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HomeMy WebLinkAbout2014 CON CDC HA - Paradise Creek Housig Partners - Subordinated Deed of Trust with Assignment of Rents Phase IRecorded at the Request of Old Republic Title Company - Oakland 111 i-U l40-40 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY AND WHEN RECORDED RETURN TO: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY Records Management Department 1243 National City Blvd. National City, California 91950 D O C ## 2014-0510273 11101II 111 HiH IIIII Hill 1110 IIIII 1011 Hill 1101 Hill �111100 IIII NOV21,2014 4:19 PM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE Ernest J. Dronenburg, Jr., COUNTY RECORDER FEES: 0.00 WAYS: 2 DA: 1 PAGES: 17 111111111111111111111111111111111111111111111111111111111111111111111111111110111111 [Free Recording Requested Government Code § 6103] SUBORDINATED DEED OF TRUST WITH ASSIGNMENT OF RENTS [Paradise Creek Apartments Project/Phase 1] [Commission Subordinate Loan Deed of Trust for Phase 1] This DEED OF TRUST is made as of November 19, 2014, by and between PARADISE CREEK HOUSING PARTNERS, L.P., a California limited partnership ("Trustor"), OLD REPUBLIC TITLE COMPANY, a California corporation ("Trustee"), and COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY, a public body, corporate and politic ("Beneficiary"). Trustor grants, transfers and assigns to Trustee in trust, upon the trusts, covenants, conditions and agreements and for the uses and purposes hereinafter contained, with power of sale, and right of entry and possession, all of its ground leasehold title and interest in that real property (the "Property") in the City of National City, County of San Diego, State of California, described in Exhibit A attached hereto and incorporated herein by this reference. Together with Beneficiary's interest in all buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Property; and Together with the rents, issues and profits thereof; and together with all buildings and improvements of every kind and description now or hereafter erected or placed thereon, and all fixtures, including but not limited to all gas and electric fixtures, engines and machinery, radiators, heaters, furnaces, heating equipment, laundry equipment, steam and hot-water boilers, stoves, ranges, elevators and motors, bathtubs, sinks, water closets, basins, pipes, faucets and other plumbing and heating fixtures, mantles, cabinets, refrigerating plant and refrigerators, whether mechanical or otherwise, cooking apparatus and appurtenances, and all shades, awnings, screens, blinds and other furnishings, it being hereby agreed that all such fixtures and furnishings Page 1 shall to the extent permitted by law be deemed to be permanently affixed to and a part of the realty; and Together with all building materials and equipment now or hereafter delivered to said premises and intended to be installed therein; and Together with all plans, drawings, specifications, and articles of personal property now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the completion and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner. To have and to hold the property hereinbefore described (including the Property and all appurtenances), all such property being referred to collectively herein as the "Property," to Trustee, its successors and assigns forever. FOR THE PURPOSE of securing (1) payment of indebtedness of Trustor to the Beneficiary in the principal sum of Six Million and No/100 Dollars ($6,000,000.00) (the "Commission Subordinate Loan"), evidenced by a promissory note of even date herewith between Trustor and Beneficiary (the "Commission Subordinate Loan Note"), together with all sums due thereunder including interest and other charges; and (2) the performance of each agreement of Trustor in this Deed of Trust and the Commission Subordinate Loan Note. Said Commission Subordinate Loan Note and all of its terms are incorporated herein by reference and this conveyance shall secure any and all extensions, amendments, modifications or renewals thereof however evidenced, and additional advances of the Commission Subordinate Loan evidenced by any note reciting that it is secured hereby. AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: 1. That it will pay the Commission Subordinate Loan Note at the time and in the manner provided therein; 2. That it will not permit or suffer the use of any of the Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed, namely, as affordable rental housing; 3. That the Commission Subordinate Loan Note is incorporated herein and made a part of this Deed of Trust. Upon default under the Commission Subordinate Loan Note or this Deed of Trust (after expiration of any applicable cure rights), Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable; Page 2 4. That all rents, profits and income from the Property covered by this Deed of Trust are hereby assigned to Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder, to collect such rents, profits and income; 5. That upon default hereunder (after expiration of any applicable cure rights), Beneficiary shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the Property described herein and operate same and collect the rents, profits and income therefrom; 6. That Trustor will keep the improvements now existing or hereafter erected on the Property insured against loss by fire and such other hazards, casualties and contingencies as may be required in writing from time to time by Beneficiary, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies, in the amount of the replacement value of the improvements. Such policies shall be endorsed with a standard mortgage clause with loss payable to Beneficiary subordinate to the rights and interest of the beneficiary of the Senior Loan Deed of Trust described in paragraph 31, below) and certificates thereof together with copies of original policies shall be deposited with Beneficiary; 7. To pay, before delinquency, any taxes and assessments affecting said Property when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof which appear to be prior or superior hereto, all costs, fees and expenses of this Trust; 8. To keep said Property in good condition and repair, not to remove or demolish any buildings thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor (unless contested in good faith if Trustor provides security satisfactory to Beneficiary that any amounts found to be due will be paid and no sale of the Property or other impairment of the security hereunder will occur); to comply with all laws affecting said Property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said Property in violation of law and/or covenants, conditions and/or restrictions affecting said Property; not to permit or suffer any alteration of or addition to the buildings or improvements hereafter constructed in or upon said Property without the consent of Beneficiary; 9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear; 10. Should Trustor fail to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Beneficiary or Trustee, being authorized to enter upon said Property for such purposes, may Page 3 commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay counsel's reasonable fees; 11. Beneficiary shall have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by Beneficiary shall be added to the principal sum secured hereby; 12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the Commission Subordinate Loan Note; 13. That the Commission Subordinate Loan advanced hereunder is to be used in the development of the Property; and upon the failure of Trustor to keep and perform such covenants, the principal sum and all arrears of interest, and other charges provided for in the Commission Subordinate Loan Note shall, at the option of Beneficiary, become due and payable, anything contained herein to the contrary notwithstanding; 14. Trustor further covenants that it will not voluntarily create, suffer or permit to be created against the Property, subject to this Deed of Trust, any lien or liens except as authorized by Beneficiary and further that it will keep and maintain the Property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on the Property; 15. That any and all improvements made or about to be made upon the Property, and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office; 16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing representative of Beneficiary a charge not to exceed that permitted by law for providing a statement regarding the obligation secured by this Deed of Trust as provided by Section 2954, Article 2, Chapter 2, Title 14, Division 3 of the California Civil Code. IT IS MUTUALLY AGREED THAT: 17. Subject to the additional cure rights in Section 17 of the Commission Subordinate Loan Note, if the construction of any improvements as herein referred to shall not be carried on with reasonable diligence, or shall be discontinued at any time for any reason other than events of Force Majeure pursuant to Paragraph 36 hereof, Beneficiary, after due notice to Trustor or any subsequent owner and the failure by same to exercise any cure rights, is hereby invested with full and complete authority to enter upon the Property, employ watchmen to protect such improvements from depredation or injury and to preserve and protect the personal property therein, and to continue any and all outstanding contracts for the erection and completion of said building or buildings, to make and enter into any contracts and obligations wherever necessary, Page 4 either in its own name or in the name of Trustor, and to pay and discharge all debts, obligations and liabilities incurred thereby. All such sums so advanced by Beneficiary (exclusive of advances of the principal of the indebtedness secured hereby) shall be added to the principal of the indebtedness secured hereby and shall be secured by this Deed of Trust and shall be due and payable on demand; 18. In the event of any fire or other casualty to the Project or eminent domain proceedings resulting in condemnation of the Project or any part thereof, Trustor shall have the right to rebuild the Project, and to use all available insurance or condemnation proceeds therefor, provided that (a) such proceeds are sufficient to rebuild the Project in a manner that provides adequate security to Beneficiary for repayment of the Commission Subordinate Loan or if such proceeds are insufficient then Trustor shall have funded any deficiency, (b) Beneficiary shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no uncured material default then exists under the Commission Subordinate Loan Note or this Deed of Trust. If the casualty or condemnation affects only part of the Project and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the Commission Subordinate Loan in a manner that provides adequate security for repayment of the remaining balance of the Commission Subordinate Loan. The rights of the Beneficiary to any insurance proceeds or condemnation awards pursuant to this paragraph 18 are and shall be subject to the prior right to any insurance proceeds or condemnation awards of the beneficiary of the Senior Loan Deed of Trust described in paragraph 31; 19. Upon default by Trustor in making any payments provided for herein or in the Commission Subordinate Loan Note secured hereby, and if such default is not made good within fifteen (15) days after notice from Beneficiary, or if Trustor shall fail to perform any covenant or agreement in this Deed of Trust within thirty (30) days after written demand therefor by Beneficiary (or, in the event that more than thirty (30) days is reasonably required to cure such default, should Trustor fail to promptly commence such cure, and diligently prosecute same to completion), Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default and of election to cause the Property to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed of Trust, the Commission Subordinate Loan Note and all documents evidencing expenditures secured hereby; 20. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said Property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said Property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts shall be Page 5 conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. Trustee shall apply the proceeds of sale to payment of (1) the expenses of such sale, together with the reasonable expenses of this trust including therein reasonable Trustee's fees or attorneys' fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee's deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the Commission Subordinate Loan Note; (4) all other sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto; 21. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Deed of Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the county or counties in which the property is situated, shall be conclusive proof of proper appointment of the successor trustee; 22. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law; 23. Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and the Commission Subordinate Loan Note to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto"; 24. The trust created hereby is irrevocable by Trustor; 25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary" shall include not only the original Beneficiary hereunder but also any future owner and holder including pledgees, of the Commission Subordinate Loan Note secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of each Trustor hereunder are joint and several; 26. Trustee accepts this trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law, Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee; Page 6 27. The undersigned Trustor requests that copies of any notice of default and of any notice of sale hereunder be mailed to it at: With a copy to: With a copy to: With a copy to: Paradise Creek Housing Partners, L.P. c/o the Related Companies of California 18201 Von Karman Avenue, Suite 900 Irvine, California 92612 Attn: Frank Cardone Community HousingWorks 2815 Camino Del Rio South, Suite 350 San Diego, California 92108 Attn. Susan M. Reynolds MUFG Union Bank, N.A. 200 Pringle Avenue, Suite 200 Walnut Creek, CA 94596 Attn. CDF Head Bocarsly Emden Cowan Esmail & Arndt LLP 633 W. 5th St., 64th Fl Los Angeles, CA 90071 Attn: Lance Bocarsly 28. Trustor agrees at any time and from time to time upon receipt of a written request from Beneficiary, to furnish to Beneficiary a detailed statement in writing of income, rents, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the Property and their use as may be requested by Beneficiary. 29. The full principal amount outstanding plus accrued but unpaid interest thereon, shall be due and payable on the earlier to occur of the following: (a) As more particularly provided in the Commission Subordinate Loan Note, sale, transfer, assignment or refinancing of the Property as provided further in this paragraph 29; unless: (i) in the case of a sale in which the sale proceeds are insufficient to repay in full the Commission Subordinate Loan, the Beneficiary approves such sale and the purchaser assumes the balance of the Commission Subordinate Loan in accordance with the terms of the Commission Subordinate Loan Note; or (ii) in the case of a refinancing in which the refinancing proceeds are insufficient to repay in full the Commission Subordinate Loan, the Beneficiary approves such refinancing and the Borrower remains obligated pursuant to the terms of the Note. Notwithstanding anything to the contrary contained in the Loan Documents, (i) Trustor may refinance the Senior Loan without the prior consent of the Beneficiary (the "Refinanced Page 7 Indebtedness"), and the Beneficiary hereby agrees to subordinate the Commission Subordinate Loan and all documents securing or evidencing the Commission Subordinate Loan, including, but not limited to, this Deed of Trust, to the Refinanced Indebtedness and the lien of any deed of trust or mortgage securing the Refinanced Indebtedness, provided that the principal balance of the Refinanced Indebtedness does not exceed the then outstanding principal balance of the Senior Loan plus the costs of refmancing the Senior Loan, and (ii) the foregoing refmance shall not constitute a "refinance" for purposes of this Section 29. (b) In order to induce Beneficiary to make the loan evidenced hereby, Trustor agrees that in the event of any transfer of the Property without the prior written consent of Beneficiary (other than a transfer resulting from a foreclosure, or conveyance by deed in lieu of foreclosure, by the holder of the Senior Loan Deed of Trust), Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary may grant or deny such consent in its sole discretion and, if consent should be given, any such transfer shall be subject to this paragraph 29, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Trustor from any liability thereunder without the prior written consent of Beneficiary. (c) As used herein, "transfer" includes the sale, agreement to sell, transfer or conveyance of the Property, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property, or the lease of all or substantially all of the Property. "Transfer" shall not include the leasing of individual residential units on the Property. (d) The term "Sale" means any transfer, assignment, conveyance or lease (other than to a tenant for occupancy) of the Property and/or the improvements thereon, or any portion thereof, or any interest therein by the Trustor, and (if Trustor is a partnership) includes any transfer, assignment or sale of any partnership interest in the Trustor (other than the removal of the general partner by a limited partner in Trustor in accordance with Trustor's partnership agreement) by an individual or entity which is a general or limited partner in the Trustor, or any interest by any individual or entity which holds an interest in any such general or limited partner in the Trustor, which brings the cumulative total of all such direct and indirect transfers, assignments and sales during the term of this Deed of Trust to more than thirty-five percent (35%) of the ownership interests in the Trustor, and any such transfer, assignment or sale of a direct or indirect partnership interest thereafter. Sale includes a sale in condemnation or under threat thereof other than by Beneficiary. Sale does not include dedications and grants of easements to public and private utility companies of the kind customary in real estate development. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor, prior to any action to enforce this Deed of Trust, shall give MUFG Union Bank, N.A., a national banking association, and its successors and assigns (the "Tax Credit Partner") notice and opportunity to cure for a period of not less than (a) fifteen (15) days to cure a monetary default, and (b) thirty (30) days to cure a nonmonetary default; provided, however, if in order to cure Page 8 such a default Tax Credit Partner reasonably determines that it must remove the general partner of Borrower, Tax Credit Partner shall so notify Trustor and so long as Tax Credit Partner is diligently and continuously attempting to so remove such general partner, Tax Credit Partner shall have until the date thirty (30) days after the effective date of the removal of the general partner or general partners to cure such default but in no event more than one (1) year. Notwithstanding the foregoing, the following shall not constitute a "Sale" under this Deed of Trust: (a) a Sale made pursuant to an option granted to a general partner of Trustor on or before the date of recordation of this Deed of Trust in the Official Records of San Diego County, California, or (b) (i) prior to the payment in full of all required capital contributions to Trustor, any assignment of an interest as limited partner of Trustor by MUFG Union Bank, N.A., a national banking association ("Special Limited Partner") or MUFG Union Bank, N.A., a national banking association ("Investor Limited Partner"), to an entity whose general partner or managing member is controlled by the Investor Limited Partner or is under common control with the Investor Limited Partner, (ii) after to the payment in full of all required capital contributions to Trustor, any assignment of an interest as limited partner of Trustor by its Tax Credit Partner to any person or entity, which assignments shall not require the consent of Beneficiary, provided that the Special Limited Partner or Investor Limited Partner, as applicable, shall give written notice to Beneficiary of such assignment; or (c) the Special Limited Partner's removal of the general partner of Trustor as general partner, and substitution of the Special Limited Partner or an affiliate of the Special Limited Partner as a general partner of Trustor, which removal shall not require Beneficiary approval, provided that the Special Limited Partner shall give notice to Beneficiary of its intent to so remove such general partner not less than ten (10) days prior to such removal. Any proposed replacement of the general partner with an entity other than the Special Limited Partner or an affiliate of the Special Limited Partner will be subject to Beneficiary's prior reasonable approval. 30. Trustor shall permit Beneficiary and its agents or representatives, to inspect the Property at any and all reasonable times, with or without advance notice. Inspections shall be conducted so as not to interfere with the tenants' use and enjoyment of the Property. 31. It is hereby expressly agreed and acknowledged by Trustor and Beneficiary that this Deed of Trust is a second and subordinate deed of trust, and that the Commission Subordinate Loan secured hereby, and the Commission Subordinate Loan Note are subject and subordinate only to the deed of trust securing a loan to Trustor in an approximate original principal amount not to exceed $21,862,587.00 in which MUFG Union Bank, N.A., a national banking association ("Senior Lender") is the Beneficiary, including any loan that refinances the balance of the Senior Loan or an assignment of the Senior Loan (collectively referred to as the "Senior Loan"). 32. For purposes of this Deed of Trust, "Hazardous Materials" mean and include any hazardous, toxic or dangerous waste, substance or material including, without limitation, flammable explosives, radioactive materials, asbestos, hazardous wastes, toxic substances and any materials or substances defined as hazardous materials, hazardous substances or toxic substances in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act of 1380 ("CERCLA"), as amended (42 U.S.C. §9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §1801 et seq.), the Resource Conservation and Page 9 Recovery Act (42 U.S.C. §6901 et seq.) and those substances defined as hazardous wastes in §25117 of the California Health and Safety Code or as hazardous substances in §25316 of the California Health and Safety Code or in any regulations promulgated under either such law, any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect. Hazardous Materials expressly exclude substances typically used in the construction, development, operation and maintenance of an apartment complex provided such substances are used in accordance with all applicable laws. 33. In addition to the general and specific representations, covenants and warranties set forth in the Deed of Trust or otherwise, Trustor represents, covenants and warrants, with respect to Hazardous Materials, as follows: (a) Other than as expressly disclosed to Trustor by Beneficiary, neither Trustor nor, to the best knowledge of Trustor, any other person, has ever caused or permitted any Hazardous Materials to be manufactured, placed, held, located or disposed of on, under or at the Property or any part thereof, and neither the Property nor any part thereof, or any property adjacent thereto, has ever been used (whether by the Trustor or, to the best knowledge of the Trustor, by any other person) as a manufacturing site, dump site or storage site (whether permanent or temporary) for any Hazardous Materials; (b) Trustor hereby agrees to indemnify Beneficiary, its officers, employees, contractors and agents, and hold Beneficiary, its officers, employees, contractors and agents harmless from and against any and all losses, liabilities, damages, injuries, costs, expenses and claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against Beneficiary, its officers, employees, contractors or agents for, with respect to, or as a direct or indirect result of, the presence or use, generation, storage, release, threatened release or disposal of Hazardous Materials on or under the Property or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials from the Property (including, without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under CERCLA, any so-called "Superfund" or "Superlien" law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any Hazardous Materials), caused by Trustor. (c) Trustor has not received any notice of (i) the happening of any event involving the use, spillage, discharge or cleanup of any Hazardous Materials ("Hazardous Discharge") affecting Trustor or the Property or (ii) any complaint, order, citation or notice with regard to air emissions, water discharges, noise emissions or any other environmental, health or safety matter affecting Trustor or the Property ("Environmental Complaint") from any person or entity, including, without limitation, the United States Environmental Protection Agency ("EPA"). If Trustor receives any such notice after the date hereof, then Trustor will give, within seven (7) business days thereafter, oral and written notice of same to Beneficiary. Page 10 (d) Without limitation of Beneficiary's rights under this Deed of Trust, but only to the extent Trustor is not effectuating a remediation of the Property, Beneficiary shall have the right, but not the obligation, to enter onto the Property or to take such other actions as it deems necessary or advisable to clean up, remove, resolve or minimize the impact of, or otherwise deal with, any such Hazardous Materials or Environmental Complaint upon its receipt of any notice from any person or entity, including without limitation, the EPA, asserting the existence of any Hazardous Materials or an Environmental Complaint on or pertaining to the Property which, if true, could result in an order, suit or other action against Trustor affecting any part of the Property by any governmental agency or otherwise which, in the sole opinion of Beneficiary, could jeopardize its security under this Deed of Trust. All reasonable costs and expenses incurred by Beneficiary in the exercise of any such rights shall be secured by this Deed of Trust and shall be payable by Trustor upon demand together with interest thereon at a rate equal to the highest rate payable under the Commission Subordinate Loan Note secured hereby. 34. The following shall be an Event of Default: (a) Failure of Trustor to pay, when due, principal and interest and any other sums or charges on the Commission Subordinate Loan Note, in accordance with the provisions set forth in the Commission Subordinate Loan Note; (b) A violation of the terms, conditions or covenants of the Commission Subordinate Loan Note or this Deed of Trust; or (c) A default (after expiration of any cure period provided therein) under the Senior Loan Deed of Trust to which the lien of this Deed of Trust is subordinate. 35. Subject to the extensions of time set forth in paragraph 36, and subject to the further provisions of this paragraph 35 and of paragraph 37, failure or delay by the Trustor to perform any term or provision of this Deed of Trust constitutes a default under this Deed of Trust. The Trustor must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. (a) The Beneficiary shall give written notice of default to the Trustor, specifying the default complained of by the Beneficiary. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (b) The Trustor shall not be in default so long as it endeavors to complete such cure, correction or remedy with reasonable diligence, provided such cure, correction or remedy is completed within thirty (30) days after receipt of written notice (or such additional time as may be deemed by the Beneficiary to be reasonably necessary to correct the cause). (c) Any failures or delays by the Beneficiary 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. Delays by the Beneficiary in asserting any of its rights and remedies shall not deprive the Beneficiary 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. Page 11 36. Notwithstanding specific provisions of this Deed of Trust, performance 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 or other deities; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor or supplier; acts of the other party; acts or failure to act of the Beneficiary, or any other public or governmental agency or entity (except that any act or failure to act of Beneficiary shall not excuse performance by Beneficiary); or any other causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time the party claiming such extension gives notice to the other party, provided notice by the party claiming such extension is given within thirty (30) days after the commencement of the cause. Times of performance under this Deed of Trust may also be extended in writing by the Beneficiary and Trustor. 37. If a monetary event of default occurs under the terms of the Commission Subordinate Loan Note or this Deed of Trust, prior to exercising any remedies thereunder Beneficiary shall give Trustor written notice of such default. Trustor shall have a period of fifteen (15) days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary under the Commission Subordinate Loan Note and this Deed of Trust. 38. If a non -monetary event of default occurs under the terms of the Commission Subordinate Loan Note or this Deed of Trust, prior to exercising any remedies thereunder, Beneficiary shall give Trustor notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Trustor shall have such period to effect a cure prior to exercise of remedies by the Beneficiary under the Commission Subordinate Loan Note and this Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Trustor (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within one hundred eighty (180) days after the first notice of default is given. 39. Upon the occurrence of an Event of Default as described in paragraph 34, Trustor shall be obligated to repay the Commission Subordinate Loan and, subject to the nonrecourse provision of the Commission Subordinate Loan Note, Beneficiary may seek to enforce payment of any and all amounts due by Trustor pursuant to the terms of the Commission Subordinate Loan Note. 40. All expenses (including reasonable attorneys' fees and costs and allowances) incurred in connection with an action to foreclose, or the exercise of any other remedy provided by this Deed of Trust, including the curing of any Event of Default, shall be the responsibility of Trustor. Page 12 Except as provided in paragraph 31, each successor owner of an interest in the Property, other than through foreclosure, deed in lieu of foreclosure or an owner who takes an interest in the Property after a foreclosure has occurred, shall take its interest subject to this Deed of Trust. "Trustor" PARADISE CREEK HOUSING PARTNERS, L.P., a California limited partnership By: RELATED/PARADISE CREEK DEVELOPMENT CO., LLC, a California limited liability company, its Administrative General Partner By: Frank Cardone, Vice President By: CHW PARADISE CREEK DEVELOPMENT CO., LLC, a California limited liability company, its Managing General Partner By: COMMUNITY HOUSING WORKS, a California nonprofit public be corporation, its Managing Bv: Page 13 . Wilson Senior Vice President ACKNOWLEDGMENT State of California - a Titpf County of San Diego ©ray t. ) nn r_ On Nwery P r let, 2014, before me, G-�.il P. f'e �tfi4ry iu17Iic.personally appeared, 'Fy'an k Card D I/1 P who proved to me on the basis of satisfactory evidence to be the person(s) whose name() is/are subscribed to the within instrument and acknowledged to me that he/she/they, executed the same in his/lief/their authorized capacity(ies}, and that by his/her/theih signature(e) on the instrument the person(s or the entity on behalf of which the persons} 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 /Il�� Q (Seal) GAIL P. FEE Commission # 1917108 Notary Public - California i Orange County My Comm. Expires Jan 10, 2015 ACKNOWLEDGMENT State of California ) u-fa-f4. - ) County of -San -Diego d rghge— ) On 4oue-uybv r 14 , 2014, before me, (3aiI P. Fee, Newry ry Cob(i personally appeared, AVIAe 12) • Wi nn who proved to me on the basis of satisfactory evidence to be the person(e) 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(.ie , and that by his/her/their signature(e) on the instrument the person($), or the entity on behalf of which the person() 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 handnd official seal. Signature IP. GAIL P. FEE Commission # 1917108 Notary Public - California Orange County My Comm. Expires Jan 10, 2015 EXHIBIT "A" LEGAL DESCRIPTION Real property in the City of National City, County of San Diego, State of California, described as follows: A leasehold estate as created by that certain Ground Lease dated November 19, 2014, executed by and between the Community Development Commission -Housing Authority of the City of National City, a public body, corporate and politic, as lessor, and Paradise Creek Housing Partners, L.P., a California limited partnership, as lessee, as evidenced by that certain "Memorandum of Ground Lease" recorded concurrently herewith in the Official Records of the County of San Diego, State of California, in and to the following: PARCEL ONE: Portions of Blocks 107, 86, 85 and 108, according to Map thereof No. 348, filed in the Office of the County Recorder of San Diego County, October 2, 1882, together with a portion of 21st Street Vacated and Coolidge Avenue Vacated, described as follows: Beginning at the southwest corner of Block 107 as shown on the above referenced map, said point also being a point in the northerly right of way line of 22nd Street, having a half right of way width of 40.00 feet; thence easterly along said line north 72° 16' 45" east 543.65 feet to a tangent curve, said curve concave northwest having a radius of 20.00 feet; thence along said curve through a central angle of 77° 55' 20" an arc length of 27.20 feet to a compound curve, said curve concave west with a radius of 760.00 feet and a radial south 84° 21' 25" west; thence along said curve through a central angle of 12° 04' 44" an arc distance of 160.22 feet to a point in the westerly right of way of Hoover Avenue with a half width of 40.00 feet; thence northerly along said right of way north 17° 45' 42" west 61.65 feet to point "A"; thence leaving said right of way south 72° 12' 08" west 182.86 feet; thence north 17° 43' 08" west 352.88 feet to point "B"; thence south 19° 34' 38" west 154.26 feet; thence south 20° 46' 08" west 110.52 feet; thence south 19° 47' 31" west 362.52 feet to a point in the easterly right of way of Harding Avenue having a half width of 40.00 feet; thence southerly along said right of way south 17° 48' 28" east 74.46 feet to the point of beginning. Being Parcel 1 in the Certificate of Compliance recorded August 20, 2013, Instrument 2013-521150, of Official Records. APN: 560-391-12 & 559-124-08 PARCEL TWO: A portion of Hoover Avenue (formerly 2nd Ave) and portion Lots 13 through 21, inclusive, lying within Block 86, according to Map thereof No. 348, filed in the County of San Diego, October 2, 1882, as vacated in the Resolution Authorizing an Order of Vacation recorded June 17, 2014, document no. 2014- 250448, being only that portion of the following described parcel that is adjacent to Parcel One above (Parcel 1 Certificate of Compliance, 2013-521150), and more particularly described as follows: Beginning at the centerline intersection of 21 st Street and Hoover Avenue; thence south 72° 14' 18" west, 25.21 feet; thence south 17° 45' 42" east, 53.90 feet to the true point of beginning; thence continuing south 17° 45' 42" east, 209.47 feet to a concave curve westerly with a radius of 27.00 feet; thence along said curve through a central angle of 90° 02' 26" an arc distance of 42.43 feet; thence leaving said curve south 72° 16' 45" west, 24.27 feet to a non tangenc curve concave westerly with a radius of 20.00 feet; thence along said curve through a central angle of 77° 55' 20" an arc distance of 27.20 feet to a tangent compound curve concave westerly with a radius of 760.00 feet; thence along said curve through a central angle of 12° 04' 44" an arc distance of 160.22 feet; thence leaving said curve north 17° 47' 56" west 61.65 EXHIBIT "A" feet along the westerly right of way of Hoover Avenue having a half right of way width of 40.00 feet; thence leaving said right of way north 72° 12' 08" east, 14.79 feet to the true point of beginning. PARCEL THREE: A portion of Harding Avenue (formerly 4th Ave) adjacent to Lots 7 through 10, inclusive, Block 107, according to Map thereof No. 348, filed in the County of San Diego, October 2, 1882, as vacated in the Resolution Authorizing an Order of Vacation recorded June 17, 2014, document no. 2014-250448, and more particularly described as follows: Beginning at the centerline intersection of Harding Avenue and 22nd Street; thence northerly along the centerline of Harding Avenue north 17° 48' 28" west, 40.00 feet to a point in the northerly right of way of 22nd Street; thence easterly along said right of way 1.00 feet to the true point of beginning; thence continuing along said right of way, 39.00 feet to a point of intersection of the easterly right of way of Harding Avenue, having a half right of way width of 40.00 feet and the northerly right of way of 22nd Street, having a half right of way width of 40.00 feet; thence northerly along the easterly right of way of Harding Avenue, north 17° 48' 28" west, 74.46 feet; thence leaving said right of way south 20° 04' 26" west, 63.51 feet; thence south 17° 48' 28" east, 24.27 feet to the true point of beginning. EXHIBIT "A" ORIGINAL SUBORDINATE COMPLETION GUARANTY [Paradise Creek Apartments Project/Phase 1] 1. Obligations Guaranteed. For valuable consideration, the adequacy and sufficiency of which is acknowledged, the undersigned ("Guarantor") unconditionally guarantees the timely completion of the construction required pursuant to Article 10 of that certain Disposition and Development Agreement, dated as of June 21, 2011, by and between the Community Development Commission -Housing Authority of the City of National City (the "Commission") and Paradise Creek Housing Partners, L.P. ("Partnership") (the "Construction" required by the "DDA"). This Guaranty is in addition to and independent of any other guaranty previously, concurrently or hereafter given to Commission by Guarantor. 2. Completion of Improvements By Guarantor. Guarantor irrevocably and unconditionally agrees that if for any reason (a) Partnership fails to diligently proceed with or complete the Construction in the manner and within the time limits set forth in the DDA, (b) Partnership fails to pay all costs of the Construction, or (c) Commission takes possession of the Property and the Improvements prior to the completion of the Construction, then, in any such event, and upon demand by Commission, Guarantor shall diligently complete the Construction in accordance with the terms of the DDA, all at Guarantor's sole cost and expense. In addition, Guarantor shall defend, indemnify and hold Commission harmless from and against all claims, demands, causes of action, liabilities, losses, costs and expenses (including, without limitation, costs of suit and reasonable attorneys' fees) arising from or in connection with any such event. Commission hereby agrees that if demand is made hereunder for Guarantor to complete the Construction, Guarantor shall have the right to have any undisbursed portion of the Commission Subordinate Loan applied to the costs of that Construction. 3. Remedies of Commission. If Guarantor fails to perform its obligations hereunder, then Commission may, in its sole and absolute discretion and without any obligation to do so, (a) elect to complete the Construction (with such changes to the General Contract and the Plans as Commission reasonably deems necessary), in which event Guarantor shall, upon demand, reimburse Commission for all reasonable expenditures made and reasonable costs incurred by Commission in connection with such completion, together with interest thereon at Commission's option at either the per annum rate of interest (the "Note Rate") set forth in that certain Commission Subordinate Loan Note of even date herewith made by Partnership in favor of Commission (the "Note") or the default rate of interest provided for in the Note (the "Default Rate"), or (b) from time to time and without first requiring performance on the part of Partnership or being required to exhaust or proceed against any or all security held by Commission, enforce performance by Guarantor of any obligation on the part of Guarantor to be performed hereunder, by action at law or in equity or both, in which event Commission shall be entitled to recover from Guarantor all losses, costs, damages, liabilities and expenses (including attorneys' fees and costs) sustained or incurred by Commission as a result of Guarantor's failure to perform its obligations hereunder, together with interest thereon at Commission's option at either the Note Rate or the Default Rate. 4. Reinstatement. All of Commission's rights pursuant to this Guaranty continue with respect to amounts previously paid to Commission on account of any obligations which are thereafter restored or returned by Commission, whether in a bankruptcy, reorganization, Page 1 insolvency, receivership or similar proceeding ("Insolvency Proceeding") of Partnership or for any other reason, all as though such amounts had not been paid to Commission, and Guarantor's liability under this Guaranty (and all its terms and provisions) shall be reinstated and revived, notwithstanding any surrender or cancellation of this Guaranty. Commission, in its sole discretion, may determine whether any amount paid to it must be restored or returned; provided, however, that if Commission elects to contest any claim for return or restoration, Guarantor agrees to indemnify and hold Commission harmless from and against all costs and expenses, including reasonable attorneys' fees, expended or incurred by Commission in connection with such contest. If any Insolvency Proceeding is commenced by or against Partnership or Guarantor, at Commission's election, Guarantor's obligations under this Guaranty shall immediately and without notice or demand become due and payable, whether or not then otherwise due and payable. 5. Authorization. Guarantor authorizes Commission, without notice and without affecting Guarantor's liability under this Guaranty, from time to time, whether before or after any revocation of this Guaranty, to alter, modify or amend the Plans, the General Contract or any of the relevant terms, covenants and conditions of the DDA. 6. Waivers. To the maximum extent permitted by law, Guarantor waives (a) all rights to require Commission to proceed against Partnership, or any other guarantor, or proceed against, enforce or exhaust any security for the Construction or to marshal assets or to pursue any other remedy in Commission's power whatsoever; (b) all defenses arising by reason of any disability or other defense of Partnership, the cessation for any reason of the liability of Partnership, any defense that any other indemnity, guaranty or security was to be obtained, any claim that Commission has made Guarantor's obligations more burdensome or more burdensome than Partnership's obligations; (c) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Guaranty, and all other notices or demands to which Guarantor might otherwise be entitled; (d) all conditions precedent to the effectiveness of this Guaranty; (e) all rights to file a claim in connection with the obligations in an Insolvency Proceeding filed by or against Partnership; and (f) all rights to require Commission to enforce any of its remedies. 7. Guarantor to Keep Informed. Guarantor warrants having established with Partnership adequate means of obtaining, on an ongoing basis, such information as Guarantor may require concerning all matters bearing on the risk of nonperformance of the Construction. Guarantor assumes sole, continuing responsibility for obtaining such information from sources other than from Commission. Commission has no duty to provide any information to Guarantor until Commission receives Guarantor's written request for specific information in Commission's possession and Partnership has authorized Commission to disclose such information to Guarantor. 8. Authorization. Where Partnership is a corporation, partnership or other entity, Commission need not inquire into or verify the powers or authority of those acting or purporting to act on behalf of Partnership, and this Guaranty shall be enforceable in reliance on the purported exercise of such powers or authority. Page 2 9. Assignments. Without notice to Guarantor, Commission may assign its rights with respect to the Construction and this Guaranty, in whole or in part, and may disclose to any prospective or actual purchaser any and all information Commission has or acquires concerning Guarantor and/or this Guaranty. 10. Counsel Fees and Costs. The prevailing party shall be entitled to attorneys' fees (including the allocated costs of Commission's in-house counsel and legal staff), and all other costs and expenses which it may incur in connection with the enforcement or preservation of its rights under, or defense of, this Guaranty or in connection with any other dispute or proceeding relating to this Guaranty, whether or not incurred in any Insolvency Proceeding, arbitration, litigation or other proceeding. 11. Integration/Severability/Amendments. This Guaranty is intended by Guarantor and Commission as the complete, final expression of their agreement concerning its subject matter. It supersedes all prior understandings or agreements with respect thereto and may be changed only by a writing signed by Guarantor and Commission. No course of dealing, or parol or extrinsic evidence shall be used to modify or supplement the express terms of this Guaranty. If any provision of this Guaranty is found to be illegal, invalid or unenforceable, such provision shall be enforced to the maximum extent permitted, but if fully unenforceable, such provision shall be severable, and this Guaranty shall be construed as if such provision had never been a part of this Guaranty and the remaining provisions shall continue in full force and effect. 12. Notice. Any notice given by any party under this Guaranty shall be effective only upon its receipt by the other party and only if (a) given in writing and (b) personally delivered or sent by United States mail, postage prepaid, and addressed to Commission or Guarantor at their respective addresses for notices indicated below. Guarantor and Commission may change the place to which notices, requests, and other communications are to be sent to them by giving written notice of such change to the other. 13. California Law. This Guaranty shall be governed by and construed according to the laws of California, and Guarantor submits to the nonexclusive jurisdiction of the state or federal courts in California. 14. Subordinate Obligation. Notwithstanding anything contained in this Guaranty to the contrary, Commission acknowledges and agrees that this Guaranty is subject and subordinate to a prior and superior guaranty made by Guarantor in favor of MUFG Union Bank, N.A., a national banking association. 15. Termination. This Guaranty shall terminate and be of no further force or effect upon completion of the Construction and payment of all costs thereof. [INTENTIONALLY LEFT BLANK] Page 3 Executed as of November 19, 2014. Guarantor acknowledges having received a copy of this Guaranty and having made each waiver contained in this Guaranty with full knowledge of its consequences. Address for notices sent to Commission: National City Housing Commission 303 East "B" Street National City, California 91764 Attn: Executive Director "GUARANTOR" THE RELATED COMPANIES, L.P., a New York limited partnership By: The Related Realty Group, Inc., a Delaware corporation Its: General Partner By: ichael J!'Brenner, EVP and CFO Address for notices sent to Guarantor: The Related Companies, L.P. 60 Columbus Circle New York, New York 10023 Attn: Michael J. Brenner Page 4 Executed as of November 19, 2014. Guarantor acknowledges having received a copy of this Guaranty and having made each waiver contained in this Guaranty with full knowledge of its consequences. Address for notices sent to Commission: National City Housing Commission 303 East "B" Street National City, California 91764 Attn: Executive Director "GUARANTOR" THE RELATED COMPANIES, L.P., a New York limited partnership By: The Related Realty Group, Inc., a Delaware corporation Its: General Partner ner, EVP and CFO Address for notices sent to Guarantor: The Related Companies, L.P. 60 Columbus Circle New York, New York 10023 Attn: Michael J. Brenner Page 4 Executed as of November 19, 2014. Guarantor acknowledges having received a copy of this Guaranty and having made each waiver contained in this Guaranty with full knowledge of its consequences. Address for notices sent to Commission: National City Housing Commission 303 East "B" Street National City, California 91764 Attn: Executive Director "GUARANTOR" THE RELATED COMPANIES, L.P., a New York limited partnership By: The Related Realty Group, Inc., a Delaware corporation Its: General Partner By: Michael J. renner, EVP and CFO Address for notices sent to Guarantor: The Related Companies, L.P. 60 Columbus Circle New York, New York 10023 Attn: Michael J. Brenner Page 4 ORIGINAL 44 ESTOPPEL CERTIFICATE MUFG UNION BANK, N.A. Commercial Real Estate Loan Administration 3151 East Imperial Highway, 1S` Floor Brea, CA 92821 MUFG UNION BANK, N.A. 200 Pringle Ave., Suite 355 Walnut Creek, CA 94596 Attention: CDF Head RE: Disposition and Development Agreement dated June 21, 2011 ("DDA") between the Community Development Commission -Housing Authority of the City of National City (the "Commission") and Paradise Creek Housing Partners, L.P. ("Developer") and Ground Lease for Phase I dated November 19, 2014 (the "Lease") between Commission, as lessor, and Developer as lessee, relating to the real property located in the City of National City, County of San Diego, State of California (the "Real Property"), and more particularly described on Exhibit "A" attached hereto. Terms not otherwise defined herein shall be given the meanings in the Lease. The Commission has been advised by Developer that Developer has applied to MUFG UNION BANK, N.A. ("Bank") for a loan in the amount of $21,812,588 (the "Loan") which shall be secured by, among other things, a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing in favor of Bank encumbering Developer's leasehold interest under the Lease and in and to the Real Property and all improvements now or hereafter situated on the Real Property (the "Deed of Trust"). Developer has also applied to Bank for tax credit equity contributions in an amount of approximately $22,426,814 ("Equity Investment"). Bank is relying upon this Estoppel Certificate (this "Estoppel Certificate") in making the Loan and the Equity Investment. For purposes of this Estoppel Certificate, to the fullest extent the context so permits, (i) the term "Transfer" shall mean any transfer of Developer's interest in the Real Property by judicial or nonjudicial foreclosure, trustee's sale or any other action or proceeding for the enforcement of the Deed of Trust, by Bank's exercise of its rights under the assignment of rents and leases contained in the Deed of Trust or any of the other Loan documents, or by deed in lieu of foreclosure; and (ii) the term "Bank" shall mean Bank, its successors and assigns and/or the purchaser through or following a Transfer of the Real Property. With such understanding, the Commission hereby states, declares, represents, warrants and certifies for the benefit of Bank, that as of the date hereof: 1. DDA and Ground Lease. Attached hereto as Exhibit "B" is a true, correct and complete copy of the DDA and all amendments thereto (collectively, the "DDA") and attached hereto as Exhibit "C" is a true and correct and complete copy of the Lease and all amendments 383/014742-0850 7488692.5 all/11/14 thereto (collectively, the "Lease"). The DDA and the Lease have been duly authorized, executed and delivered by the Commission and are in full force and effect. The DDA, the Lease and the documents attached as exhibits thereto, along with the Easement Agreement (Fire Lane) which is being recorded concurrently herewith, constitute the entire agreement between the Commission and Developer pertaining to the Real Property (including, without limitation, all amendments, assignments and subordination or nondisturbance agreements). Neither the DDA nor the Lease shall be amended, supplemented or modified except as described above and attached hereto. There are no other agreements, whether oral or written, between Developer and the Commission concerning the Real Property. 2. Conditions Precedent. Each and every covenant, condition and obligation contained in the DDA required to be performed or satisfied as of the date hereof, including, without limitation, the conditions precedent specified in Sections 7.8, 7.9, 7.10, 9.3.5 and 11.4 of the DDA have been performed or satisfied by Developer or waived by the Commission. 3. Default under Phase II. The Real Property subject to the Lease is the first phase of a two -phased project pursuant to the terms of the DDA. The Real Property constitutes Phase I and certain adjoining property constitutes Phase II. The Commission acknowledges and agrees that from and after the date of this Estoppel Certificate, in the event of a default or a failure of a condition precedent contained in the DDA related to Phase II, the Commission shall not terminate the DDA as to Phase I and the Commission shall not exercise any right or remedy under the DDA or any related agreement with respect to the Real Property or the Developer of the Real Property. 4. Environmental Remediation. The final Property Mitigation Plan and final Site Preparation Plan for the Real Property are described on Exhibit "D" attached hereto. The Commission has completed all work required by the DTSC, the Property Mitigation Plan, the Site Preparation Plan, and Section 4.4 of the DDA required to be completed prior to the close of escrow for the Real Property and DTSC has issued a DTSC Partial Certificate with respect to such work. Commission agrees not to modify, amend or terminate the Property Mitigation Plan or the Site Preparation Plan as it relates to the Real Property without the prior written consent of Bank. 5. Approvals of Commission. The Commission has approved all design documents, plans, bid packages, construction contracts and other matters required to be approved by Commission pursuant to Article 8 of the DDA and the project budget and evidence of financing pursuant to Section 11.4 of the DDA. 6. No Right to Terminate DDA. The Commission has no further right to terminate the DDA pursuant to Sections 5.3, 6.1.2, 8.8, 9.8 or 11.8 of the DDA. 7. Financing Plan. The Commission has approved the financing plan for Phase I in accordance with Section 9.2 of the DDA. 8. Schedule of Performance. The Commission hereby waives any failure of Developer to satisfy the performance milestones contained in the Schedule of Performance 383/014742-0850 7488692.5 all/I 1/14 -2- attached as Exhibit "D" to the DDA which were required to be performed prior to the date hereof. 9. Priority of Ground Lease. The Commission currently holds all of the right, title and interest of the "Commission" or "Landlord" under the Lease and has not assigned, hypothecated, encumbered, mortgaged, pledged or subordinated any of its interest under the Lease or any of its interest in the Real Property (or otherwise leased or encumbered any of the Real Property except pursuant to the Lease) in whole or in part. The Commission agrees that any mortgage, deed of trust or other encumbrance on the fee estate in the Real Property shall be junior and subordinate to the Lease, the Deed of Trust, and any other leasehold mortgage, and the Commission agrees to execute, acknowledge (if appropriate) and deliver any additional documents reasonably requested by Bank to confirm the foregoing. The Commission recognizes Developer identified above as the holder of the leasehold interest in the Real Property and the "Developer" under the Lease. 10. Lease Term. The Lease term shall commence as of the date the memorandum of the Lease records in the Official Records of the County of San Diego, State of California (the "Commencement Date") and the Lease term shall expire on the ninety-ninth (99th) anniversary of the date on which a notice of completion with respect to the improvements constructed on the Real Property records in the Official Records of the County of San Diego, State of California (the "Termination Date") unless sooner terminated pursuant to the terms of the Lease. 11. Rent. Developer shall make all of its rent and other payments directly to Commission under the Lease (and not to any receiver, assignee, property management company or other person or entity). The current annual rent under the Lease is $75,000 and is subject to increase as set forth in Section 4.1 of the Lease. No rent is due until the earlier of the date the Loan converts to its permanent phase or the third anniversary of the Commencement Date of the Lease. No additional rent or charge (including, without limitation, as applicable, taxes, maintenance, operating expenses or otherwise) that has been billed to Developer by The Commission or, to Commission's knowledge, by any other party, is overdue. 12. Security Deposit. No amounts have been paid by Developer to or for the account of Commission by way of any deposit as security or for any other purpose, the return of which Developer would be entitled. 13. No Defaults. No default, or any event or condition which, with the passing of time or giving of notice or both, would constitute a default, on the part of the Commission, or, to the Commission's knowledge, on the part of Developer, exists under the DDA or the Lease in the performance of the terms, covenants and conditions of the DDA or the Lease required to be performed on the part of Developer and Commission and no event has occurred which authorizes, or with the lapse of time or with the giving of notice or both, will authorize either Commission or Developer to terminate the DDA or the Lease. The Commission has no existing defenses as to its obligations under the DDA or the Lease and claims no offsets against enforcement of the Lease by Developer or counterclaim against Developer. To the Commission's actual knowledge, Developer has no defense, set -offs, basis for withholding rent, claims or counterclaims against Commission for any failure of performance of any of the terms of the DDA or the Lease. 383/0 I 4742-0850 7488692.5 all/I I/14 -3- 14. Mortgagee Protections; Right of Bank As Tax Credit Investor. The Commission agrees that Bank shall constitute a "Mortgagee" and the Deed of Trust shall constitute a "Mortgage" within the meaning of the Lease, including, without limitation, Section 18 of the Lease, such rights being incorporated herein by reference for the benefit of Bank as if fully set forth, and, to the extent such consent is required under the Lease, the Commission hereby consents to the Deed of Trust and the other security interests to be given to Bank, including, without limitation, an assignment of Developer's interest in rents, issues and profits of the Real Property. The execution and delivery by Developer of the Deed of Trust in favor of Bank, or any subsequent modification thereof, will constitute neither a breach of Developer's obligations as Developer under the Lease nor an event of default thereunder. Foreclosure of the Deed of Trust or any sale thereunder, whether by judicial proceedings or by virtue of any power of sale contained in the Deed of Trust, or any conveyance of the leasehold interest under the Lease from Developer to Bank by virtue of any deed in lieu of foreclosure or other appropriate proceedings in the nature thereof, shall not require the consent of the Commission or constitute of breach of any provision or of a default under the Lease. The Commission shall recognize Bank as Developer under the Lease following any Transfer, subject to the obligations of Bank to comply with the Lease and cure any defaults which are reasonably susceptible of cure by Bank as provided in Section 18 of the Lease. In addition thereto, Commission agrees that the Bank as Tax Credit Investor under the partnership agreement of Developer has the right in certain circumstances to remove one or more of the general partners of Developer. Commission agrees that the removal of one or more of the general partners of Developer and the replacement thereof by Bank or its affiliate is hereby approved by Commission and shall not constitute a default under the DDA, the Ground Lease or under any loan any Mortgage in favor of the Commission 15. No Merger. No merger of Developer's interest in the Real Property into the Commission's interest in the Real Property shall result or be deemed to result by reason of ownership of Developer's interest and the Commission's interest by the same party or by reason of any other circumstances, without the prior written consent of Bank. 16. No Termination or Amendment. During the term of the Loan and until reconveyance of the Deed of Trust, the Commission will not terminate or enter into any agreement with any other party to terminate, cancel, surrender, amend, alter, modify or extend the Lease or any interest of Developer thereunder without prior written consent of Bank and any such purported agreement shall not be valid or effective without the prior written consent of Bank. Without limiting the generality of the foregoing, Bank's prior written consent shall be required prior to Developer being permitted to terminate the Lease following occurrence of damage, destruction, a taking or abandonment of the Lease. 17. No Other Agreements. Except as otherwise provided in the Lease, the Commission has no right or option to acquire any of Developer's right, title or interest in or to the Real Property or any improvements or personal property located thereon. There are no provisions for, and the Commission has no rights with respect to, terminating the Lease or increasing the rent payable thereunder, except as expressly set forth in the Lease. 18. Bank to Act as Insurance Trustee. During the term of the Loan and until reconveyance of the Deed of Trust, the Commission agrees that the Bank shall be designated as the Insurance Trustee under the Lease. 383/014742-0850 7488692.5 all/11/14 -4- 19. No Liability. The Commission agrees that by acceptance of this Estoppel Certificate or by acceptance of the Deed of Trust or other encumbrance of the Lease, Bank has not become liable under the terms of the Lease. Developer and the Commission agree that Bank shall be so liable only if Bank acquires ownership of the leasehold interest in the Real Property pursuant to a Transfer, and then only for such period of time as Bank holds such leasehold interest. The Commission further agrees that Bank's personal liability shall be limited to Bank's interest in the Real Property, notwithstanding any assumption of the Lease or entering into a new lease by Bank. 20. No Litigation. There are no actions, whether voluntary or otherwise, pending against the Commission under any insolvency, bankruptcy or other debtor relief laws of the United States or any state. The Commission has not received written notice of any pending eminent domain proceedings or other governmental actions or any judicial actions of any kind against the Commission's interest in the Real Property. The Commission has not received written notice that it or Developer is in violation of any governmental law or regulation applicable to the Real Property, the interests therein or the operation thereon, including, without limitation, any environmental laws or the Americans with Disabilities Act, and has no reason to believe that there are grounds for any claim of any such violation. 21. Notice of Termination. In the event of a foreclosure of the Deed of Trust or assignment in lieu thereof, Bank elects to terminate the provisions of the Lease referenced in Sections 8.21 and 17.2 of the Lease. 22. Insurance. Bank may be named as additional insured and loss payee under insurance coverages carried by Developer and may participate in any settlement of proceeds therefrom. 23. No Liability. The Commission agrees that Bank has not become liable under the terms of the Lease by acceptance of this Certificate or by acceptance of the Deed of Trust or other encumbrance of the Real Property. 24. Representations. The Commission represents and warrants that: (i) the Commission is duly organized and existing; (ii) the persons executing this Estoppel Certificate are duly authorized to execute and deliver the same on behalf of the Commission; (iii) the Commission has taken such formal action of its governing body as may be required by law to bind Commission, if any, and that the Commission is formally bound to the provisions of this Estoppel Certificate; and (iv) entering into this Estoppel Certificate does not violate any provision of any other agreement to which the Commission is bound. 25. Notices. The Commission agrees to deliver to Bank copies of all notices which the Commission delivers to Developer substantially concurrently with the giving of such notice to Developer and this Estoppel Certificate constitutes written request by Developer to the Commission to deliver to Bank copies of all such notices at the following addresses for Bank: 383/014742-0850 7488692.5 aI 1/11/14 -5- MUFG UNION BANK, N.A. Commercial Real Estate Loan Administration 3151 East Imperial Highway, ls` Floor Brea, CA 92821 Facsimile: (949) 553-7123 Attn: Manager Reference: Paradise Creek Apartments With a Copy to: MUFG UNION BANK, N.A. 200 Pringle Avenue, Suite 355 Walnut Creek, CA 94596-2455 Facsimile: (925) 947-2455 Attn: Manager Reference: Paradise Creek Apartments And: MUFG UNION BANK, N.A. 200 Pringle Ave., Suite 355 Walnut Creek, CA 94596 Attention: CDF Head 26. Successors. This Estoppel Certificate shall inure to the benefit of the successors and assigns of Bank. 27. Reliance. The Commission has executed this Estoppel Certificate for the benefit and protection of Bank with full knowledge that Bank is relying on this Estoppel Certificate in making the Loan to and Equity Investment in Developer. Upon the request of Bank, but no more often than twice in any calendar year, the Commission and Developer agree to execute and deliver to Bank an estoppel certificate setting forth the substance of the provisions set forth in this Estoppel Certificate. In addition, the Commission hereby agrees to consent to the encumbrance of the Real Property and to execute estoppel certificates substantially similar to this Estoppel Certificate in favor of any other lender whose loan is secured by a mortgage or deed of trust encumbering the Real Property. 28. Estoppel. This Estoppel Certificate constitutes, as against the Commission and for the benefit of Bank and its successors and assigns, an estoppel as to the information contained herein and a waiver of any right of the Commission to disaffirm or contest the accuracy of such information. To the extent inconsistent with the Lease, this Estoppel Certificate shall constitute an amendment to the Lease. 383/014742-0850 7488692.5 all/11/14 [Signature Page Follows] -6- IN WITNESS WHEREOF, the Commission has executed this Estoppel Certificate as of November 19, 2014. APPROVED AS TO FORM: CHRISTENSEN & SPATH LLP, Commission Special Counsel Bv: Walter F. Spath 383/014742-0850 7488692.5 all/11/14 COMMISSION: COMMUNITY DEVELOPMENT COMMISSION - HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By. >>.4-=_ Name: Leslie Deese Title: Executive Director -7- EXHIBIT "A" LEGAL DESCRIPTION 383/014742-0850 7488692.5 all/11/14 EXHIBIT "B" DDA 383/014742-0850 7488692.5 al 1/11/14 EXHIBIT "C" GROUND LEASE [See Attached] 383/014742-0850 7488692.5 al1/11/14 EXHIBIT "D" PROPERTY MITIGATION PLAN AND SITE PREPARATION PLAN 383/014742-0850 7488692.5 al 1/11/14 ESTOPPEL CERTIFICATE February 20, 2017 MUFG UNION BANK, N.A. 200 Pringle Ave., Suite 355 Walnut Creek, CA 94596 RE: Paradise Creek Housing Partners, L.P. ("Partnership"). Ladies and Gentlemen: The Community Development Commission -Housing Authority of the City of National City ("Commission") made a loan to the Partnership in the original principal amount of $6,000,000.00 ("Commission Loan"). The Commission Loan is evidenced and secured by various documents ("Commission Loan Documents"). The Commission is advised that MUFG Union Bank, N.A., is a partner in the Partnership and is making an equity installment to the Partnership and has requested that the Commission execute this Estoppel Certificate in connection therewith. Therefore, the Commission represents and warrants to MUFG Union Bank, N.A., as follows: 1) To the best knowledge of the undersigned as of the date of this letter, no default under the Commission Loan Documents has occurred or is continuing. 2) To the best knowledge of the undersigned as of the date of this letter, no event has occurred that, with notice or passage of time, or both, would constitute a default under the Commission Loan Documents. 3) To the best knowledge of the undersigned as of the date of this letter, each and every covenant, condition and obligation to funding the Commission Loan has been satisfied, completed or waived. 4) To the best knowledge of the undersigned as of the date of this letter, all matters required to be approved by the Commission with respect to the Commission Loan Documents have been approved. 5) The Commission Loan is cross -defaulted with all other loans and obligations secured by the property which secures the Commission Loan, but the Commission Loan has not otherwise been cross -defaulted or cross -collateralized. 6) The terms of this Estoppel Certificate bind assignees of the Commission Loan and the Commission will not assign the Commission Loan without providing the assignee with a copy of this Estoppel Certificate. 7) The person executing this Estoppel Certificate on the Commission's behalf represents and warrants that: (i) the Commission is duly organized and existing; (ii) the person executing this Estoppel Certificate is duly authorized to execute and deliver the same on behalf of the Commission; (iii) the Commission is not required to take any formal action in order to bind the Commission as set forth in this Estoppel Certificate, and the Commission is bound by the provisions of this Estoppel Certificate; and (iv) executing and delivering this Estoppel Certificate does not violate any provision of any other agreement to which the Commission is bound. APPROVED AS TO FORM: CHRISTENSEN & SPATH LLP Commission , pecial Counsel By. alter . p. h III, Esq. COMMISSION: COMMUNITY DEVELOPMENT COMMISSION - HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY By: _- Name: Leslie Deese Title: Executive Director -2- Charles B. Christensen Walter F. Spath III Joel B. Mason Jose A. Garcia Erin C. Hale February 16, 2017 Carlos Aguirre Community Development Program Manager Housing, Grants, and Asset Mgmt. Dept. City of National City 140 East 12th Street, Suite B National City, CA 91950-4301 Carlos: Re: WTOD Phase I — Union Bank Estoppel Christensen & Spath IIP 550 West C Street . Suite 1660 San Diego. California 92101 {t} 61 9.236.9343 {f} 61 9.236.8307 Enclosed please find the Estoppel Certificate which I signed off on. If you have any questions or need any additional information, please do not hesitate to contact me at 619-255-6587. Sine rely, Walter F Enclosure II, Esq. INDEMNITY AGREEMENT This Indemnity Agreement (the "Agreement") is made and entered into as of this 1st day of November, 2016, by and between The Related Companies of California, LLC, a California limited liability company ("TRCC"), and the City of National City, a California municipal corporation (the "City"), with reference to the following recitals of fact: RECITALS: A. WHEREAS, TRCC is a member of Related/Paradise Creek II Development Co., LLC, a California limited liability company (the "Administrative General Partner"), the administrative general partner of Paradise Creek II Housing Partners, L.P., a California limited partnership (the "Partnership"). B. WHEREAS, the Partnership owns a leasehold interest in approximately 1.99 acres of land on Hoover Avenue, in the City of National City, County of San Diego, State of California (the "Property"). C. WHEREAS, the Partnership intends to develop upon the Property a 92-unit affordable rental housing project for person and families of very low and low-income (the "Phase II Project"). D. WHEREAS, the State of California Department of Housing and Community Development ("HCD") has awarded grant funds from the Affordable Housing and Sustainable Communities Program to TRCC and the City in an amount equal to $5,480,271 for use in connection with the Phase II Project (the "AHSC Grant"). E. WHEREAS, the AHSC Grant is made pursuant to the terms of (i) that certain Standard Agreement Number 14-AHSC-10481, dated as of November , 2016, and executed by and among HCD, TRCC and the City (the "Standard Agreement"), (ii) that certain Disbursement Agreement dated for reference purposes as of November 1, 2016, by and among HCD, TRCC and the City (the "Disbursement Agreement"), and (iii) that certain Declaration of Restrictive Covenants for the Development and Operation of Affordable Housing dated November 1, 2016 for reference purposes only, by and among the Partnership and HCD (the "Covenant," and collectively with the Standard Agreement and the Disbursement Agreement, the "AHSC Documents"). F. WHEREAS, the AHSC Grant consists of two components: (i) $4,550,000 to be used for the development of Housing -Related Infrastructure as more particularly described in Exhibit A-1 to the Standard Agreement and Exhibit B to the Disbursement Agreement (the "HRI"), and (ii) $930,271 to be used for the development of Transit -Related Infrastructure as more particularly described in Exhibit A-2 to the Standard Agreement and Exhibit B to the Disbursement Agreement (the "TRI"). G. WHEREAS, the City shall complete the TRI and TRCC shall cause the Partnership to complete the HRI in connection with the development of the Phase II Project. H. WHEREAS, under the AHSC Documents, TRCC and the City are jointly and severally liable for the completion of the TRI and the HRI and all other obligations under the AHSC Documents. Indemnity Agreement 50145866.5 J. WHEREAS, TRCC and the City wish to agree to indemnify one another, and certain related parties, against their respective responsibilities to complete the HRI and TRI under the AHSC Documents in accordance with the terms of this Agreement. NOW, THEREFORE, in consideration of the foregoing recitals, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, TRCC and the City hereby agree as follows: AGREEMENT: 1. Defined Terms. For purposes hereof, the following terms shall have the meanings designated below: (a) TRCC's Obligations. "TRCC Obligations" shall mean the obligations of TRCC to: (i) complete the HRI in accordance with the terms and conditions of the AHSC Documents; (ii) perform its obligations under the AHSC Documents and (iii) cause the Partnership to perform its obligations under the Covenant. (b) City's Obligations. "City Obligations" shall mean the obligations of the City to: (i) complete the TRI in accordance with the terms and conditions of the AHSC Documents; and (ii) perform its obligations under the AHSC Documents. 2. TRCC Indemnity. TRCC shall indemnify, defend, protect and hold the City, and its agents, employees, successors and assigns (each, a "City Party," and collectively, the "City Parties") harmless from and against any actual and reasonable loss, cost, damage, liability, demand, action, cause of action, suit or expense (including, without limitation, reasonable attorneys' fees and court costs) incurred by any City Party as a result of, or related to, the TRCC Obligations; provided, however, the foregoing indemnity shall not apply to the extent any such liability results from negligence, fraud, or willful misconduct on the part of any one or more of the City Parties. 3. City Indemnity. The City shall indemnify, defend, protect and hold TRCC, the Administrative General Partner, the Partnership and their respective affiliates, agents, employees, partners, members, successors and assigns (each, a "Related Party" and, collectively, the "Related Parties") harmless from and against any actual and reasonable loss, cost, damage, liability, demand, action, cause of action, suit or expense (including, without limitation, reasonable attorneys' fees and court costs) incurred by any Related Party as a result of or related to the City Obligations; provided, however, the foregoing shall not apply to the extent any such liability results from negligence, fraud, or willful misconduct on the part of any one or more of the Related Parties. 4. Payment. Within thirty (30) calendar days following written demand therefor, TRCC and the City shall pay to the applicable indemnitees hereunder any amount owed to such indemnitees under the terms of this Agreement. 5. Attorneys Fees and Expenses. Any party found by a court of competent jurisdiction or by an arbitrator to have breached or to be breaching this Agreement shall be liable for the reasonable attorneys' fees and costs actually incurred by the injured party in enforcing this Agreement, remedying the breach, or recovering damages for any such breach, including rescinding this Agreement and fully prosecuting its rights and claims surrendered hereby. 2 Indemnity Agreement 50145866.5 6. Governing Law. This Agreement shall be construed and interpreted in accordance with the substantive laws of the State of California, without regard to principles of conflicts of laws. 7. Headings. The headings used herein are for convenience only, and do not limit or alter the terms of this Agreement or in any way affect the meaning or interpretation of this Agreement. 8 Successors and Assigns. This Agreement shall be binding on the parties hereto, and any and all heirs, administrators, executors, successors, creditors and assigns thereof. 9. Validity. The invalidity or unenforceability of any terms or provisions of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect and, if such unenforceable provision hereof is enforceable in any part or to any lesser extent, such provision shall be enforceable to the greatest extent permissible under applicable law. 10. Remedies Cumulative. Each right and remedy provided for herein shall be cumulative and non-exclusive, and shall be in addition to every other right or remedy provided for herein or now or hereafter existing at law or in equity or by statute or otherwise. 11. Entire Agreement. This Agreement embodies the entire agreement and understanding between TRCC and the City with respect to its subject matter and supersedes all prior agreements and understandings, written and oral, between TRCC and the City related to that subject matter. (document continues on following page) 3 Indemnity Agreement 50145866.5 IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the day and year first set forth above. "City" City of National City, a California municipal corporation Leslie Deese, City Manager APPROVED AS TO FORM: Christensen& Spath LLP, City Special Counsel By: Li) ter F.th III, Esq., Partner (signatures continue on following page) S-1 Indemnity Agreement 50145866.5 "TRCC" The Related Companies of California, LLC, a California limited liability company By: ./N.,0%-•1-./4-- Frank Cardone, President S-2 Indemnity Agreement 50145866.5 ORIGINAL ASSIGNMENT OF ARCHITECTURAL AGREEMENTS AND PLANS AND SPECIFICATIONS [Paradise Creek Apartments Project/Phase 1] FOR VALUE RECEIVED, the undersigned, PARADISE CREEK HOUSING PARTNERS, L.P., a California limited partnership ("Developer"), assigns to COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY, a public body, corporate and politic ("Commission"), all of its right, title and interest in and to: 1. All architectural, design, engineering and development agreements, and any and all amendments, modifications, supplements, addenda and general conditions thereto (collectively, "Architectural Agreements"), and 2. All plans and specifications, shop drawings, working drawings, amendments, modifications, changes, supplements, general conditions and addenda thereto (collectively, "Plans and Specifications"), heretofore or hereafter entered into or prepared by any architect, engineer or other person or entity (collectively, "Architect"), for or on behalf of Developer in connection with the construction of the Improvements on the Real Property described on Exhibit "A" attached hereto. The Plans and Specifications, as of the date hereof, are those which Developer has heretofore, or will hereafter deliver to Commission. The Architectural Agreements include, but are not limited to, the architectural agreement or contract between Developer and Pyatock Architects, Inc., dated November 30, 2011, and the architectural agreement or contract between Developer and Pyatock Architects, Inc., dated May 14, 2014. This ASSIGNMENT OF ARCHITECTURAL AGREEMENTS AND PLANS AND SPECIFICATIONS ("Assignment") constitutes a present, absolute and unconditional assignment to Commission. Developer acknowledges that by accepting this Assignment, Commission does not assume any of Developer's obligations under the Architectural Agreements with respect to the Plans and Specifications. Developer represents and warrants to Commission that: (a) all Architectural Agreements entered into by Developer are in full force and effect and are enforceable in accordance with their terms and no default, or event which would constitute a default after notice or the passage of time, or both, exists with respect to said Architectural Agreements; (b) all copies of the Architectural Agreements and Plans and Specifications delivered to Commission are complete and correct; and (c) Developer has not assigned any of its rights under the Architectural Agreements or with respect to the Plans and Specifications other than to [insert Construction Lender], which assignment shall be senior and superior to the assignment contemplated hereby in all respects. This Assignment shall be governed by the laws of the State of California, except to the extent that federal laws preempt the laws of the State of California, and Developer consents to the jurisdiction of any federal or state court within the State of California having proper venue for the filing and maintenance of any action arising hereunder and agrees that the prevailing Page 1 party in any such action shall be entitled, in addition to any other recovery, to reasonable attorneys' fees and costs. This Assignment shall be binding upon and inure to the benefit of the heirs, legal representatives, assigns, and successors -in -interest of Developer and Commission. The attached Architect's/Engineer's Consent and Exhibit "A" are incorporated by reference. Executed by Developer as of November 19, 2014. "Developer" PARADISE CREEK HOUSING PARTNERS, L.P., a California limited partnership By: RELATED/PARADISE CREEK DEVELOPMENT CO., LLC, a California limited liability company, its Administrative General Partner Frank Cardone, Vice President By: CHW PARADISE CREEK DEVELOPMENT CO., LLC, a California limited liability company, its Managing General Partner By: COMMUNITY HOUSING WORKS, a California nonprofit public ► - - it corportion, its Managi g Me ber B. ilson Senior Vice President Page 2 ARCHITECT'S/ENGINEER'S CONSENT [Paradise Creek Apartments Project/Phase 1] The undersigned architect and/or engineer (collectively referred to as "Architect") hereby consents to the foregoing Assignment to which this Architect's/Engineer's Consent ("Consent") is a part, and acknowledges that there presently exists no unpaid claims due to the Architect arising out of the preparation and delivery of the Plans and Specifications to Developer and/or the performance of the Architect's obligations under the Architectural Agreements described in the Assignment. Architect agrees that, by virtue of the foregoing Assignment, Commission has succeeded to all of Developer's right, title and interest in, to and under the Architectural Agreements and the Plans and Specifications and, therefore, so long as the Architect continues to receive the compensation called for under the Architectural Agreements, Commission and its successors and assigns may, at their option, use and rely on the Plans and Specifications for the purposes for which they were prepared, and Architect will continue to perform its obligations under the Architectural Agreements for the benefit and account of Commission and its successors and assigns in the same manner as if performed for the benefit or account of Developer in the absence of the Assignment. Architect warrants and presents that it/he has no knowledge of any prior assignment(s) of any interest in either the Plans and Specifications and/or the Architectural Agreements. Except as otherwise defined herein, the terms used herein shall have the meanings given them in the Assignment. Executed as of November 19, 2014. Pyato¢k Architects, Inc. By: �--- Print Name: Coatis ta,. CA -Col r A-1A- lts: .v.1 (At, G•o,o. Page 3 ARCHITECT'S/ENGINEER'S CONSENT [Paradise Creek Apartments Project/Phase 1] The undersigned architect and/or engineer (collectively referred to as "Architect") hereby consents to the foregoing Assignment to which this Architect's/Engineer's Consent ("Consent") is a part, and acknowledges that there presently exists no unpaid claims due to the Architect arising out of the preparation and delivery of the Plans and Specifications to Developer and/or the performance of the Architect's obligations under the Architectural Agreements described in the Assignment. Architect agrees that, by virtue of the foregoing Assignment, Commission has succeeded to all of Developer's right, title and interest in, to and under the Architectural Agreements and the Plans and Specifications and, therefore, so long as the Architect continues to receive the compensation called for under the Architectural Agreements, Commission and its successors and assigns may, at their option, use and rely on the Plans and Specifications for the purposes for which they were prepared, and Architect will continue to perform its obligations under the Architectural Agreements for the benefit and account of Commission and its successors and assigns in the same manner as if performed for the benefit or account of Developer in the absence of the Assignment. Architect warrants and presents that it/he has no knowledge of any prior assignment(s) of any interest in either the Plans and Specifications and/or the Architectural Agreements. Except as otherwise defined herein, the terms used herein shall have the meanings given them in the Assignment. Executed as of November 19, 2014. Pyatock Architects, Inc. By: Print Name: CANA N.. (A ,ns �j,,�. •A LA - Its: G2ritNCtPAt, b G00 Page 3 EXHIBIT "A" PROPERTY DESCRIPTION That certain real property situated in the City of National City, County of San Diego, State of California, described as follows: All that certain real property in the City of National City, County of San Diego, State of California, described as Parcel 1 in that certain Certificate of Compliance No. 2012-04 LS, SC, recorded in the Official Records of San Diego County on August 20, 2013, as Document No. 2013-0521150. INDEMNITY AGREEMENT This Indemnity Agreement (the "Agreement") is made and entered into as of this 1st day of November, 2016, by and between The Related Companies of California, LLC, a California limited liability company ("TRCC"), and the City of National City, a California municipal corporation (the "City"), with reference to the following recitals of fact: RECITALS: A. WHEREAS, TRCC is a member of Related/Paradise Creek II Development Co., LLC, a California limited liability company (the "Administrative General Partner"), the administrative general partner of Paradise Creek II Housing Partners, L.P., a California limited partnership (the "Partnership"). B. WHEREAS, the Partnership owns a leasehold interest in approximately 1.99 acres of land on Hoover Avenue, in the City of National City, County of San Diego, State of California (the "Property"). C. WHEREAS, the Partnership intends to develop upon the Property a 92-unit affordable rental housing project for person and families of very low and low-income (the "Phase II Project"). D. WHEREAS, the State of California Department of Housing and Community Development ("HCD") has awarded grant funds from the Affordable Housing and Sustainable Communities Program to TRCC and the City in an amount equal to $5,480,271 for use in connection with the Phase II Project (the "AHSC Grant"). E. WHEREAS, the AHSC Grant is made pursuant to the terms of (i) that certain Standard Agreement Number 14-AHSC-10481, dated as of November , 2016, and executed by and among HCD, TRCC and the City (the "Standard Agreement"), (ii) that certain Disbursement Agreement dated for reference purposes as of November 1, 2016, by and among HCD, TRCC and the City (the "Disbursement Agreement"), and (iii) that certain Declaration of Restrictive Covenants for the Development and Operation of Affordable Housing dated November 1, 2016 for reference purposes only, by and among the Partnership and HCD (the "Covenant," and collectively with the Standard Agreement and the Disbursement Agreement, the "AHSC Documents"). F. WHEREAS, the AHSC Grant consists of two components: (i) $4,550,000 to be used for the development of Housing -Related Infrastructure as more particularly described in Exhibit A-1 to the Standard Agreement and Exhibit B to the Disbursement Agreement (the "HRI"), and (ii) $930,271 to be used for the development of Transit -Related Infrastructure as more particularly described in Exhibit A-2 to the Standard Agreement and Exhibit B to the Disbursement Agreement (the "TRI"). G. WHEREAS, the City shall complete the TRI and TRCC shall cause the Partnership to complete the HRI in connection with the development of the Phase II Project. H. WHEREAS, under the AHSC Documents, TRCC and the City are jointly and severally liable for the completion of the TRI and the HRI and all other obligations under the AHSC Documents. Indemnity Agreement 50145866.5 J. WHEREAS, TRCC and the City wish to agree to indemnify one another, and certain related parties, against their respective responsibilities to complete the HRI and TRI under the AHSC Documents in accordance with the terms of this Agreement. NOW, THEREFORE, in consideration of the foregoing recitals, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, TRCC and the City hereby agree as follows: AGREEMENT: 1. Defined Terms. For purposes hereof, the following terms shall have the meanings designated below: (a) TRCC's Obligations. "TRCC Obligations" shall mean the obligations of TRCC to: (i) complete the HRI in accordance with the terms and conditions of the AHSC Documents; (ii) perform its obligations under the AHSC Documents and (iii) cause the Partnership to perform its obligations under the Covenant. (b) City's Obligations. "City Obligations" shall mean the obligations of the City to: (i) complete the TRI in accordance with the terms and conditions of the AHSC Documents; and (ii) perform its obligations under the AHSC Documents. 2. TRCC Indemnity. TRCC shall indemnify, defend, protect and hold the City, and its agents, employees, successors and assigns (each, a "City Party," and collectively, the "City Parties") harmless from and against any actual and reasonable loss, cost, damage, liability, demand, action, cause of action, suit or expense (including, without limitation, reasonable attorneys' fees and court costs) incurred by any City Party as a result of, or related to, the TRCC Obligations; provided, however, the foregoing indemnity shall not apply to the extent any such liability results from negligence, fraud, or willful misconduct on the part of any one or more of the City Parties. 3. City Indemnity. The City shall indemnify, defend, protect and hold TRCC, the Administrative General Partner, the Partnership and their respective affiliates, agents, employees, partners, members, successors and assigns (each, a "Related Party" and, collectively, the "Related Parties") harmless from and against any actual and reasonable loss, cost, damage, liability, demand, action, cause of action, suit or expense (including, without limitation, reasonable attorneys' fees and court costs) incurred by any Related Party as a result of or related to the City Obligations; provided, however, the foregoing shall not apply to the extent any such liability results from negligence, fraud, or willful misconduct on the part of any one or more of the Related Parties. 4. Payment. Within thirty (30) calendar days following written demand therefor, TRCC and the City shall pay to the applicable indemnitees hereunder any amount owed to such indemnitees under the terms of this Agreement. 5. Attorneys Fees and Expenses. Any party found by a court of competent jurisdiction or by an arbitrator to have breached or to be breaching this Agreement shall be liable for the reasonable attorneys' fees and costs actually incurred by the injured party in enforcing this Agreement, remedying the breach, or recovering damages for any such breach, including rescinding this Agreement and fully prosecuting its rights and claims surrendered hereby. 2 Indemnity Agreement 50145866.5 6. Governing Law. This Agreement shall be construed and interpreted in accordance with the substantive laws of the State of California, without regard to principles of conflicts of laws. 7. Headings. The headings used herein are for convenience only, and do not limit or alter the terms of this Agreement or in any way affect the meaning or interpretation of this Agreement. 8 Successors and Assigns. This Agreement shall be binding on the parties hereto, and any and all heirs, administrators, executors, successors, creditors and assigns thereof. 9. Validity. The invalidity or unenforceability of any terms or provisions of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect and, if such unenforceable provision hereof is enforceable in any part or to any lesser extent, such provision shall be enforceable to the greatest extent permissible under applicable law. 10. Remedies Cumulative. Each right and remedy provided for herein shall be cumulative and non-exclusive, and shall be in addition to every other right or remedy provided for herein or now or hereafter existing at law or in equity or by statute or otherwise. 11. Entire Agreement. This Agreement embodies the entire agreement and understanding between TRCC and the City with respect to its subject matter and supersedes all prior agreements and understandings, written and oral, between TRCC and the City related to that subject matter. (document continues on following page) 3 Indemnity Agreement 50145866.5 IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the day and year first set forth above. "City" City of National City, a California municipal corporation Leslie Deese, City Manager APPROVED AS TO FORM: Christensen& Spath LLP, City Special Counsel By: Li) ter F.th III, Esq., Partner (signatures continue on following page) S-1 Indemnity Agreement 50145866.5 "TRCC" The Related Companies of California, LLC, a California limited liability company By: ./N.,0%-•1-./4-- Frank Cardone, President S-2 Indemnity Agreement 50145866.5 ORIGINAL ASSIGNMENT OF ARCHITECTURAL AGREEMENTS AND PLANS AND SPECIFICATIONS [Paradise Creek Apartments Project/Phase 1] FOR VALUE RECEIVED, the undersigned, PARADISE CREEK HOUSING PARTNERS, L.P., a California limited partnership ("Developer"), assigns to COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY, a public body, corporate and politic ("Commission"), all of its right, title and interest in and to: 1. All architectural, design, engineering and development agreements, and any and all amendments, modifications, supplements, addenda and general conditions thereto (collectively, "Architectural Agreements"), and 2. All plans and specifications, shop drawings, working drawings, amendments, modifications, changes, supplements, general conditions and addenda thereto (collectively, "Plans and Specifications"), heretofore or hereafter entered into or prepared by any architect, engineer or other person or entity (collectively, "Architect"), for or on behalf of Developer in connection with the construction of the Improvements on the Real Property described on Exhibit "A" attached hereto. The Plans and Specifications, as of the date hereof, are those which Developer has heretofore, or will hereafter deliver to Commission. The Architectural Agreements include, but are not limited to, the architectural agreement or contract between Developer and Pyatock Architects, Inc., dated November 30, 2011, and the architectural agreement or contract between Developer and Pyatock Architects, Inc., dated May 14, 2014. This ASSIGNMENT OF ARCHITECTURAL AGREEMENTS AND PLANS AND SPECIFICATIONS ("Assignment") constitutes a present, absolute and unconditional assignment to Commission. Developer acknowledges that by accepting this Assignment, Commission does not assume any of Developer's obligations under the Architectural Agreements with respect to the Plans and Specifications. Developer represents and warrants to Commission that: (a) all Architectural Agreements entered into by Developer are in full force and effect and are enforceable in accordance with their terms and no default, or event which would constitute a default after notice or the passage of time, or both, exists with respect to said Architectural Agreements; (b) all copies of the Architectural Agreements and Plans and Specifications delivered to Commission are complete and correct; and (c) Developer has not assigned any of its rights under the Architectural Agreements or with respect to the Plans and Specifications other than to [insert Construction Lender], which assignment shall be senior and superior to the assignment contemplated hereby in all respects. This Assignment shall be governed by the laws of the State of California, except to the extent that federal laws preempt the laws of the State of California, and Developer consents to the jurisdiction of any federal or state court within the State of California having proper venue for the filing and maintenance of any action arising hereunder and agrees that the prevailing Page 1 party in any such action shall be entitled, in addition to any other recovery, to reasonable attorneys' fees and costs. This Assignment shall be binding upon and inure to the benefit of the heirs, legal representatives, assigns, and successors -in -interest of Developer and Commission. The attached Architect's/Engineer's Consent and Exhibit "A" are incorporated by reference. Executed by Developer as of November 19, 2014. "Developer" PARADISE CREEK HOUSING PARTNERS, L.P., a California limited partnership By: RELATED/PARADISE CREEK DEVELOPMENT CO., LLC, a California limited liability company, its Administrative General Partner Frank Cardone, Vice President By: CHW PARADISE CREEK DEVELOPMENT CO., LLC, a California limited liability company, its Managing General Partner By: COMMUNITY HOUSING WORKS, a California nonprofit public ► - - it corportion, its Managi g Me ber B. ilson Senior Vice President Page 2 ARCHITECT'S/ENGINEER'S CONSENT [Paradise Creek Apartments Project/Phase 1] The undersigned architect and/or engineer (collectively referred to as "Architect") hereby consents to the foregoing Assignment to which this Architect's/Engineer's Consent ("Consent") is a part, and acknowledges that there presently exists no unpaid claims due to the Architect arising out of the preparation and delivery of the Plans and Specifications to Developer and/or the performance of the Architect's obligations under the Architectural Agreements described in the Assignment. Architect agrees that, by virtue of the foregoing Assignment, Commission has succeeded to all of Developer's right, title and interest in, to and under the Architectural Agreements and the Plans and Specifications and, therefore, so long as the Architect continues to receive the compensation called for under the Architectural Agreements, Commission and its successors and assigns may, at their option, use and rely on the Plans and Specifications for the purposes for which they were prepared, and Architect will continue to perform its obligations under the Architectural Agreements for the benefit and account of Commission and its successors and assigns in the same manner as if performed for the benefit or account of Developer in the absence of the Assignment. Architect warrants and presents that it/he has no knowledge of any prior assignment(s) of any interest in either the Plans and Specifications and/or the Architectural Agreements. Except as otherwise defined herein, the terms used herein shall have the meanings given them in the Assignment. Executed as of November 19, 2014. Pyato¢k Architects, Inc. By: �--- Print Name: Coatis ta,. CA -Col r A-1A- lts: .v.1 (At, G•o,o. Page 3 ARCHITECT'S/ENGINEER'S CONSENT [Paradise Creek Apartments Project/Phase 1] The undersigned architect and/or engineer (collectively referred to as "Architect") hereby consents to the foregoing Assignment to which this Architect's/Engineer's Consent ("Consent") is a part, and acknowledges that there presently exists no unpaid claims due to the Architect arising out of the preparation and delivery of the Plans and Specifications to Developer and/or the performance of the Architect's obligations under the Architectural Agreements described in the Assignment. Architect agrees that, by virtue of the foregoing Assignment, Commission has succeeded to all of Developer's right, title and interest in, to and under the Architectural Agreements and the Plans and Specifications and, therefore, so long as the Architect continues to receive the compensation called for under the Architectural Agreements, Commission and its successors and assigns may, at their option, use and rely on the Plans and Specifications for the purposes for which they were prepared, and Architect will continue to perform its obligations under the Architectural Agreements for the benefit and account of Commission and its successors and assigns in the same manner as if performed for the benefit or account of Developer in the absence of the Assignment. Architect warrants and presents that it/he has no knowledge of any prior assignment(s) of any interest in either the Plans and Specifications and/or the Architectural Agreements. Except as otherwise defined herein, the terms used herein shall have the meanings given them in the Assignment. Executed as of November 19, 2014. Pyatock Architects, Inc. By: Print Name: CANA N.. (A ,ns �j,,�. •A LA - Its: G2ritNCtPAt, b G00 Page 3 EXHIBIT "A" PROPERTY DESCRIPTION That certain real property situated in the City of National City, County of San Diego, State of California, described as follows: All that certain real property in the City of National City, County of San Diego, State of California, described as Parcel 1 in that certain Certificate of Compliance No. 2012-04 LS, SC, recorded in the Official Records of San Diego County on August 20, 2013, as Document No. 2013-0521150.