2021, but in no event later than November 1, 2021, or such later date as may be agreed to by the City and provided that commitments for the Tax Credit Funds and the permanent loan remain in full force and effect. In connection with the DDLA, the Project developer agreed to accept the statutorily authorized and other conditions set forth in the DDLA and the Regulatory Agreement recorded against the Project, which are also required in connection with the funding of the Bridge Loan from the LMIHAF. The City’s financial consultant, Urban Futures, Inc. has reviewed the flow of funds and Project financing and determined that the City Bridge Loan is appropriate and that there are sufficient Project funds to cover the Bridge Loan and accrued interest. Fiscal Impact The City’s financial assistance under the Affordable Housing Bridge Loan Agreement will be funded from available funds in the City’s Low and Moderate Income Housing Asset Fund (LMIHAF). The Project developer will reimburse the City for legal fees incurred in the preparation of the Affordable Housing Bridge Loan Agreement. Attachments: Exhibit A - Vicinity Map Exhibit B - Affordable housing Bridge Loan Agreement I 1 5 MISS ION TRLDIAMOND DRMILL ST LAKESHORE DR G R A P E S T MALAGA RD CA S I N O D R CORYDON STVILLAGE PKWYELM STPARK WAY HIDDEN TRLHIGH STBASEBALL I 1 5 Source: Esri, DigitalGlobe, GeoEye, i-cubed, Earthstar Geographics,CNES/Airbus DS, USDA, USGS, AEX, Getmapping, Aerogrid, IGN,IGP, swisstopo, and the GIS User Community I 1 5 MISS ION TRLDIAMOND DRMILL ST LAKESHORE DR G R A P E S T MALAGA RD CA S I N O D R CORYDON STVILLAGE PKWYELM STPARK WAY HIDDEN TRLHIGH STBASEBALL I 1 5 Source: Esri, DigitalGlobe, GeoEye, i-cubed, Earthstar Geographics,CNES/Airbus DS, USDA, USGS, AEX, Getmapping, Aerogrid, IGN,IGP, swisstopo, and the GIS User Community PROJECT SITE ´ AFFORDABLE HOUSING BRIDGE LOAN AGREEMENT (Cottages at Mission Trail) by and between the CITY OF LAKE ELSINORE and MISSION COTTAGES LP TABLE OF CONTENTS Page Cottages Bridge Loan Agreement FINAL i 1. DEFINITIONS ..................................................................................................................... 2 1.1. Defined Terms ........................................................................................................ 2 1.2. Singular and Plural Terms ...................................................................................... 5 1.3. Accounting Principles ............................................................................................. 5 1.4. References and Other Terms ................................................................................... 6 1.5. Attachments Incorporated ....................................................................................... 6 2. REPRESENTATIONS AND TRANSFERS ...................................................................... 6 2.1. Representations by the Developer .......................................................................... 6 2.1.1. Organization ............................................................................................ 6 2.1.2. Authority ................................................................................................. 6 2.1.3. Consent ................................................................................................... 6 2.1.4. Valid and Binding Agreements ............................................................... 7 2.1.5. Contingent Obligations ........................................................................... 7 2.1.6. Litigation ................................................................................................. 7 2.1.7. No Conflict .............................................................................................. 7 2.1.8. Bankruptcy .............................................................................................. 7 2.1.9. No Default under Approved Financing ................................................... 7 2.1.10. Revised Financing Plan ........................................................................... 7 2.2. Limitation Upon Change in Ownership, Management and Control of Developer . 8 2.2.1. Prohibition ............................................................................................... 8 2.2.2. City Consideration of Requested Transfer .............................................. 8 2.2.3. Successors and Assigns ........................................................................... 9 3. BRIDGE LOAN ................................................................................................................... 9 3.1. Bridge Loan ............................................................................................................ 9 3.1.1. Bridge Loan ............................................................................................ 9 3.1.2. Disbursement and Use of Bridge Loan Proceeds ................................... 9 3.2. Conditions Precedent to Disbursement of the Loan Proceeds ................................ 9 3.2.1. Execution and Delivery of City Loan Documents ................................ 10 3.2.2. Insurance ............................................................................................... 10 3.2.3. No Default ............................................................................................. 10 3.2.4. Evidence of Payment Due under Construction Contract ...................... 10 3.2.5. Evidence of Instructions to Wilmington Trust ...................................... 10 3.2.6. Representations and Warranties ............................................................ 10 3.2.7. Consents of Senior Lenders; Amendment to Permanent Loan Documents ............................................................................................ 10 3.2.8. Consent of Investor; Amendment to Partnership Agreement ............... 11 3.2.9. Amendment to Bond Documents .......................................................... 11 3.2.10. Corporate Authority .............................................................................. 11 3.2.11. Subordination Agreements; Other Recordable Documents .................. 11 3.2.12. Revised Financing Plan ......................................................................... 11 3.2.13. Developer Financial Statements ........................................................... 11 3.3. Repayment of Bridge Loan. . ............................................................................... 12 4. DEVELOPMENT ACTIVITIES ...................................................................................... 12 4.1. Permits and Entitlements ...................................................................................... 12 4.2. Design ................................................................................................................... 12 TABLE OF CONTENTS Page Cottages Bridge Loan Agreement FINAL ii 4.3. Preparation of Property ......................................................................................... 12 4.4. Insurance ............................................................................................................... 12 4.5. Developer’s Indemnity.......................................................................................... 13 4.5.1. General.. ................................................................................................ 13 4.5.2. Bodily Injury and Property Damage Indemnification. . ...................... 13 4.5.3. Survival. . ............................................................................................. 13 4.5.4. No Waiver. . ......................................................................................... 13 4.6. Compliance with Laws ......................................................................................... 14 4.6.1. Labor Standards .................................................................................... 14 4.6.2. General .................................................................................................. 14 4.6.3. Nondiscrimination in Employment ....................................................... 15 4.7. Nondiscrimination Covenants ............................................................................... 15 4.8. Required Disclosures ............................................................................................ 18 4.9. Duty to Prevent Hazardous Materials Contamination .......................................... 18 4.10. Environmental Inquiries........................................................................................ 19 5. AFFORDABILITY COVENANTS AND RESTRICTIONS ......................................... 19 5.1. Use Covenants ...................................................................................................... 19 5.2. Affordable Housing Requirements ....................................................................... 20 6. DEFAULTS, REMEDIES AND TERMINATION ......................................................... 20 6.1. Defaults - General ................................................................................................. 20 6.2. Legal Actions ........................................................................................................ 21 6.2.1. Institution of Legal Actions .................................................................. 21 6.2.2. Applicable Law ..................................................................................... 21 6.2.3. Acceptance of Service of Process ......................................................... 21 6.3. Rights and Remedies are Cumulative ................................................................... 21 6.4. Inaction Not a Waiver of Default.......................................................................... 21 6.5. Specific Performance ............................................................................................ 21 6.6. Consequential Damages ........................................................................................ 22 6.7. Attorneys’ Fees ..................................................................................................... 22 6.8. Acceleration of Promissory Note .......................................................................... 22 6.9. Termination ........................................................................................................... 23 7. GENERAL PROVISIONS ................................................................................................ 23 7.1. Notices, Demands and Communications Between the Parties ............................. 23 7.2. Conflicts of Interest............................................................................................... 24 7.3. Warranty Against Payment of Consideration for Agreement ............................... 24 7.4. Nonliability of City Officials and Employees ...................................................... 24 7.5. Approvals by City and Developer......................................................................... 24 7.6. Force Majeure ....................................................................................................... 24 7.7. Applicable Law; Interpretation ............................................................................. 25 7.8. Inspection of Books and Records, Reports ........................................................... 25 7.9. Administration ...................................................................................................... 25 7.10. Mutual Cooperation .............................................................................................. 25 7.11. Independent Contractor ......................................................................................... 26 7.12. Time ...................................................................................................................... 26 7.13. Third Party Beneficiaries ...................................................................................... 26 TABLE OF CONTENTS Page Cottages Bridge Loan Agreement FINAL iii 7.14. Reimbursement of City Costs ............................................................................... 26 8. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS ...................................... 26 Cottages Bridge Loan Agreement FINAL iv ATTACHMENTS ATTACHMENT NO. 1 PROMISSORY NOTE ATTACHMENT NO. 2 DEED OF TRUST ATTACHMENT NO. 3 REVISED FINANCING PLAN ATTACHMENT NO. 4 BRIDGE LOAN FLOW OF FUNDS Cottages Bridge Loan Agreement FINAL 1 AFFORDABLE HOUSING BRIDGE LOAN AGREEMENT THIS AFFORDABLE HOUSING BRIDGE LOAN AGREEMENT (Cottages Affordable Housing Project) (“Agreement”) dated for identification purposes only as of December __, 2020, is made and entered into by and between the CITY OF LAKE ELSINORE, a California municipal corporation (“City”) and MISSION COTTAGES LP, a California limited partnership (“Developer”), with reference to the following: RECITALS The following Recitals are a substantive part of this Agreement. Capitalized terms used in these Recitals and not otherwise defined shall have the meaning set forth in Section 1.1. If not defined in the Recitals or in Section 1.1 hereof, such terms shall have the meaning set forth in the DDLA (as hereinafter defined). A. In accordance with California Health & Safety Code Section 34172, the Redevelopment Agency of the City of Lake Elsinore (“Former Agency”) was dissolved as of February 1, 2012. The City is the successor to the “housing assets” (as defined in California Health & Safety Section 34176) of the Former Agency, and as such holds funds in the Low and Moderate Income Housing Asset Fund (the “LMIHAF Fund”) pursuant to California Health & Safety Code Section 34176(d). B. Developer and City are parties to that certain Disposition, Development and Loan Agreement is entered into as of April 1, 2019 (including all agreements entered into between City and Developer concurrently therewith, and any amendments or modifications thereto, collectively, the “DDLA”), pursuant to which City made Developer certain loans for the acquisition and development of an approximately one hundred forty three (143) unit apartment building (“Project”) restricted to occupancy by households earning up to 60% of area median income, including an approximately 55,000 square foot park/recreation area, a 2,200 square foot recreation building, a children’s play area, open lawn, picnic area, meandering walkways and a 6.97-acre flood storage basin with a 1,312 linear foot, circular walking/running path around the basin. The Project is being developed on an approximately 19.46 acre site located at the intersection of Mission Trail & Sedco Boulevard in the City’s East Lake Specific Plan (as legally described in the DDLA, the “Property”). C. Development activities with respect to the Property and the Project are ongoing. Developer has identified a gap in funding for the Project due to the requirement that the construction contract be repaid in full prior to or concurrent with the funding of the permanent loan. Developer requires the financial assistance of City to repay the construction contract in a timely manner, but, due to an anticipated increase in the amount of the Permanent Loan, will be able to repay the Bridge Loan (as hereinafter defined) upon Conversion to Permanent Financing. In connection with the DDLA, Developer agreed to accept the statutorily authorized and other conditions set forth therein and in the Regulatory Agreement, which are also required in connection with the funding of the Bridge Loan from the LMIHAF. D. By this Agreement, and in furtherance of the City’s affordable housing goals and activities to increase and preserve the community’s supply of affordable housing, City desires to loan to Developer an amount not to exceed Nine Hundred Fifty Thousand Dollar ($950,000) from the LMIHAF (the “Bridge Loan”). Proceeds of the Bridge Loan are to be used solely for Cottages Bridge Loan Agreement FINAL 2 payment of the Construction Contract pursuant to and in accordance with all applicable federal, state and local laws. E. The provision of the Bridge Loan to Developer and the completion of the Project pursuant to the terms and conditions of this Agreement are in the vital and best interest of the City and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws, including (without limitation) the City’s replacement housing and housing production obligations pursuant to Section 33413 of the Community Redevelopment Law. NOW, THEREFORE, the City and the Developer hereby agree as follows: 1. DEFINITIONS 1.1. Defined Terms As used in this Agreement, the following capitalized terms shall have the following meanings: “Affiliate” means any person or entity directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Developer which, if Developer is a partnership or limited liability company, shall include each of the constituent members or partners, respectively, thereof. The term “control” as used in the immediately preceding sentence, means, with respect to a person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person. “Affordable Rent” means the amount of monthly rent, including a reasonable utility allowance, permitted by the Regulatory Agreement for each Restricted Unit. “Affordability Period” means the period commencing upon the recordation of the Regulatory Agreement and ending upon the later of: (i) the fifty-fifth (55th) anniversary of the City’s recordation of a Notice of Completion for the construction of the Development; or (ii) December 31, 2076. “Agency” or “RDA” means the former Redevelopment Agency of the City of Lake Elsinore, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law and any assignee of or successor to its rights, powers and responsibilities. “Agreement” means this Bridge Loan Agreement, including all of the Attachments, by and between the Parties, and any amendments or modifications hereto. “Bridge Loan” means the loan from the City to the Developer from the LMIHAF in accordance with the terms of this Agreement in an amount not to exceed Nine Hundred Fifty Thousand Dollars ($950,000). “Bridge Loan Flow of Funds” means the schedule attached as Attachment 4 setting forth the timing and use of the proceeds of the Bridge Loan. Cottages Bridge Loan Agreement FINAL 3 “Business Day(s)” means Monday through Friday, except for federal and state holidays. “City” means the City of Lake Elsinore, a California municipal corporation. “City Indemnitees” means the City and its officers, employees, elected and appointed officials, representatives and agents. “City Loan Documents” means all of the documents evidencing the Bridge Loan and required as consideration for the City to make the Bridge Loan, including, without limitation, this Agreement, the Promissory Note, the Deed of Trust, the Bridge Loan Flow of Funds, the Revised Financing Plan, the Regulatory Agreement and any third party consents or certificates delivered in connection herewith. The term “City Loan Documents” shall include all modifications, extensions, renewals, and replacements of the aforementioned documents or any other agreement. “City Manager” means the City Manager of the City or his or her designee. “Closing” means the date upon which the Deed of Trust is recorded in the Official Records. “Community Redevelopment Law” means Health & Safety Code Section 33000, et seq. “Construction Contract” means that certain Construction Contract dated March 29, 2018 between Developer and General Contractor for construction of the Project. “County” means the County of Riverside, California. “Deed of Trust” means the deed of trust securing the Promissory Note evidencing the Bridge Loan in substantially the form of Attachment No. 2 “Developer” means Mission Cottages LP, a California limited partnership and any permitted successors and assigns. “Effective Date” means the date this Agreement is executed by the City. “Environmental Laws” means any and all present and future federal, state and local laws (whether under common law, statute, ordinance, rule, regulation or otherwise), court or administrative orders or decrees, requirements of permits issued with respect thereto, and other requirements of governmental authorities relating to the environment or to any Hazardous Materials (including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. § 9601, et seq.), as heretofore or hereafter amended from time to time (“CERCLA”), and the applicable provisions of the Health & Safety Code and the Water Code, and any and all successor statutes and regulations, orders, decrees, guidelines, or pronouncements promulgated thereunder). “Event of Default” means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure, as set forth in Section 6. Cottages Bridge Loan Agreement FINAL 4 “Financing Plan” means the financial information dated as of March 14, 2019, and attached as Exhibit N to the DDLA, which constituted Developer’s best estimate of Project costs, financing, revenues and cost of ongoing operations based upon the information available to Developer as of the Effective Date of the DDLA. “General Contractor” means Premier Design + Build Group. “Governmental Regulations” means any local, state, and federal laws, ordinances, rules, requirements, resolutions, policy statements and regulations (including, without limitation, those relating to land use, subdivision, zoning, environmental, labor relations, prevailing wage, notification of sale to employees, Hazardous Materials, occupational health and safety, water, earthquake hazard reduction and building and fire codes) bearing on the demolition, alteration, replacement, repair, refurbishing, improvement, construction, maintenance, management, use, or operation of the Project. “Hazardous Materials” means any substance, material, or waste which is: (1) defined as a “hazardous waste”, “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,” “pollutant” or any other terms comparable to the foregoing terms under any provision of California law or federal law; (2) petroleum; (3) asbestos; (4) polychlorinated biphenyls; (5) radioactive materials; (6) mold; (7) MTBE; or (8) determined by California, federal or local government authority to be capable of posing a risk of injury to health, safety or property. Without limiting the foregoing, Hazardous Materials means and includes any substance or material defined or designated as hazardous or toxic waste, hazardous or toxic material, a hazardous, toxic or radioactive substance, or other similar term, by any Environmental Laws including any federal, state or local environmental statute, regulation or ordinance presently in effect that may be promulgated in the future, as such as statutes, regulations and ordinances may be amended from time to time. The term “Hazardous Materials” shall not include: (i) construction materials, gardening materials, household products, office supply products or janitorial supply products customarily used in the construction, maintenance, rehabilitation, or management of commercial properties, buildings and grounds, or typically used in office or residential activities, or (ii) certain substances which may contain chemicals listed by the State of California pursuant to California Health & Safety Code Section 25249.8 et seq., which substances are commonly used by a significant portion of the population living within the region of the Improvements, including, but not limited to, alcoholic beverages, aspirin, tobacco products, NutraSweet and saccharine, so long as such materials and substances are stored, used and disposed of in compliance with all applicable Environmental Laws. “Indenture” means the Indenture of Trust dated as of April 1, 2019, between California Statewide Community Development Authority and Wilmington Trust, as trustee, to provide funds to finance the costs of the acquisition, construction and equipping of the Project. “LMIHAF” means the City’s Low and Moderate Income Housing Asset Fund, established pursuant to Section 34176(d) of the California Health & Safety Code. “Loan Proceeds” is defined in Section 3.1.2. “Maturity Date” shall have the meaning set forth in the Promissory Note. Cottages Bridge Loan Agreement FINAL 5 “Notice” means a notice in the form prescribed by Section 7.1. “Outside Closing Date” means April 30, 2021. “Parties” means City and Developer; “Party” means City or Developer. “Promissory Note” means the Promissory Note Secured by Deed of Trust (Low and Moderate Income Housing Asset Fund – Cottages Bridge Loan) evidencing the Bridge Loan in substantially the form shown in Attachment No. 1. “Project” means the acquisition of the Property, the construction of one hundred forty three (143) Units and any other Improvements ancillary thereto, and the financing and operation thereof in conformance with the Revised Financing Plan, the DDLA, and the Regulatory Agreement. “Property” is defined in Recital B. “Regulatory Agreement” means that certain Regulatory Agreement and Declaration of Restrictive Covenants (Low and Moderate Income Housing Asset Funds) recorded in the official records of the County of Riverside on April 10, 2019 as document no. 2019-0121312. “Restricted Units” shall have the meaning set forth in the Regulatory Agreement. “Revised Financing Plan” means the financing plan for the Project dated as of _____________, 2020 prepared by Developer and included as Attachment No. 3 hereto, which updates the Financing Plan as of the Effective Date. “Trustee Acknowledgement” is defined in Section 3.1.2. “Unit” or “Units” means one or more individual apartments within the Project to be constructed and operated by the Developer on the Property, in accordance with the terms and conditions of the DDLA, Regulatory Agreement and Approved Financing. “Wilmington Trust” means Wilmington Trust, National Association, a national banking association organized under the laws of the United States of America, as trustee of the Bonds. 1.2. Singular and Plural Terms Any defined term used in the plural herein shall refer to all members of the relevant class and any defined term used in the singular shall refer to any number of the members of the relevant class. 1.3. Accounting Principles Any accounting term used and not specifically defined herein shall be construed in conformity with, and all financial data required to be submitted herein shall be prepared in conformity with, generally accepted accounting principles applied on a consistent basis or in accordance with such other principles or methods as are reasonably acceptable to the City Manager. Cottages Bridge Loan Agreement FINAL 6 1.4. References and Other Terms Any reference to any document shall include such document both as originally executed and as it may from time to time be modified. References herein to Sections and Attachments shall be construed as references to this Agreement unless a different document is named. References to subparagraphs shall be construed as references to the same Section in which the reference appears. The term “document” is used in its broadest sense and encompasses agreements, certificates, opinions, consents, instruments and other written material of every kind. The terms “including” and “include” mean “including (include), without limitation.” 1.5. Attachments Incorporated All attachments to this Agreement, as now existing and as the same may from time to time be modified, are incorporated herein by this reference. 2. REPRESENTATIONS AND TRANSFERS 2.1. Representations by the Developer The Developer hereby represents and warrants to the City as follows: 2.1.1. Organization Developer is a duly organized, validly existing limited partnership in good standing under the laws of the State of California and has the power and authority to own and lease property and carry on its business as now being conducted. The copies of the documents evidencing the good standing of Developer delivered to the City are true and correct copies of the originals. 2.1.2. Authority The Developer has the legal power, right and authority to execute, deliver and enter into this Agreement and any and all other agreements and documents required to be executed and delivered by the Developer in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement, and to perform and observe the terms and provisions of all of the above. The parties who have executed this Agreement and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement are authorized to execute and deliver the same on behalf of the Developer and all actions required under Developer’s organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and all other documents or instruments executed and delivered, or to be executed and delivered pursuant hereto, have been duly taken. 2.1.3. Consent Developer has obtained all necessary consents of third parties required in connection with the Bridge Loan under any agreement entered into by Developer with respect to the Project. Cottages Bridge Loan Agreement FINAL 7 2.1.4. Valid and Binding Agreements This Agreement and all other documents or instruments which have been executed and delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will constitute when so executed and delivered, legal, valid and binding obligations of Developer enforceable against it in accordance with their respective terms. 2.1.5. Contingent Obligations Neither Developer nor any Affiliate has any material contingent obligations or any material contractual agreements which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. 2.1.6. Litigation To the Developer’s best knowledge, no action, suit or proceedings are pending or threatened before any governmental department, commission, board, bureau, agency or instrumentality to which the Developer or any Affiliate have or may be made a party or to which any of their property is or may become subject, which could materially adversely affect the ability of the Developer to carry out its obligations hereunder. 2.1.7. No Conflict Developer’s execution and delivery of this Agreement and any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, and the performance of any provision, condition, covenant or other term hereof or thereof, do not or will not conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on Developer or any Affiliate, or any provision of the organizational documents of Developer, or will conflict with or constitute a breach of or a default under any agreement to which Developer or any Affiliate is a party, or will result in the creation or imposition of any lien upon any assets or property of Developer, other than liens established pursuant hereto. 2.1.8. Bankruptcy No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization, receivership or other proceedings except as previously disclosed in the DDLA, are pending or threatened against the Developer or any Affiliate, nor are any of such proceedings contemplated by Developer or any Affiliate. 2.1.9. No Default under Approved Financing The DDLA, the Bonds, the Construction Loan, the Partnership Agreement and the Tax Credit Funds are in full force and effect, no default exists thereunder, and to the Developer’s best knowledge, there exists no circumstance, which, with the passage of time, would constitute an Event of Default thereunder. 2.1.10. Revised Financing Plan The Revised Financing Plan submitted by Developer and approved by City in connection herewith shall be deemed an ongoing representation by Developer that the sum total of all sources of financing are equal to the amount of the Project costs as set forth in Cottages Bridge Loan Agreement FINAL 8 the Revised Financing Plan. Developer shall promptly notify City in writing of any change in or additional costs and/or sources of financing. Any material increase in the costs set forth in the Revised Financing Plan shall be subject to the reasonable approval of City. Each of the foregoing representations shall be deemed to be an ongoing representation and warranty. The Developer shall advise the City in writing if there is any change pertaining to any matters set forth or referenced in the foregoing representations. 2.2. Limitation Upon Change in Ownership, Management and Control of Developer 2.2.1. Prohibition The identity and qualifications of Developer as a party to the DDLA and this Agreement and as experienced developers and operators/managers of affordable housing are of particular concern to the City. It is because of this identity and these qualifications that the City has entered into this Agreement with the Developer. Prior to the Maturity Date, no voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement by assignment or otherwise, nor shall Developer make any total or partial sale, transfer, conveyance, encumbrance to secure financing, distribution, assignment or lease of the whole or any part of the Property, the DDLA or this Agreement (except for the lease of a Restricted Unit in accordance with the Regulatory Agreement), or any material change in the management or control of Developer, without the prior written approval of the City. Any purported transfer, voluntary or by operation of law, in violation of this Section 2.2 shall constitute a default hereunder and shall be void and the City shall have the cumulative options to terminate this Agreement and to seek all remedies available at law or equity. Notwithstanding anything to the contrary herein or under any of the City Loan Documents, the consent of the City shall not be required for any transfer of limited partnership interests in Developer or in such limited partners in accordance with Section 7.4 (g) of the DDLA and any such transfer shall not be a default hereunder or under any of the City Loan Documents. 2.2.2. City Consideration of Requested Transfer The City agrees that it will not unreasonably withhold approval of a request to transfer made pursuant to this Section 2.2.2, provided (i) any proposed transferee shall have submitted such documentation as determined to be reasonably necessary by City such that City can determine, in its reasonable discretion, that such proposed transferee has at least five (5) years’ experience in operating affordable housing developments similar to the Project and that, given the purchase price and financing for such purchase of the Project, operation of the Project appears financially feasible for the foreseeable future, (ii) Developer and the proposed transferee enter into an Assignment and Assumption Agreement in such form as is approved by City, pursuant to which the transferee assumes all obligations of Developer to City with respect to the Project, including the obligations set forth in the City Loan Documents, and (iii) Developer delivers the documentation regarding the proposed transferee set forth in (i) above to City and written notice to the City requesting such approval at least sixty (60) days prior to the proposed effective date of such transfer. Such notice shall be accompanied by evidence regarding the proposed assignee’s or purchaser’s development, operation and management qualifications and experience and its financial commitments and resources sufficient to enable the City to evaluate Cottages Bridge Loan Agreement FINAL 9 whether the proposed assignee or purchaser is qualified and capable to perform the Developer’s obligations pursuant to this Agreement and the DDLA. Within ten (10) working days after the receipt of such documentation regarding the proposed transferee and Developer’s written notice requesting City approval of an assignment or transfer pursuant to this Section 2.2.2, the City shall respond in writing by stating what further information, if any, the City requires in order to determine the request complete and determine whether or not to grant the requested approval. Upon receipt of such a response, Developer shall promptly furnish to the City such further information as may be requested. An assignment approved by the City pursuant to this Section 2.2.2 shall not be effective unless and until the proposed assignee executes and delivers to the City an agreement in form reasonably satisfactory to the City’s legal counsel assuming the obligations of Developer which have been assigned. Thereafter, the assignor shall remain responsible to the City for performance of the obligations assumed by the assignee unless the City releases the assignor in writing. Developer shall promptly reimburse all of City’s cost of evaluating and, if applicable, effecting, any request to transfer submitted pursuant to this Section, including, without limitation, all attorneys’ fees and costs. 2.2.3. Successors and Assigns All of the terms, covenants and conditions of this Agreement shall be binding upon Developer and the successors and assigns of Developer. 3. BRIDGE LOAN 3.1. Bridge Loan 3.1.1. Bridge Loan Upon satisfaction of the conditions set forth in Section 3.2 below, City agrees to loan to Developer and Developer hereby agrees to borrow from City the Bridge Loan in an amount not to exceed Nine Hundred Fifty Thousand Dollars ($950,000) pursuant to the terms and conditions of the City Loan Documents. City shall make the Bridge Loan to Developer from funds held in the LMIHAF. 3.1.2. Disbursement and Use of Bridge Loan Proceeds Upon satisfaction of the conditions set forth in Section 3.2, the proceeds of the Bridge Loan (the “Loan Proceeds”) shall be disbursed to Wilmington Trust for deposit into the “Project Fund” as defined in the Indenture. Developer shall instruct Wilmington Trust to disburse the Loan Proceeds to the Construction Contractor for payment of invoices under the Construction Contract in accordance with Section 4.03(b) of the Indenture. Developer shall obtain City’s approval of the form of written instructions and shall obtain the written agreement of Wilmington Trust to the approved written instructions (“Trustee Acknowledgement”). 3.2. Conditions Precedent to Disbursement of the Loan Proceeds City shall disburse Loan Proceeds to Wilmington Trust on behalf of Developer only upon satisfaction of the conditions precedent set forth in this Section 3.2. Satisfaction of the conditions shall be determined in the reasonable discretion of the City Manager. Cottages Bridge Loan Agreement FINAL 10 3.2.1. Execution and Delivery of City Loan Documents Developer shall have executed and delivered to City this Agreement, the Promissory Note, and any other documents and instruments reasonably required to be executed or delivered by Developer to City, all in form and substance reasonably satisfactory to City. The Deed of Trust shall have been executed by Developer, notarized, and delivered to escrow for recording in the Official Records of Riverside County. 3.2.2. Insurance Developer, at its cost, shall provide to City a Certificate of Insurance or similar evidence that Developer has procured and is maintaining in full force and effect insurance consistent with the requirements of the DDLA and in the amounts specified therein. 3.2.3. No Default There shall exist no condition, event or act which would constitute an Event of Default by Developer under the City Loan Documents, the DDLA, the agreement of limited partnership of Developer or any Approved Financing or which, upon the giving of notice or the passage of time, or both, would constitute such an Event of Default. 3.2.4. Evidence of Payment Due under Construction Contract Developer shall have submitted to City and Wilmington Trust a Disbursement Request accompanied by approved invoices, receipts, cancelled checks or other written documentation satisfactory to the City Manager evidencing payment due to Contractor under the Construction Contract. Developer shall provide the City Manager with satisfactory evidence that such payment will pay the Construction Contract in full except for any final payment to be made at Conversion to Permanent Financing. 3.2.5. Evidence of Instructions to Wilmington Trust Developer shall have submitted to City the Trustee Acknowledgement in such form as is satisfactory to the City Manager evidencing that Wilmington Trust shall disburse the Bridge Loan proceeds solely in accordance with the terms and conditions of the City Loan Documents. 3.2.6. Representations and Warranties All representations and warranties of Developer herein contained shall be true and correct. 3.2.7. Consents of Senior Lenders; Amendment to Permanent Loan Documents Developer shall have provided City with (i) the written consent of Construction Lender and Permanent Lender to the entry into this Agreement by City and Developer for the Bridge Loan and the recordation of the Deed of Trust upon the disbursement of the Bridge Loan proceeds, and (ii) copies of a commitment letter or amendment or other modifications to the Permanent Loan documents, in such form as is approved by the City Manager, documenting the increased amount of the Permanent Loan reflected on the Revised Financing Plan, executed by the parties thereto, and, if required, notarized. Cottages Bridge Loan Agreement FINAL 11 3.2.8. Consent of Investor; Amendment to Partnership Agreement Developer shall have provided City with (i) evidence satisfactory to City that Investor consents to the entry into this Agreement by City and Developer for the Bridge Loan, and (ii) copies of a commitment letter or an amendment or other modification to the Partnership Agreement evidencing that equity funds contributed to Developer upon Conversion to Permanent Financing will be available for and sufficient to repay the Bridge Loan and Construction Loan in full at Conversion to Permanent Financing in such form as is reasonably approved by the City, executed by the parties thereto, and, if required, notarized. 3.2.9. Amendment to Bond Documents Developer shall have amended the Bonds to permit a reduction in the amount of the redemption of the Bonds required to take place at Conversion to Permanent Financing, and the Controlling Person (as defined in the Bond documents) shall be irrevocably committed to direct the Trustee (as defined in the Bond documents) to redeem, on the first Interest Payment Date (as defined in the Bond documents), such amount of the Bonds as will result in a Permanent Loan amount not less than the Permanent Loan Amount set forth in the Revised Financing Plan. 3.2.10. Corporate Authority Developer shall have provided City with evidence satisfactory to City that Developer is in good standing in the state of California. Developer shall have provided City with resolutions or other evidence of corporate authorization to enter into the Bridge Loan Agreement, the amendment effecting the increase in the Permanent Loan, and such other actions as are contemplated by the Revised Financing Plan. 3.2.11. Subordination Agreements; Other Recordable Documents All subordination agreements and/or other documents required to be recorded prior to or concurrently with the recording of the Deed of Trust and funding of the Bridge Loan shall have been approved by City, executed and dually notarized by all parties, and delivered to escrow for recording in the Official Records of Riverside County. 3.2.12. Revised Financing Plan Developer shall have submitted to City such supporting documentation as is reasonably requested by City in connection with its review of the Revised Financing Plan. City, in its reasonable discretion, shall have determined, based upon the Revised Financing Plan and supporting documentation submitted, that the Project appears financially feasible and that repayment of the Bridge Loan upon Conversion to Permanent Financing appears financially feasible. Notwithstanding the foregoing, upon Closing of the Bridge Loan, City shall be deemed to have approved the Revised Financing Plan. 3.2.13. Developer Financial Statements Developer shall deliver to City a financial statement of Developer and/or other agreements and documentation satisfactory to City (which may include a limited partnership agreement) as evidence of other sources of capital sufficient to demonstrate that Cottages Bridge Loan Agreement FINAL 12 Developer has adequate funds to cover the difference, if any, between the Project Costs and the sources of financing identified in the Revised Financing Plan. 3.3. Repayment of Bridge Loan. All principal and interest outstanding under the Promissory Note shall be repaid in full at Conversion to Permanent Financing with the proceeds of the Permanent Loan and/or Tax Credit equity, unless repaid in full earlier. 4. DEVELOPMENT ACTIVITIES 4.1. Permits and Entitlements Developer shall, at its own expense, secure or cause to be secured any and all permits, entitlements or approvals which may be required to perform the development of the Project in accordance with applicable Governmental Regulations. The execution of this Agreement does not constitute the granting of or a commitment to grant any required land use entitlements or approvals required by the City. 4.2. Design Developer assumes all responsibility for the design and construction of, and shall let contracts for (or cause contracts to be let for) the design and construction of the Project. City shall not be responsible to Developer or to third parties in any way for any defects in the design of the Project, nor for any structural or other defects in any work done according to the approved design of the Project. 4.3. Preparation of Property Developer shall perform any preparation of the Property necessary for the development and construction of the Project. The Developer shall carry out or cause to be carried out such activities in compliance with all applicable Federal, State and local laws, regulations and enactments. It shall be the sole responsibility of the Developer to investigate and determine the soil conditions of the Property for the construction of all improvements thereon. 4.4. Insurance Prior to Closing, Developer shall deliver either certified copies of the required insurance policies or endorsements on forms approved by the City (“evidence of insurance”) to the City Manager for approval as to sufficiency and form. Developer shall maintain in full force and effect insurance policies in compliance with the terms of the DDLA at all times during which the Bridge Loan is outstanding. At least fifteen (15) days prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City Manager. If such coverage is cancelled or reduced, Developer shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City Manager evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies. Developer agrees to suspend and cease all activities hereunder during such period of time as the required insurance coverage is not in effect and evidence of insurance has not been furnished to the City. Cottages Bridge Loan Agreement FINAL 13 4.5. Developer’s Indemnity 4.5.1. General. The Developer agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to the City) the City Indemnitees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses or cost of any kind, whether actual, alleged or threatened, including without limitation reasonable attorneys’ fees and costs, court costs, interest or defense costs, and expert witness fees) suffered or incurred as a result of a third party claim against the City Indemnitees, arising out of or in connection with: (i) the Developer’s performance or non- performance under this Agreement, or any other agreement executed pursuant to this Agreement, (ii) acts or omissions of Developer or any of Developer’s contractors, subcontractors, or consultants involved by, for or on behalf of Developer or persons claiming under any of the aforesaid, (iii) the Developer’s ownership, construction, use and operation of the Project (including, but not limited to, any claim made against the City in connection with the approval of this Agreement or the use or operation of the Improvements, including, but not limited to, any claim regarding tenant selection) except as directly caused by the City’s willful misconduct or gross negligence, (iv) the Developer’s breach of this Agreement, (v) Developer’s compliance with or failure to comply with all applicable laws, including all applicable federal and state labor standards, including, without limitation, Davis Bacon and the requirements of Labor Code § 1720 to the extent applicable; (vi) defects in the design of the Project, including (without limitation) the violation of any laws, and for defects in any work done according to the City approved plans, or (vii) any other performance or act or failure to perform or act pursuant to this Agreement by Developer, or by any individual or entity that Developer shall bear the legal liability thereof, including but not limited to officers, agents, employees or contractors of Developer. 4.5.2. Bodily Injury and Property Damage Indemnification. Developer agrees to and shall defend, indemnify and hold the City Indemnitees harmless from and against all liability, loss, damage, costs, or expenses (including without limitation attorneys’ fees and costs) suffered or incurred as a result of a third party claim against the City Indemnitees, arising from or as a result of the death of any person or any accident, injury, loss, or damage whatsoever caused to any person or to the property of any person resulting from the acts or omissions of Developer, its officers, agents or employees, except if caused, in whole or in part, by the City’s intentional misconduct or active negligence. In instances where the City is shown to have been actively negligent or to have acted with intentional misconduct and where City’s active negligence or intentional misconduct accounts for only a percentage of the liability involved, the obligation of Developer will be for that entire portion or percentage of liability not attributable to the active negligence or intentional misconduct of the City. 4.5.3. Survival. The provisions of this Section shall survive expiration of the Term or other termination of this Agreement, and shall remain in full force and effect. 4.5.4. No Waiver. Failure of City Indemnitees to monitor compliance with these requirements imposes no additional obligations on City Indemnitees and will in no way act as a waiver of any rights hereunder. This obligation to indemnify and defend City Indemnitees as set forth here is binding on the successors, assigns or heirs of Developer and shall survive the termination of this Agreement. Cottages Bridge Loan Agreement FINAL 14 4.6. Compliance with Laws 4.6.1. Labor Standards Developer shall carry out the development activities and all construction with respect to the Property in conformance with all applicable laws, including all applicable federal and state labor standards, if any, which such standards may include, without limitation: (a) the payment of not less than the wages prevailing in the locality as determined by the Secretary of Labor pursuant to the Davis Bacon Act (40 U.S.C. 276a to 276a-5), to all laborers and mechanics employed in the development of any part of the Project; (b) the overtime provisions, as applicable, of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327 332); and (c) Labor Code Section 1720 et seq., including without limitation the payment of prevailing wage and maintenance of payroll records in accordance with Labor Code Sections 1776 and 1812, and employment of apprentices in accordance with Labor Code Section 1777.5. Developer further agrees that all public work (as defined in Labor Code Section 1720) performed pursuant to this Agreement (the “work”) shall comply with the requirements of Labor Code Section 1770 et seq. In all bid specifications, contracts and subcontracts for the work, Developer (or its general contractor, in the case of subcontracts) shall obtain the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in this locality for each craft, classification or type of worker needed to perform the work, and shall include such rates in the bid specifications, contract or subcontract. To the extent applicable, such bid specifications, contract or subcontract must contain the following provision: “It shall be mandatory for the contractor to pay not less than the said prevailing rate of wages to all workers employed by the contractor in the execution of this contract. The contractor expressly agrees to comply with the penalty provisions of Labor Code Section 1775 and the payroll record keeping requirements of Labor Code Section 1776.” To the extent applicable, the provisions of Labor Code Sections 1775 and 1813 regarding penalties to be paid upon the failure to pay prevailing wage and for failure to comply with the hours laws respectively shall be enforced. As set forth in Labor Code Section 1810, eight (8) hours labor constitutes a legal day's work. In accordance with the provisions of Labor Code Section 3700, Developer is required to secure payment of compensation to its employees. Developer shall include in every contract for the development of the Project: (a) a statement that in accordance with the provisions of Labor Code Section 3700, the contractor will be required to secure the payment of compensation to its employees; and (b) copies of Labor Code Sections 1771, 1775, 1776, 1777.5, 1813 and 1815. This paragraph shall only apply if the foregoing sections of the Labor Code apply to the Project. 4.6.2. General Developer shall comply with all Governmental Regulations in the development, construction, use and operation of the Project, including all applicable federal, state and local statutes, ordinances, regulations and laws, including without limitation, all applicable federal, state, and local labor standards, City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and all applicable disabled and handicapped access requirements, including Cottages Bridge Loan Agreement FINAL 15 without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., and Government Code Section 11135, et seq. 4.6.3. Nondiscrimination in Employment Developer certifies and agrees that all persons employed or applying for employment by it, its Affiliates, subsidiaries, or holding companies, and all contractors, subcontractors, bidders and vendors, are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Government Code Section 12900, et seq., the California Equal Pay Law, Labor Code Section 1197.5, Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., and all other applicable anti-discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. 4.7. Nondiscrimination Covenants Developer covenants and agrees 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 any Unit or the Project nor shall the Developer establish or permit any such practice or practices of discrimination or segregation with reference to the location, subtenants, or vendees of any Unit or in connection with the employment of persons for the construction, operation and management of the Project. Notwithstanding the foregoing paragraph, with respect to familial status, the foregoing paragraph shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in the foregoing paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to the foregoing paragraph. All deeds, rental agreements, leases, or contracts made or entered into by the Developer as to the Units or the Project or any portion thereof, shall contain and be subject to the following nondiscrimination and nonsegregation clauses: a. In deeds: “(1) Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) and (d) of Section 12955 of the Government Code, as those bases are defined in Cottages Bridge Loan Agreement FINAL 16 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 herein conveyed, nor shall the grantee or any person claiming under or through the grantee, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land. (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).” b. In leases: “(1) Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) and (d) of Section 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 leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee or any person claiming under or through the lessee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased. (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).” Cottages Bridge Loan Agreement FINAL 17 c. In contracts: “(1) There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) and (d) of Section 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 nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land. (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).” “There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) 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 connection with the performance of this contract nor shall the contracting party himself or herself, or any person claiming under or through him or her, 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, sublessees, subtenants, contractors, subcontractors or vendees with respect to the premises.” Notwithstanding the foregoing paragraph, with respect to familial status, the foregoing paragraph shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in the foregoing paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to the foregoing paragraph. The covenants established herein shall, without regard to technical classification and designation, be binding on Developer and any successors in interest to the Project, or any part thereof, for the benefit and in favor of City and its successors and assigns. Each and every contract, deed, or other instrument hereafter executed covering or conveying the Property shall be held conclusively to have been executed, delivered, and accepted subject to such covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed, or other instrument, unless the City expressly releases the Property from the requirements of this Agreement. Cottages Bridge Loan Agreement FINAL 18 4.8. Required Disclosures Developer shall notify City, and provide to City, a copy or copies, of all environmental permits, applications, or entitlements relating to the Property, including notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self-reporting requirements and reports filed or applications made pursuant to any Governmental Regulations relating to Hazardous Materials and underground tanks. Except for customary materials used and applied in accordance with all Governmental Regulations and in the ordinary course of completing, maintaining and operating the Improvements or customarily utilized by households for domestic purposes in accordance with all Governmental Regulations, in the event of a release of any Hazardous Materials into the environment, Developer shall, reasonably promptly after the release, furnish to City a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request, Developer shall furnish to City a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Property including, but not limited to, all permit applications, permits and reports. 4.9. Duty to Prevent Hazardous Materials Contamination The Developer hereby represents and warrants that the Developer shall not cause or permit the Property, or the Improvements thereon to be used as a site for the use, generation, manufacture, storage, treatment, release, discharge, disposal, transportation or presence of any Hazardous Materials. Developer shall take all reasonably customary and necessary precautions to prevent the release of any Hazardous Materials onto the Property or into the environment in connection with the use or development thereof in violation of applicable Governmental Regulations. Such precautions shall include complying with and causing all activities on the Property to comply with all Governmental Regulations with respect to Hazardous Materials. In addition, the Developer shall install and utilize such equipment and implement and adhere to all procedures, requirements and restrictions imposed by Governmental Regulations pertaining to the disclosure, storage, use, removal and disposal of Hazardous Materials. Developer further covenants that it shall not, except for customary materials used and applied in accordance with all Governmental Regulations and in the ordinary course of completing, maintaining and operating the Improvements or customarily utilized by households for domestic purposes in accordance with all Governmental Regulations, (i) deposit Hazardous Materials in, on or upon the Property, in violation of any applicable Governmental Regulations, nor (ii) permit the deposit of Hazardous Materials in, on or upon the Property in violation of any applicable Governmental Regulations. Prior to and during construction of the Project, Developer shall not knowingly engage in any Hazardous Materials Activity, except in strict compliance with all Environmental Laws, and shall comply with all Environmental Laws in connection with any activity on or about the Property, including the construction and operation of the Project. Developer shall maintain the Property and any Improvements thereon in good condition free from graffiti and from any accumulation of debris or waste materials. Developer shall keep and maintain the Property in conformity with the Lake Elsinore Municipal Code and all applicable Governmental Regulations. Cottages Bridge Loan Agreement FINAL 19 4.10. Environmental Inquiries In the event that, Developer discovers the presence of Hazardous Materials under or upon the Property in violation of applicable Governmental Regulations, or there is a release of Hazardous Materials on or from the Property, the Developer shall provide to City a copy of any environmental permits, disclosures, applications, entitlements or inquiries relating to such Hazardous Materials, including any notices of violation, notices to comply, citations, inquiries, clean up or abatement orders, cease and desist orders, reports filed pursuant to self-reporting requirements and reports filed or applications made pursuant to any Governmental Regulations relating to Hazardous Materials and underground tanks including, specifically, without limitation, the following: a. All required reports of releases of Hazardous Materials, including notices of any release of Hazardous Materials as required by any Governmental Regulations; b. All notices of suspension of any environmental permits; c. All notices of violation from federal, state or local environmental authorities; d. All orders under the State Hazardous Waste Control Act and the State Hazardous Materials Account Act and corresponding federal statutes, concerning investigation, compliance schedules, clean up, or other remedial actions; e. All orders under the Porter Cologne Act, including corrective action orders, cease and desist orders, and clean up and abatement orders; f. Any notices of violation from OSHA or Cal OSHA concerning employees’ exposure to Hazardous Materials; and g. All complaints and other pleadings filed against the Developer relating to the Developer’s storage, use, transportation, handling or disposal of Hazardous Materials on the Property. In the event that a release of Hazardous Materials into the environment occurs on the Property following the Closing in violation of applicable Governmental Regulations, the Developer shall promptly and fully remediate such Hazardous Materials in accordance with all Governmental Regulations. Upon request of City, the Developer shall furnish to City a copy of any and all other environmental documents or inquiries relating to or affecting the Property from time to time during Developer’s ownership or possession thereof. 5. AFFORDABILITY COVENANTS AND RESTRICTIONS 5.1. Use Covenants Developer covenants and agrees that the Loan Proceeds shall be used solely to finance construction activities for the Project. Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property or any part thereof, that Developer shall devote the Property to the uses specified in the Regulatory Agreement. All uses conducted on the Property, including, without limitation, all activities undertaken by the Cottages Bridge Loan Agreement FINAL 20 Developer pursuant to this Agreement, shall also conform to all applicable provisions of the Lake Elsinore Municipal Code. 5.2. Affordable Housing Requirements In connection with the DDLA, Developer and City entered into the Regulatory Agreement, which includes statutory restrictions on the Project required by the use of funds from the LMIHAF. In connection with the Bridge Loan, Developer covenants and agrees to comply with the terms and conditions of the Regulatory Agreement, including the construction and operation of one hundred forty two (142) Restricted Units which shall be restricted to occupancy by Low Income Households (as defined in the Regulatory Agreement) and Very Low Income Households (as defined in the Regulatory Agreement) at an Affordable Rent during the Affordability Period. 6. DEFAULTS, REMEDIES AND TERMINATION 6.1. Defaults - General Subject to the extensions of time set forth in Section 7.6, failure or delay by either party to perform, comply with or observe any of the conditions, provisions, terms, covenants or representations of this Agreement or the DDLA, including any of the attachments or documents entered into in the form of an attachment to either this Agreement or the DDLA, constitutes a default under this Agreement. As provided herein below, the party who so fails or delays must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy with diligence. The injured party shall give written Notice of default to the party in default, specifying the default complained of by the injured party. Failure or delay in giving such Notice shall not constitute a waiver of any default, nor shall it change the date of default. Except as required to protect against further damages, the injured party may not institute legal proceedings against the party in default until an “Event of Default” (as such term is hereinafter defined) has occurred. An “Event of Default” for purposes of instituting legal proceedings by a non-defaulting party against the defaulting party shall mean a failure to satisfy, perform, comply with or observe any of the conditions, provisions, terms, covenants or representations contained in this Agreement or the DDLA, including any of the attachments or documents entered into in the form of an attachment to either this Agreement or the DDLA, and such failure having continued uncured or without the defaulting party commencing to diligently cure for thirty (30) days after notice thereof in writing is mailed by the injured party to the defaulting party; provided, however, that if a different period or notice requirement is specified for any particular default under any other provision of this Agreement or the DDLA, including any of the attachments or documents entered into in the form of an attachment to either this Agreement or the DDLA, the specific provision shall control; and provided further, that if such failure is not reasonably capable of being cured within such thirty (30) day or different period, despite Developer’s good faith and timely efforts, such time as is reasonably necessary to complete such cure but in no event shall such time exceed one hundred twenty (120) days after notice thereof is mailed to the defaulting party. Notwithstanding anything to the contrary herein or under any of the City Loan Documents, the City shall provide copies of any notices of default delivered to Developer hereunder or under any of the City Loan Documents to Developer’s limited partner at the address Cottages Bridge Loan Agreement FINAL 21 provided for in Section 7.1 hereof. Developer’s limited partner shall have a right to cure any such default on behalf of the Developer upon the same terms provided to the Developer hereunder. 6.2. Legal Actions 6.2.1. Institution of Legal Actions In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either party may institute an action at law or equity to cure, correct or remedy any Event of Default, to recover damages as provided herein for any Event of Default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions may be instituted in the Superior Court of the County of Riverside, State of California, or in the Federal District Court in the Central District of California. 6.2.2. Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 6.2.3. Acceptance of Service of Process In the event that any legal action is commenced by Developer against City, service of process on the City shall be made by personal service upon the City Clerk, or in such other manner as may be provided by law. In the event that any legal action is commenced by City against Developer, service of process on Developer shall be made by personal service upon any member, owner or general partner of Developer or in such other manner as may be provided by law, whether made within or without the State of California. 6.3. Rights and Remedies are Cumulative To the extent permitted by law and except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same time or different times, of any other rights or remedies for the same Event of Default or any other Event of Default by the other party. 6.4. Inaction Not a Waiver of Default Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 6.5. Specific Performance Upon an Event of Default, the nondefaulting party, at its option, may thereafter (but not before) commence an action seeking specific performance and/or other equitable relief to enforce the terms of this Agreement pertaining to such default. Cottages Bridge Loan Agreement FINAL 22 6.6. Consequential Damages Neither Developer nor City shall in any event be entitled to, and each hereby waives, any right to seek special or consequential damages of any kind or nature from the other party arising out of or in connection with this Agreement. In connection with such waiver, each of City and Developer is familiar with and each hereby waives the provision of Section 1542 of the California Civil Code which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” 6.7. Attorneys’ Fees In any action between the Parties to interpret, enforce, reform, modify, rescind or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing Party in the action or other proceeding shall be entitled, in addition to damages, injunctive relief or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs, expert witness fees and reasonable attorneys’ fees. As used herein, the terms “attorneys’ fees” or “attorneys’ fees and costs” means the fees and expenses of counsel to the parties hereto (including, without limitation, in-house counsel employed by City) which may include printing, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals and others not admitted to the bar but performing services under the supervision of an attorney. The terms “attorneys’ fees” or “attorneys’ fees and costs” shall also include, without limitation, all such fees and expenses incurred with respect to appeals, arbitrations and bankruptcy proceedings, and whether or not any action or proceeding is brought with respect to the matter for which said fees and expenses were incurred. 6.8. Acceleration of Promissory Note Following an Event of Default by Developer, the City shall have the right to cause all indebtedness of the Developer to the City under this Agreement, together with any accrued interest thereon, to become immediately due and payable. The Developer waives all right to presentment, demand, protest or notice of protest or dishonor. The City may proceed to enforce payment of the outstanding amounts under the Bridge Loan and to exercise any or all rights afforded to the City as a creditor and secured party under the law, including the Uniform Commercial Code, including foreclosure under the Deed of Trust. The Developer shall be liable to pay the City on demand all expenses, costs and fees (including, without limitation, reasonable attorneys’ fees and expenses and other professional service fees and expenses) paid or incurred by the City in connection with the collection of the Bridge Loan and the amounts due under the Promissory Note, and the preservation, maintenance, protection, sale, or other disposition of the security given for the Bridge Loan and the amounts due under the Promissory Note. Cottages Bridge Loan Agreement FINAL 23 6.9. Termination In the event the City determines that the supporting documentation and/or Revised Financial Model submitted pursuant hereto does not demonstrate a financially feasible Project, City may terminate this Agreement prior to Closing upon written Notice to Developer. This Agreement shall automatically terminate if the Closing has not occurred by the Outside Closing Date. 7. GENERAL PROVISIONS 7.1. Notices, Demands and Communications Between the Parties All notices, demands, requests, elections, approvals, disapprovals, consents or other communications (“Notice”) given under this Note shall be in writing and shall be given by personal delivery, certified mail, return receipt requested, or overnight guaranteed delivery service and addressed as follows: To City: City of Lake Elsinore 130 S. Main Street Lake Elsinore, CA 92530 Attn: City Manager Copy to: Leibold McClendon & Mann, P.C. 9841 Irvine Center Drive, Suite 230 Irvine, CA 92618 Attn: Barbara Leibold To Developer: Mission Cottages, LP 7777 Center Avenue, Suite 230 Huntington Beach, CA 92647 Attn: Steven P. Semingson Copy to: c/o Riverside Mission Trails Partner, LP Two Liberty Place 50 South 16th Street Suite 2825 Philadelphia, PA 19102 Attn: Managing Director and to: Nixon Peabody LLP Exchange Place 53 State Street Boston, MA 02109 Attn: Roger W. Holmes Cottages Bridge Loan Agreement FINAL 24 Any Notice shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 7.2. Conflicts of Interest No member, official or employee of the City shall have any direct or indirect interest in this Agreement, nor participate in any decision relating to the Agreement which is prohibited by law. 7.3. Warranty Against Payment of Consideration for Agreement Developer warrants that it has not paid or given and will not pay or give, any third person any money or other consideration for obtaining this Agreement, other than normal costs of conducting business and costs of professional services such as project managers, architects, engineers, attorneys, and public relations consultants. 7.4. Nonliability of City Officials and Employees No member, official, employee, representative or agent of the City shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by City or for any amount which may become due to Developer or any successor, or on any obligation under the terms of this Agreement. 7.5. Approvals by City and Developer Wherever this Agreement requires the City or Developer to approve any contract, document, plan, proposal, specification, drawing or other matter, such approval shall not be unreasonably withheld or delayed, unless expressly provided to the contrary. 7.6. Force Majeure In addition to specific provisions of this Agreement, performance by either Party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; governmental restrictions or priority; litigation (including suits filed by third parties concerning or arising out of this Agreement); weather (provided that such claim is documented by data substantiating that weather conditions were abnormal for the period of time, could not have been reasonably anticipated, and had a material adverse impact on the Party’s ability to satisfy its obligation hereunder); inability to secure necessary labor, materials or tools; acts of the other Party; acts or failure to act of any public or governmental agency or entity; or any other causes (other than Developer’s inability to obtain financing for the Development) beyond the control or without the fault of the party claiming an extension of time to perform. An extension of time for any cause will be deemed granted if notice by the Party claiming such extension is sent to the other within thirty (30) days from the date the Party seeking the extension first discovered the cause and such extension of time is not rejected in writing by the other Party within ten (10) days after receipt of the notice. Times of performance under this Agreement may also be extended in writing by the City and the Developer. In no event shall the cumulative delays exceed one hundred eighty (180) days, unless otherwise agree to by the Parties in writing. Cottages Bridge Loan Agreement FINAL 25 The lack of funding to complete the development of the Property (other than the failure of the City to fund the Bridge Loan in accordance herewith) shall not constitute grounds of forced delay pursuant to this Section. Developer expressly assumes the risk of real estate market conditions, construction costs, interest rates, funding availability (other than the commitment of City funding) and other similar general economic circumstances that may make funding and/or construction of the Development difficult, more expensive, or infeasible, whether or not such events or causes are foreseeable as of the date of this Agreement. Developer acknowledges and agrees that the provisions of this Section shall not operate to excuse Developer from prompt payment of loans or other monies when due. 7.7. Applicable Law; Interpretation The laws of the State of California shall govern the interpretation and enforcement of this Agreement. This Agreement shall be construed as a whole and in accordance with its fair meaning and as though both of the parties participated equally in its drafting. Captions and organizations are for convenience only and shall not be used in construing meaning. 7.8. Inspection of Books and Records, Reports Upon two (2) Business Days’ notice, the City or its designee has the right at all reasonable times to inspect the books and records and other related documents of the Developer pertaining to the satisfaction of its obligations hereunder as reasonably necessary for purposes of enforcing the provisions of this Agreement. Such books, records and related documents shall be maintained by the Developer at locations as agreed by the parties. Throughout the term of this Agreement, the Developer shall submit to the City reasonable written progress reports as and when reasonably requested by City on all matters pertaining to the Project. 7.9. Administration This Agreement shall be administered by the City Manager or his or her designee. Whenever a reference is made in this Agreement to an action, finding or approval to be undertaken by the City, the City Manager or his or her designee is authorized to act on behalf of the City unless specifically provided otherwise or the context should require otherwise. The City Manager or his or her designee shall have the authority to issue interpretations, waive provisions and enter into amendments of this Agreement on behalf of the City, so long as such actions do not substantially change the uses or development permitted on the Property, or add to the costs of the City as specified herein or as agreed to by the City Council. Notwithstanding the foregoing, the City Manager or his or her designee may in his or her sole and absolute discretion refer any matter to the City Council for action, direction or approval. 7.10. Mutual Cooperation Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful or appropriate to carry out the purposes and intent of this Agreement. Cottages Bridge Loan Agreement FINAL 26 7.11. Independent Contractor The parties agree that the Developer, in the performance of this Agreement shall act as and be an independent contractor and shall not act in the capacity of an agent, employee or partner of the City. 7.12. Time Time is of the essence in this Agreement. 7.13. Third Party Beneficiaries This Agreement is made and entered into for the sole protection and benefit of the City, its successors and assigns, and Developer, its permitted successors and assigns, and no other person or persons shall have any right of action hereon. 7.14. Reimbursement of City Costs Within ten (10) working days of the earlier of (i) Closing or (ii) the Outside Closing Date, Developer shall reimburse City for all reasonable costs, expenses and fees of administration of this Agreement, including, without limitation, evaluation and preparation of documents in connection with the Revised Financial Model, any change, amendment or modification to the documents evidencing the Approved Financing, evaluation of evidence of consent and review and preparation of documents in connection with the Closing. Costs, expenses and fees to be reimbursed shall include, without limitation, City staff time at a reasonable hourly rate, as well as costs, expenses and fees billed to the City by third parties such as attorneys, financial consultants and other parties engaged by the City in connection with the Bridge Loan and related changes to the Approved Financing as a result of Project cost overruns. 8. ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS This Agreement includes __________________ (__) pages and Attachment Nos. 1, 2, 3 and 4, which constitute the entire understanding and agreement of the Parties. Two (2) duplicate originals of this Agreement shall be executed each of which shall be deemed to be an original. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. Except as otherwise provided herein, this Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of City or Developer, and all amendments hereto must be in writing and signed by the appropriate authorities of the City and Developer. [Signatures On Next Page] Cottages Bridge Loan Agreement FINAL IN WITNESS WHEREOF, the City and Developer have signed this Agreement as of the date set opposite their signatures. “City” CITY OF LAKE ELSINORE, a California municipal corporation , 2020 By: Its: APPROVED AS TO FORM: LEIBOLD MCCLENDON & MANN, P.C. By: Barbara Leibold, City Attorney ATTEST: __________________________ City Clerk [SIGNATURE PAGE TO BRIDGE LOAN AGREEMENT] [PAGE 1 OF 2] Cottages Bridge Loan Agreement FINAL “DEVELOPER” MISSION COTTAGES, LP, a California limited partnership By: Cottages Management, LLC, a California limited liability company, its Administrative General Partner By: Steven P. Semingson Manager By: AOF Mission Trails LLC, a California limited liability company, its Managing General Partner By: AOF/Pacific Affordable Housing Corp., a California nonprofit public benefit corporation, its Sole Member and Manager By: Ajay Nayar Vice President [SIGNATURE PAGE TO BRIDGE LOAN AGREEMENT] [PAGE 2 OF 2] Cottages Bridge Loan Agreement FINAL 1 ATTACHMENT NO. 1 PROMISSORY NOTE [attached] PROMISSORY NOTE SECURED BY DEED OF TRUST (Low and Moderate Income Housing Asset Fund – Cottages Bridge Loan) $950,000 Lake Elsinore, California _________________, 2021 FOR VALUE RECEIVED, MISSION COTTAGES, LP, a California limited partnership (“Borrower” or the “Developer”), promises to pay to the CITY OF LAKE ELSINORE, a municipal corporation (“City”), or order, the principal sum of Nine Hundred Fifty Thousand Dollars ($950,000), or such lesser amount as disbursed by the City to the Borrower pursuant to that certain Affordable Housing Bridge Loan Agreement dated as of December__, 2020, as may be amended from time to time (collectively, the “AHBLA”), incorporated herein, plus interest thereon pursuant to Section 2 below. 1. Borrower’s Obligation. This promissory note (the “Note”) evidences the Borrower’s obligation to pay the City the principal amount of Nine Hundred Fifty Thousand Dollars ($950,000) (the “Bridge Loan”), or such lesser amount as disbursed by the City to the Borrower to finance the development of the Property pursuant to the AHBLA, plus interest in accordance herewith. All capitalized terms not otherwise defined in this Note shall have the meanings set forth in the AHBLA. 2. Interest. The outstanding principal balance of this Note shall bear simple interest at the rate of three percent (3%) per annum; provided, however, if a Developer Event of Default occurs, interest on the principal balance shall begin to accrue, as of the date of the Developer Event of Default (following expiration of applicable notice and cure periods), and continuing until such time as the Bridge Loan funds are repaid in full or the Developer Event of Default is cured, at the default rate of ten percent (10%) compounded annually, or the highest rate permitted by law (whichever is lower) (“Default Rate”). 3. Disbursement of Loan Proceeds. The Bridge Loan proceeds (the “Loan Proceeds”) shall be used for payment of the Construction Contract and other Eligible Costs as approved by the City in the amounts set forth on the Bridge Loan Flow of Funds. Upon satisfaction of the conditions precedent to disbursement of the Loan Proceeds as set forth in Section 3 of the AHBLA, the Loan Proceeds shall be disbursed in accordance therewith. 4. Term and Repayment Requirements. (a) The term of this Note (the “Term”) shall commence on the Closing and shall expire on the earliest of (the “Maturity Date”): (i) Conversion to Permanent Financing upon satisfaction of the conditions set forth in the DDLA, currently anticipated to occur in April 2021, but in no event later than November 1, 2021, or such later date as may be agreed to in a writing signed by City, provided that Developer provides a written agreement consent to such later date signed by Construction Lender, and further provided that commitments for the Tax Credit Funds and Permanent Loan remain in full force and effect, (ii) the occurrence of a Developer Event of Default for which the City exercises its right to cause the Bridge Loan indebtedness to become immediately due and payable, (iii) a Transfer other than a Transfer Cottages Bridge Loan Promissory Note FINAL 2 permitted or approved by the City as provided in the AHBLA and DDLA; or (iv) termination of the AHBLA or DDLA in accordance with their respective terms. (b) All outstanding principal and interest on the Bridge Loan shall be due and payable upon the Maturity Date. (c) The Borrower shall have the right to prepay the Bridge Loan at any time without penalty or additional charge. 5. No Assumption. This Note shall not be assumable by the successors and assigns of Borrower without the prior written consent of the City. 6. Security. This Note is secured by a Deed of Trust (“Deed of Trust”) executed concurrently herewith. The Bridge Loan evidenced hereby shall constitute a nonrecourse obligation of Borrower. The City's sole security under this Note is the exercise of its rights under the Deed of Trust. Notwithstanding the foregoing, Borrower, and, if Borrower is a partnership, any general partner, member, or shareholder of Borrower, shall be liable for, and indemnify and hold harmless City for, damages caused to City as a result of (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges that are payable or applicable as a result of Developer’s development activities under the DDLA (to the full extent of such taxes, assessments or other charges); (iii) the misapplication of any proceeds under any insurance policies or awards resulting from Developer’s development activities under the DDLA or the AHBLA; and (vi) breach of any covenant or representation in the AHBLA or this Note made by the Borrower. 7. Terms of Payment. (a) All payments due under this Note shall be paid in currency of the United States of America, which at the time of payment is lawful for the payment of public and private debts. (b) All payments on this Note shall be paid to the City at the following address: City of Lake Elsinore, 130 South Main Street, Lake Elsinore, CA 92530, Attention: Director of Administrative Services, or to such other place as the City may from time to time designate in writing. (c) All payments on this Note shall be without expense to the City, and the Borrower agrees to pay all costs and expenses, including reasonable attorney’s fees of the City, incurred in connection with the administration and/or payment of this Note and the release of any security hereof. (d) Notwithstanding any other provision of this Note, or any instrument securing the obligations of the Borrower under this Note, if, for any reason whatsoever, the payment of any sums by the Borrower pursuant to the terms of this Note would result in the payment of interest which would exceed the amount that the City may legally charge under applicable law, then the amount by which payments exceeds the lawful interest rate shall automatically be deducted from the principal balance owing on this Note, so that in no event shall the Borrower be obligated under the terms of this Note to pay any interest which would exceed the lawful rate. Cottages Bridge Loan Promissory Note FINAL 3 8. Default. (a) Any of the following shall constitute an “Event of Default” or “Borrower Event of Default” under this Note: (i) Any failure to pay, in full, any payment required under this Note when due following written notice by the City of such failure and ten (10) days opportunity to cure; (ii) Any failure in the performance by the Borrower of any term, condition, provision or covenant set forth in the AHBLA or herein subject to the applicable notice and cure period set forth therein; (iii) The material falsity of any representation or breach of any warranty or covenant made by Borrower under the terms of this Note or the AHBLA; (iv) Borrower shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to pay its debts generally as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or (v) commence a voluntary petition that is not withdrawn within ten (10) days of the filing thereof or answer seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding; (v) If without the application, approval or consent of Borrower, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of Borrower for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Borrower or of all or any substantial part of Borrower’s assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Borrower, in good faith, the same shall (i) result in the entry of an order for relief or any such adjudication or appointment, or (ii) continue undismissed, or pending and unstayed, for any period of ninety (90) consecutive days; (vi) A transfer or assignment of this Note, the AHBLA, or the rights of Borrower under theDDLA, in violation of the terms and conditions thereof; or (vii) Borrower shall be in default under the terms of the DDLA or any other financing awarded to the Project, whether junior or senior, relating to the Project, or any other secured or unsecured obligation relating to the Project, unless the default is cured within the cure period, if any, applicable thereto under the terms and obligation which is in default. (b) Failure to obtain and provide Evidence of Financing in accordance with Section 3.5.3 of the AHBLA shall not constitute a default hereunder, but shall entitle the City to terminate this Note and the AHBLA in accordance with Section 3.5.5 of the AHBLA. (c) Upon the occurrence of such an Event of Default, the entire unpaid principal balance, together with all interest thereon, and together with all other sums then payable under this Note shall at the option of the City become immediately due and payable upon written notice by the City to the Borrower without further demand. Cottages Bridge Loan Promissory Note FINAL 4 (d) The failure to exercise the remedy set forth in subsection 8(c) above or any other remedy provided by law upon the occurrence of one or more of the foregoing events of default shall not constitute a waiver of the right to exercise any remedy at any subsequent time in respect to the same or any other default. The acceptance by the City hereof of any payment which is less than the total of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the foregoing remedies or options at that time or at any subsequent time, or nullify any prior exercise of any such remedy or option, without the express consent of the City, except as and to the extent otherwise provided by law. (e) City Remedies. Upon the occurrence of an Event of Default hereunder, City may, in its sole discretion, take any one or more of the following actions: (i) By notice to Borrower, except in the case of a default by Borrower under Section 8(a)(iii) through Section 8(a)(v) in which event no notice shall be required, declare the entire then unpaid principal balance of the Bridge Loan immediately due and payable, and the same shall become due and payable without further demand, protest or further notice of any kind, all of which are expressly waived. Upon such declaration, outstanding principal and (to the extent permitted by law) interest and any other sums outstanding in connection with the Bridge Loan shall thereafter bear interest at the Default Rate, payable from the date of such declaration until paid in full; (ii) Take any and all actions and do any and all things which are allowed, permitted or provided by law, in equity or by statute, in the sole discretion of City, to collect the amounts then due and thereafter to become due hereunder, and to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Note, the AHBLA or under any other document executed in connection herewith; (iii) Upon the occurrence of an Event of Default which is occasioned by Borrower’s failure to pay money, City may, but shall not be obligated to, make such payment. If such payment is made by City, Borrower shall deposit with City, upon written demand therefor, such sum plus interest at the Default Rate. In either case, the Event of Default with respect to which any such payment has been made by City shall not be deemed cured until such repayment (as the case may be) has been made by Borrower. Until repaid, such amounts shall have the security afforded disbursements under this Note; and (iv) Upon the occurrence of an Event of Default described in Section 8(a)(iv) or 8(a)(v) hereof, City shall be entitled and empowered by intervention in such proceedings or otherwise to file and prove a claim for the whole amount owing and unpaid on the Bridge Loan and, in the case of commencement of any judicial proceedings, to file such proof of claim and other papers or documents as may be necessary or advisable in the judgment of City and its counsel to protect the interests of City and to collect and receive any monies or other property in satisfaction of its claim. No remedy herein conferred upon or reserved to City intended to be exclusive of any other available remedy or remedies, but each such remedy shall be cumulative and shall be in addition to every other remedy given under this Note or now existing at law or in equity or by statute; and may be exercised in such number, at such times and in such order as City may determine in its sole discretion. No delay or omission to exercise any right or power upon the occurrence of any Event of Default hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to Cottages Bridge Loan Promissory Note FINAL 5 time and as often as may be deemed expedient by City. In order to entitle City to exercise any right or remedy reserved to it under this Note, no notice shall be required except as expressly provided herein. 9. Waivers. (a) The Borrower hereby waives diligence, presentment, protest and demand, and notice of protest, notice of demand, and notice of dishonor of this Note. The Borrower expressly agrees that this Note or any payment hereunder may be extended from time to time, and that the City may accept further security or release any security for this Note, all without in any way affecting the liability of the Borrower. (b) No extension of time for payment of this Note or any installment hereof made by agreement by the City with any person now or hereafter liable for payment of this Note shall operate to release, discharge, modify, change or affect the original liability of the Borrower under this Note, either in whole or in part. (c) The obligations of the Borrower under this Note shall be absolute and the Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reason whatsoever. (d) Borrower shall in no event be entitled to, and hereby waives, any right to seek special or consequential damages of any kind or nature from City arising out of or in connection with this Note. 10. Miscellaneous Provisions. (a) All notices to the City or the Borrower shall be given in the manner and at the addresses set forth in the AHBLA, or to such addresses as the City and the Borrower may hereinafter designate. (b) The Borrower promises to pay all costs and expenses, including reasonable attorney’s fees and costs and other professional service fees and costs, incurred by the City in the enforcement of the provision of this Note, regardless of whether suit is filed to seek enforcement. (c) The obligation of Borrower to repay the Bridge Loan and all accrued interest thereon shall be absolute and unconditional, and until such time as all of the outstanding principal of and interest on this Note shall have been fully paid, Borrower agrees that it: (a) will use the funds solely for the purposes set forth herein and in the AHBLA; and (b) will not terminate or suspend any payment or obligations under this Note, the AHBLA, or any other document executed hereunder or in connection herewith for any cause, including without limitation, any acts or circumstances that may constitute failure of consideration, commercial frustration of purpose, or any duty, liability or obligation arising out of or in connection with this Note, the AHBLA or any document executed hereunder or in connection herewith. (d) The Bridge Loan proceeds shall be used by Borrower as provided in the AHBLA and for such other uses approved in writing by City. In no event shall Borrower use or otherwise invest the proceeds of the Bridge Loan except as expressly provided in this Note or in the AHBLA. Cottages Bridge Loan Promissory Note FINAL 6 (e) As additional consideration for the making of the Bridge Loan by City, Borrower covenants as follows: (i) Compliance with AHBLA. Borrower shall comply with all of its obligations under the AHBLA. Any amounts payable by Borrower under the AHBLA (other than amounts also payable hereunder) shall be deemed added to the principal amount of the Bridge Loan payable hereunder. (ii) Other Loans. Borrower shall comply with all monetary and non- monetary covenants associated with any loan made to Borrower in connection with the Property or the Project. Borrower shall provide to City a copy of any notice of default within five business days after receiving any notice of a default or alleged default of such covenants by Borrower, and Borrower shall promptly cure any such default and cooperate in permitting City, to the extent City in its sole discretion elects to do so, to cure or assist in curing the default. Any cost or expenditure incurred by City in providing or assisting in such a cure shall be deemed added to the outstanding principal amount of the Bridge Loan. (f) No official or employee of City shall have any personal interest, direct or indirect, in this Note, nor shall any official or employee of City participate in any decision relating to this Note which affects such official’s or employee’s pecuniary interest in any corporation, partnership or association in which such official or employee is directly or indirectly interested. No official or employee of City shall be personally liable in the event of a breach of this Note by City. (g) This Note may not be changed orally, but only by an agreement in writing signed by the Party against whom enforcement of any waiver, change, modification or discharge is sought. (h) This Note shall be governed by and construed in accordance with the laws of the State of California. The invalidity or unenforceability of any one or more provisions of this Note will in no way affect any other provisions. (i) The times for the performance of any obligations hereunder shall be strictly construed, time being of the essence. Signatures on Following Page Cottages Bridge Loan Promissory Note FINAL BORROWER: MISSION COTTAGES, LP, a California limited partnership By: Cottages Management, LLC, a California limited liability company, its Administrative General Partner By: Steven P. Semingson Manager By: AOF Mission Trails LLC, a California limited liability company, its Managing General Partner By: AOF/Pacific Affordable Housing Corp., a California nonprofit public benefit corporation, its Sole Member and Manager By: Ajay Nayar Vice President [SIGNATURE PAGE TO PREDEVELOPMENT PROMISSORY NOTE] Cottages Bridge Loan Agreement FINAL 2 ATTACHMENT NO. 2 DEED OF TRUST [attached] RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 Attention: City Manager (Space above for Recorder’s use.) (Exempt from Recording Fees Per Government Code Section 27383.) DEED OF TRUST, FIXTURE FILING AND ASSIGNMENT OF RENTS (Cottages at Mission Trail - City Bridge Loan) THIS DEED OF TRUST, FIXTURE FILING AND ASSIGNMENT OF RENTS (“Deed of Trust”) is made as of this ___ day of ____________, 2021, by and among MISSION COTTAGES LP, a California limited partnership (“Trustor”) and CHICAGO TITLE COMPANY, a California corporation (“Trustee”), for the benefit of the CITY OF LAKE ELSINORE, a municipal corporation (“Beneficiary”). THIS DEED OF TRUST CONSTITUTES A FIXTURE FILING UNDER SECTION 9-102(40) OF THE UNIFORM COMMERCIAL CODE OF THE STATE OF CALIFORNIA. TO THE EXTENT THE GOODS ARE FIXTURES UNDER THE LAWS OF THE STATE OF CALIFORNIA, THE FIXTURES ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY LOCATED IN THE CITY OF LAKE ELSINORE IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, COMMONLY KNOWN AS COTTAGES AT MISSION TRAIL, IN THE CITY OF LAKE ELSINORE, CALIFORNIA, MORE PARTICULARLY DESCRIBED ON EXHIBIT A ATTACHED HERETO. THE NAME OF THE RECORD OWNER OF THE FEE INTEREST IN THE REAL PROPERTY AS DESCRIBED IN EXHIBIT A IS MISSION COTTAGES LP, A CALIFORNIA LIMITED PARTNERSHIP. TRUSTOR’S ORGANIZATIONAL IDENTIFICATION NUMBER IS: CA- 201711500003. RECITALS The following recitals are a substantive part of this Deed of Trust: A. Concurrently herewith, Trustor and Beneficiary are entering into an Affordable Housing Bridge Loan Agreement (the “Loan Agreement”), pursuant to which a construction loan is made by Beneficiary to Trustor of Nine Hundred Fifty Thousand Dollars ($950,000) (the “City Bridge Loan” or “Loan”), subject to the terms and conditions contained therein. The Loan is made from Low and Moderate Income Housing Asset Funds (“LMIHAF”) allocated to Beneficiary. The Loan is given for the purpose of providing construction financing for the development of property located on Mission Trail in the City of Lake Elsinore. Capitalized terms not defined herein shall have the meaning set forth in the Loan Agreement. All terms not defined herein or in the Loan Agreement shall have the meaning given them in the Uniform Commercial Code, as enacted in the State of California, or under the Uniform Commercial Code in any other state to the extent the same is applicable law (collectively, as amended, recodified, Cottages Bridge Loan Deed of Trust FINAL 2 and in effect from time to time, the “UCC”). If a term is defined differently in Article 9 of the UCC than in another Article, Article 9 shall control. B. The City Bridge Loan is evidenced by a Promissory Note (“Note”) given by Trustor in favor of Beneficiary. Upon recordation of this Deed of Trust, the Note shall be secured by this Deed of Trust. This Deed of Trust and the Loan Agreement, together with all of their exhibits, and all other documents which evidence, secure, or otherwise pertain to the Loan, including, without limitation, that certain Regulatory Agreement and Declaration of Restrictive Covenants (Low and Moderate Income Housing Asset Funds) recorded on April 10, 2019 as document no. 2019-0121312 (the “Regulatory Agreement”), collectively constitute the “Loan Documents.” C. Trustor and City desire to enter into this Deed of Trust in connection with the making of the City Bridge Loan in accordance with the terms and conditions of the Loan Agreement. AGREEMENT NOW, THEREFORE, the parties hereto agree as follows: 1. Grant in Trust and Secured Obligations. 1.1 Grant in Trust. In consideration and for the purpose of securing payment and performance of the Secured Obligations (as defined below), Trustor hereby irrevocably and unconditionally grants, bargains, conveys, sells, transfers, and assigns to Trustee, in trust for the 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 following property (all or any part of such property, or any interest in all or any part of it, as the context may require, the “Property”): (a) The real property located on Mission Trail in the City of Lake Elsinore, County of Riverside, California, as more fully described in Exhibit A attached hereto and made a part hereof, together with all rights, privileges, easements, appurtenances, tenements, hereditaments, rights of way, appendages, projections, water rights including riparian and littoral rights and whether or not appurtenant, streets, ways, alleys, and strips and gores of land, now or hereafter in any way belonging, adjoining, crossing or pertaining to such real property (the “Land”); together with (b) All buildings, structures and improvements now located or later to be constructed on the Land (the “Improvements”); together with (c) All articles of personal property (including those specified below) and any software imbedded therein, now owned or hereafter acquired by Trustor and attached to, placed upon for an indefinite term, or used in connection with the Land and/or Improvements, together with all goods and other property that are, or at any time become, so related to the Property that an interest in them arises under real estate law, or they are otherwise a “fixture” under applicable law (each a “Fixture,” collectively “Fixtures”); together with (d) All existing and future as-extracted collateral produced from or allocated to the Land, including, all minerals, oil, gas, other hydrocarbons and associated substances, Cottages Bridge Loan Deed of Trust FINAL 3 sulphur, nitrogen, carbon dioxide, helium and any other commercially valuable substances which may be in, under or produced from any part of the Land, and all products processed or obtained therefrom, and the proceeds thereof, and all development rights and credits, air rights, water, water courses, water rights (whether riparian, appropriative or otherwise, and whether or not appurtenant) and water stock, easements, rights-of-way, gores or strips of land, and any land lying in the streets, ways, alleys, passages, roads or avenues, open or proposed, in front of or adjoining the Land and Improvements; together with (e) All existing and future leases, subleases, subtenancies, licenses, occupancy agreements, concessions, and other agreements of any kind relating to the use or occupancy of all or any portion of the Property, whether now in effect or entered into in the future (each a “Lease,” collectively, the “Leases”) relating to the use and enjoyment of all or any part of the Land and Improvements, all amendments, extensions, renewals, or modifications thereof (subject to Beneficiary’s right to approve same pursuant to the terms of the Loan Documents), and any and all guaranties of, and security for, lessees’ performance under any and all Leases, and all other agreements relating to or made in connection with any of such Leases; together with (f) All rents (and payments in lieu of rents), royalties, issues, profits, income, proceeds, payments, and revenues of or from the Property, and/or at any time payable under any and all Leases, including all rent loss insurance proceeds, prepaid rents and any and all security deposits received or to be received by Trustor pursuant to any and all Leases, and all rights and benefits accrued, or to accrue, to Trustor under any and all Leases (some or all collectively, as the context may require, “Rents”); together with (g) All rights to the name, signs, trade names, trademarks, trademark applications, service marks, licenses, software, and symbols used in connection with the Land and Improvements; together with (h) All goods, materials, supplies, chattels, furniture, fixtures, machinery, apparatus, fittings, equipment, and articles of personal property of every kind and nature whatsoever, including consumable goods, now or hereafter located in or upon the Property or any part thereof, or to be attached to or placed in or on, or used or useable in connection with any present or future use, enjoyment, occupancy or operation of all or any part of the Land and Improvements, whether stored on the Land or elsewhere, including by way of description but without limiting the generality of the foregoing, all computer systems, telephone and telecommunication systems, televisions and television systems, pumps or pumping plants, tanks, motors, conduits, engines, pipes, ditches and flumes, and also all gas and electrical apparatus (including, but not limited to, all electrical transformers, switches, switch boxes, and equipment boxes), cooking, heating, cooling, air conditioning, sprinkler equipment, lighting, power equipment, ventilation, incineration, refrigeration and plumbing apparatus, fixtures and equipment, screens, storm doors and windows, stoves, wall beds, refrigerators, attached cabinets, partitions, ovens, ranges, disposals, dishwashers, carpeting, plants and shrubbery, ground maintenance equipment, ducts and compressors; together with all building materials, goods and personal property on or off the Property intended to be affixed to or incorporated in the Property but not yet affixed to or incorporated in the Property, all which shall be considered to the fullest extent of the law to be real property for purposes of this Deed of Trust; together with (i) All building materials, equipment, work in process or other personal property of any kind, whether stored on the Land or elsewhere, which have been or later will be Cottages Bridge Loan Deed of Trust FINAL 4 acquired for the purpose of being delivered to, incorporated into or installed in or about the Land or Improvements; together with (j) All deposit accounts of Trustor, including but not limited to, the Replacement Reserve Account (if any), the Operating Reserve Account (if any), and all Loan funds deposited into any such account, whether disbursed or not, and Trustor’s own funds now or later to be held on deposit in all such accounts; together with (k) To the extent not expressly prohibited by law, all federal, state, and local tax benefits (except the low income housing tax credits) related to the Property; together with (l) All rights to the payment of money and all guaranties thereof and judgments therefor, and all accounts, accounts receivable, reserves, deferred payments, refunds of real property and personal property taxes and other refunds, cost savings, payments and deposits, whether now or later to be received from third parties (including all earnest money sales deposits) or deposited by Trustor with third parties (including all utility deposits), warranty rights, contract rights, management contracts, service contracts, construction and architectural contracts, contracts for the purchase and sale of the Property or any part thereof, end-loan or other financing commitments, development and use rights, governmental permits and licenses, applications, architectural and engineering plans, specifications and drawings, as-built drawings, chattel paper, instruments, documents, promissory notes, drafts, letters of credit (other than letters of credit in favor of Beneficiary), letter of credit rights (whether or not the letter of credit is evidenced by a writing), supporting obligations, and general intangibles, including payment intangibles, whether any of the foregoing are tangible or electronic, which arise from or relate to construction on the Land or to any business now or later to be conducted on it, or to the Land and Improvements generally; together with (m) All insurance policies (and the unearned premiums therefor) and bonds required by the Loan Documents and all proceeds thereof, and all proceeds (including all claims to and demands for them) of the voluntary or involuntary conversion of any of the Land, the Improvements, or the other property described above into cash or liquidated claims, including proceeds of all present and future fire, hazard or casualty insurance policies and all condemnation awards or payments now or later to be made by any public body or decree by any court of competent jurisdiction for any taking or in connection with any condemnation or eminent domain proceeding, and all causes of action and their proceeds for any damage or injury to, or defect in, the Land, the Improvements, or the other property described above or any part of them, or breach of warranty in connection with the construction of the Improvements, including causes of action arising in tort, contract, fraud, misrepresentation, or concealment of a material fact; together with (n) All books, records, and all recorded data of any kind or nature (regardless of the medium of recording) pertaining to any and all of the property described above, including records relating to tenants under any leases, and the qualification of such tenants, and all certificates, vouchers, and other documents in any way related thereto, and all records relating to the application and allocation of any federal, state, and local tax credits or benefits, including computer-readable memory and any computer hardware or software necessary to access and process such memory (collectively, the “Books and Records”); together with Cottages Bridge Loan Deed of Trust FINAL 5 (o) All commercial tort claims Trustor now has or hereafter acquires relating to any of the property described above; together with (p) All software embedded within or used in connection with any of the property described above; together with (q) All products, accounts, and proceeds (cash or non-cash) of, additions, betterments, extensions, accessions and accretions to, substitutions, renewals and replacements for, and changes in any of the property described above, including all proceeds of any voluntary or involuntary disposition or claim respecting any such property (arising out of any judgment, condemnation or award, or otherwise arising) and all supporting obligations ancillary to or arising in connection therewith, general intangibles (including payment intangibles) arising in connection therewith, and all goods, accounts, instruments, documents, promissory notes, chattel paper, deposit accounts, supporting obligations, and general intangibles (including payment intangibles) (whether any of the foregoing are tangible or electronic), wherever located, acquired with cash proceeds of any of the foregoing or its proceeds. Trustor shall and will warrant and forever defend the above-bargained Property in the quiet and peaceable possession of Trustee, its successors and assigns, against all and every person or persons lawfully claiming or to claim the whole or any part thereof. Trustor agrees that any greater title to the Property hereafter acquired by Trustor during the term hereof shall be subject hereto. 1.2 Secured Obligations. (a) Trustor makes the grant, bargain, conveyance, sale, transfer, and assignment set forth above and grants the security interest set forth in Section 3 below for the purpose of securing the following obligations (the “Secured Obligations”) in such order of priority as Beneficiary may determine: (i) Payment of all obligations at any time owing under a Promissory Note Secured by Deed of Trust (Low and Moderate Income Housing Asset Fund – Cottages Bridge Loan) (the “Note”) secured by Deed of Trust dated as of ______________, 2021, payable by Trustor as maker to the order of Beneficiary in the stated principal amount of Nine Hundred Fifty Thousand Dollars ($950,000) to the order of Beneficiary, including principal, interest and all other amounts payable under the terms of the Note and performance of each covenant and agreement of Trustor in the Note and all modifications, amendments, replacements, extensions and renewals thereof and substitution therefore; and (ii) Payment and performance of all obligations of Trustor under this Deed of Trust; and (iii) Payment and performance of all obligations of Trustor under the Loan Agreement, under any Loan Documents, and under the Regulatory Agreement; provided, however, that this Deed of Trust does not secure any Loan Document or other document, or any provision of any Loan Document or other document, that is expressly stated to be unsecured; and (iv) Payment and performance of all future advances and other obligations that Trustor, or any successor in interest to Trustor, and/or any other obligor (if Cottages Bridge Loan Deed of Trust FINAL 6 different than Trustor), or any successor in ownership of all or part of the Property, may agree to pay and/or perform (whether as principal, surety, or guarantor) for the benefit of Beneficiary, when a writing evidences the parties’ agreement that the advance or obligation be secured by this Deed of Trust; and (v) Payment and performance of all modifications, amendments, extensions, and renewals, however evidenced, of any of the Secured Obligations, including any successor agreements or instruments which restate and supersede any agreements or instruments evidencing the Secured Obligations; and (vi) Payment of all sums advanced by Beneficiary to protect the security of this Deed of Trust or the Property, with interest at the Default Rate as defined in the Note. (b) All persons who may have or acquire an interest in all or any part of the Property will be considered to have notice of, and will be bound by, the terms of the Secured Obligations and each other agreement or instrument made or entered into in connection with each of the Secured Obligations. Such terms include any provisions in the Note or the Loan Agreement which permit borrowing, repayment, and reborrowing, or which provide that the interest rate on one or more of the Secured Obligations may vary from time to time. 2. Assignment of Lessor’s Interest in Leases and Assignment of Rents. 2.1 Absolute Assignment. Effective upon the recordation of this Deed of Trust, Trustor hereby irrevocably, absolutely, presently, and unconditionally assigns, transfers, and sets over to Beneficiary: (a) All of Trustor’s right, title, and interest in, to, and under any and all Leases, all amendments, extensions, renewals, or modifications thereof (subject to Beneficiary’s right to approve same pursuant to the terms of the Loan Documents), and any and all guaranties of, and security for, lessees’ performance under any and all Leases, and all other agreements relating to or made in connection with any of such Leases; and (b) All Rents. In the event that anyone establishes and exercises any right to develop, bore for, or mine for any water, gas, oil, or mineral on or under the surface of the Property, any sums that may become due and payable to Trustor as bonus or royalty payments, and any damages or other compensation payable to Trustor in connection with the exercise of any such rights, shall also be considered Rents assigned under this Section. THIS IS AN ABSOLUTE ASSIGNMENT, NOT AN ASSIGNMENT FOR SECURITY ONLY. 2.2 Grant of License. Beneficiary hereby confers upon Trustor a license (the “License”) to collect and retain the Rents as they become due and payable, so long as no Event of Default (as such term is defined below) shall exist. Upon the occurrence of an Event of Default, the License shall terminate (automatically and without notice or demand of any kind and without regard to the adequacy of Beneficiary’s security under this Deed of Trust). Cottages Bridge Loan Deed of Trust FINAL 7 2.3 Collection and Application of Rents and Enforcement of Leases. Subject to the License granted to Trustor above and the other provisions of this Section, Beneficiary has the right, power, and authority to collect any and all Rents and enforce the provisions of any Lease. In connection with the provisions of this Section, Trustor hereby constitutes and irrevocably appoints Beneficiary its attorney-in-fact, with full power of substitution, to perform any and all of the following acts, if and at the times when Beneficiary in its sole and absolute discretion may so choose: (a) Demand, receive, and enforce payment of any and all Rents, and endorse all checks and other payment instruments related thereto; (b) Give receipts, releases, and satisfactions for any and all Rents; (c) Sue either in the name of Trustor or in the name of Beneficiary for any and all Rents; (d) Enforce the provisions of any and all Leases; (e) Enter into Leases; and/or (f) Perform and discharge any and all undertakings of Trustor or otherwise under any Lease. The appointment granted in this Section shall be deemed to be a power coupled with an interest. Beneficiary’s rights under this Section do not depend on whether or not Beneficiary takes possession of the Property as permitted under this Deed of Trust. In Beneficiary’s sole and absolute discretion, Beneficiary may choose to collect Rents or enforce any and all Leases either with or without taking possession of the Property and either in person or through a court- appointed receiver. Beneficiary’s rights and powers under this Section are in addition to the other remedies herein provided for upon the occurrence of an Event of Default and may be exercised independently of or concurrently with any other such remedies. 2.4 Notice. All lessees under any and all Leases are hereby irrevocably authorized and notified by Trustor to rely upon and to comply with (and will be fully protected in so doing) any notice or demand by Beneficiary for the payment to Beneficiary of any rental or other sums which may at any time become due under the Leases, or for the performance of any of lessees’ undertakings under the Leases, and lessees have no right or duty to inquire whether any Event of Default has actually occurred or is then existing hereunder or to obtain Trustor’s consent. 2.5 Proceeds. Beneficiary has the right to apply all amounts received by it pursuant to this assignment to pay any of the following in the amounts and in the order Beneficiary deems appropriate: (a) any and all Secured Obligations, in any order and proportions as Beneficiary in its sole and absolute discretion may choose, and (b) the costs and expenses of operation of the Property and collection of Rents and other sums that may be incurred by Trustee, Beneficiary, and/or any receiver, including but not limited to reasonable attorneys’ fees and any and all expenses of leasing, operating, maintaining, and managing the Property, and all other costs and charges incident to the Property; including, without limitation, (i) salaries, fees, commissions and wages of a managing agent, and other employees, agents, or independent contractors; (ii) taxes, charges, claims, assessments, any other liens, and premiums for all insurance; and (iii) the cost of Cottages Bridge Loan Deed of Trust FINAL 8 all alterations, renovations, repairs or replacements, and all expenses incident to taking and retaining possession of the Property. In addition, Beneficiary may hold the same as security for the payment of the Secured Obligations. Beneficiary shall have no liability for any funds which it does not actually receive. 2.6 Beneficiary Not Responsible. Under no circumstances shall Beneficiary have any duty to produce Rents from the Property. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land and the Improvements, Beneficiary is not and shall not be deemed to be: (a) A “mortgagee in possession” for any purpose; (b) Responsible for performing any of the obligations of the Trustor as lessor under any lease; (c) Responsible for any waste committed by lessees or any other parties, any dangerous or defective condition of the Property, or any negligence in the management, upkeep, repair or control of the Property; or (d) Liable in any manner for the Property or the use, occupancy, enjoyment or operation of all or any part of it. 2.7 Leasing. Trustor shall not accept any deposit or prepayment of Rents for any rental period exceeding two (2) months without Beneficiary’s express prior written consent. Trustor shall not lease the Property or any part of it except strictly in accordance with the Loan Agreement. Trustor shall apply all Rents received by it in the manner required by the Loan Agreement. 3. Grant of Security Interest. 3.1 Security Agreement. 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 and some of the Rents and Leases may be determined under applicable law to be personal property or fixtures. To the extent that any Property, Rents, or Leases 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, Rents, and Leases, to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the UCC, covering all such Property, Rents, and Leases. To the extent such Property, Rents, or Leases are not real property encumbered by the lien granted above, and are not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property, Rents, and/or Leases 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. 3.2 Financing Statements; Authorization to File; Power of Attorney. Trustor hereby authorizes Beneficiary, at any time and from time to time, to file any initial financing statements, amendments thereto, and continuation statements, with or without the signature of Trustor, as authorized by applicable law, as applicable to the Property or any part thereof. Cottages Bridge Loan Deed of Trust FINAL 9 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 and all other reasonable fees and costs Beneficiary incurs in connection with perfection of its security interests. For purposes of such filings, Trustor agrees to promptly furnish any information requested by Beneficiary. Trustor also ratifies its authorization for Beneficiary to have filed any like initial financing statements, amendments thereto, or continuation statements if filed prior to the date of this Deed of Trust. Trustor hereby irrevocably constitutes and appoints Beneficiary, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Trustor to execute in Trustor’s name any such documents and to otherwise carry out the purposes of this Section, to the extent that Trustor’s authorization above is not sufficient. Such power is deemed to be coupled with an interest, and is therefore irrevocable. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall never 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 real estate encumbered by this Deed of Trust regardless 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 never 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 the 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, shall be filed in the UCC records. 4. Effective as a Financing Statement; Fixture Filing. This Deed of Trust constitutes a financing statement filed as a fixture filing under the applicable section of the UCC, covering any Property which now is or later may become fixtures attached to the Land or Improvements. This Deed of Trust shall also be effective as a financing statement covering as-extracted collateral (including oil and gas), accounts, and general intangibles under the UCC, and is to be filed of record in the real estate records of each county where any part of the Land is situated. This Deed of Trust shall also be effective as a financing statement covering any other Property and may be filed in any other appropriate filing or recording office. The mailing address of Trustor is the address of Trustor set forth at the end of this Deed of Trust, and the address of Beneficiary from which information concerning the security interests hereunder may be obtained is the address of Beneficiary set forth at the end of this Deed of Trust. A carbon, photographic, or other reproduction of this Deed of Trust or of any financing statement related to this Deed of Cottages Bridge Loan Deed of Trust FINAL 10 Trust shall be sufficient as a financing statement for any of the purposes referred to in this Section. 5. Rights and Duties of the Parties. 5.1 Representations and Warranties. Trustor represents and warrants that, except as previously disclosed to Beneficiary in writing: (a) Trustor is indefeasibly seized of and lawfully possesses and holds good and marketable fee simple title to all of the Land and the Improvements, unless any portion of Trustor’s present interest in the Land is described in Exhibit A as a leasehold interest, in which case Trustor lawfully possesses and holds a leasehold interest in such portion of the Land as stated in Exhibit A; and Trustor and its successors and assigns warrant and shall forever defend title to the Property, subject only to such exceptions and conditions to title as Beneficiary has approved in its sole and absolute discretion (the “Permitted Title Exceptions”) (and any later such encumbrances approved by Beneficiary in writing), unto Trustee and Trustee’s successors and assigns against the claims and demands of all persons claiming or to claim the same or any part thereof; (b) Trustor has the full and unlimited power, right, and authority to encumber the Property and assign the Rents; (c) This Deed of Trust creates a lien on the Property free and clear of all liens, encumbrances, and claims whatsoever, except for the liens of any construction or permanent lender with whom Beneficiary has entered into a recorded Subordination Agreement, and subject only to the Permitted Title Exceptions; (d) The Property includes all property and rights which may be reasonably necessary or desirable to promote the present and any reasonable future beneficial use and enjoyment of the Land and the Improvements; (e) Trustor owns any Property which is personal property free and clear of all liens, encumbrances, and claims whatsoever, as well as any security agreements, reservations of title, or conditional sales contracts, and there is no presently effective financing statement affecting such personal property on file in any public office nor is any of such personal property subject to a security interest having priority over Beneficiary’s priority to the same except with respect to junior indebtedness, if any, approved and permitted by Beneficiary as a Permitted Title Exception and Trustor has the right to convey and encumber such property and will warrant and defend such property against the claims of all persons and parties; (f) The Property has frontage on and direct access for ingress and egress to publicly dedicated streets; (g) Electricity (and gas, if available), water facilities, sewer facilities and any other necessary utilities are, and at all times hereafter shall be, available in sufficient capacity to service the Property satisfactorily and any easements necessary to the furnishing of such utilities are or will be granted and duly recorded; and Cottages Bridge Loan Deed of Trust FINAL 11 (h) Trustor’s exact legal name, and, if Trustor is not an individual, organizational identification number (if any assigned by Trustor’s state of incorporation or organization) are correctly set forth in this Deed of Trust. If Trustor is an individual, Trustor’s principal residence has for the preceding four months been and will continue to be (unless Trustor notifies Beneficiary of any change in writing at least thirty (30) days prior to the date of such change) the address of the principal residence of Trustor as set forth at the end of this Deed of Trust. If Trustor is not an individual, Trustor is an organization of the type and (if not an unregistered entity) is incorporated in or organized under the laws of the state specified in the introductory paragraph of this Deed of Trust. If Trustor is an unregistered entity (including a general partnership), it is organized under the laws of the state specified in the introductory paragraph of this Deed of Trust. Trustor’s principal place of business and chief executive office and the place where it keeps its Books and Records has for the preceding four months (or, if less, the entire period of the existence of Trustor) been and will continue to be (unless Trustor notifies Beneficiary of any change in writing at least thirty (30) days prior to the date of such change) the address of Trustor set forth at the end of this Deed of Trust. 5.2 Taxes and Assessments. (a) Trustor shall pay prior to delinquency all taxes, levies, charges and assessments, including assessments on appurtenant water stock (individually and collectively, an “Imposition”), imposed by any public or quasi-public authority or utility company that are (or if not paid, may become) a lien on all or part of the Property or any interest in it, or that, if not paid, may cause any decrease in the value of the Property or any part of it. If any Imposition becomes delinquent, Beneficiary may require Trustor to present evidence that it has been paid in full, on ten (10) days’ written notice by Beneficiary to Trustor. Notwithstanding the foregoing provisions of this Section, Trustor may, at its expense, contest the validity or application of any Imposition 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 be reasonably required from time to time by Beneficiary; and provided further that if at any time payment of any obligation imposed upon Trustor by this Section becomes necessary to prevent a lien foreclosure sale or forfeiture or loss of the Property, or any part thereof, then Trustor must pay the same in sufficient time to prevent such sale, forfeiture, or loss. (b) Following an Event of Default, Trustor shall, upon demand of Beneficiary, pay monthly to Beneficiary an amount sufficient, as estimated by Beneficiary, to accumulate the sum required to pay thirty (30) days prior to the due date thereof the annual cost of any real property taxes and any assessments or other Impositions and the estimated next premiums for hazard and other required insurance on the Property. These funds will be held by Beneficiary (and may be commingled with other funds of Beneficiary) without interest and will be released to Trustor for payment of Impositions and insurance premiums, or directly applied to such costs by Beneficiary, as Beneficiary may elect. (c) Notwithstanding anything to the contrary in subsection (b) above, if a property tax reserve account, taxes and insurance reserve account, or similar reserve for real property taxes is required pursuant to the terms of the Loan Agreement or other Loan Documents, then, if and at all such times as such reserve is required pursuant to the terms of the Loan Agreement, Trustor shall pay to Beneficiary the reserve deposits, including, if applicable, Cottages Bridge Loan Deed of Trust FINAL 12 any initial reserve deposit and any monthly or periodic reserve deposits, as described in the Loan Agreement or other applicable Loan Document, and all terms and conditions set forth in therein related to such reserve shall apply and are herein incorporated by reference; provided, however, no reserve will be required if a similar reserve is being held by any lender holding a lien superior to Beneficiary (“Senior Lender”). 5.3 Performance of Secured Obligations. Trustor shall promptly pay and perform each Secured Obligation in accordance with its terms. 5.4 Liens, Charges, and Encumbrances. Trustor shall immediately discharge any lien on the Property that Beneficiary has not expressly consented to 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 all or part of the Property or any interest in it, whether the lien, charge, or encumbrance is or would be senior or subordinate to this Deed of Trust. This Section is subject to any right granted to Trustor in the Loan Agreement to contest in good faith claims and liens for labor done and materials and services furnished in connection with construction of the Improvements. Trustor shall pay, perform and observe all obligations under any Permitted Title Exceptions, and will not modify or permit modification of them without Beneficiary’s prior written consent. 5.5 Damages and Insurance and Condemnation Proceeds. (a) Subject to the rights of any Senior Lender, Trustor hereby absolutely and irrevocably assigns to Beneficiary, and authorizes the payor to pay to Beneficiary, the following claims, causes of action, awards, payments, and rights to payment (whether awarded or to be awarded or which may be awarded because of judicial action, private action, settlement, or compromise): (i) All awards of damages and all other compensation payable directly or indirectly because of a condemnation, proposed condemnation or taking for public or private use which affects all or part of the Property or any interest in it; and (ii) All other awards, claims, and causes of action, arising out of any warranty affecting all or any part of the Property, or for damage or injury to or decrease in value of all or part of the Property or any interest in it; and (iii) All proceeds of any insurance policies payable because of loss sustained to all or part of the Property, whether or not such insurance policies are required by Beneficiary; and (iv) All interest which may accrue on any of the foregoing. (b) Trustor shall immediately notify Beneficiary in writing if: (i) Any material damage occurs or any injury or loss is sustained to all or any part of the Property, or any action or proceeding relating to any such damage, injury, or loss is commenced; or Cottages Bridge Loan Deed of Trust FINAL 13 (ii) Any written offer is made, or any action or proceeding is threatened or commenced, which relates to any actual or proposed condemnation or taking of all or part of the Property. (c) If Beneficiary chooses to do so, Beneficiary may in its own name appear in or prosecute any action or proceeding to enforce any cause of action based on warranty, or for damage, injury, or loss to all or part of the Property, and Beneficiary may make any compromise or settlement of the action or proceeding with respect to its rights and interests. Beneficiary, if it so chooses, may participate in any action or proceeding relating to condemnation or taking of all or part of the Property, and may join Trustor in adjusting any loss covered by insurance, and in connection therewith, Beneficiary shall have the right to be represented by counsel of its choice. (d) All proceeds of these assigned claims and all other property and rights which Trustor may receive or be entitled to shall be paid to Beneficiary. In each instance, Beneficiary shall apply such proceeds first toward reimbursement of all of Beneficiary’s reasonable costs and expenses of recovering the proceeds, including reasonable attorneys’ fees. If, in any instance, each and all of the following conditions are satisfied in Beneficiary’s reasonable judgment, Beneficiary shall permit Trustor to use the balance of such proceeds (the “Net Claims Proceeds”) to pay costs of repairing or reconstructing the Property in the manner described below: (i) The plans and specifications, cost breakdown, construction contract, construction schedule, contractor and payment and performance bond (or acceptable substitute therefore) for the work of repair or reconstruction shall all be reasonably acceptable to Beneficiary; and (ii) Beneficiary shall receive evidence reasonably satisfactory to it that after repair or reconstruction, the Property would be at least as valuable as it was immediately before the damage or condemnation occurred, and to that end and notwithstanding any other provision of the Loan Documents, Beneficiary may order an appraisal from an appraiser acceptable to Beneficiary, the cost of which shall be borne by Trustor; and (iii) The Net Claims Proceeds (together with the net proceeds of any rental interruption insurance and reasonably projected rental receipts during the repair or reconstruction period) shall be sufficient in Beneficiary’s determination to pay for the total cost of repair or reconstruction, including all associated development costs and interest and other sums projected to be payable on the Secured Obligations until the repair or reconstruction is complete; or Trustor shall provide its own funds in an amount equal to the difference between the Net Claims Proceeds and a reasonable estimate, made by Trustor and found acceptable by Beneficiary, of the total cost of repair or reconstruction; and (iv) Unless otherwise agreed to by Beneficiary, Beneficiary shall receive evidence satisfactory to it that, after the repair or reconstruction is complete, the Property will continue to operate in substantially the same manner, and will generate the same debt service coverage as immediately before the damage or condemnation occurred; and (v) Beneficiary shall be satisfied that the repair or reconstruction can be completed prior to the maturity date of the Note; and Cottages Bridge Loan Deed of Trust FINAL 14 (vi) No default or Event of Default (as defined in the applicable document, subject to applicable notice and cure periods) shall have occurred and be continuing under this Deed of Trust, the Note, the Loan Agreement or any other Loan Document. If Beneficiary finds that such conditions have been met, Beneficiary shall hold the Net Claims Proceeds, and any funds which Trustor is required to provide, in an account and shall disburse them to Trustor to pay costs of repair or reconstruction upon presentation of evidence reasonably satisfactory to Beneficiary that repair or reconstruction has been completed satisfactorily and lien-free, including partial progress payments of Net Claims Proceeds from time to time, in accordance with a cost breakdown approved by Beneficiary and the same procedures and subject to the same conditions as are set forth in the Loan Agreement for Loan disbursements. However, if Beneficiary finds that one or more of such conditions have not been satisfied, Beneficiary may apply the Net Claims Proceeds to pay or prepay some or all of the Secured Obligations in such order and proportions as Beneficiary may determine, all without affecting the lien and security interest created by this Deed of Trust. Notwithstanding the foregoing, if the Senior Lender finds that the above conditions have been met, Beneficiary shall also so agree and all Net Claims Proceeds shall be held or disbursed pursuant to the terms of the Senior Loan Documents until the obligations under the Senior Loan are satisfied. Any remaining proceeds shall be held or disbursed pursuant to this Deed of Trust and the Loan Documents. (e) Notwithstanding the foregoing, subsequent to the initial fifteen (15) year tax credit compliance period, in the event any governmental agency or authority shall require, or commence any proceedings for, the demolition of any buildings or structures comprising a substantial part of the Improvements, or shall commence any proceedings to condemn or otherwise take pursuant to the power of eminent domain a material portion of the Land or Improvements, Beneficiary may, at its option, declare the Secured Obligations to be immediately due and payable and apply any condemnation awards or proceeds to the Secured Obligations. Prior to the expiration of the initial fifteen (15) year tax credit compliance period, Trustor covenants and agrees to use any such proceeds for rebuilding the Project. If the proceeds are not used to rebuild the Project, Beneficiary may, at its option, declare the Secured Obligations to be immediately due and payable and apply any condemnation awards or proceeds to the Secured Obligations. (f) Trustor hereby specifically, unconditionally, and irrevocably waives all rights of a property owner granted under any applicable law that provides for allocation of condemnation proceeds between a property owner and a lienholder, and any other law or successor statute of similar import. 5.6 Surety Bond Proceeds. (a) Subject to the rights of any Senior Lender, Trustor hereby absolutely and irrevocably assigns to Beneficiary, and authorizes the payor to pay to Beneficiary, all payments, rights to payment, and all other compensation payable, directly or indirectly, under any payment, performance, or other bond (each a “Surety Bond”) related to, or issued in connection with, the construction of any Improvements or the performance of any acts, related to the Property or any interest in it, whether or not such Surety Bonds are required by Beneficiary. (b) Trustor shall immediately notify Beneficiary in writing of: Cottages Bridge Loan Deed of Trust FINAL 15 (i) Any threatened or actual default or breach of any obligation under any Surety Bond; or (ii) Any action or inaction, including a breach by any contractor under their contract (if applicable), which would give rise to the obligation of the payor/surety to pay any sums or perform any acts pursuant to the terms of any Surety Bond. (c) If Beneficiary chooses to do so, Beneficiary may in its own name appear in or prosecute any action or proceeding to enforce any cause of action based on any claim under a Surety Bond, and Beneficiary may make any compromise or settlement of any such action or proceeding. (d) Subject to the rights of any Senior Lender, all proceeds of these assigned payments, rights to payment, and compensation payable, directly or indirectly, under any Surety Bond which Trustor may receive or be entitled to, shall be paid to Beneficiary. In each instance, Beneficiary shall apply such proceeds first toward reimbursement of all of Beneficiary’s costs and expenses of recovering the proceeds, including reasonable attorneys’ fees. The balance of such proceeds (the “Net Bond Proceeds”) shall be used to pay the costs of completing all or a part of the construction of certain of the Improvements. When each and all of the following conditions are satisfied in Beneficiary’s reasonable judgment, Beneficiary shall permit Trustor to pay such costs of construction, in the manner described below: (i) The plans and specifications, cost breakdown, construction contract (including any replacement contract), construction schedule (including all revisions thereto), contractor (including any replacement contractor), and, if required by Beneficiary, any replacement payment and performance bond for the construction work, shall all be acceptable to Beneficiary; and (ii) To the extent allowed pursuant to the terms of the Surety Bond, Beneficiary shall have approved any replacement contractor(s); and (iii) Beneficiary shall receive evidence satisfactory to it that after the construction is complete, the Property would be at least as valuable as it would have been if completed pursuant to the original construction contract, and to that end and notwithstanding any other provisions of the Loan Documents, Beneficiary may order an appraisal from an appraiser acceptable to Beneficiary, the cost of which shall be borne by Trustor; and (iv) The Net Bond Proceeds shall be sufficient in Beneficiary’s reasonable determination to pay for the total cost of the applicable construction, including all associated development costs and interest and other sums projected to be payable on the Secured Obligations until the applicable construction is complete; or Trustor shall provide its own funds in an amount equal to the difference between the Net Bond Proceeds and a reasonable estimate, made by Trustor and found acceptable by Beneficiary, of the total cost of such construction; and (v) Beneficiary shall be satisfied that the repair or reconstruction can be completed prior to the maturity date of the Note; and (vi) No default or Event of Default (as defined in the applicable document, subject to applicable notice and cure periods) shall have occurred and be continuing Cottages Bridge Loan Deed of Trust FINAL 16 under this Deed of Trust, the Note, the Loan Agreement, the Regulatory Agreement or any other Loan Document. If Beneficiary finds that such conditions have been met, Beneficiary shall hold the Net Bond Proceeds, and any funds which Trustor is required to provide, in a non-interest-bearing account and shall disburse them to Trustor to pay costs of construction upon presentation of evidence reasonably satisfactory to Beneficiary that the construction has been completed satisfactorily and lien-free, including partial progress payments of Net Bond Proceeds from time to time, in accordance with a cost breakdown approved by Beneficiary and the same procedures and subject to the same conditions, as are set forth in the Loan Agreement for Loan disbursements. However, if Beneficiary finds that one or more of such conditions have not been satisfied, Beneficiary may apply the Net Bond Proceeds to pay or prepay some or all of the Secured Obligations in such order and proportions as Beneficiary may choose, all without affecting the lien and security interest created by this Deed of Trust. Notwithstanding the foregoing, if the Senior Lender finds that the above conditions have been met, Beneficiary shall also so agree and all Net Bond Proceeds shall be held or disbursed pursuant to the terms of the Senior Loan Documents until the obligations under the Senior Loan are satisfied. Any remaining proceeds shall be held or disbursed in accordance with this Deed of Trust and the Loan Documents. (e) Notwithstanding anything herein to the contrary, to the extent that any of the terms of this Section conflict with the terms of any Surety Bond which has been approved in writing by Beneficiary, the terms of such Surety Bond shall control. 5.7 Maintenance and Preservation of Property. (a) Trustor shall insure the Property as required by the Loan Agreement and keep the Property in good condition and repair. (b) Trustor shall not remove or demolish the Property or any part of it, or alter, restore or add to the Property, or initiate or allow any change in any zoning or other land use classification which affects the Property or any part of it, except as permitted or required by the Loan Documents or with Beneficiary’s express prior written consent in each instance. (c) If all or part of the Property becomes damaged or destroyed, Trustor shall, upon direction of Beneficiary, promptly and completely repair and/or restore the Property in a good and workmanlike manner in accordance with sound building practices and only if insurance proceeds from any Property insurer are available for such purpose; provided, however, this subsection is subject to the provisions of Sections 5.5 and 5.6 above. (d) Trustor shall not commit or allow any act upon or use of the Property which would violate: (i) any applicable law or order of any governmental authority, whether now existing or later to be enacted and whether foreseen or unforeseen; or (ii) any public or private covenant, condition, restriction or equitable servitude affecting the Property. Trustor shall not bring or keep any article on the Property or cause or allow any condition to exist on it, if that could invalidate or would be prohibited by any insurance coverage required to be maintained by Trustor on the Property or any part of it under the Loan Documents. Cottages Bridge Loan Deed of Trust FINAL 17 (e) Trustor shall not commit or allow waste of the Property, including those acts or omissions characterized under the Loan Agreement as waste that arise out of Hazardous Matrerials (as such term is defined in the Loan Agreement). (f) Trustor shall perform all other acts which from the character or use of the Property may be reasonably necessary to maintain and preserve its value and utility. (g) If any part of Trustor’s interest in the Property is a leasehold interest, Trustor shall observe and perform all obligations of Trustor under any such lease or leases and shall refrain from taking any actions prohibited by any lease or leases, and Trustor shall preserve and protect such leasehold estate and its value. (h) If any easement or right of way appurtenant to, or recorded agreement which benefits, the Property exists or is hereafter entered into, Trustor shall perform its obligations and duties under such easement, right of way, or agreement, and shall take all such actions as may be necessary to prevent such easement, right of way, or agreement from being terminated for Trustor’s non-performance. Trustor irrevocably appoints Beneficiary its attorney- in-fact, with full power of substitution, for the purpose of performing any act to be performed by Trustor under any such easement, right of way, or agreement, such power deemed to be coupled with an interest and therefore irrevocable. 5.8 Trustee’s Acceptance of Trust. Trustee accepts this trust when this Deed of Trust is recorded. 5.9 Required Insurance. (a) Trustor shall at all times provide, maintain and keep in force or cause to be provided, maintained and kept in force, at no expense to Trustee or Beneficiary, policies of insurance in accordance with the terms of the Loan Documents in form and amounts, providing for deductibles, and issued by companies, associations or organizations covering such casualties, risks, perils, liabilities and other hazards as required by the Loan Documents or by Beneficiary pursuant thereto. (b) Trustor shall not obtain separate insurance concurrent in form or contributing in the event of loss with that required to be maintained hereunder unless Beneficiary is included thereon under a standard, non-contributory mortgagee clause or endorsement acceptable to Beneficiary. Trustor shall immediately notify Beneficiary whenever any such separate insurance is obtained and shall promptly deliver to Beneficiary the original policy or policies of such insurance. (c) Within 90 days following the end of each fiscal year of Trustor, at the request of Beneficiary, Trustor at Trustor’s expense shall furnish such evidence of replacement costs as the insurance carrier providing casualty insurance for the building(s) and other improvements on the Property may require to determine, or which such carrier may provide in determining, the then replacement cost of the building(s) and other improvements on The Property. Cottages Bridge Loan Deed of Trust FINAL 18 5.10 Delivery of Policies, Payment of Premiums. (a) At Beneficiary’s option Trustor shall furnish Beneficiary with an original of all policies of insurance required under Section 5.9 above or evidence of insurance issued by the applicable insurance company for each required policy setting forth the coverage, the limits of liability, the name of the carrier, the policy number and the period of coverage, and otherwise in form and substance satisfactory to Beneficiary in all respects. (b) In the event Trustor fails to provide, maintain, keep in force or deliver to Beneficiary the policies of insurance required by this Deed of Trust or by any Loan Documents, Beneficiary may (but shall have no obligation to) procure such insurance or single-interest insurance for such risks covering Beneficiary’s interest and Trustor will pay all premiums thereon and reimburse Beneficiary for all amounts paid or incurred by it in connection therewith promptly upon demand by Beneficiary and, until such payment and reimbursement is made by Trustor, the amount of all such premiums and amounts paid or incurred by Beneficiary shall become indebtedness secured by this Deed of Trust and bear interest at the Default Rate. In such event, upon the request of Beneficiary, Trustor further agrees to cause all bills, statements or other documents relating to the foregoing insurance premiums to be sent or mailed directly to Beneficiary. Upon receipt of such bills, statements or other documents evidencing that a premium for a required policy is then payable, and providing Trustor has deposited sufficient funds with Beneficiary pursuant to this Section, Beneficiary shall timely pay such amounts as may be due thereunder out of the funds so deposited with Beneficiary. If at any time and for any reason the funds deposited with Beneficiary are or will be insufficient to pay such amounts as may be then or subsequently due, Beneficiary shall notify Trustor and Trustor shall immediately deposit an amount equal to such deficiency with Beneficiary. Notwithstanding the foregoing, nothing contained herein shall cause Beneficiary to be deemed a trustee of the funds or to be obligated to pay any amounts in excess of the amount of funds deposited with Beneficiary pursuant to this Section, nor shall anything contained herein modify the obligation of Trustor set forth above to maintain and keep such insurance in force at all times. Beneficiary may commingle the reserve with its own funds and Trustor shall be entitled to no interest thereon. 5.11 Intentionally Omitted. 5.12 Assignment of Policies Upon Foreclosure. In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Trust Estate in extinguishment, in whole or in part, of the debt secured hereby, all right, title and interest of Trustor in and to all policies of insurance obtained by Trustor, whether required by the Loan Documents or otherwise, shall inure to the benefit of and pass to the successor in interest of Trustor or the purchaser or grantee of the Trust Estate. 5.13 Releases, Extensions, Modifications, and Additional Security. (a) From time to time, Beneficiary may perform any of the following acts without incurring any liability or giving notice to any person: (i) Release any person liable for payment of any Secured Obligation; or Cottages Bridge Loan Deed of Trust FINAL 19 (ii) Extend the time for payment, or otherwise alter the terms of payment, of any Secured Obligation; or (iii) Accept additional real or personal property of any kind as security for any Secured Obligation, whether evidenced by deeds of trust, mortgages, security agreements or any other instruments of security; or (iv) Alter, substitute or release any property securing the Secured Obligations. (b) From time to time, when requested to do so by Beneficiary in writing, Trustee may perform any of the following acts without incurring any liability or giving notice to any person: (i) Consent to the making of any plat or map of the Property or any part of it; or (ii) Join in granting any easement or creating any restriction affecting the Property; or (iii) Join in any subordination or other agreement affecting this Deed of Trust or the lien of it; or (iv) Reconvey the Property or any part of it without any warranty. 5.14 Reconveyance. Beneficiary shall reconvey this Deed of Trust upon satisfaction of all of Trustor’s obligations under the Promissory Note. 5.15 Compensation, Exculpation, Indemnification. (a) Trustor agrees to pay fees in the maximum amounts legally permitted, or reasonable fees as may be charged by Beneficiary and Trustee when the law provides no maximum limit, for any services that Beneficiary or Trustee may render in connection with this Deed of Trust, including Beneficiary’s providing a statement of the Secured Obligations or Trustee’s rendering of services in connection with a release or reconveyance (full or partial). Trustor shall also pay or reimburse all of Beneficiary’s and Trustee’s costs and expenses which may be incurred in rendering any such services. 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 the exercise of any rights or remedies afforded to Beneficiary or Trustee or both of them under the remedies section below, whether any lawsuit is filed or not, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys’ fees and other legal costs (which shall include reimbursement for the allocated costs of in-house counsel used by Beneficiary and/or Trustee to the extent not prohibited by law), costs of any Trustee’s Sale (as described below), any judicial foreclosure of this Deed of Trust, and any cost of evidence of title. If Beneficiary chooses to dispose of Property through more than one Trustee’s Sale or judicial foreclosure, Trustor shall pay all costs, expenses, or other advances that may be incurred or made by Trustee or Beneficiary in each of such Trustee’s Sales or judicial foreclosure actions. Cottages Bridge Loan Deed of Trust FINAL 20 (b) 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 lessees of the Property or any other parties, or any dangerous or defective condition of the Property; or (iv) Any loss sustained by Trustor or any third party resulting from Beneficiary’s failure to lease the Property, or from any other act or omission of Beneficiary in operating or managing the Property, after an Event of Default, unless the loss is caused solely by the gross negligence or willful misconduct of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described above, and agrees that no such liability shall be asserted against or imposed upon Beneficiary. (c) Trustor agrees to indemnify, defend, and hold Trustee and Beneficiary harmless, for, from, and against, and reimburse them for, all losses, damages, liabilities, claims, causes of action, judgments, penalties, court costs, reasonable attorneys’ fees and other legal expenses and expenses of professional consultants and experts, cost of evidence of title, cost of evidence of value, and other costs and expenses, including the settlement of any such matter, excepting those arising out of, or resulting, solely from Beneficiary’s or Trustee’s, as the case may be, gross negligence or willful misconduct, which either may suffer or incur as a result of a third party claim against Trustee or Beneficiary: (i) In performing any act required or permitted by this Deed of Trust or any of the other Loan Documents or by law; (ii) Because of any failure of Trustor to perform any of Trustor’s obligations; or (iii) Because of any obligation of or undertaking by Trustor to perform or discharge any of the representations, warranties, conditions, covenants, or other obligations in any document relating to the Property other than the Loan Documents. This agreement by Trustor to indemnify Trustee and Beneficiary shall survive payoff, termination, or the release and cancellation of any or all of the Secured Obligations, and the full or partial release and/or reconveyance of this Deed of Trust. (d) Trustor shall pay all obligations to pay money arising under this Section immediately upon written demand by Trustee or Beneficiary. Each such obligation shall be added to, and considered to be part of, the principal of the Note, and shall bear interest from the date the obligation arises at the Default Rate (as such term may be defined in the Note), or if no Default Rate is specified, at five percent (5%) in excess of the Stated Rate. For purposes hereof, “Stated Rate” means the stated interest rate in effect from time to time under the Note Cottages Bridge Loan Deed of Trust FINAL 21 and/or other debt instrument evidencing the Loan; provided that if more than one rate of interest is in effect, the highest rate shall be used. 5.16 Defense and Notice of Claims and Actions. At Trustor’s sole expense, Trustor shall protect, preserve and defend the Property and title to and right of possession of the Property, and the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims. Trustor shall give Beneficiary and Trustee prompt notice in writing if any claim is asserted which does or could affect any of such matters, or if any action or proceeding is commenced which alleges or relates to any such claim. 5.17 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances affecting the Property, whether released or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust or with the proceeds of any loan secured by this Deed of Trust. 5.18 Site Visits, Observation and Testing. Beneficiary and its agents and representatives and the other City Indemnitees (as such term is defined in the Loan Agreement), and their agents and representatives, shall have the right at any reasonable time to enter and visit the Property for the purposes of observing the Property, performing appraisals, taking and removing soil or groundwater samples, and conducting tests on any part of the Property. The City Indemnitees have no duty, however, to visit or observe the Property or to conduct tests, and no site visit, observation, or testing by any City Indemnitee shall impose any liability on any City Indemnitee. In no event shall any site visit, observation, or testing by any City Indemnitee be a representation that Hazardous Substances (as such term is defined in the Loan Agreement) are or are not present in, on, or under the Property, or that there has been or shall be compliance with any law, regulation, or ordinance pertaining to Hazardous Substances or any other applicable governmental law. Neither Trustor nor any other party is entitled to rely on any site visit, observation, or testing by any City Indemnitee. The City Indemnitees owe no duty of care to protect Trustor or any other party against, or to inform Trustor or any other party of, any Hazardous Substances or any other adverse condition affecting the Property. The City Indemnitees may in their discretion disclose to Trustor or any other party any report or findings made as a result of, or in connection with, any site visit, observation, or testing by the City Indemnitees. Trustor understands and agrees that the City Indemnitees make no representation or warranty to Trustor or any other party regarding the truth, accuracy, or completeness of any such report or findings that may be disclosed. Trustor also understands that, depending on the results of any site visit, observation, or testing by any City Indemnitee which are disclosed to Trustor, Trustor may have a legal obligation to notify one or more environmental agencies of the results. Any City Indemnitee shall give Trustor reasonable prior electronic or written notice before entering the Property. Such City Indemnitee shall make reasonable efforts to avoid interfering with Trustor’s use of the Property in exercising any rights provided in this Section. In connection with any such site visit, observation, or testing, Trustor shall have any rights with respect to the release and/or disclosure of environmental reports as set forth in the Loan Agreement. 5.19 Notice of Change. Trustor will not cause or permit any change to be made in (a) its name, identity, or corporate, partnership, limited liability company, or other entity structure, (b) its jurisdiction of organization (c) its organizational identification number, (d) its place of business or, if more than one, its chief executive office, (e) its mailing address, or (f) any change in the location of any Property, unless Trustor shall have notified Beneficiary in writing Cottages Bridge Loan Deed of Trust FINAL 22 of such change at least thirty (30) days prior to the effective date of such change, and shall have first taken all action required by Beneficiary for the purpose of further perfecting or protecting the lien and security interest of Beneficiary in the Property. Unless otherwise approved by Beneficiary in writing, all Property that consists of personal property (other than Books and Records) will be located on the Land and all Books and Records will be located at Trustor’s place of business or chief executive office if Trustor has more than one place of business. 5.20 Further Assurances. Trustor shall, promptly on request of Beneficiary, (a) correct any defect, error or omission which may be discovered in the contents, execution, or acknowledgment of this Deed of Trust or any other Loan Document; (b) execute, authenticate, acknowledge, deliver, procure, and record and/or file and/or authorize the filing of such further documents (including, without limitation, further deeds of trust, security agreements, financing statements, financing statement amendments, continuation statements, and assignments of rents or leases) and do such further acts as may be necessary, desirable, or proper (i) to carry out more effectively the purposes of this Deed of Trust and the other Loan Documents, (ii) to more fully identify and subject to the liens and security interests hereof any property intended to be covered hereby (including specifically, but without limitation, any renewals, additions, substitutions, replacements, or appurtenances to the Property), or (iii) as deemed advisable by Beneficiary to protect the lien or security interest hereunder against the rights or interests of third persons; and (c) provide such certificates, documents, reports, information, affidavits and other instruments and do such further acts as may be necessary, desirable or proper to enable Beneficiary to comply with the requirements or requests of any agency having jurisdiction over Beneficiary or any examiners of such agencies with respect to the Secured Obligations, the Trustor, or the Property. Trustor shall pay all costs connected with any of the foregoing within five (5) days after the written demand by Trustee or Beneficiary. If not paid when due, such costs shall be added to, and considered to be part of, the principal of the Note, and shall bear interest from the date of such written demand at the Default Rate (as such term may be defined in the Note), or if no Default Rate is specified, at ten percent (10%) in excess of the Stated Rate. Notwithstanding anything to the contrary set forth herein, Trustor shall have no obligation to execute any document, or to take any action, which (i) would alter any business term or condition of the Loan Documents, or (ii) impose greater liabilities upon Trustor, any Guarantor and/or any partner, member or officer thereof. 6. Accelerating Transfers, Default and Remedies. 6.1 Due on Sale or Other Accelerating Transfers. Upon an Accelerating Transfer, Beneficiary may, in its sole discretion, declare all Secured Obligations immediately due and payable. (a) “Accelerating Transfer” means any sale, contract to sell, conveyance, encumbrance, pledge, mortgage, lease not expressly permitted under Article 7 of the Loan Agreement, or other transfer of all or any material part of the Property or any interest in it, whether voluntary, involuntary, by operation of law, or otherwise. (b) Trustor acknowledges that Beneficiary is making one or more advances under the Loan Agreement in reliance on the expertise, skill, and experience of Trustor; thus, the Secured Obligations include material elements similar in nature to a personal service contract. In consideration of Beneficiary’s reliance, Trustor agrees that Trustor shall not make any Accelerating Transfer, other than a transfer allowed pursuant to the express terms of the Loan Cottages Bridge Loan Deed of Trust FINAL 23 Documents, unless the transfer is preceded by Beneficiary’s express written consent to the particular transaction and transferee. Beneficiary may withhold such consent in its sole and absolute discretion. If any Accelerating Transfer occurs, an Event of Default will occur under the Loan Agreement, and Beneficiary may implement available rights and remedies under the Loan Agreement and the other Loan Documents including declaration of all of the Secured Obligations to be immediately due and payable, and Beneficiary and Trustee may invoke any rights and remedies under this Deed of Trust. Trustor acknowledges the materiality of the provisions of this Section as a covenant of Trustor, given individual weight and consideration by Beneficiary in entering into the Secured Obligations, and that any Accelerating Transfer in violation of the prohibited transfer provisions herein set forth shall result in a material impairment of Beneficiary’s interest in the Property and be deemed a breach of the foregoing covenant. (c) Notwithstanding the foregoing, Beneficiary acknowledges and agrees that any transfer specifically allowed or permitted by, and made in accordance with, the terms of Section 2 of the Loan Agreement, if any, shall not be an Accelerating Transfer under this Section. 6.2 Events of Default. Trustor will be in default under this Deed of Trust upon the occurrence of any one or more of the following events (some or all collectively, “Events of Default;” any one singl y, an “Event of Default”): (a) Trustor fails to perform any obligation to pay money which arises under this Deed of Trust, and does not cure that failure within ten (10) days after written notice from Beneficiary or Trustee; or (b) Trustor fails to perform any obligation arising under this Deed of Trust other than one to pay money, and does not cure that failure either within thirty (30) days (the “Initial Cure Period”) after written notice from Beneficiary or Trustee, or within sixty (60) days after such written notice, so long as Trustor begins within the Initial Cure Period, and Beneficiary, exercising reasonable judgment, determines that the cure cannot reasonably be completed at or before expiration of the Initial Cure Period; or (c) A default or Event of Default by Trustor (as such term is defined in the applicable document, subject to any applicable notice and cure periods) has occurred under the Loan Agreement or any other Loan Document or any document evidencing any Secured Obligation; or (d) Trustor makes or permits the occurrence of an Accelerating Transfer; or (e) Any default by Trustor occurs under any other mortgage, deed of trust, security deed, or other security instrument on all or any part of the Property, subject to any applicable notice and cure period provided for therein or under any obligation secured by such security instrument, whether such security instrument is prior to or subordinate to this Deed of Trust. 6.3 Remedies. Except as otherwise expressly set forth in the Loan Agreement or any other Loan Document, 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 or permitted by Cottages Bridge Loan Deed of Trust FINAL 24 applicable law or in equity. All of such rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. (a) Acceleration. Beneficiary may declare any or all of the Secured Obligations to be due and payable immediately and may terminate any Loan Document in accordance with its terms. (b) Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. Trustor hereby consents to such appointment. (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 in its own name or in the name of Trustor sue for or otherwise collect any and all Rents, including those that are past due, and may also do any and all other things in connection with those actions that Beneficiary may in its sole and absolute discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing all of Trustor’s or the then owner’s Books and Records; 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 (but not in excess of any applicable maximum low income rents for residential tenants); collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; contracting for and making repairs and alterations; and/or performing such acts of cultivation or irrigation as necessary to conserve the value of the Property. 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, with full power of substitution, to perform such acts and execute such documents as Beneficiary in its sole and absolute discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor’s name on any instruments. The appointment granted in this Section shall be deemed to be a power coupled with an interest. Regardless of any provision of this Deed of Trust, or any other Loan Document, Beneficiary shall not be considered to have accepted any property other than cash or immediately available funds in satisfaction of any obligation of Trustor to Beneficiary, unless Beneficiary has given express written notice of Beneficiary’s election of that remedy in accordance with applicable law. Trustor agrees to deliver to Beneficiary all Books and Records pertaining to the Property, including computer-readable memory and any computer hardware or software necessary to access or process such memory, as may reasonably be requested by Beneficiary in order to enable Beneficiary to exercise its rights under this Section. (d) 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 that it may, in its sole and absolute 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 that purports 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; obtaining insurance and/or paying any premiums or charges for insurance required to be carried under the Loan Documents; otherwise Cottages Bridge Loan Deed of Trust FINAL 25 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 either with or without giving notice to any person. (e) Cure Rights of Limited Partner. Trustor’s limited partner(s) (collectively, “Limited Partner”) shall have the right but not the obligation to cure any Event of Default of Trustor under the Loan Documents, and Beneficiary agrees to accept any cure tendered by Limited Partner on behalf of Trustor within the cure periods described in this Section 6. In addition to any notice required to be given by Beneficiary to Trustor, Beneficiary shall give concurrent written notice of any Event of Default under the Loan Documents to Limited Partner. The notice shall specify: (i) the nature of the event or deficiency giving rise to the Event of Default, (ii) the action required to cure the event or deficiency, if an action to cure is possible and can be ascertained, and (iii) a date by which such action to cure must be taken, if applicable, which date shall in no event be less than thirty (30) calendar days from the mailing of the notice for monetary defaults or sixty (60) calendar days from the mailing of the notice for non- monetary defaults. If the cure of a non-monetary default requires more than sixty (60) days, Beneficiary may, in its reasonable discretion, extend the time within which the Event of Default must be cured, provided Limited Partner promptly commences to cure the Event of Default and thereafter diligently pursues or prosecutes such cure to completion, or diligently pursues the removal and replacement of the general partner of Trustor. In the event Beneficiary fails to provide notice of an Event of Default to Limited Partner as set forth herein, Beneficiary’s failure to provide such notice to Limited Partner shall not result in liability to Beneficiary, but Beneficiary shall grant Limited Partner thirty (30) calendar days from receipt of actual notice of a monetary default or sixty (60) days from receipt of actual notice of a non-monetary default to pay any and all sums or perform any and all acts necessary to cure such Events of Default, provided Limited Partner has recorded a request for notice of default and has taken any and all other steps necessary to mitigate its damages in the event of a default by Trustor. Notwithstanding the foregoing, in no event shall Limited Partner’s right to cure an Event of Default extend beyond five (5) calendar days prior to Beneficiary’s foreclosure of its interest in the Property. (f) UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC. (g) 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 the foreclosure of deeds of trusts or mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust. If Beneficiary brings such an action, Trustor agrees to pay Beneficiary’s reasonable attorneys’ fees (including the allocated costs of in-house counsel to the extent not prohibited by applicable law) and court costs as determined by the court. (h) 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. (i) Sales of Personal Property. Cottages Bridge Loan Deed of Trust FINAL 26 (A) For purposes of this power of sale, and to the extent not prohibited by applicable law, Beneficiary may elect to treat as personal property any Property which is intangible or which can be severed from the Land or Improvements without causing structural damage. If it chooses to do so, Beneficiary may dispose of any personal property separately from the sale of real property, in any manner permitted by the UCC, including any public or private sale, or in any manner permitted by any other applicable law. Any proceeds of any such disposition shall not cure any Event of Default or reinstate any Secured Obligation. (B) In connection with any sale or other disposition of such personal property disposed of separately from the sale of the real property, Trustor agrees that the following procedures constitute a commercially reasonable sale. Beneficiary shall mail written notice of the sale to Trustor not later than ten (10) days prior to the date of public sale of the Property or prior to the date after which a private sale of the Property will be made, and such notice shall constitute reasonable notice; provided that, if Beneficiary fails to comply with this subsection in any respect, its liability for such failure shall be limited to the liability, if any, imposed on it as a matter of law under the UCC. Upon receipt of any written request, Beneficiary will make the personal property available to any bona fide prospective purchaser for inspection during reasonable business hours. Notwithstanding, Beneficiary shall be under no obligation to consummate a sale if, in its judgment, none of the offers received by it equal the fair value of the personal property offered for sale. The foregoing procedures do not constitute the only procedures that may be commercially reasonable. (j) Trustee’s Sales of Real Property or Mixed Collateral. (A) Beneficiary may choose to dispose of some or all of the Property which consists solely of real property in any manner then permitted by applicable law. In its sole and absolute discretion, and to the extent not prohibited by applicable law, Beneficiary may also or alternatively choose to dispose of some or all of the Property, in any combination consisting of both real and personal property, together in one sale to be held in accordance with the law and procedures applicable to real property, as may be permitted by the UCC. Trustor agrees that such a sale of personal property together with real property constitutes a commercially reasonable sale of the personal property. For purposes of this power of sale, either a sale of real property alone, or a sale of both real and personal property together in accordance with the UCC, will sometimes be referred to as a “Trustee’s Sale.” (B) Before any Trustee’s Sale, Beneficiary or Trustee shall give such statement of breach or nonperformance, notice of sale, and/or notice of default as may then be required by applicable law. When all time periods then legally mandated have expired, and after such notice of sale and/or other notice as may then be legally required has been given, Trustee shall sell the property being sold at a public auction to be held at the time and place specified in the notice of sale. Neither Trustee nor Beneficiary shall have any obligation to make demand on Trustor before any Trustee’s Sale. From time to time in accordance with then applicable law, Trustee may, and in any event at Beneficiary’s request shall, postpone any Trustee’s Sale by public announcement at the time and place noticed for that Trustee’s Sale, unless otherwise required by applicable law. (C) At any Trustee’s Sale, Trustee shall sell to the highest bidder at public auction for cash in lawful money of the United States, payable at the time of sale unless otherwise required by applicable law. Trustee shall execute and deliver to the purchaser(s) a Cottages Bridge Loan Deed of Trust FINAL 27 deed or deeds conveying the property being sold without any covenant or warranty whatsoever, express or implied. The recitals in any such deed of any matters or facts, including any facts bearing upon the regularity or validity of any Trustee’s Sale, shall be conclusive proof of their truthfulness, absent manifest error. Absent manifest error, any such deed shall be (1) conclusive against all persons as to the facts recited in it; and (2) conclusive evidence in favor of purchasers and encumbrancers for value and without actual notice, that all requirements of this Deed of Trust and all requirements of law were met relating to the exercise of the power of sale and the Trustee’s Sale of the Property conveyed by such deed. Knowledge of the Trustee shall not be imputed to the Beneficiary. (k) Attorney-in-Fact. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor’s attorney-in-fact, with full power of substitution, to perform such acts and execute such documents as Beneficiary in its sole and absolute discretion may consider to be appropriate (1) to effect the purpose of this Deed of Trust; and (2) in connection with taking the measures described in this Section, including endorsement of Trustor’s name on any instruments. This appointment granted in this Section shall be deemed to be a power coupled with an interest, and is therefore irrevocable. (l) Single or Multiple Foreclosure Sales. Unless prohibited by applicable law, Beneficiary may elect to dispose of the Property, or any portion thereof, including but not limited to lots, parcels, and/or items through a single consolidated sale or disposition to be held or made under the power of sale granted above, or in connection with judicial proceedings, or by virtue of a judgment and decree of foreclosure and sale; or through two or more such sales or dispositions; or in any other manner Beneficiary may deem to be in its best interests (any such sale or disposition, a “Foreclosure Sale;” any two or more, “Foreclosure Sales”). If the Property consists of more than one lot, parcel or item of property, Beneficiary may designate the order in which the lots, parcels and/or items shall be sold or disposed of or offered for sale or disposition. If Beneficiary chooses to have more than one Foreclosure Sale, Beneficiary at its option may cause the Foreclosure Sales to be held simultaneously or successively, on the same day, or on such different days and at such different times and in such order as Beneficiary may deem to be in its best interests. No Foreclosure Sale shall terminate or affect the lien of this Deed of Trust on any part of the Property which has not been sold, until all of the Secured Obligations have been paid and performed in full. 6.4 Personal Property. It shall not be necessary that Beneficiary take possession of all or any part of the Property that is personal property or fixture property prior to the time that any sale pursuant to the provisions of this Section is conducted, and it shall not be necessary that such Property or any part thereof be present at the location of such sale. With respect to application of proceeds from disposition of such Property, the costs and expenses incident to disposition shall include the reasonable expenses of retaking, holding, preparing for sale or lease, selling, leasing and the like and the reasonable attorneys’ fees and legal expenses (including, without limitation, the allocated costs for in-house counsel to the extent not prohibited by applicable law) incurred by Beneficiary. Any and all statements of fact or other recitals made in any bill of sale or assignment or other instrument evidencing any foreclosure sale hereunder as to nonpayment of the Secured Obligations or as to the occurrence of any default or Event of Default, or as to Beneficiary having declared all of such indebtedness to be due and payable, or as to notice of time, place, and terms of sale, and of the properties to be sold having been duly given, or as to any other act or thing having been duly done by Beneficiary, shall be taken as Cottages Bridge Loan Deed of Trust FINAL 28 prima facie evidence of the truth of the facts so stated and recited (absent manifest error). Beneficiary may appoint or delegate any one or more persons as agent to perform any act or acts necessary or incident to any sale held by Beneficiary, including the sending of notices and the conduct of the sale, but in the name and on behalf of Beneficiary. Beneficiary may comply with any applicable state or federal law or regulatory requirements in connection with a disposition of the Property or any part thereof, and such compliance will not be considered to affect adversely the commercial reasonableness of any sale of such Property. Beneficiary may sell all or any portion of the Property without giving any warranties as to such Property, and may specifically disclaim any warranties of title, merchantability, fitness for a specific purpose, or the like, and this procedure will not be considered to affect adversely the commercial reasonableness of any sale of such Property. Trustor acknowledges that a private sale of all or any part of the Property may result in less proceeds than a public sale, and Trustor acknowledges that the Property may be sold at a loss to Trustor, and that, in such event, Beneficiary shall have no liability or responsibility to Trustor for such loss. In addition to the rights granted elsewhere in this Deed of Trust, after the occurrence of any default or Event of Default, Beneficiary may at any time notify the account debtors or obligors of any accounts, chattel paper (whether tangible or electronic), general intangibles (including payment intangibles), negotiable instruments, promissory notes, or other evidences of indebtedness included in the Property to pay Beneficiary directly. 6.5 Credit Bids. At any Trustee’s Sale, Foreclosure Sale, or any sale of personal property collateral under this Deed of Trust, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property being sold or any part of it to the extent not expressly prohibited by then applicable law. Instead of paying cash for such property, Beneficiary shall have the benefit of any applicable law permitting credit bids. 6.6 Application of Trustee’s Sale or Foreclosure Sale Proceeds. Except as may be otherwise required by law, Beneficiary and Trustee shall apply the proceeds of any Trustee’s Sale, Foreclosure Sale, or any other sale of personal property collateral under this Deed of Trust, in the following manner: (a) First, to pay the portion of the Secured Obligations attributable to the expenses of sale, including all costs and expenses of exercising the power of sale and other costs of sale, including, but not limited to, trustee’s fees and reasonable attorneys’ fees, the costs of any action, and any other sums for which Trustor is obligated to reimburse Beneficiary or Trustee under this Deed of Trust; and (b) Second, to pay the portion of the Secured Obligations attributable to any sums expended or advanced by Beneficiary or Trustee under the terms of this Deed of Trust which then remain unpaid; and (c) Third, to pay all other Secured Obligations, to the extent not expressly prohibited by applicable law, in any order and proportions as Beneficiary in its sole and absolute discretion may choose; and (d) Fourth, to remit the remainder, if any, to the person or persons entitled to it, or, if permitted or required by applicable law, to the clerk of the court of the county in which the Trustee’s Sale, Foreclosure Sale, or any other sale of personal property collateral under this Deed of Trust, took place. Cottages Bridge Loan Deed of Trust FINAL 29 If the Secured Obligations include more than one loan or line of credit, by cross-collateralization or otherwise, it is specifically agreed that the proceeds of any Trustee’s Sale or other foreclosure action shall not be applied pro-rata unless such application is directed by Beneficiary, but instead shall be applied to all such Secured Obligations in any order, proportions and manner as Beneficiary in its sole and absolute discretion may choose. 6.7 Application of Rents and Other Sums. Beneficiary shall apply any and all Rents collected by it in such order as set forth in Section 2.5 above, and any and all other sums, other than proceeds of a Trustee’s Sale or a judicial foreclosure sale under this Deed of Trust, which Beneficiary may receive or collect under this Section, in the following manner: (a) First, to pay the portion of the Secured Obligations attributable to the costs and expenses of operation of the Property and collection of Rents and other sums that may be incurred by Trustee, Beneficiary, and/or any receiver, including but not limited to reasonable attorneys’ fees and any and all expenses of leasing, operating, maintaining, and managing the Property, and all other costs and charges incident to the Property; and (b) Second, to pay all other Secured Obligations in any order and proportions as Beneficiary in its sole and absolute discretion may choose; and (c) Third, to remit the remainder, if any, to the person or persons entitled to it. Beneficiary shall have no liability for any funds which it does not actually receive. 6.8 Request for Notice. Trustor hereby requests a copy of any notice of default and that any notice of sale hereunder be mailed to it at the address set forth herein. 6.9 Forbearance by Lender Not a Waiver. Any forbearance by Beneficiary in exercising any right or remedy hereunder, or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any right or remedy. The acceptance by Beneficiary of payment of any sum secured by this Deed of Trust after the due date of such payment shall not be a waiver of Beneficiary’s right either to require prompt payment when due of all other sums so secured or to declare an Event of Default for failure to make prompt payment. The procurement of insurance or this payment of taxes or other liens or charges by Beneficiary shall not be a waiver of Beneficiary’s right to accelerate the maturity of the indebtedness secured by this Deed of Trust nor shall Beneficiary’s receipt of any awards, proceeds or damages under this Deed of Trust operate to cure or waive any Event of Default with respect to any payment secured by this Deed of Trust. 6.10 Restriction on Rental Increases. Notwithstanding anything to the contrary contained in the Loan Documents, the Beneficiary acknowledges and agrees that in the event of a foreclosure or deed-in-lieu of foreclosure (collectively, “Foreclosure”) with respect to the Project, the following rule contained in Section 42(h)(6)(E)(ii) of the Internal Revenue Code of 1986, as amended, shall apply: For a period of three (3) years from the date of Foreclosure, with respect to any unit that had been regulated by a regulatory agreement with the California Tax Credit Allocation Committee, (i) none of the tenants occupying those units at the time of Foreclosure may be Cottages Bridge Loan Deed of Trust FINAL 30 evicted or their tenancy terminated (other than for good cause), (ii) nor may any rent be increased except as otherwise permitted under Section 42 of the Code. 7. Miscellaneous. 7.1 Amendments. This instrument cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of any waiver, change, discharge or termination is sought. 7.2 Trustor Waiver of Rights. Trustor waives to the extent permitted by law, (a) the benefit of all laws now existing or that may hereafter be enacted providing for any appraisement before sale of any portion of the Trust Estate, (b) all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature or declare due the whole of the secured indebtedness and marshalling in the event of foreclosure of the liens hereby created, (c) all rights and remedies which Trustor may have or be able to assert by reason of the laws of the State of California pertaining to the rights and remedies of sureties, (d) the right to assert any statute of limitations as a bar to the enforcement of the lien of this Deed of Trust or to any action brought to enforce the Agreement or any other obligation secured by this Deed of Trust, and (e) any rights, legal or equitable, to require marshalling of assets or to require upon foreclosure sales in a particular order, including any rights under Civil Code Sections 2899 and 3433. Beneficiary shall have the right to determine the order in which any or all of the Trust Estate shall be subjected to the remedies provided herein. Beneficiary shall have the right to determine the order in which any or all portions of the indebtedness secured hereby are satisfied from the proceeds realized upon the exercise of the remedies provided herein. Nothing contained herein shall be deemed to be a waiver of Trustor’s rights under Section 2924c of the Civil Code. 7.3 Notices. Any approval, disapproval, demand, document or other notice (“Notice”) required or permitted under this Deed of Trust must be in writing and may be given by any commercially acceptable means to the party to whom the Notice is directed at the address of the party as set forth below, or at any other address as that party may later designate by Notice. If to Beneficiary: City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 Attention: City Manager Copy to: Leibold McClendon & Mann 9841 Irvine Center Drive, Suite 230 Irvine, California 92618-4316 Attn: Barbara Leibold If to Trustor: Mission Cottages LP c/o Cottages Management LLC 7777 Center Drive, Ste 300 Huntington Beach, CA 92647 Attn: Steve Semingson Cottages Bridge Loan Deed of Trust FINAL 31 With a copy to: Friedman Stroffe & Gerard PC 19800 MacArthur Blvd., Ste 1100 Irvine, CA 92612 Attn: James D. Stroffe, Esq. Any Notice shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 7.4 Subordination. Notwithstanding anything to the contrary contained herein, all rights of Beneficiary hereunder shall be subject to the prior and superior rights of any Senior Lender to the Property and its security interest therein, provided that such Senior Lender has entered into a subordination agreement with Beneficiary prior to or concurrently with recordation of such lien. 7.5 Survival of Warranties. All representations, warranties and covenants of Trustor contained in the Loan Documents or incorporated by reference therein, shall survive the execution and delivery of this Deed of Trust and shall remain continuing obligations, warranties and representations of Trustor so long as any portion of the obligations secured by this Deed of Trust remains outstanding. 7.6 Successors and Assigns. This Deed of Trust applies to, inures to the benefit of and binds all parties hereto, and the heirs, legatees, devisees, administrators, executors, successors and assigns of Beneficiary. The term “Beneficiary” means the owner and holder of the Promissory Note, whether or not named as Beneficiary herein. In exercising any rights hereunder or taking any actions provided for herein, Beneficiary may act through its employees, agents or independent contractors authorized by Beneficiary. 7.7 Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. 7.8 Captions. The captions or headings at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust. 7.9 Invalidity of Certain Provisions. Every provision of this Deed of Trust is intended to be severable. In the event any term or provision hereof is declared to be illegal, invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. 7.10 Subrogation. To the extent that proceeds of the Promissory Note are used to pay any outstanding lien, charge or prior encumbrance against the Trust Estate, such proceeds have been or will be advanced by Beneficiary at Trustor’s request and Beneficiary shall be subrogated to any and all rights and liens held by any owner or holder of such outstanding liens, charges and prior encumbrances, irrespective of whether the liens, charges or encumbrances are released. 7.11 Attorneys’ Fees. In the event that either party hereto brings any action or files any proceeding in connection with the enforcement of its respective rights under this Deed of Cottages Bridge Loan Deed of Trust FINAL 32 Trust or the Promissory Note, as a consequence of any breach by the other party of its obligations thereunder, the prevailing party in such action or proceeding shall be entitled to have its reasonable attorneys’ fees and out-of-pocket expenditures paid by the losing party. The attorneys’ fees so recovered shall include fees for prosecuting or defending any appeal and shall be awarded for any supplemental proceedings until the final judgment is satisfied in full. In addition to the foregoing award of attorneys’ fees, the prevailing party in any lawsuit with respect to the Promissory Note or this Deed of Trust shall also be entitled to its attorneys’ fees incurred in any post-judgment proceedings to collect or enforce the judgment. In addition to the foregoing, Trustor agrees to pay or reimburse Beneficiary, upon demand by Beneficiary, for all costs incurred by Beneficiary in connection with enforcement of this Deed of Trust or the Promissory Note, including without limitation, reasonable attorneys’ fees and costs, if there shall be filed by or against Trustor any proceedings under any federal or state bankruptcy or insolvency laws, whether Beneficiary is a creditor in such proceedings or otherwise. As used herein, the terms “attorneys’ fees” or “attorneys’ fees and costs” means the fees and expenses of counsel to the parties hereto (including, without limitation, in-house counsel employed by Beneficiary) which may include printing, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals and others not admitted to the bar but performing services under the supervision of an attorney. The terms “attorneys’ fees” or “attorneys’ fees and costs” shall also include, without limitation, all such fees and expenses incurred with respect to appeals, arbitrations and bankruptcy proceedings, and whether or not any action or proceeding is brought with respect to the matter for which said fees and expenses were incurred. 7.12 Waiver of Special or Consequential Damages. Each of Trustor and Beneficiary shall in no event be entitled to, and hereby waives, any right to seek consequential or special damages of any kind or nature from the other arising out of or in connection with this Deed of Trust, and in connection with such waiver each of Trustor and Beneficiary is familiar with and each hereby waives the provision of Section 1542 of the California Civil Code which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” 7.13 Nondiscrimination. Trustor herein covenants by and for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account any basis listed in subdivision (a) or (d) of Section 12955 of the California Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, Section 12955.2 and Section 12955.3 of the California Government Code, nor shall the Trustor or any person claiming under or through the Trustor 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 the Property. With respect to familial status, this Section 7.13 shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the California Government Code. With respect to familial status, nothing in this Section shall be construed to Cottages Bridge Loan Deed of Trust FINAL 33 affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the California Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51, and subdivisions (n), (o), and (p) of Section 12955 of the California Government Code shall apply to this Section 7.13. The foregoing covenants shall run with the land. 7.14 No Merger of Lease. If both the lessor’s and lessee’s estate under any lease or any po rtion thereof which now or hereafter constitutes a part of the Trust Estate shall at any time become vested in one owner, this Deed of Trust and the lien created hereby shall not be destroyed or terminated by application of the doctrine of merger unless Beneficiary so elects as evidenced by recording a written declaration so stating, and, unless and until Beneficiary so elects, Beneficiary shall continue to have and enjoy all of the rights and privileges of Beneficiary as to the separate estates. In addition, upon the foreclosure of the lien created by this Deed of Trust on the Trust Estate pursuant to the provisions hereof, any leases or subleases then existing and affecting all or any portion of the Trust Estate shall not be destroyed or terminated by application of the law of merger or as a matter of law or as a result of such foreclosure unless Beneficiary or any purchaser at such foreclosure sale shall so elect. No act by or on behalf of Beneficiary or any such purchaser shall constitute a termination of any lease or sublease unless Beneficiary or such purchaser shall give written notice thereof to such tenant or subtenant. 7.15 Governing Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. 7.16 Joint and Several Obligations. Should this Deed of Trust be signed by more than one party, all obligations herein contained shall be deemed to be the joint and several obligations of each party executing this Deed of Trust. Any married person signing this Deed of Trust agrees that recourse may be had against community assets and against his or her separate property for the satisfaction of all obligations contained herein. 7.17 Interpretation. In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neuter and vice versa, if the context so requires. 7.18 Reconveyance by Trustee. Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and the Promissory Note to Trustee for cancellation and retention and upon payment by Trustor of Trustee’s fees, Trustee shall reconvey to Trustor, or to the person or persons legally entitled thereto, without warranty, any portion of the Trust Estate then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in any reconveyance may be described as “the person or persons legally entitled thereto.” Such grantee shall pay Trustee a reasonable fee and Trustee’s costs incurred in so reconveying the Trust Estate. 7.19 Counterparts. This document may be executed and acknowledged in counterparts, all of which executed and acknowledged counterparts shall together constitute a single document. Signature and acknowledgment pages may be detached from the counterparts and attached to a single copy of this document to physically form one document, which may be recorded. 7.20 Nonforeign Entity. Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”) and Sections 18805, 18815 and 26131, as applicable, of the Revenue and Cottages Bridge Loan Deed of Trust FINAL 34 Taxation Code (“CRTC”) provide that a transferee of a U.S. real property interest must withhold tax, in the case of the Code, if the transferor is a foreign person, or if, in the case of the CRTC, the transferor is not a California resident. To inform Beneficiary that the withholding of tax will not be required in the event of the disposition of the Property or the Improvements, or any portion thereof or interest therein, pursuant to the terms of this Deed of Trust, Trustor hereby certifies, under penalty of perjury, that: (a) Trustor is not a foreign corporation, foreign partnership, foreign trust or foreign estate, as those terms are defined in the Code and the regulations promulgated thereunder; and (b) Trustor’s U.S. employer identification number is 82-1354730; and (c) Trustor’s principal place of business is 7777 Center Drive, Ste 300, Huntington Beach, CA 92647; Attn: Steve Semingson. It is understood that Beneficiary may disclose the contents of this certification to the Internal Revenue Service and the California Franchise Tax Board, and that any false statement contained herein could be punished by fine, imprisonment or both. Trustor covenants and agrees to execute such further certificates, which shall be signed under penalty of perjury, as Beneficiary shall reasonably require. The covenant set forth herein shall survive the foreclosure of the lien of this Deed of Trust or acceptance of a deed in lieu thereof. 7.21 Substitute Trustee. Beneficiary at any time and from time to time, by instrument in writing, may substitute and appoint a successor Trustee (either corporate or individual) to any Trustee named herein or previously substituted hereunder, which instrument when executed, acknowledged, and recorded in the Official Records of the Office of the Recorder of the county or counties where The Property is located shall be conclusive proof of the proper substitution and appointment of each successor trustee or trustees, who shall then have all the title, powers, duties and rights of the predecessor Trustee, without the necessity of any conveyance from such predecessor. Trustee shall not be obligated to notify any party hereto of pending sale under any other Deed of Trust, or, unless brought by Trustee, or any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party. 7.22 Fixture Filing. This Deed of Trust constitutes a fixture filing under Sections 9313 and 9402 of the California Uniform Commercial Code, as amended or recodified from time to time (“UCC”), and is acknowledged and agreed to be a “construction mortgage” under the UCC. This Deed of Trust as fixture filing covers the personal property that is or is to become fixtures on the Property or Real Property. “Fixtures” include all articles of personal property now or hereafter attached to, placed upon or used for an indefinite term or used in connection with said Property and/or Real Property, and/or included within the term “Trust Estate” together with all property that is or at any time becomes so related to the Property that an interest in them arises under real estate law. This Deed of Trust also constitutes a Security Agreement (this “Security Agreement”) between Trustor as the “Debtor” and Beneficiary as the “Secured Party” with respect to all items constituting the Property (“Collateral”), a security interest in all such Collateral being hereby transferred, pledged, assigned, set over, conveyed and granted to Beneficiary by Trustor as security for the payment of the Note and all sums becoming due and owing thereunder or under any other Loan Document and the observance and performance by Trustor of all of the terms, covenants and provisions of the Loan Documents on the part of Trustor to be observed and performed (said indebtedness, interest and all other sums which may or shall become due under, and said obligation to observe and perform terms, covenants and provisions of the Loan Documents are collectively part of the Secured Obligations). This Deed of Trust constitutes a Cottages Bridge Loan Deed of Trust FINAL 35 financing statement filed as a fixture filing in the Official Records of the County Recorder in the county in which the Property is located with respect to any and all fixtures as used herein and with respect to any goods or other personal property that may now be or hereafter become such fixtures. 7.23 Notices. TRUSTOR ACKNOWLEDGES RECEIPT OF A TRUE COPY OF THIS DEED OF TRUST WITHOUT CHARGE. TRUSTOR PLEASE NOTE: UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, CALIFORNIA PROCEDURE PERMITS TRUSTEE TO SELL THE TRUST ESTATE AT A SALE HELD WITHOUT SUPERVISION BY ANY COURT AFTER EXPIRATION OF A PERIOD PRESCRIBED BY LAW. UNLESS YOU PROVIDE AN ADDRESS FOR THE GIVING OF NOTICE, YOU MAY NOT BE ENTITLED TO NOTICE OF THE COMMENCEMENT OF ANY SALE PROCEEDINGS. BY EXECUTION OF THIS DEED OF TRUST, YOU CONSENT TO SUCH PROCEDURE. BENEFICIARY URGES YOU TO GIVE PROMPT NOTICE OF ANY CHANGE IN YOUR ADDRESS SO THAT YOU MAY RECEIVE PROMPTLY ANY NOTICE GIVEN PURSUANT TO THIS DEED OF TRUST. [Signatures On Next Page] Cottages Bridge Loan Deed of Trust FINAL IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first above written. TRUSTOR: MISSION COTTAGES, LP, a California limited partnership By: Cottages Management, LLC, a California limited liability company, its Administrative General Partner By: Steven P. Semingson Manager By: AOF Mission Trails LLC, a California limited liability company, its Managing General Partner By: AOF/Pacific Affordable Housing Corp., a California nonprofit public benefit corporation, its Sole Member and Manager By: Ajay Nayar Vice President [SIGNATURE PAGE TO DEED OF TRUST] [PAGE 1 OF 1] Cottages Bridge Loan Deed of Trust FINAL 37 STATE OF CALIFORNIA ) ) § County of ) On , before me, a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS my hand and official seal. ________________________________ Signature of Notary (Affix seal here) 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. Cottages Bridge Loan Deed of Trust FINAL 38 STATE OF CALIFORNIA ) ) § County of ) On , before me, a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS my hand and official seal. ________________________________ Signature of Notary (Affix seal here) 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. Cottages Bridge Loan Deed of Trust FINAL EXHIBIT “A” EXHIBIT “A” LEGAL DESCRIPTION OF THE PROPERTY THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LAKE ELSINORE, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL 1: THAT PORTION OF THE SOUTHWEST QUARTER OF SECTION 15, THE SOUTHEAST QUARTER OF SECTION 16; AND THE NORTHEAST QUARTER OF SECTION 21, ALL OF TOWNSHIP 6 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN, DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 12, IN BLOCK "G" OF RANCHO LA LAGUNA, AS SHOWN BY MAP ON FILE IN BOOK 6 PAGE 296 OF MAPS, SAN DIEGO COUNTY RECORDS; THENCE SOUTH 15°15' EAST ON THE EASTERLY LINE OF SAID RANCHO, 990 FEET, TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH 15°15' EAST, ALONG SAID RANCHO LINE 165 FEET; THENCE NORTH 74°45; EAST, 1313 FEET, MORE OR LESS, TO A POINT ON THE WESTERLY LINE OF MISSION TRAIL HIGHWAY; THENCE NORTHERLY ON THE WESTERLY LINE OF SAID MISSION TRAIL HIGHWAY 167 FEET, MORE OR LESS TO A POINT WHICH BEARS NORTH 74°45' EAST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH 74°45'20" WEST 1281 FEET, MORE OR LESS, TO THE TRUE POINT OF BEGINNING; SAID LAND ALSO DESCRIBED AS ALL OF LOTS 1282, 1254, 1226, 1191, 1163, 1123, 1098, 1053, 1031, 980 AND THE NORTHWESTERLY HALF OF LOTS 1281, 1255, 1192, 1124, 1097, 1054, 1162, 1225, 1030 AND 981 AS SHOWN ON ASSESSOR'S MAP NO. 48, RIVERSIDE COUNTY RECORDS. ALSO THAT PORTION OF THE ABANDONED RIGHT OF WAY TO ATCHISON, TOPEKA AND SANTA FE RAILROAD COMPANY ADJACENT THERETO. PARCEL 2: THAT PORTION OF THE SOUTHWEST QUARTER OF SECTION 15; THE SOUTHEAST QUARTER OF SECTION 16; AND THE NORTHEAST QUARTER OF SECTION 21, ALL IN TOWNSHIP 6 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN, DESCRIBED AS FOLLOWS: Cottages Bridge Loan Deed of Trust FINAL EXHIBIT “A” BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 12 IN BLOCK G OF RANCHO LA LAGUNA AS PER MAP RECORDED IN BOOK 6, PAGE 296 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA; THENCE SOUTH 15°15' EAST ON THE EASTERLY LINE OF SAID RANCHO, A DISTANCE OF 1155 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH 15°15' EAST ALONG SAID RANCHO LINE, A DISTANCE OF 165 FEET; THENCE NORTH 74°45' EAST A DISTANCE OF 1344.95 FEET, MORE OR LESS, TO A POINT ON THE WESTERLY LINE OF MISSION LINE OF MISSION TRAIL HIGHWAY, WHICH IS ALSO THE NORTHEASTERLY CORNER OF THAT PROPERTY CONVEYED TO ALEXANDER DEUTCH, AS RECORDED IN BOOK 2573, PAGE 519, OFFICIAL RECORDS; THENCE NORTHERLY ALONG THE WESTERLY LINE OF SAID MISSION TRAIL HIGHWAY, A DISTANCE OF 169 FEET, MORE OR LESS, TO THE SOUTHEASTERLY CORNER OF THE PROPERTY CONVEYED TO G. E. ORR, ET AL., AS RECORDED IN BOOK 3193, PAGE 166, OFFICIAL RECORDS; THENCE SOUTH 74°45' WEST, ALONG THE SOUTHERLY LINE OF SAID G.E. ORR PROPERTY TO THE POINT OF BEGINNING. SAID LAND BEING ALSO DESCRIBED AS LOTS 982, 1029, 1055, 1096, 1125, 1161, 1193, 1224, 1256, 1280 AND THE SOUTHERLY HALF OF LOTS 981, 1030, 1054, 1097, 1124, 1162, 1192, 1225, 1255, 1281 AND THE NORTHERLY HALF OF LOT 1298, AS SHOWN ON ASSESSORS MAP NO. 48, IN THE OFFICE OF THE COUNTY RECORDER OF RIVERSIDE COUNTY. ALSO THAT PORTION OF THE ABANDONED RIGHT OF WAY TO ATCHISON, TOPEKA AND SANTA FE RAILROAD COMPANY ADJACENT THERETO. PARCEL 3: PARCEL NO. 2, AS SHOWN ON RECORD OF SURVEY ON FILE IN BOOK 56, PAGE 69 OF RECORDS OF SURVEY, RIVERSIDE COUNTY, RECORDS, BEING A PORTION OF SECTIONS 15 AND 16, TOWNSHIP 6 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN. EXCEPTING THEREFROM ALL MINERALS, OIL, GAS, OR HYDROCARBON SUBSTANCES, IN, UPON OR UNDER SAID LAND. APN: 365-030-005, 006, 007, et.al. Cottages Bridge Loan Agreement FINAL 3 ATTACHMENT NO. 3 REVISED FINANCIAL MODEL [attached] Copyright © 2017 Hunt Mortgage Group. All Rights Reserved Cottages at Mission Trail 32675 Mission Trail City of Lake Elsinore Civic Partners John McAlister Hunt Real Estate Capital (626) 263-9666 488 E. Santa Clara Street, Suite 203 john.mcalister@huntcompanines.com Arcadia, CA 91006 Phone: (626) 446-6864 Brett Flanders Fax: (626) 226-5992 (626) 263-9664 www.huntmortgagegroup.com brett.flanders@huntcompanies.com Thursday, November 12, 2020 1 SUMMARY Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Property Name:Cottages at Mission Trail Property Address:32675 Mission Trail City:City of Lake Elsinore State:CA Total # of Units:143 Type of Development:New Construction 1st Loan Amount:12,450,000$ Tenant Type:Family Lender:Red Stone - Ops Loan Tax Credit Deal:Yes Rate:4.85% Type of Tax Credit Deal:4%MIP/Other Fees:0.15% DDA or QCT?:QCT Amo (months): 480 Max. Fed. LIHTC:14,647,610$ Term (months):480 Fed. LIHTC Price:0.926$ Acquisition Price:3,891,908$ Total Hard Debt:21,100,000$ Construction Budget:44,484,946$ Stabilized DSCR:1.24 Construction Schedule & TC Equity Contributions 2nd Loan Amount:8,650,000$ Date Milestone %Equity Amount Lender:Red Stone - TIF Loan 1-Apr-19 Loan/Partnership Closing 20.0%2,716,614$ Rate:4.97% 1-Apr-19 Construction Start 0.0%- Term (months): 240 1-Feb-20 50% Completion 0.0%- 1-Sep-20 75% Completion 22.0%2,984,011 1-Dec-20 100% Completion 11.5%1,559,824 Construction Loan Amount:24,270,000$ 1-Apr-21 Stabilization 40.8%5,533,391 Lender:Red Stone - Bonds A & B 1-Jan-22 8609s 2.0%269,847 Rate:5.10% 1-Jan-22 Final Equity 3.7%500,000 Term (months): 36 Totals:100.0%13,563,687$ 2 PROJECT INFORMATION AND ASSUMPTIONS Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Property Information Partner Information Property Name:Cottages at Mission Trail Developer/Sponsor:Civic Partners Property Address:32675 Mission Trail Managing GP AOF-Pacific City:City of Lake Elsinore Administrative GP Cottages Mgmt County:Riverside Investor - Limited Partner TBD State:CA Syndicator - Administrative Limited Partner Riverside Developer/Sponsor:Civic Partners Property Manager Aperto Contact:Tina Alexander Issuer CSCDA Other Construction Information Type of Development:New Construction Partnership Allocations Tenant Type:Family Cash flow Allocation Occupied During Construction?:No AOF-Pacific/Cottages Mgmt:90.00% Acquisition Price:3,891,908$ TBD/Riverside:10.00% Construction Budget:44,484,946$ Sales Proceeds Allocation Total # of Units:143 AOF-Pacific/Cottages Mgmt:90.00% LIHTC Units:142 TBD/Riverside:10.00% Market Rate Units:0 Tax Credit Allocation Manager Units:1 AOF-Pacific/Cottages Mgmt:0.01% # of Residential Buildings:104 TBD/Riverside:99.99% Tax Credit Information Tax Credit Deal:Yes Other Information Type of Tax Credit Deal:4%Vacancy:5.0% Acq. Credit Rate:3.08%Revenue Escalation:2.5% Rehab./NC Credit Rate:3.08%Expense Escalation:3.5% DDA or QCT?:QCT Tax Escalation:2.0% Applicable Fraction:100.0%Replacement Reserves Escalation:3.0% Max. Fed. LIHTC:14,647,610$ Income Tax Rate:21.0% Fed. LIHTC Price:0.926$ 3 SOURCES USES SUMMARY Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Construction Permanent Sources Construction Loan 24,270,000$ -$ Hard Debt - 20,680,000 Soft Debt 5,521,250 5,721,250 Bridge Loan 950,000 - Cash from Operations 357,371 357,371 Investment Income 324,892 324,892 TIF Disbursement 258,131 1,277,439 Net Equity Adjuster - (327,870) Sponsor Equity/(Surplus)0 100 Tax Credit Equity 7,260,449 13,563,687 Deferred Developer Fee - 2,888,078 68.9% Total 38,942,093$ 44,484,946$ Uses Acquisition 3,891,908$ 3,891,908$ Hard Cost 23,601,745 24,101,745 Contingency 50,000 50,000 Finance Cost & Fees 3,818,865 4,014,299 Soft Cost 7,175,341 7,175,341 Reserves - 1,057,044 Developer Fee 404,234 4,194,609 Total 38,942,093$ 44,484,946$ Hard Developer Fee Payment Total Fee:4,194,609$ 100.0% Total Hard Fee:1,306,531$ 31.1% DDF Interest Rate:0.00% 4 FINANCING Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Construction Loan Red Stone - Bonds A & B Fourth Loan City of Lake Elsinore Loan Amount:24,270,000$ 54.56%Loan Amount:5,721,250$ Rate:5.10%Rate:3.00% Term (months):36 Term (months):660 Amortizes (months)?:No 660 First Mortgage Loan Red Stone - Ops Loan Mandatory Annual Payment?:No - Loan Amount:12,450,000$ Commencement: Closing Rate:4.85%Available During Construction?:Yes 97%5,521,250 Term (months):480 Amortizes (months)?:Yes 480 Mandatory Annual Payment?:Yes 705,623 Fifth Loan Loan Required DSCR:1.15 Loan Amount:-$ Commencement: Stabilization Rate:0.00% Available During Construction?:No 100%- Term (months):660 Amortizes (months)?:No 660 Mandatory Annual Payment?:No - Second Loan Red Stone - TIF Loan Commencement: Stabilization Loan Amount:8,650,000$ Available During Construction?:Yes 100%- Rate:4.97% Term (months):240 Amortizes (months)?:Yes 240 Other Funding Mandatory Annual Payment?:Yes 694,126 Grant -$ Commencement: Stabilization Available During Construction?:No 0%- Available During Construction?:No 100%- Grant:-$ Available During Construction?:No 0%- Third Loan TBD Loan Amount:-$ Rate:0.00% Term (months):36 Amortizes (months)?:Yes 36 Bridge Loan City of Lake Elsinore Mandatory Annual Payment?:Yes - Loan Amount:950,000$ Commencement:- Stabilization Rate:3.00% Available During Construction?:Yes 100%- Term (months):6 5 CONSTRUCTION BUDGET Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Description Acquisition Total Acq. Basis NC/Rehab Basis Depr./Ineligible Land Improvements Personal Property Amortize Expense Land 3,519,953 Land Lease - During Construction - Subdivision Cost 1,695 Land - Mitigation 370,260 Pre-Development Cost - Existing Buildings - - Total 3,891,908$ -$ -$ -$ -$ -$ -$ -$ Construction NC Hard Cost 19,986,563 19,986,563 - - - Rehab Hard Cost - - - - Sitework 3,736,254 3,736,254 Utilities (150,952) - - (150,952) Other 529,881 529,881 General Requirements - GC Overhead - GC Profit - 24,101,745$ -$ 20,516,444$ -$ 3,585,302$ -$ -$ -$ Contingency Contingency - - Soft 50,000 50,000 50,000$ -$ 50,000$ -$ -$ -$ -$ -$ Professional Services Architect 1,169,549 1,169,549 Engineer - - Survey 15,915 15,915 PNA/CNA - - Accounting/Cost Cert./Audit 31,840 31,840 Market Study 11,400 11,400 Appraisal 4,303 4,303 LEED/Energy Survey - - Investment Banking - Hunt 298,250 - 298,250 Investment Banking - CCP 135,600 - 135,600 CDLAC/TCAC App. Preparation 25,000 - 25,000 Legal - Transactional - - Legal - Enviromental - - Other Legal Fees 402,561 402,561 IRMA Fee 1,000 1,000 Non-Profit Acq./Organization Fee 100,000 100,000 2,195,418$ -$ 1,735,568$ -$ -$ -$ -$ 459,850$ Construction Finance Construction Loan Interest 2,428,396 2,428,396 - Construction Origination Fees - - RS Construction Admin Fee 182,025 182,025 - Adler Loan Interest During Const.- - - Negative Arbitrage - - - Pre-Development Loan Interest - - Pre-Development Loan Fees - - Title/Recording/Closing Cost 110,729 110,729 Const. Period RE Taxes 57,394 57,394 Const. Period Insurance 405,913 405,913 P & P Bond - - Borrow Legal - Construction 70,000 70,000 Lender Legal - Construction - - Payment and Performance Bond - - 3,254,457$ -$ 3,254,457$ -$ -$ -$ -$ -$ 6 CONSTRUCTION BUDGET Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Description Acquisition Total Acq. Basis NC/Rehab Basis Depr./Ineligible Land Improvements Personal Property Amortize Expense Permanent Finance Perm Origination Fees 244,275 244,275 Supplemental Bond Fees - - City of LE Loan Fees - - Title/Recording/Closing Cost 15,000 15,000 Trustee Fee 14,500 14,500 Issuer/CDLAC Fees 86,760 86,760 Bond Counsel - Legal 90,000 90,000 Borrow Legal - Perm 82,078 82,078 Lender Legal - Perm 95,085 95,085 627,698$ -$ -$ -$ -$ -$ 627,698$ -$ Tax Credit Fees Application Fees 23,514 23,514 Monitoring Fees 58,630 58,630 TC Syndicator UW/DD Fees 50,000 50,000 Organization Fees - - 132,144$ -$ -$ -$ -$ -$ 132,144$ -$ Soft Costs Tap Fees 1,984,216 1,984,216 Permits 805,697 805,697 Permits, Fees & PreDev Cost - - Impact Fees 1,377,576 1,377,576 Environmental/Phase I/Soil Test 56,861 56,861 Mitigation/Endow.651,561 651,561 Other 12,866 12,866 Operational Cost During Lease-Up 81,146 81,146 Marketing 10,000 10,000 FF& E - - 4,979,923$ -$ 4,318,362$ -$ -$ -$ -$ 661,561$ Reserves Operating Reserve 1,000,000 Replacement Reserve - Subsidy Reserve - Tax/Insurance Escrow 57,044 Rent-up Reserve - 1,057,044$ -$ -$ -$ -$ -$ -$ -$ Developer Fee Basis Eligible Developer Fee 1,079,389 - 2,930,000 Required Deferred Developer Fee 3,115,220 - 1,264,609 Total Developer Fee 4,194,609$ -$ 4,194,609$ -$ -$ -$ -$ -$ Total 44,484,946$ -$ 34,069,440$ -$ 3,585,302$ -$ 759,842$ 1,121,411$ Total NC/Rehab Eligible Basis 37,654,742 Total Eligible Basis 37,654,742 7 INCOME Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 County:Riverside Metropolitan Statistical Area:Riverside-San Bernadino-Ontario, CA Area Median Income:75,300$ Year: 2020 # Bedrooms # Bathrooms Unit Type # units Unit SQFT Total SQFT Set Aside Subsidy Projected Net Rent Max LIHTC Rent UA Max Project Rents Max Net Rent Total Monthly Rent Overhang 2 1.0 LIHTC 3 829 2,487 50%None 762.88$ 847$ 84 847.00$ 762.88$ 2,289$ 2 1.0 LIHTC 9 829 7,461 60%None 932.25$ 1,017$ 84 1,016.25$ 932.25$ 8,390$ 2 1.0 LIHTC 5 969 4,845 50%None 762.88$ 847$ 84 847.00$ 762.88$ 3,814$ 2 1.0 LIHTC 21 969 20,349 60%None 932.25$ 1,017$ 84 1,016.25$ 932.25$ 19,577$ 3 1.0 LIHTC 2 1,147 2,294 50%None 874.00$ 979$ 105 979.00$ 874.00$ 1,748$ 3 1.0 LIHTC 13 1,147 14,911 60%None 1,070.00$ 1,175$ 105 1,175.00$ 1,070.00$ 13,910$ 3 1.5 LIHTC 5 1,222 6,110 50%None 874.00$ 979$ 105 979.00$ 874.00$ 4,370$ 3 1.5 LIHTC 34 1,222 41,548 60%None 1,070.00$ 1,175$ 105 1,175.00$ 1,070.00$ 36,380$ 3 2.0 LIHTC 2 1,219 2,438 50%None 874.00$ 979$ 105 979.00$ 874.00$ 1,748$ 3 2.0 LIHTC 21 1,219 25,599 60%None 1,070.00$ 1,175$ 105 1,175.00$ 1,070.00$ 22,470$ 3 1.5 LIHTC 3 1,203 3,609 50%None 874.00$ 979$ 105 979.00$ 874.00$ 2,622$ 3 1.5 LIHTC 24 1,203 28,872 60%None 1,070.00$ 1,175$ 105 1,175.00$ 1,070.00$ 25,680$ 2 1.0 Manager 1 969 969 n/a n/a -$ -$ -$ -$ -$ 143 161,492 142,999$ - Monthly 1,715,982$ - Annual Other Income Unit Breakdown Bedroom Breakdown AMI Set-Aside Count Commercial - Per Month - LIHTC 142 Studio/SRO 0 50%20 14.0%Per Year - Market 0 1 BR 0 60%122 85.3% Manager 1 2 BR 39 n/a 1 0.7%NSF & Late Fees 3.90$ PUPM 558$ Other Affordable 0 3 BR 104 TIF Income 477.45 PUPM 68,276 143 4 BR 0 Damage/Clean 3.06 PUPM 438 143 143 100.0%Laundry 1.40 PUPM 200 Misc. Income 2.23 PUPM 319 Unit Fraction 100.0%Sec. 8 Rents Application Fees 1.89 PUPM 270 Area Fraction 100.0%2BR 1,355.00$ 70,061$ Monthly Applicable Fraction 100.0%3BR 1,888.00$ 840,730$ Annual Total Monthly Income 213,059$ Total Annual Income 2,556,712$ 8 1ST YEAR OPERATIONS Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 PUPY % of Income Gross Potential Rents 1,715,982$ 12,000$ Subsidy Overhang - - 0.0% Commercial - - 0.0% TIF Income 819,308 Other Income 21,422 150 0.9% Bad Debt/Concessions (16,494) (115) 0.7% Vacancy (86,870) (607) 5.0% Net Income 2,453,348$ 17,156$ 100.0% Administrative 33,593$ 235 1.4% Payroll 179,633 1,256 7.3% Management Fee 64,159 449 3.89% Repairs & Maintenance 15,175 106 0.6% Utilities 153,150 1,071 6.2% RE Taxes /Assesments 5,004 35 0.2% Insurance 52,044 364 2.1% Replacement Reserves 42,900 300 1.7% AOF-Pacific Annual Fee 17,160 120 0.7% Trustee Fee 5,000 35 0.2% Issuer Fee 12,135 85 0.5% Other 97,327 681 4.0% City of L.E. Monitoring Fee:8,580 60 0.3% Total Expenses 685,860$ 4,796$ 28.0% TCAC Expenses 620,796$ 4,341$ Net Operating Income 1,767,488$ 12,360$ 103.0% Mandatory Debt Service 1,429,064$ 9,993$ 83.3% DSCR 1.2368 Waterfall Cashflow 338,424$ 2,367 19.7% AMF - Riverside Annual Amount:7,500$ Accrues?:Yes Escalates?:Yes 3.0% Land Lease -$ Accrues?:No Escalates?:No AMF - Cottages Mgmt Annual Amount:17,840$ Accrues?:Yes Escalates?:Yes 3.0% Other Fee:-$ Accrues?:No Escalates?:No 3.0% 9 PROFORMA Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 1 2 3 4 5 6 7 8 9 10 Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 100% Gross Potential Rents 1,715,994 1,802,854 1,847,925 1,894,124 1,941,477 1,990,014 2,039,764 2,090,758 2,143,027 2,196,603 Subsidy - - - - - - - - - - Commercial - - - - - - - - - - TIF Income 819,308 807,610 795,855 784,051 772,205 760,326 748,420 736,498 724,568 712,641 Other Income 21,422 22,506 23,069 23,646 24,237 24,843 25,464 26,101 26,753 27,422 Bad Debt/Concessions (16,494) (17,329) (17,762) (18,206) (18,661) (19,128) (19,606) (20,096) (20,599) (21,114) Vacancy (86,870) (91,268) (93,550) (95,888) (98,286) (100,743) (103,261) (105,843) (108,489) (111,201) Net Income 2,453,361 2,524,373 2,555,537 2,587,725 2,620,972 2,655,311 2,690,781 2,727,418 2,765,261 2,804,351 Administrative 33,593 35,986 37,245 38,549 39,898 41,294 42,740 44,236 45,784 47,386 Payroll 179,633 192,427 199,162 206,133 213,348 220,815 228,543 236,542 244,821 253,390 Management Fee 64,159 66,733 68,402 70,112 71,865 73,661 75,503 77,390 79,325 81,308 Repairs & Maintenance 15,175 16,256 16,825 17,414 18,023 18,654 19,307 19,983 20,682 21,406 Utilities 153,150 164,058 169,800 175,743 181,894 188,260 194,850 201,669 208,728 216,033 Taxes 5,004 5,360 5,548 5,742 5,943 6,151 6,366 6,589 6,820 7,059 Insurance 52,044 55,751 57,702 59,722 61,812 63,975 66,215 68,532 70,931 73,413 Replacement Reserves 42,900 44,187 45,513 46,878 48,284 49,733 51,225 52,762 54,344 55,975 AOF-Pacific Annual Fee 17,160 18,205 18,751 19,314 19,893 20,490 21,105 21,738 22,390 23,062 Issuer Fee 12,135 12,999 13,454 13,925 14,413 14,917 15,439 15,979 16,539 17,118 Other 97,327 104,259 107,908 111,685 115,594 119,640 123,827 128,161 132,647 137,289 Trustee Fee 5,000 5,356 5,544 5,738 5,938 6,146 6,361 6,584 6,814 7,053 City of L.E. Monitoring Fee:8,580 9,103 9,376 9,657 9,947 10,245 10,552 10,869 11,195 11,531 Total Expenses 685,860$ 730,681$ 755,230$ 780,611$ 806,852$ 833,982$ 862,033$ 891,034$ 921,020$ 952,023$ Net Operating Income 1,767,501 1,793,692 1,800,308 1,807,115 1,814,120 1,821,329 1,828,748 1,836,383 1,844,241 1,852,328 Mandatory Debt Service Principal 290,000 355,000 425,000 445,000 475,000 510,000 555,000 580,000 595,000 620,000 Interest 449,354 1,022,352 980,018 958,355 935,578 911,193 884,723 856,541 827,351 797,175 Fees 6,741 22,246 27,948 27,379 26,781 26,142 25,449 24,712 23,948 23,158 Total Mandatory Debt Service 746,095$ 1,399,598$ 1,432,966$ 1,430,734$ 1,437,359$ 1,447,335$ 1,465,172$ 1,461,253$ 1,446,299$ 1,440,333$ DSCR 2.37 1.28 1.26 1.26 1.26 1.26 1.25 1.26 1.28 1.29 Remaining Cash Flow 1,021,406 394,094 367,342 376,381 376,761 373,994 363,576 375,130 397,942 411,995 10 PROFORMA Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Waterfall Cash Flow 1,021,406 394,094 367,342 376,381 376,761 373,994 363,576 375,130 397,942 411,995 Cash from Ops to Fund Construction 262,107 - AMF - Riverside Annual Amount:7,500 7,763 8,034 8,315 8,606 8,908 9,219 9,542 9,876 10,222 Accrual - - - - - - - - - - Beginning Balance of DDF 2,888,078 2,136,279 1,749,948 1,390,640 1,022,574 654,419 289,333 - - - Deferred Developer Fee Payment 751,799 386,332 359,308 368,066 368,155 365,087 289,333 - - - Incurred Interest - - - - - - - - - - Interest Paid - - - - - - - - - - Accrued Interest - - - - - - - - - - Principal Paid 751,799 386,332 359,308 368,066 368,155 365,087 289,333 - - - Balance of DDF 2,136,279 1,749,948 1,390,640 1,022,574 654,419 289,333 - - - - Remaining Cash Flow - - - - - - 65,024 365,588 388,066 401,773 AMF - Cottages Mgmt Annual Amount:- - - - - - 65,024 101,486 24,314 25,165 Accrual 17,840 36,951 56,730 77,202 98,390 120,320 77,994 - - - Remaining Cash Flow - - - - - - - 264,103 363,752 376,608 Soft Loan Interest Payments - - - - - - - 132,051 181,876 188,304 Soft Loan Principal Payments - - - - - - - - - - Residual Cashflow - - - - - - - 132,051 181,876 188,304 Residual Split GP IMF - Cottages Mgmt - - - - - - - 118,846 163,688 169,474 LP Distribution - - - - - - - 13,205 18,188 18,830 Soft Loan Accrued Interest 171,638 171,638 171,638 171,638 171,638 171,638 171,638 39,586 (10,238) (16,667) Total Income (Losses)1,132,268 569,694 612,670 641,428 671,517 703,449 737,719 655,105 647,740 680,662 LP Income (Losses)1,132,155 569,637 612,609 641,364 671,450 703,379 737,645 655,039 647,675 680,594 GP Income (Losses)113 57 61 64 67 70 74 66 65 68 11 PROFORMA Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Year Gross Potential Rents Subsidy Commercial TIF Income Other Income Bad Debt/Concessions Vacancy Net Income Administrative Payroll Management Fee Repairs & Maintenance Utilities Taxes Insurance Replacement Reserves AOF-Pacific Annual Fee Issuer Fee Other Trustee Fee City of L.E. Monitoring Fee: Total Expenses Net Operating Income Mandatory Debt Service Principal Interest Fees Total Mandatory Debt Service DSCR Remaining Cash Flow 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2,251,518 2,307,806 2,365,501 2,424,638 2,485,254 2,547,386 2,611,070 2,676,347 2,743,256 2,811,837 2,882,133 2,954,186 3,028,041 3,103,742 3,181,336 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 700,727 688,836 676,982 665,176 653,432 641,763 630,184 618,712 440,309 - - - - - - 28,108 28,810 29,530 30,269 31,025 31,801 32,596 33,411 34,246 35,102 35,980 36,880 37,801 38,747 39,715 (21,642) (22,183) (22,737) (23,306) (23,888) (24,485) (25,098) (25,725) (26,368) (27,027) (27,703) (28,396) (29,105) (29,833) (30,579) (113,981) (116,831) (119,752) (122,745) (125,814) (128,959) (132,183) (135,488) (138,875) (142,347) (145,906) (149,553) (153,292) (157,124) (161,053) 2,844,729 2,886,439 2,929,525 2,974,032 3,020,009 3,067,505 3,116,570 3,167,257 3,052,567 2,677,565 2,744,504 2,813,117 2,883,445 2,955,531 3,029,419 49,045 50,761 52,538 54,377 56,280 58,250 60,289 62,399 64,583 66,843 69,182 71,604 74,110 76,704 79,388 262,259 271,438 280,938 290,771 300,948 311,481 322,383 333,666 345,345 357,432 369,942 382,890 396,291 410,161 424,517 83,341 85,424 87,560 89,749 91,993 94,293 96,650 99,066 101,543 104,081 106,683 109,351 112,084 114,886 117,759 22,155 22,930 23,733 24,564 25,423 26,313 27,234 28,187 29,174 30,195 31,252 32,346 33,478 34,650 35,862 223,594 231,420 239,520 247,903 256,580 265,560 274,855 284,474 294,431 304,736 315,402 326,441 337,866 349,692 361,931 7,306 7,561 7,826 8,100 8,383 8,677 8,981 9,295 9,620 9,957 10,305 10,666 11,039 11,426 11,826 75,983 78,642 81,395 84,243 87,192 90,244 93,402 96,671 100,055 103,557 107,181 110,932 114,815 118,834 122,993 57,654 59,384 61,165 63,000 64,890 66,837 68,842 70,907 73,034 75,225 77,482 79,807 82,201 84,667 87,207 23,753 24,466 25,200 25,956 26,735 27,537 28,363 29,214 30,090 30,993 31,923 32,880 33,867 34,883 35,929 17,717 18,337 18,979 19,643 20,330 21,042 21,778 22,541 23,330 24,146 24,991 25,866 26,771 27,708 28,678 142,094 147,068 152,215 157,543 163,057 168,764 174,670 180,784 187,111 193,660 200,438 207,454 214,715 222,230 230,008 7,300 7,555 7,820 8,093 8,377 8,670 8,973 9,287 9,613 9,949 10,297 10,658 11,031 11,417 11,816 11,877 12,233 12,600 12,978 13,367 13,768 14,181 14,607 15,045 15,496 15,961 16,440 16,933 17,441 17,965 984,077$ 1,017,220$ 1,051,488$ 1,086,920$ 1,123,555$ 1,161,435$ 1,200,601$ 1,241,099$ 1,282,973$ 1,326,271$ 1,371,041$ 1,417,334$ 1,465,201$ 1,514,697$ 1,565,878$ 1,860,652 1,869,219 1,878,036 1,887,112 1,896,454 1,906,070 1,915,969 1,926,158 1,769,595 1,351,295 1,373,464 1,395,783 1,418,244 1,440,834 1,463,541 650,000 655,000 685,000 710,000 740,000 760,000 790,000 800,000 605,000 245,000 250,000 270,000 280,000 295,000 310,000 765,745 733,577 700,320 665,705 629,820 592,844 554,392 515,162 481,211 461,922 449,817 437,167 423,809 409,865 395,194 22,334 21,490 20,617 19,708 18,764 17,791 16,778 15,743 14,835 14,286 13,912 13,521 13,108 12,676 12,223 1,438,079$ 1,410,067$ 1,405,937$ 1,395,413$ 1,388,583$ 1,370,635$ 1,361,170$ 1,330,905$ 1,101,046$ 721,208$ 713,729$ 720,688$ 716,917$ 717,542$ 717,417$ 1.29 1.33 1.34 1.35 1.37 1.39 1.41 1.45 1.61 1.87 1.92 1.94 1.98 2.01 2.04 422,573 459,152 472,100 491,699 507,871 535,435 554,799 595,253 668,549 630,086 659,734 675,096 701,327 723,292 746,125 12 PROFORMA Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Year Waterfall Cash Flow h from Ops to Fund Construction AMF - Riverside Annual Amount: Accrual Beginning Balance of DDF Deferred Developer Fee Payment Incurred Interest Interest Paid Accrued Interest Principal Paid Balance of DDF Remaining Cash Flow Cottages Mgmt Annual Amount: Accrual Remaining Cash Flow Soft Loan Interest Payments Soft Loan Principal Payments Residual Cashflow Residual Split GP IMF - Cottages Mgmt LP Distribution Soft Loan Accrued Interest Total Income (Losses) LP Income (Losses) GP Income (Losses) 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 422,573 459,152 472,100 491,699 507,871 535,435 554,799 595,253 668,549 630,086 659,734 675,096 701,327 723,292 746,125 10,579 10,950 11,333 11,730 12,140 12,565 13,005 13,460 13,931 14,419 14,923 15,446 15,986 16,546 17,125 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 411,993 448,202 460,767 479,969 495,731 522,870 541,794 581,793 654,618 615,667 644,811 659,650 685,341 706,746 729,000 26,046 26,957 27,901 28,878 29,888 30,934 32,017 33,138 34,297 35,498 36,740 38,026 39,357 40,735 42,160 - - - - - - - - - - - - - - - 385,947 421,244 432,866 451,092 465,842 491,936 509,777 548,656 620,320 580,170 608,071 621,624 645,984 666,012 686,839 192,974 210,622 216,433 225,546 232,921 245,968 254,889 274,328 310,160 290,085 304,035 310,812 322,992 333,006 343,420 - - - - - - - - - - - - - - - 192,974 210,622 216,433 225,546 232,921 245,968 254,889 274,328 310,160 290,085 304,035 310,812 322,992 333,006 343,420 173,676 189,560 194,790 202,991 209,629 221,371 229,400 246,895 279,144 261,076 273,632 279,731 290,693 299,705 309,078 19,297 21,062 21,643 22,555 23,292 24,597 25,489 27,433 31,016 29,008 30,404 31,081 32,299 33,301 34,342 (21,336) (38,985) (44,795) (53,908) (61,284) (74,330) (83,251) (102,690) (138,523) (118,447) (132,398) (139,174) (151,354) (161,368) (171,782) 716,679 742,004 779,340 815,341 854,464 889,861 930,757 963,261 808,836 427,954 449,542 478,282 503,011 530,403 558,285 716,608 741,930 779,262 815,259 854,379 889,772 930,664 963,164 808,755 427,911 449,497 478,234 502,960 530,350 558,229 72 74 78 82 85 89 93 96 81 43 45 48 50 53 56 13 PROFORMA Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Year Gross Potential Rents Subsidy Commercial TIF Income Other Income Bad Debt/Concessions Vacancy Net Income Administrative Payroll Management Fee Repairs & Maintenance Utilities Taxes Insurance Replacement Reserves AOF-Pacific Annual Fee Issuer Fee Other Trustee Fee City of L.E. Monitoring Fee: Total Expenses Net Operating Income Mandatory Debt Service Principal Interest Fees Total Mandatory Debt Service DSCR Remaining Cash Flow 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 3,260,869 3,342,391 3,425,950 3,511,599 3,599,389 3,689,374 3,781,608 3,876,149 3,973,052 4,072,379 4,174,188 4,278,543 4,385,506 4,495,144 4,607,523 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 40,708 41,726 42,769 43,838 44,934 46,057 47,209 48,389 49,599 50,839 52,110 53,413 54,748 56,117 57,519 (31,343) (32,127) (32,930) (33,753) (34,597) (35,462) (36,349) (37,257) (38,189) (39,144) (40,122) (41,125) (42,153) (43,207) (44,287) (165,079) (169,206) (173,436) (177,772) (182,216) (186,772) (191,441) (196,227) (201,133) (206,161) (211,315) (216,598) (222,013) (227,563) (233,252) 3,105,155 3,182,784 3,262,353 3,343,912 3,427,510 3,513,198 3,601,028 3,691,053 3,783,330 3,877,913 3,974,861 4,074,232 4,176,088 4,280,490 4,387,502 82,167 85,043 88,019 91,100 94,289 97,589 101,004 104,539 108,198 111,985 115,905 119,961 124,160 128,506 133,003 439,375 454,753 470,669 487,143 504,193 521,840 540,104 559,008 578,573 598,823 619,782 641,474 663,926 687,163 711,214 120,703 123,720 126,813 129,983 133,233 136,564 139,978 143,477 147,064 150,741 154,509 158,372 162,331 166,390 170,549 37,117 38,417 39,761 41,153 42,593 44,084 45,627 47,224 48,877 50,587 52,358 54,190 56,087 58,050 60,082 374,599 387,710 401,279 415,324 429,860 444,906 460,477 476,594 493,275 510,539 528,408 546,903 566,044 585,856 606,361 12,240 12,668 13,111 13,570 14,045 14,537 15,046 15,572 16,117 16,681 17,265 17,869 18,495 19,142 19,812 127,297 131,753 136,364 141,137 146,077 151,189 156,481 161,958 167,626 173,493 179,566 185,850 192,355 199,088 206,056 89,823 92,518 95,293 98,152 101,097 104,130 107,253 110,471 113,785 117,199 120,715 124,336 128,066 131,908 135,865 37,007 38,117 39,261 40,439 41,652 42,901 44,188 45,514 46,879 48,286 49,734 51,226 52,763 54,346 55,977 29,682 30,721 31,796 32,909 34,060 35,253 36,486 37,763 39,085 40,453 41,869 43,334 44,851 46,421 48,046 238,058 246,390 255,013 263,939 273,177 282,738 292,634 302,876 313,477 324,448 335,804 347,557 359,722 372,312 385,343 12,230 12,658 13,101 13,559 14,034 14,525 15,034 15,560 16,104 16,668 17,251 17,855 18,480 19,127 19,796 18,504 19,059 19,630 20,219 20,826 21,451 22,094 22,757 23,440 24,143 24,867 25,613 26,382 27,173 27,988 1,618,801$ 1,673,525$ 1,730,113$ 1,788,627$ 1,849,136$ 1,911,705$ 1,976,407$ 2,043,313$ 2,112,501$ 2,184,047$ 2,258,033$ 2,334,543$ 2,413,662$ 2,495,481$ 2,580,092$ 1,486,354 1,509,259 1,532,241 1,555,285 1,578,374 1,601,493 1,624,621 1,647,740 1,670,829 1,693,865 1,716,827 1,739,689 1,762,426 1,785,009 1,807,410 325,000 340,000 360,000 375,000 390,000 415,000 435,000 455,000 480,000 500,000 525,000 555,000 580,000 610,000 640,000 379,795 363,548 346,654 328,769 310,158 290,555 269,963 248,340 225,646 201,841 176,843 150,593 123,109 94,191 63,879 11,746 11,244 10,721 10,168 9,593 8,986 8,349 7,681 6,979 6,243 5,469 4,658 3,808 2,913 1,976 716,542$ 714,792$ 717,375$ 713,938$ 709,750$ 714,542$ 713,313$ 711,021$ 712,625$ 708,083$ 707,313$ 710,250$ 706,917$ 707,104$ 705,854$ 2.07 2.11 2.14 2.18 2.22 2.24 2.28 2.32 2.34 2.39 2.43 2.45 2.49 2.52 2.56 769,813 794,467 814,866 841,347 868,624 886,951 911,308 936,719 958,204 985,782 1,009,515 1,029,439 1,055,509 1,077,905 1,101,556 14 PROFORMA Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Year Waterfall Cash Flow h from Ops to Fund Construction AMF - Riverside Annual Amount: Accrual Beginning Balance of DDF Deferred Developer Fee Payment Incurred Interest Interest Paid Accrued Interest Principal Paid Balance of DDF Remaining Cash Flow Cottages Mgmt Annual Amount: Accrual Remaining Cash Flow Soft Loan Interest Payments Soft Loan Principal Payments Residual Cashflow Residual Split GP IMF - Cottages Mgmt LP Distribution Soft Loan Accrued Interest Total Income (Losses) LP Income (Losses) GP Income (Losses) 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 769,813 794,467 814,866 841,347 868,624 886,951 911,308 936,719 958,204 985,782 1,009,515 1,029,439 1,055,509 1,077,905 1,101,556 17,724 18,345 18,987 19,651 20,339 21,051 21,788 22,550 23,340 24,156 25,002 25,877 26,783 27,720 28,690 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 752,088 776,122 795,879 821,696 848,285 865,900 889,521 914,169 934,864 961,626 984,513 1,003,562 1,028,726 1,050,185 1,072,866 43,636 45,163 46,744 48,380 50,073 51,826 53,640 55,517 57,460 59,471 61,553 63,707 65,937 68,245 70,633 - - - - - - - - - - - - - - - 708,452 730,959 749,135 773,316 798,212 814,074 835,881 858,652 877,404 902,154 922,960 939,855 962,789 981,940 1,002,233 235,429 168,074 162,151 155,779 148,853 141,345 133,374 124,837 115,703 106,013 95,661 84,686 73,129 60,881 47,978 118,797 197,406 212,416 230,879 250,253 265,692 284,566 304,489 322,999 345,065 365,819 385,242 408,266 430,089 453,138 354,226 365,480 374,568 386,658 399,106 407,037 417,940 429,326 438,702 451,077 461,480 469,928 481,395 490,970 501,116 318,804 328,932 337,111 347,992 359,195 366,333 376,146 386,393 394,832 405,970 415,332 422,935 433,255 441,873 451,005 35,423 36,548 37,457 38,666 39,911 40,704 41,794 42,933 43,870 45,108 46,148 46,993 48,139 49,097 50,112 (63,791) - - - - - - - - - - - - - - 586,647 619,117 656,617 692,925 730,237 773,222 815,000 857,938 904,330 949,644 998,520 1,050,941 1,102,342 1,157,431 1,213,883 586,589 619,055 656,551 692,855 730,164 773,144 814,919 857,852 904,239 949,549 998,420 1,050,836 1,102,232 1,157,315 1,213,762 59 62 66 69 73 77 82 86 90 95 100 105 110 116 121 15 PROFORMA Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Year Gross Potential Rents Subsidy Commercial TIF Income Other Income Bad Debt/Concessions Vacancy Net Income Administrative Payroll Management Fee Repairs & Maintenance Utilities Taxes Insurance Replacement Reserves AOF-Pacific Annual Fee Issuer Fee Other Trustee Fee City of L.E. Monitoring Fee: Total Expenses Net Operating Income Mandatory Debt Service Principal Interest Fees Total Mandatory Debt Service DSCR Remaining Cash Flow 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 2061 2062 2063 2064 2065 2066 2067 2068 2069 2070 2071 2072 2073 2074 2075 4,722,711 4,840,778 4,961,798 5,085,843 5,212,989 5,343,314 5,476,896 5,613,819 5,754,164 5,898,018 6,045,469 6,196,606 6,351,521 6,510,309 6,673,066 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 58,957 60,431 61,942 63,491 65,078 66,705 68,373 70,082 71,834 73,630 75,470 77,357 79,291 81,273 83,305 (45,395) (46,529) (47,693) (48,885) (50,107) (51,360) (52,644) (53,960) (55,309) (56,692) (58,109) (59,562) (61,051) (62,577) (64,141) (239,083) (245,060) (251,187) (257,467) (263,903) (270,501) (277,263) (284,195) (291,300) (298,582) (306,047) (313,698) (321,541) (329,579) (337,819) 4,497,190 4,609,620 4,724,860 4,842,982 4,964,056 5,088,158 5,215,362 5,345,746 5,479,389 5,616,374 5,756,783 5,900,703 6,048,221 6,199,426 6,354,412 137,659 142,477 147,463 152,624 157,966 163,495 169,217 175,140 181,270 187,614 194,181 200,977 208,011 215,292 222,827 736,106 761,870 788,535 816,134 844,699 874,263 904,862 936,533 969,311 1,003,237 1,038,350 1,074,693 1,112,307 1,151,238 1,191,531 174,813 179,184 183,663 188,255 192,961 197,785 202,730 207,798 212,993 218,318 223,776 229,370 235,104 240,982 247,007 62,185 64,361 66,614 68,945 71,358 73,856 76,441 79,116 81,885 84,751 87,718 90,788 93,965 97,254 100,658 627,583 649,549 672,283 695,813 720,166 745,372 771,460 798,461 826,407 855,332 885,268 916,253 948,321 981,513 1,015,866 20,506 21,223 21,966 22,735 23,531 24,354 25,207 26,089 27,002 27,947 28,925 29,937 30,985 32,070 33,192 213,268 220,732 228,458 236,454 244,730 253,295 262,160 271,336 280,833 290,662 300,835 311,364 322,262 333,541 345,215 139,941 144,140 148,464 152,918 157,505 162,230 167,097 172,110 177,274 182,592 188,070 193,712 199,523 205,509 211,674 57,656 59,386 61,167 63,002 64,892 66,839 68,844 70,909 73,037 75,228 77,485 79,809 82,203 84,670 87,210 49,727 51,468 53,269 55,133 57,063 59,060 61,127 63,267 65,481 67,773 70,145 72,600 75,141 77,771 80,493 398,830 412,789 427,237 442,190 457,666 473,685 490,264 507,423 525,183 543,564 562,589 582,280 602,659 623,752 645,584 20,489 21,206 21,949 22,717 23,512 24,335 25,186 26,068 26,980 27,925 28,902 29,914 30,961 32,044 33,166 28,828 29,693 30,584 31,501 32,446 33,419 34,422 35,455 36,518 37,614 38,742 39,905 41,102 42,335 43,605 2,667,591$ 2,758,076$ 2,851,651$ 2,948,421$ 3,048,496$ 3,151,989$ 3,259,019$ 3,369,705$ 3,484,175$ 3,602,557$ 3,724,986$ 3,851,601$ 3,982,546$ 4,117,970$ 4,258,027$ 1,829,599 1,851,544 1,873,210 1,894,561 1,915,560 1,936,168 1,956,343 1,976,040 1,995,215 2,013,817 2,031,798 2,049,102 2,065,674 2,081,456 2,096,385 670,000 350,000 - - - - - - - - - - - - - 31,990 3,536 - - - - - - - - - - - - - 989 109 - - - - - - - - - - - - - 702,979$ 353,646$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 2.60 5.24 1,126,620 1,497,898 1,873,210 1,894,561 1,915,560 1,936,168 1,956,343 1,976,040 1,995,215 2,013,817 2,031,798 2,049,102 2,065,674 2,081,456 2,096,385 16 PROFORMA Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Year Waterfall Cash Flow h from Ops to Fund Construction AMF - Riverside Annual Amount: Accrual Beginning Balance of DDF Deferred Developer Fee Payment Incurred Interest Interest Paid Accrued Interest Principal Paid Balance of DDF Remaining Cash Flow Cottages Mgmt Annual Amount: Accrual Remaining Cash Flow Soft Loan Interest Payments Soft Loan Principal Payments Residual Cashflow Residual Split GP IMF - Cottages Mgmt LP Distribution Soft Loan Accrued Interest Total Income (Losses) LP Income (Losses) GP Income (Losses) 2061 2062 2063 2064 2065 2066 2067 2068 2069 2070 2071 2072 2073 2074 2075 1,126,620 1,497,898 1,873,210 1,894,561 1,915,560 1,936,168 1,956,343 1,976,040 1,995,215 2,013,817 2,031,798 2,049,102 2,065,674 2,081,456 2,096,385 29,694 30,734 31,809 32,923 34,075 35,268 36,502 37,780 39,102 40,470 41,887 43,353 44,870 46,441 48,066 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,096,926 1,467,164 1,841,400 1,861,638 1,881,485 1,900,901 1,919,841 1,938,261 1,956,113 1,973,347 1,989,911 2,005,749 2,020,804 2,035,015 2,048,319 73,105 75,664 78,312 81,053 83,890 86,826 89,865 93,010 96,266 99,635 103,122 106,732 110,467 114,334 118,335 - - - - - - - - - - - - - - - 1,023,820 1,391,500 1,763,088 1,780,585 1,797,595 1,814,074 1,829,976 1,845,250 1,859,847 1,873,712 1,886,788 1,899,017 1,910,337 1,920,682 1,929,984 34,384 20,058 - - - - - - - - - - - - - 477,526 668,606 - - - - - - - - - - - - - 511,910 702,836 1,763,088 1,780,585 1,797,595 1,814,074 1,829,976 1,845,250 1,859,847 1,873,712 1,886,788 1,899,017 1,910,337 1,920,682 1,929,984 460,719 632,552 1,586,779 1,602,527 1,617,836 1,632,667 1,646,978 1,660,725 1,673,862 1,686,341 1,698,110 1,709,116 1,719,303 1,728,613 1,736,985 51,191 70,284 176,309 178,059 179,760 181,407 182,998 184,525 185,985 187,371 188,679 189,902 191,034 192,068 192,998 - - - - - - - - - - - - - - - 1,271,823 1,164,554 254,621 259,112 263,650 268,234 272,863 277,535 282,250 287,006 291,801 296,633 301,501 306,402 311,334 1,271,695 1,164,437 254,596 259,086 263,623 268,207 272,835 277,508 282,222 286,978 291,772 296,604 301,471 306,371 311,302 127 116 25 26 26 27 27 28 28 29 29 30 30 31 31 17 SOFT LOAN PAYMENTS Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 0 0 1 2 3 4 5 6 7 8 9 10 Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Cashflow Available for Payments on Soft Debt:-$ - - - - - - - - 264,103 363,752 376,608 4th Loan Paid from CF?% of CF City of Lake Elsinore Yes 50.0%Beginning Balance 5,721,250$ 5,892,888 6,064,525 6,236,163 6,407,800 6,579,438 6,751,075 6,922,713 7,094,350 7,265,988 7,305,574 7,295,335 Payment - - - - - - - - - (132,051) (181,876) (188,304) Incurred Interest 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 Interest Paid - - - - - - - - - 132,051 181,876 188,304 Accrued Interest 171,638 343,275 514,913 686,550 858,188 1,029,825 1,201,463 1,373,100 1,544,738 1,584,324 1,574,085 1,557,419 Principal Paid - - - - - - - - - - - - Balance 5,892,888$ 6,064,525 6,236,163 6,407,800 6,579,438 6,751,075 6,922,713 7,094,350 7,265,988 7,305,574 7,295,335 7,278,669 Remaining Cash Flow -$ - - - - - - - - 132,051 181,876 188,304 Cashflow Available after Payments on Soft Debt:-$ - - - - - - - - 132,051 181,876 188,304 18 SOFT LOAN PAYMENTS Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Year Cashflow Available for Payments on Soft Debt: 4th Loan Paid from CF?% of CF City of Lake Elsinore Yes 50.0%Beginning Balance Payment Incurred Interest Interest Paid Accrued Interest Principal Paid Balance Remaining Cash Flow Cashflow Available after Payments on Soft Debt: 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 385,947 421,244 432,866 451,092 465,842 491,936 509,777 548,656 620,320 580,170 608,071 621,624 645,984 666,012 686,839 708,452 730,959 7,278,669 7,257,332 7,218,348 7,173,552 7,119,644 7,058,360 6,984,030 6,900,779 6,798,088 6,659,566 6,541,119 6,408,721 6,269,546 6,118,192 5,956,824 5,785,041 5,602,453 (192,974) (210,622) (216,433) (225,546) (232,921) (245,968) (254,889) (274,328) (310,160) (290,085) (304,035) (310,812) (322,992) (333,006) (343,420) (354,226) (365,480) 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 171,638 168,074 192,974 210,622 216,433 225,546 232,921 245,968 254,889 274,328 310,160 290,085 304,035 310,812 322,992 333,006 343,420 235,429 168,074 1,536,082 1,497,098 1,452,302 1,398,394 1,337,110 1,262,780 1,179,529 1,076,838 938,316 819,869 687,471 548,296 396,942 235,574 63,791 - - - - - - - - - - - - - - - - - 118,797 197,406 7,257,332 7,218,348 7,173,552 7,119,644 7,058,360 6,984,030 6,900,779 6,798,088 6,659,566 6,541,119 6,408,721 6,269,546 6,118,192 5,956,824 5,785,041 5,602,453 5,405,047 192,974 210,622 216,433 225,546 232,921 245,968 254,889 274,328 310,160 290,085 304,035 310,812 322,992 333,006 343,420 354,226 365,480 192,974 210,622 216,433 225,546 232,921 245,968 254,889 274,328 310,160 290,085 304,035 310,812 322,992 333,006 343,420 354,226 365,480 19 SOFT LOAN PAYMENTS Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Year Cashflow Available for Payments on Soft Debt: 4th Loan Paid from CF?% of CF City of Lake Elsinore Yes 50.0%Beginning Balance Payment Incurred Interest Interest Paid Accrued Interest Principal Paid Balance Remaining Cash Flow Cashflow Available after Payments on Soft Debt: 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 2061 2062 2063 2064 749,135 773,316 798,212 814,074 835,881 858,652 877,404 902,154 922,960 939,855 962,789 981,940 1,002,233 1,023,820 1,391,500 1,763,088 1,780,585 5,405,047 5,192,631 4,961,751 4,711,498 4,445,806 4,161,240 3,856,751 3,533,751 3,188,687 2,822,867 2,437,626 2,029,360 1,599,271 1,146,132 668,606 - - (374,568) (386,658) (399,106) (407,037) (417,940) (429,326) (438,702) (451,077) (461,480) (469,928) (481,395) (490,970) (501,116) (511,910) (688,664) - - 162,151 155,779 148,853 141,345 133,374 124,837 115,703 106,013 95,661 84,686 73,129 60,881 47,978 34,384 20,058 - - 162,151 155,779 148,853 141,345 133,374 124,837 115,703 106,013 95,661 84,686 73,129 60,881 47,978 34,384 20,058 - - - - - - - - - - - - - - - - - - - 212,416 230,879 250,253 265,692 284,566 304,489 322,999 345,065 365,819 385,242 408,266 430,089 453,138 477,526 668,606 - - 5,192,631 4,961,751 4,711,498 4,445,806 4,161,240 3,856,751 3,533,751 3,188,687 2,822,867 2,437,626 2,029,360 1,599,271 1,146,132 668,606 - - - 374,568 386,658 399,106 407,037 417,940 429,326 438,702 451,077 461,480 469,928 481,395 490,970 501,116 511,910 702,836 1,763,088 1,780,585 374,568 386,658 399,106 407,037 417,940 429,326 438,702 451,077 461,480 469,928 481,395 490,970 501,116 511,910 702,836 1,763,088 1,780,585 20 SOFT LOAN PAYMENTS Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Year Cashflow Available for Payments on Soft Debt: 4th Loan Paid from CF?% of CF City of Lake Elsinore Yes 50.0%Beginning Balance Payment Incurred Interest Interest Paid Accrued Interest Principal Paid Balance Remaining Cash Flow Cashflow Available after Payments on Soft Debt: 45 46 47 48 49 50 51 52 53 54 55 2065 2066 2067 2068 2069 2070 2071 2072 2073 2074 2075 Totals 1,797,595 1,814,074 1,829,976 1,845,250 1,859,847 1,873,712 1,886,788 1,899,017 1,910,337 1,920,682 1,929,984 - - - - - - - - - - - - - - - - - - - - - - (12,200,004) - - - - - - - - - - - - - - - - - - - - - - 6,478,754 - - - - - - - - - - - - - - - - - - - - - - 5,721,250 - - - - - - - - - - - 1,797,595 1,814,074 1,829,976 1,845,250 1,859,847 1,873,712 1,886,788 1,899,017 1,910,337 1,920,682 1,929,984 1,797,595 1,814,074 1,829,976 1,845,250 1,859,847 1,873,712 1,886,788 1,899,017 1,910,337 1,920,682 1,929,984 21 LEASE-UP AND CREDIT DELIVERY SCHEDULE Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Occupied Rehab:No Units Occupied at Closing:0 0%2020 Year 1 Tax Credit Projections Total LIHTC Units 142 Units/Month Leased-up 25 Leased in Cumulative %Qualified % LIHTC Month Current Month Leased Leased Leased Qualified Credits Equity Schedule 1 0 0 0%0 0%- Milestone Date % Equity Equity 2 0 0 0%0 0%- 1 2019 Closing 1-Apr-19 20.03%2,716,614 3 0 0 0%0 0%- 2 2019 Construction Start 1-Apr-19 0.00%- 4 0 0 0%0 0%- 3 2020 50% Completion 1-Feb-20 0.00%- 5 0 0 0%0 0%- 4 2020 75% Completion 1-Sep-20 22.00%2,984,011 6 0 0 0%0 0%- 5 2020 100% Completion 1-Dec-20 11.50%1,559,824 7 0 0 0%0 0%- 6 2020 Lease-Up Start 1-Nov-20 0.00%8 0 0 0%0 0%- 7 2020 Lease-Up Finish 1-Dec-20 0.00%9 0 0 0%0 0%- 8 2021 Stabilization 1-Apr-21 40.80%5,533,391 10 0 0 0%0 0%- 9 8609s 1-Jun-21 1.99%269,847 11 48 48 34%48 34%41,265 2022 Final Equity 1-Jan-22 3.69%500,000 12 95 143 101%143 101%122,935 100%13,563,687 164,200 Average Leased 11%11% 2021 Year 2 Tax Credit Projections 2022 Year 3 Tax Credit Projections Leased in Cumulative %Qualified % LIHTC Leased in Cumulative %Qualified % LIHTC Month Current Month Leased Leased Leased Qualified Credits Month Current Month Leased Leased Leased Qualified Credits 1 0 143 101%143 101%122,935 1 0 143 101%143 101%122,935 2 0 143 101%143 101%122,935 2 0 143 101%143 101%122,935 3 0 143 101%143 101%122,935 3 0 143 101%143 101%122,935 4 0 143 101%143 101%122,935 4 0 143 101%143 101%122,935 5 0 143 101%143 101%122,935 5 0 143 101%143 101%122,935 6 0 143 101%143 101%122,935 6 0 143 101%143 101%122,935 7 0 143 101%143 101%122,935 7 0 143 101%143 101%122,935 8 0 143 101%143 101%122,935 8 0 143 101%143 101%122,935 9 0 143 101%143 101%122,935 9 0 143 101%143 101%122,935 10 0 143 101%143 101%122,935 10 0 143 101%143 101%122,935 11 0 143 101%143 101%122,935 11 0 143 101%143 101%122,935 12 0 143 101%143 101%122,935 12 0 143 101%143 101%122,935 1,475,224 1,475,224 Average Leased 101%101%Average Leased 101%101% 22 DEPRECIATION AMORTIZATION SCHEDULE Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Depreciation Amortization Start Bonus Depr?Yes Start Date: Date:Permanent Financing Fees 627,698 1-Apr-21 Real Property: Acquisition - 1-Apr-19 9 Tax Credit Fees 132,144 1-Dec-20 Real Property: NC/Rehab 34,069,440 1-Dec-20 1 Total Real Property 34,069,440 Expensed Construction Cost 1,121,411 1-Dec-20 Site Improvements 3,585,302 1-Dec-20 12 Personal Property - 1-Dec-20 12 Real Property: Acquisition Real Property: NC/Rehab Site Improvements Site Improvements - Bonus Personal Property Personal Property - Bonus Permanent Financing Fees Tax Credit Fees Expensed Construction Cost Annual Total Depreciation/ Amortization Year 30 30 15 100%5 100%40 15 2020 - 94,637 - 3,585,302 - - - 734 1,121,411 4,802,084 2021 - 1,135,648 - - - - 11,769 8,810 - 1,156,227 2022 - 1,135,648 - - - - 15,692 8,810 - 1,160,150 2023 - 1,135,648 - - 15,692 8,810 1,160,150 2024 - 1,135,648 - - 15,692 8,810 1,160,150 2025 - 1,135,648 - - 15,692 8,810 1,160,150 2026 - 1,135,648 - - 15,692 8,810 1,160,150 2027 - 1,135,648 - - 15,692 8,810 1,160,150 2028 - 1,135,648 - - 15,692 8,810 1,160,150 2029 - 1,135,648 - - 15,692 8,810 1,160,150 2030 - 1,135,648 - - 15,692 8,810 1,160,150 2031 - 1,135,648 - - 15,692 8,810 1,160,150 2032 - 1,135,648 - 15,692 8,810 1,160,150 2033 - 1,135,648 - 15,692 8,810 1,160,150 2034 - 1,135,648 - 15,692 8,810 1,160,150 2035 - 1,135,648 - 15,692 8,075 1,159,416 2036 - 1,135,648 - 15,692 - 1,151,340 - 18,265,005 - 3,585,302 - - 247,156 132,144 23,351,018 23 LIMITED PARTNER SCHEDULE OF BENEFITS Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Year Ending Capital Contributions (Income)/ Loss Depreciation & Amortization Cash Distributions Fed LIHTC Total Capital Account Net Assets Non- recourse Liabilities Minimum Gain 31-Dec-19 (2,716,614) 171,638 - - - (2,680,570) 2,544,977 37,494,755 26,992,888 - 31-Dec-20 (4,543,835) (302,780) 4,801,604 - 164,184 (3,434,898) 2,589,988 36,359,107 26,964,525 - 31-Dec-21 (5,803,238) (1,132,268) 1,156,111 - 1,475,076 (4,323,155) 8,369,383 35,223,459 26,846,163 - 31-Dec-22 (172,130) (569,694) 1,160,034 - 1,475,076 1,426,918 7,951,173 34,087,811 26,662,800 - 31-Dec-23 - (612,670) 1,160,034 - 1,464,761 1,579,707 7,403,809 32,952,163 26,409,438 - 31-Dec-24 - (641,428) 1,160,034 - 1,464,761 1,573,668 6,885,204 31,816,515 26,136,075 - 31-Dec-25 - (671,517) 1,160,034 - 1,464,761 1,567,350 6,396,687 30,680,867 25,832,713 - 31-Dec-26 - (703,449) 1,160,034 - 1,464,761 1,560,644 5,940,102 29,545,219 25,494,350 - 31-Dec-27 - (737,719) 1,160,034 - 1,464,761 1,553,447 5,517,787 28,409,571 25,110,988 - 31-Dec-28 - (655,105) 1,160,034 13,205 1,464,761 1,570,796 4,999,652 27,273,923 24,570,574 - 31-Dec-29 - (647,740) 1,160,034 18,188 1,464,761 1,572,343 4,469,171 26,138,275 23,965,335 - 31-Dec-30 - (680,662) 1,160,034 18,830 1,279,947 1,380,615 3,970,969 25,002,627 23,328,669 - 31-Dec-31 - (716,679) 1,160,034 19,297 - 93,104 3,508,317 23,866,979 22,657,332 - 31-Dec-32 - (742,004) 1,160,034 21,062 - 87,786 3,069,225 22,731,331 21,963,348 - 31-Dec-33 - (779,340) 1,160,034 21,643 - 79,946 2,666,887 21,595,683 21,233,552 - 31-Dec-34 - (815,341) 1,160,034 22,555 - 72,386 2,299,639 20,460,035 20,469,644 9,609 31-Dec-35 - (854,464) 1,159,300 23,292 - 64,016 1,971,511 19,324,387 19,668,360 343,973 -- - - - - - - - - - -- - - - - - - - - - -- - - - - - - - - - (13,235,817) (11,091,224) 22,197,458 158,073 14,647,610 3,744,102 - - 24 1st MORTGAGE Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Annual Summary First Mortgage Loan Red Stone - Ops Loan Year Months Payment Interest Principal Fees Balance Loan Amount:12,450,000$ 1 2019 0 - - - - 12,450,000 Note Rate:4.85%2 2020 0 - - - - 12,450,000 All-In Rate:4.85%3 2021 0 342,210 342,210 - - 12,450,000 Term (months):480 4 2022 12 457,026 612,451 50,000 12,428 12,400,000 End of Term:Apr-62 5 2023 12 703,672 598,672 105,000 18,516 12,295,000 Amortization (Months):Yes 480 6 2024 12 703,357 593,357 110,000 18,351 12,185,000 Mandatory Annual Payment?:Yes $705,623 7 2025 12 707,820 587,820 120,000 18,180 12,065,000 Commencement : Stabilization 8 2026 12 706,960 581,960 125,000 17,999 11,940,000 Available During Construction?:No 100%- 9 2027 12 705,796 575,796 130,000 17,808 11,810,000 10 2028 12 704,329 569,329 135,000 17,608 11,675,000 11 2029 12 702,560 562,560 140,000 17,399 11,535,000 Annual Payment:$705,623 12 2030 12 705,446 555,446 150,000 17,179 11,385,000 Monthly Payment:$58,802 13 2031 12 707,969 547,969 160,000 16,948 11,225,000 14 2032 12 705,169 540,169 165,000 16,706 11,060,000 Fees:15 2033 12 702,005 532,005 170,000 16,454 10,890,000 MIP 0.00%16 2034 12 703,436 523,436 180,000 16,189 10,710,000 Servicing Fee 0.15%17 2035 12 709,343 514,343 195,000 15,908 10,515,000 Other 0.00%18 2036 12 704,905 504,905 200,000 15,616 10,315,000 Total Fees:0.15%19 2037 12 704,882 494,882 210,000 15,306 10,105,000 20 2038 12 704,495 484,495 220,000 14,984 9,885,000 Notes About the Loan:21 2039 12 703,441 473,441 230,000 14,643 9,655,000 22 2040 12 706,922 461,922 245,000 14,286 9,410,000 23 2041 12 699,817 449,817 250,000 13,912 9,160,000 24 2042 12 707,167 437,167 270,000 13,521 8,890,000 25 2043 12 703,809 423,809 280,000 13,108 8,610,000 Rough Loan Sizing 26 2044 12 704,865 409,865 295,000 12,676 8,315,000 Loan Max - LTV 90%31,814,789 27 2045 12 705,194 395,194 310,000 12,223 8,005,000 Cap Rate 5.00%28 2046 12 704,795 379,795 325,000 11,746 7,680,000 Loan Max - Cost 80%35,587,957 29 2047 12 703,548 363,548 340,000 11,244 7,340,000 30 2048 12 706,654 346,654 360,000 10,721 6,980,000 31 2049 12 703,769 328,769 375,000 10,168 6,605,000 Loan Max - DSCR 1.15 32 2050 12 700,158 310,158 390,000 9,593 6,215,000 Debt Constant Calc:33 2051 12 705,555 290,555 415,000 8,986 5,800,000 Rate + Service Fee 5.00%34 2052 12 704,963 269,963 435,000 8,349 5,365,000 Amo Rate 0.67%35 2053 12 703,340 248,340 455,000 7,681 4,910,000 MIP 0.00%36 2054 12 705,646 225,646 480,000 6,979 4,430,000 Debt Constant 5.67%37 2055 12 701,841 201,841 500,000 6,243 3,930,000 38 2056 12 701,843 176,843 525,000 5,469 3,405,000 Annual Debt Service Capacity 1,536,946 14,870,701 39 2057 12 705,593 150,593 555,000 4,658 2,850,000 40 2058 12 703,109 123,109 580,000 3,808 2,270,000 Bond Test 41 2059 12 704,191 94,191 610,000 2,913 1,660,000 Is this a TE Bond?Yes 42 2060 12 703,879 63,879 640,000 1,976 1,020,000 Basis+Land 37,654,742 43 2061 12 701,990 31,990 670,000 989 350,000 50% of Basis + Land 18,827,371 44 2062 12 353,536 3,536 350,000 109 - Bond Amount 21,100,000 45 2063 12 - - - - - Bond % of Rehab/NC 56.0%46 2064 12 - - - - - Bond Test Passed 47 2065 12 - - - - - 48 2066 12 - - - - - 49 2067 12 - - - - - 50 2068 12 - - - - - 51 2069 12 - - - - - 52 2070 12 - - - - - 53 2071 12 - - - - - 54 2072 12 - - - - - 55 2073 12 - - - - - 56 2074 12 - - - - - 57 2075 12 - - - - - 28,627,005 16,382,430 12,450,000 489,576 25 2nd MORTGAGE Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Annual Summary Second Loan Red Stone - TIF Loan Year Months Payment Interest Principal Fees Balance Loan Amount:8,650,000$ 1 2019 0 - - - - 8,650,000 Note Rate:4.85%2 2020 0 307,144 107,144 200,000 - 8,450,000 All-In Rate:4.97%3 2021 12 569,303 409,901 290,000 6,741 8,160,000 Term (months):240 4 2022 12 711,767 396,949 305,000 9,818 7,855,000 End of Term:Apr-41 5 2023 12 710,778 381,346 320,000 9,432 7,535,000 Amortization (Months):Yes 240 6 2024 12 709,025 364,997 335,000 9,028 7,200,000 Mandatory Annual Payment?:Yes $694,126 7 2025 12 711,359 347,758 355,000 8,601 6,845,000 Commencement : Stabilization 8 2026 12 722,376 329,233 385,000 8,143 6,460,000 Available During Construction?:No 100%- 9 2027 12 741,568 308,927 425,000 7,641 6,035,000 10 2028 12 739,315 287,211 445,000 7,104 5,590,000 11 2029 12 726,341 264,792 455,000 6,549 5,135,000 Annual Payment:$694,126 12 2030 12 717,708 241,729 470,000 5,979 4,665,000 Monthly Payment:$57,844 13 2031 12 713,162 217,776 490,000 5,386 4,175,000 14 2032 12 688,192 193,408 490,000 4,784 3,685,000 Fees:15 2033 12 687,478 168,315 515,000 4,163 3,170,000 MIP 0.00%16 2034 12 675,788 142,269 530,000 3,519 2,640,000 Servicing Fee 0.12%17 2035 12 663,333 115,477 545,000 2,856 2,095,000 Other 0.00%18 2036 12 650,114 87,939 560,000 2,175 1,535,000 Total Fees:0.12%19 2037 12 640,982 59,510 580,000 1,472 955,000 20 2038 12 611,425 30,667 580,000 759 375,000 Notes About the Loan:21 2039 12 382,963 7,770 375,000 192 - 22 2040 12 - - - - - 23 2041 12 - - - - - 24 2042 12 - - - - - 25 2043 12 - - - - - 26 2044 12 - - - - - 27 2045 12 - - - - - 28 2046 12 - - - - - 29 2047 12 - - - - - 30 2048 12 - - - - - 31 2049 12 - - - - - 32 2050 12 - - - - - Debt Constant Calc:33 2051 12 - - - - - Rate + Service Fee 4.85%34 2052 12 - - - - - Amo Rate 3.05%35 2053 12 - - - - - MIP 0.12%36 2054 12 - - - - - Debt Constant 8.02%37 2055 12 - - - - - 38 2056 12 - - - - - 39 2057 12 - - - - - 40 2058 12 - - - - - 41 2059 12 - - - - - 42 2060 12 - - - - - 43 2061 12 - - - - - 44 2062 12 - - - - - 45 2063 12 - - - - - 46 2064 12 - - - - - 47 2065 12 - - - - - 48 2066 12 - - - - - 49 2067 12 - - - - - 50 2068 12 - - - - - 51 2069 12 - - - - - 52 2070 12 - - - - - 53 2071 12 - - - - - 54 2072 12 - - - - - 55 2073 12 - - - - - 56 2074 12 - - - - - 57 2075 12 - - - - - 13,080,123 4,463,121 8,650,000 104,342 26 2nd MORTGAGE Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Amortization Schedule (Monthly) Payment Interest Principal Additional Principal Fees:Balance 2021 May-21 1 326,734 35,847 - 290,000 887 8,160,000 2021 Jun-21 2 34,653 33,816 - - 836 8,160,000 2021 Jul-21 3 34,653 33,816 - - 836 8,160,000 2021 Aug-21 4 34,653 33,816 - - 836 8,160,000 2021 Sep-21 5 34,653 33,816 - - 836 8,160,000 2021 Oct-21 6 34,653 33,816 - - 836 8,160,000 2021 Nov-21 7 34,653 33,816 - - 836 8,160,000 2021 Dec-21 8 34,653 33,816 - - 836 8,160,000 2022 Jan-22 9 34,653 33,816 - - 836 8,160,000 2022 Feb-22 10 34,653 33,816 - - 836 8,160,000 2022 Mar-22 11 34,653 33,816 - - 836 8,160,000 2022 Apr-22 12 34,653 33,816 - - 836 8,160,000 2022 May-22 13 339,653 33,816 - 305,000 836 7,855,000 2022 Jun-22 14 33,358 32,552 - - 805 7,855,000 2022 Jul-22 15 33,358 32,552 - - 805 7,855,000 2022 Aug-22 16 33,358 32,552 - - 805 7,855,000 2022 Sep-22 17 33,358 32,552 - - 805 7,855,000 2022 Oct-22 18 33,358 32,552 - - 805 7,855,000 2022 Nov-22 19 33,358 32,552 - - 805 7,855,000 2022 Dec-22 20 33,358 32,552 - - 805 7,855,000 2023 Jan-23 21 33,358 32,552 - - 805 7,855,000 2023 Feb-23 22 33,358 32,552 - - 805 7,855,000 2023 Mar-23 23 33,358 32,552 - - 805 7,855,000 2023 Apr-23 24 33,358 32,552 - - 805 7,855,000 2023 May-23 25 353,358 32,552 - 320,000 805 7,535,000 2023 Jun-23 26 31,999 31,226 - - 772 7,535,000 2023 Jul-23 27 31,999 31,226 - - 772 7,535,000 2023 Aug-23 28 31,999 31,226 - - 772 7,535,000 2023 Sep-23 29 31,999 31,226 - - 772 7,535,000 2023 Oct-23 30 31,999 31,226 - - 772 7,535,000 2023 Nov-23 31 31,999 31,226 - - 772 7,535,000 2023 Dec-23 32 31,999 31,226 - - 772 7,535,000 2024 Jan-24 33 31,999 31,226 - - 772 7,535,000 2024 Feb-24 34 31,999 31,226 - - 772 7,535,000 2024 Mar-24 35 31,999 31,226 - - 772 7,535,000 2024 Apr-24 36 31,999 31,226 - - 772 7,535,000 2024 May-24 37 366,999 31,226 - 335,000 772 7,200,000 2024 Jun-24 38 30,576 29,838 - - 738 7,200,000 2024 Jul-24 39 30,576 29,838 - - 738 7,200,000 2024 Aug-24 40 30,576 29,838 - - 738 7,200,000 2024 Sep-24 41 30,576 29,838 - - 738 7,200,000 2024 Oct-24 42 30,576 29,838 - - 738 7,200,000 2024 Nov-24 43 30,576 29,838 - - 738 7,200,000 2024 Dec-24 44 30,576 29,838 - - 738 7,200,000 2025 Jan-25 45 30,576 29,838 - - 738 7,200,000 2025 Feb-25 46 30,576 29,838 - - 738 7,200,000 2025 Mar-25 47 30,576 29,838 - - 738 7,200,000 2025 Apr-25 48 30,576 29,838 - - 738 7,200,000 2025 May-25 49 385,576 29,838 - 355,000 738 6,845,000 2025 Jun-25 50 29,068 28,367 - - 702 6,845,000 2025 Jul-25 51 29,068 28,367 - - 702 6,845,000 2025 Aug-25 52 29,068 28,367 - - 702 6,845,000 2025 Sep-25 53 29,068 28,367 - - 702 6,845,000 27 2nd MORTGAGE Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 2025 Oct-25 54 29,068 28,367 - - 702 6,845,000 2025 Nov-25 55 29,068 28,367 - - 702 6,845,000 2025 Dec-25 56 29,068 28,367 - - 702 6,845,000 2026 Jan-26 57 29,068 28,367 - - 702 6,845,000 2026 Feb-26 58 29,068 28,367 - - 702 6,845,000 2026 Mar-26 59 29,068 28,367 - - 702 6,845,000 2026 Apr-26 60 29,068 28,367 - - 702 6,845,000 2026 May-26 61 414,068 28,367 - 385,000 702 6,460,000 2026 Jun-26 62 27,433 26,771 - - 662 6,460,000 2026 Jul-26 63 27,433 26,771 - - 662 6,460,000 2026 Aug-26 64 27,433 26,771 - - 662 6,460,000 2026 Sep-26 65 27,433 26,771 - - 662 6,460,000 2026 Oct-26 66 27,433 26,771 - - 662 6,460,000 2026 Nov-26 67 27,433 26,771 - - 662 6,460,000 2026 Dec-26 68 27,433 26,771 - - 662 6,460,000 2027 Jan-27 69 27,433 26,771 - - 662 6,460,000 2027 Feb-27 70 27,433 26,771 - - 662 6,460,000 2027 Mar-27 71 27,433 26,771 - - 662 6,460,000 2027 Apr-27 72 27,433 26,771 - - 662 6,460,000 2027 May-27 73 452,433 26,771 - 425,000 662 6,035,000 2027 Jun-27 74 25,629 25,010 - - 619 6,035,000 2027 Jul-27 75 25,629 25,010 - - 619 6,035,000 2027 Aug-27 76 25,629 25,010 - - 619 6,035,000 2027 Sep-27 77 25,629 25,010 - - 619 6,035,000 2027 Oct-27 78 25,629 25,010 - - 619 6,035,000 2027 Nov-27 79 25,629 25,010 - - 619 6,035,000 2027 Dec-27 80 25,629 25,010 - - 619 6,035,000 2028 Jan-28 81 25,629 25,010 - - 619 6,035,000 2028 Feb-28 82 25,629 25,010 - - 619 6,035,000 2028 Mar-28 83 25,629 25,010 - - 619 6,035,000 2028 Apr-28 84 25,629 25,010 - - 619 6,035,000 2028 May-28 85 470,629 25,010 - 445,000 619 5,590,000 2028 Jun-28 86 23,739 23,166 - - 573 5,590,000 2028 Jul-28 87 23,739 23,166 - - 573 5,590,000 2028 Aug-28 88 23,739 23,166 - - 573 5,590,000 2028 Sep-28 89 23,739 23,166 - - 573 5,590,000 2028 Oct-28 90 23,739 23,166 - - 573 5,590,000 2028 Nov-28 91 23,739 23,166 - - 573 5,590,000 2028 Dec-28 92 23,739 23,166 - - 573 5,590,000 2029 Jan-29 93 23,739 23,166 - - 573 5,590,000 2029 Feb-29 94 23,739 23,166 - - 573 5,590,000 2029 Mar-29 95 23,739 23,166 - - 573 5,590,000 2029 Apr-29 96 23,739 23,166 - - 573 5,590,000 2029 May-29 97 478,739 23,166 - 455,000 573 5,135,000 2029 Jun-29 98 21,807 21,280 - - 526 5,135,000 2029 Jul-29 99 21,807 21,280 - - 526 5,135,000 2029 Aug-29 100 21,807 21,280 - - 526 5,135,000 2029 Sep-29 101 21,807 21,280 - - 526 5,135,000 2029 Oct-29 102 21,807 21,280 - - 526 5,135,000 2029 Nov-29 103 21,807 21,280 - - 526 5,135,000 2029 Dec-29 104 21,807 21,280 - - 526 5,135,000 2030 Jan-30 105 21,807 21,280 - - 526 5,135,000 2030 Feb-30 106 21,807 21,280 - - 526 5,135,000 2030 Mar-30 107 21,807 21,280 - - 526 5,135,000 2030 Apr-30 108 21,807 21,280 - - 526 5,135,000 2030 May-30 109 491,807 21,280 - 470,000 526 4,665,000 2030 Jun-30 110 19,811 19,333 - - 478 4,665,000 2030 Jul-30 111 19,811 19,333 - - 478 4,665,000 2030 Aug-30 112 19,811 19,333 - - 478 4,665,000 2030 Sep-30 113 19,811 19,333 - - 478 4,665,000 2030 Oct-30 114 19,811 19,333 - - 478 4,665,000 28 2nd MORTGAGE Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 2030 Nov-30 115 19,811 19,333 - - 478 4,665,000 2030 Dec-30 116 19,811 19,333 - - 478 4,665,000 2031 Jan-31 117 19,811 19,333 - - 478 4,665,000 2031 Feb-31 118 19,811 19,333 - - 478 4,665,000 2031 Mar-31 119 19,811 19,333 - - 478 4,665,000 2031 Apr-31 120 19,811 19,333 - - 478 4,665,000 2031 May-31 121 509,811 19,333 - 490,000 478 4,175,000 2031 Jun-31 122 17,730 17,302 - - 428 4,175,000 2031 Jul-31 123 17,730 17,302 - - 428 4,175,000 2031 Aug-31 124 17,730 17,302 - - 428 4,175,000 2031 Sep-31 125 17,730 17,302 - - 428 4,175,000 2031 Oct-31 126 17,730 17,302 - - 428 4,175,000 2031 Nov-31 127 17,730 17,302 - - 428 4,175,000 2031 Dec-31 128 17,730 17,302 - - 428 4,175,000 2032 Jan-32 129 17,730 17,302 - - 428 4,175,000 2032 Feb-32 130 17,730 17,302 - - 428 4,175,000 2032 Mar-32 131 17,730 17,302 - - 428 4,175,000 2032 Apr-32 132 17,730 17,302 - - 428 4,175,000 2032 May-32 133 507,730 17,302 - 490,000 428 3,685,000 2032 Jun-32 134 15,649 15,271 - - 378 3,685,000 2032 Jul-32 135 15,649 15,271 - - 378 3,685,000 2032 Aug-32 136 15,649 15,271 - - 378 3,685,000 2032 Sep-32 137 15,649 15,271 - - 378 3,685,000 2032 Oct-32 138 15,649 15,271 - - 378 3,685,000 2032 Nov-32 139 15,649 15,271 - - 378 3,685,000 2032 Dec-32 140 15,649 15,271 - - 378 3,685,000 2033 Jan-33 141 15,649 15,271 - - 378 3,685,000 2033 Feb-33 142 15,649 15,271 - - 378 3,685,000 2033 Mar-33 143 15,649 15,271 - - 378 3,685,000 2033 Apr-33 144 15,649 15,271 - - 378 3,685,000 2033 May-33 145 530,649 15,271 - 515,000 378 3,170,000 2033 Jun-33 146 13,462 13,137 - - 325 3,170,000 2033 Jul-33 147 13,462 13,137 - - 325 3,170,000 2033 Aug-33 148 13,462 13,137 - - 325 3,170,000 2033 Sep-33 149 13,462 13,137 - - 325 3,170,000 2033 Oct-33 150 13,462 13,137 - - 325 3,170,000 2033 Nov-33 151 13,462 13,137 - - 325 3,170,000 2033 Dec-33 152 13,462 13,137 - - 325 3,170,000 2034 Jan-34 153 13,462 13,137 - - 325 3,170,000 2034 Feb-34 154 13,462 13,137 - - 325 3,170,000 2034 Mar-34 155 13,462 13,137 - - 325 3,170,000 2034 Apr-34 156 13,462 13,137 - - 325 3,170,000 2034 May-34 157 543,462 13,137 - 530,000 325 2,640,000 2034 Jun-34 158 11,211 10,941 - - 271 2,640,000 2034 Jul-34 159 11,211 10,941 - - 271 2,640,000 2034 Aug-34 160 11,211 10,941 - - 271 2,640,000 2034 Sep-34 161 11,211 10,941 - - 271 2,640,000 2034 Oct-34 162 11,211 10,941 - - 271 2,640,000 2034 Nov-34 163 11,211 10,941 - - 271 2,640,000 2034 Dec-34 164 11,211 10,941 - - 271 2,640,000 2035 Jan-35 165 11,211 10,941 - - 271 2,640,000 2035 Feb-35 166 11,211 10,941 - - 271 2,640,000 2035 Mar-35 167 11,211 10,941 - - 271 2,640,000 2035 Apr-35 168 11,211 10,941 - - 271 2,640,000 2035 May-35 169 556,211 10,941 - 545,000 271 2,095,000 2035 Jun-35 170 8,897 8,682 - - 215 2,095,000 2035 Jul-35 171 8,897 8,682 - - 215 2,095,000 2035 Aug-35 172 8,897 8,682 - - 215 2,095,000 2035 Sep-35 173 8,897 8,682 - - 215 2,095,000 2035 Oct-35 174 8,897 8,682 - - 215 2,095,000 2035 Nov-35 175 8,897 8,682 - - 215 2,095,000 29 2nd MORTGAGE Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 2035 Dec-35 176 8,897 8,682 - - 215 2,095,000 2036 Jan-36 177 8,897 8,682 - - 215 2,095,000 2036 Feb-36 178 8,897 8,682 - - 215 2,095,000 2036 Mar-36 179 8,897 8,682 - - 215 2,095,000 2036 Apr-36 180 8,897 8,682 - - 215 2,095,000 2036 May-36 181 568,897 8,682 - 560,000 215 1,535,000 2036 Jun-36 182 6,519 6,361 - - 157 1,535,000 2036 Jul-36 183 6,519 6,361 - - 157 1,535,000 2036 Aug-36 184 6,519 6,361 - - 157 1,535,000 2036 Sep-36 185 6,519 6,361 - - 157 1,535,000 2036 Oct-36 186 6,519 6,361 - - 157 1,535,000 2036 Nov-36 187 6,519 6,361 - - 157 1,535,000 2036 Dec-36 188 6,519 6,361 - - 157 1,535,000 2037 Jan-37 189 6,519 6,361 - - 157 1,535,000 2037 Feb-37 190 6,519 6,361 - - 157 1,535,000 2037 Mar-37 191 6,519 6,361 - - 157 1,535,000 2037 Apr-37 192 6,519 6,361 - - 157 1,535,000 2037 May-37 193 586,519 6,361 - 580,000 157 955,000 2037 Jun-37 194 4,056 3,958 - - 98 955,000 2037 Jul-37 195 4,056 3,958 - - 98 955,000 2037 Aug-37 196 4,056 3,958 - - 98 955,000 2037 Sep-37 197 4,056 3,958 - - 98 955,000 2037 Oct-37 198 4,056 3,958 - - 98 955,000 2037 Nov-37 199 4,056 3,958 - - 98 955,000 2037 Dec-37 200 4,056 3,958 - - 98 955,000 2038 Jan-38 201 4,056 3,958 - - 98 955,000 2038 Feb-38 202 4,056 3,958 - - 98 955,000 2038 Mar-38 203 4,056 3,958 - - 98 955,000 2038 Apr-38 204 4,056 3,958 - - 98 955,000 2038 May-38 205 584,056 3,958 - 580,000 98 375,000 2038 Jun-38 206 1,593 1,554 - - 38 375,000 2038 Jul-38 207 1,593 1,554 - - 38 375,000 2038 Aug-38 208 1,593 1,554 - - 38 375,000 2038 Sep-38 209 1,593 1,554 - - 38 375,000 2038 Oct-38 210 1,593 1,554 - - 38 375,000 2038 Nov-38 211 1,593 1,554 - - 38 375,000 2038 Dec-38 212 1,593 1,554 - - 38 375,000 2039 Jan-39 213 1,593 1,554 - - 38 375,000 2039 Feb-39 214 1,593 1,554 - - 38 375,000 2039 Mar-39 215 1,593 1,554 - - 38 375,000 2039 Apr-39 216 1,593 1,554 - - 38 375,000 2039 May-39 217 376,593 1,554 - 375,000 38 - 2039 Jun-39 218 - - - - - - 2039 Jul-39 219 - - - - - - 2039 Aug-39 220 - - - - - - 2039 Sep-39 221 - - - - - - 2039 Oct-39 222 - - - - - - 2039 Nov-39 223 - - - - - - 2039 Dec-39 224 - - - - - - 2040 Jan-40 225 - - - - - - 2040 Feb-40 226 - - - - - - 2040 Mar-40 227 - - - - - - 2040 Apr-40 228 - - - - - - 2040 May-40 229 - - - - - - 2040 Jun-40 230 - - - - - - 2040 Jul-40 231 - - - - - - 2040 Aug-40 232 - - - - - - 2040 Sep-40 233 - - - - - - 30 4TH LOAN Cottages at Mission Trail - 111220 Copyright © 2017 Hunt Mortgage Group. All Rights Reserved 11/12/2020 Fourth Loan City of Lake Elsinore Loan Amount:5,721,250$ Rate:3.00% Term (months):660 End of Term:Mar-74 Amortization (Months):No 660 Mandatory Annual Payment?:No $0 Commencement : Closing Available During Construction?:Yes 96.5%5,521,250 Is Soft Loan Paid?Yes 50.0%% of Cash Flow Soft Interest, Simple or Compounding?Simple Annual Payment: Monthly Payment: Fees: MIP 0.00% Servicing Fee 0.00% Other 0.00% Total Fees:0.00% Notes About the Loan: $1.45M Accrued Funds Loan $3M Low and Moderate Income Housing Asset Fund (LMIHAF) $200K Fund 106 Loan $1,071,250 - Future Fund 106 31 Cottages Bridge Loan Agreement FINAL 4 ATTACHMENT NO. 4 BRIDGE LOAN FLOW OF FUNDS [attached] Cottages at Mission TrailFlow of Funds through Cost Certificationanticipated timing:Jan‐21 Feb‐21 Mar‐21 Apr‐21 May‐21As of Nov 15100% CompletionStabilization Month 1Stabilization Month 2Stabilization Month 3Permanent Loan Conversion 8609/FinalConstruction Draws2,373,108        1,291,425    8,500              ‐                     1,800,319     3,885,067   Total Cumulative Draws35,126,528         37,499,636      38,791,061  38,799,561   38,799,561      40,599,879  44,484,946Sources InstallmentsNet Income from Operations184,370            89,969          83,032           83,008              81,116          233,166      Interest Income322,916               1,976                ‐                 ‐                 ‐                     ‐                 ‐               City TIF disbursement458,131               ‐                     ‐                 ‐                 819,000            ‐                 ‐               Deferred Developer Fee‐                       ‐                     ‐                 ‐                 ‐                     ‐                 3,115,220   City Loan5,521,250           ‐                     ‐                 ‐                 ‐                     200,000        ‐               Equity5,700,625           1,559,824        ‐                 ‐                 ‐                     5,533,391     769,847      Construction Loan24,070,000         ‐                     ‐                 ‐                 ‐                     (3,390,000)   ‐               City Bridge Loan950,000            (950,000)       Increased Perm LoanSources Balance946,394              1,269,455        67,999          142,532         1,044,540        718,729        951,895      Project MilestonesPrinted 11/18/2020