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Loan Agreement

LOAN AGREEMENT

among

FARMERS AND MERCHANTS BANK OF LONG BEACH, as the Lender

and

CALIFORNIA MUNICIPAL FINANCE AUTHORITY, as the I ssuer

and

HARBOR DAY SCHOOL, as the B orrCM1er

relating to

$3 5, 000, 000 California Municipal Finance Authority

Tax-Exempt Loan (Harbor Day School Prqject)

Dated as of J une 1, 2020

Loan Nurmer -!X}-290-0281--6 4840--9714-0152.8

Section 1.01. Section 1.02.

Table of Contents

ARTICLE I DEFINITIONS

Page

Definitions ........................................................................................................ 2 Accounting Terms and Determi nati ans ......................................................... 14

ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS OF ISSUER AND BORROWER


Section 3.01. Section 3.02. Section 3.03. Section 3.04. Section 3.05. Section 3.06. Section 3.07.

Section 4.01. Section 4.02. Section 4.03. Section 4.04. Section 4.05. Section 4.06. Section 4.07. Section 4.08. Section 4.09. Section 4.10. Section 4.11. Section 4.12. Section 4.13. Section 4.14.


4840--9714-0152.8

Representations, Warranties and Covenants of the Issuer ............................. 15 Representations, Warranties and Covenants of the B orrovver ....................... 15

ARTICLE Ill ISSUANCE OF LOANS; APPLICATION OF PROCEEDS

Loans to Finance the P raj ect .......................................................................... 20 Advances ........................................................................................................ 21 Term ............................................................................................................... 22 Costs and Expenses of the Issuer ................................................................... 22 Limited Obi i gati ans of the Issuer .................................................................. 23 Invalidity of Borrovver Loan .......................................................................... 24 Project Fund ................................................................................................... 24

ARTICLE IV REPAYMENT OF THE LOANS

I nterest. ........................................................................................................... 2 4 Payments ........................................................................................................ 25 Advances of the Loans ................................................................................... 25 Security for the Loans .................................................................................... 25 Deed of Trust and Security Agreement ......................................................... 26 Payment on Non Business Days .................................................................... 27 B orrovver Payments to Be U nconditi anal ...................................................... 27 Prepayments ................................................................................................... 27 R estri cti ans on Transfer of Loans .................................................................. 30 Repayment ..................................................................................................... 31 Purchase Price of Issuer Loan Obligation ...................................................... 31 Late Charge .................................................................................................... 31 Default Rate ................................................................................................... 31 Determination of Applicable Loan Rate ........................................................ 32

ARTICLE V CONDITIONS PRECEDENT

Precedent to Loan Agreement ........................................................................ 32 Conditions Precedent to Subsequent Advances of Loan Proceeds ................ 34

Section 5.03.

Section 6.01.


Section 7.01. Section 7.02. Section 7.03. Section 7.04. Section 7.05. Section 7.06. Section 7.07. Section 7.08. Section 7.09. Section 7.10. Section 7.11. Section 7.12. Section 7.13. Section 7.14. Section 7.15.

Section 7.16. Section 7.17. Section 7.18. Section 7.19. Section 7.20. Section 7.21. Section 7.22. Section 7.23.

Section 8.01. Section 8.02. Section 8.03.

4840--9714-0152.8

Table of Contents ( conti nued)

Page

Limitations to Disbursement .......................................................................... 36

ARTICLE VI SECURITY INTEREST

Change in Name or Corporate Structure of the Borrovver; Change in Location of the B orrCMter' s P ri nci pal PI ace of B usi ness ............................... 3 7 Security Interest ............................................................................................. 37 Assignment of Insurance ................................................................................ 37

ARTICLE VII AFFIRMATIVE COVENANTS OF BORROWER

Maintenance of Property ................................................................................ 38 Campi iance With Laws and Obi igations ....................................................... 38 Payment of Taxes and Other Claims ............................................................. 39 Insurance; Indemnity ..................................................................................... 39 Reporting R equi rernents ................................................................................ 42 B oaks and Records; I nspecti on and E xami nation ......................................... 44 Performance by the Lender ............................................................................ 44 Preservation of Existence ............................................................................... 45 No Liability for Consents or Appointments ................................................... 45 Non-liability of the Issuer ............................................................................. 45 Expenses ........................................................................................................ 45 No Personal Liability ..................................................................................... 46 The B orrovver I ndemni fi cation of the I ssuer .................................................. 46 The B orrovver I ndemni fi cation of the Lender ................................................ 48 Covenant to Enter into Agreement or Contract to Pr0vide Ongoing Disclosure ...................................................................................................... 49 Financial Covenants ....................................................................................... 49 Deposit Relationship ...................................................................................... 50 Tax C0venants of the Issuer and the B orrovver .............................................. 50 Office of Foreign Assets Control; Patriot Act Compliance ........................... 52 Compliance With Documents ........................................................................ 53 Compliance With ERISA ............................................................................... 53 Environmental Laws ...................................................................................... 53 Annual Reporting U nder SB 1029 ................................................................. 53

ARTICLE VIII NEGATIVE COVENANTS OF BORROWER

Lien ................................................................................................................ 53 Sale of Assets ................................................................................................. 55 Consolidation and Merger .............................................................................. 55

ii

Section 8.04. Section 8.05. Section 8.06. Section 8.07. Section 8. 08. Section 8.09. Section 8.10. Section 8.11. Section 8.12. Section 8.13. Section 8.14. Section 8.15. Section 8.16. Section 8.17.


Page

Accounting ..................................................................................................... 55 Transfers ........................................................................................................ 55 Other I ndebtedness and Guarantees ............................................................... 56 Other Defaults ................................................................................................ 56 Prohibited Uses .............................................................................................. 56 Use of Property .............................................................................................. 56 Maintenance of B usi ness ............................................................................... 56 Restrictive Agreements .................................................................................. 56 Tax Exempt Status ......................................................................................... 56 Federal Reserve Board Regulations ............................................................... 57 Advances ........................................................................................................ 57 Swap Agreement ............................................................................................ 57 Loan Documents ............................................................................................ 57 Formation of S ubsi diaries and A ffi Ii ates ....................................................... 5 7

ARTICLE IX DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS


Eminent Dornai n ............................................................................................ 5 7 Application of Net Proceeds .......................................................................... 5 7

ARTICLE X ASSIGNMENT, PARTICIPATION, MORTGAGING AND SELLING

Section 10.01. Assignment by the Lender ............................................................................. 58 Section 10.02. No Sale, Assignment or Leasing by the B orrovver ........................................ 59

Section 11.01. Section 11.02. Section 11.03. Section 11.04. Section 11.05.

Section 12.01. Section 12.02. Section 12.03. Section 12.04. Section 12.05. Section 12.06.

4840--9714-0152.8

ARTICLE XI EVENTS OF DEFAULT AND REMEDIES

Events of Default ........................................................................................... 59 Remedies on Default ...................................................................................... 61 The Lender's Right to Perform the Obligations ............................................ 62 No Remedy Exel usive .................................................................................... 63 Issuer Enforcement of Rights ......................................................................... 63

ARTICLE XII MISCELLANEOUS

Di sci aimer of Warranties ............................................................................... 63 Limitations of Liability .................................................................................. 64 Additional Payments to the Lender ................................................................ 64 Notices ........................................................................................................... 64 B i ndi ng Effect; Ti me of the Essence ............................................................. 66 Severabi I ity .................................................................................................... 66

iii



Page

Amendments .................................................................................................. 66 Execution in Counterparts .............................................................................. 66 Applicable Law .............................................................................................. 66 Jury Trial Waiver ........................................................................................... 66 Captions ......................................................................................................... 67 Entire Agreement ........................................................................................... 67 Waiver ............................................................................................................ 67 Survivability ................................................................................................... 67 Usury .............................................................................................................. 67 Third-Party B enefi ci ary ................................................................................. 68 Further Assurance and Corrective Instruments .............................................. 68 J udi ci al Reference .......................................................................................... 68 A rm' s--l ength Transaction ............................................................................. 70 Patriot Act ...................................................................................................... 70

EXHIBIT A DESCRIPTION OF PROPERTY

EXHIBIT B FORM OF INVESTOR LETTER OF REPRESENTATIONS

EXHIBIT( MATTERS TO BE ADDRESSED IN OPINION OF COUNSEL OF THE BORROWER

EXHIBIT D SCHEDULE OF PAYMENTS

EXHIBIT E FORM OF REPORTING CERTIFICATE

EXHIBITF FORM OF DRAW REQUEST /REQUEST FOR ADVANCE

EXHIBITG FORM OF ASSIGNMENT LETTER

EXHIBIT H AGGREGATE PRINCIPAL AMOUNT OF LOANS OUTSTANDING

EXHIBIT I PHASING MAP OF PROJECT

iv 4840--9714-0152.8

LOAN AGREEMENT

This Loan Agreement, dated as of J une 1, 2020 (this " Loan Agreement"), among Farmers and Merchants Bank of Long Beach, a California corporation (the "Lender''), California Municipal Finance Authority (the "Issuer) a joint povvers agency duly organized and validly existing under the laws of the State of California (the "State"), as issuer, and Harbor Day School, a California nonprofit public benefit corporation (the" Borrovver'').

WITNESSETH:

WHEREAS, the Issuer was established pursuant to the provisions of the Joint Exercise of Povvers Act, comprising Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the Government Code of the State of California (the "Act"); and

W H E RE AS, the Issuer is authorized by the Act to issue bonds, notes or other e,;i dences of i ndebtedness, or certificates of parti ci pati on in I eases or other agreements, or enter i nto I oan agreements to, among other things, refinance facilities ovvned and/or leased and operated by organizations described in Section 501(c)(3) of the Internal Re,;enue Code of 1986, as amended (the "Code''); and

W H E RE AS, pursuant to the provi si ans of the Act, the public agencies which are members of the Issuer are authorized to jointly exercise any povver common to such public agency members, including, without limitation, the povver to acquire and dispose of property, both real and personal; and

WHEREAS, the Borrovver is a nonprofit public benefit corporation duly incorporated and exi sti ng under the I aws of the State ( as further defi ned herei n, the " State"), and an organization described in Section 501(c)(3) of the Code; and

W H E R EA S, the B orrCMter desi res to fi nance and refi nance the construction, development, improvement, installation, equipping and furnishing of a new educational facility, totaling up to approximately 100,000 square feet of net space located at 3443 Pacific View Drive, Corona Del Mar, California 92625, to be constructed in three phases (each a "Phase") as identified in Exhibit I hereto, including, but not limited to, (a) the demolition of the existing gymnasium and science/art bui I ding, expansion of the existing parking I ot, construction staging, and temporary classrooms, new bui I dings for admi ni strati on, kindergarten through gth grade classrooms, anci 11 ary I andscapi ng, improvements and recreation areas; and ( b) construction of hardcourts and play areas, gym and I ockers, outdoor courts, soccer field, and anci 11 ary landscaping and improvements and, at the Borrovver's option, a theatre building and associated support spaces, I ocated on the real property descri bed i n E xhi bit A attached hereto ( the " Land"); and

W H E RE AS, Phases 1 and 2 identified on Exhibit I hereto consist of the "P rqj ect" for purposes of this Loan Agreement and Phase 3 is not a part of the Project for purposes of this Loan Agreement; and

4840--9714-0152.8

WHEREAS, to the extent funds are available, the Borrovver intends to pay certain costs of issuance i n connection with the fi nanci ng as part of the P rqj ect on the terms and condi ti ans set forth bel ovv; and

W H E R EA S, i n order to fi nance the P raj ect, the I ssuer i ntends to issue a tax-exempt obligation to the Lender in the aggregate principal amount of up to $35,()()(),()()() (as further defined herein, the " Issuer Loan Obi i gati on"), the interest on which shal I be excluded from income of the Lender for Federal income tax purposes and exempt from State personal income taxes, and lend the proceeds thereof to the Borrovver (as further defined herein, the "Borrovver Loan"); and

W H E RE AS, for and in consideration of such B orrCMter Loan, the B orrovver agrees, inter al i a, to make I oan payments ( as further defi ned herei n, the " Payments") sufficient to pay on the dates specified herein, the principal of, premium, if any, interest thereon and Additional Payments (as defined herein); and

W H E RE AS, the Issuer wi 11 assign the Payments due under B orrCMter Loan pursuant to this Loan Agreement ( except any payments due to the Issuer pursuant to Reserved Issuer Rights ( as herei nafter defi ned)) to the Lender to satisfy the I ssuer' s obi i gati ans under I ssuer Loan Obi i gati on; and

W H E RE AS, the Borrower shal I make Payments ( as hereinafter defined) directly to the Lender as assignee of the I ssuer; and

WHEREAS, the Issuer, the Lender and the Borrovver have duly authorized the execution and delivery of this Loan Agreement;

NOW , TH E RE FORE , in consideration of the payments to be made hereunder and the mutual covenants contained herein, the parties agree as fol I CMts:

ARTICLE I

DEFINITIONS

Section 1.01. Definitions. The follovving terms used herein will have the meanings indicated bel ovv uni ess the context clearly requi res otherwise.

"Act" means the Joint Exercise of Povvers Act, constituting Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title I of the Government Code of the State of California

"Accessibility Laws" means any federal, state or local law, statute, code, ordinance, rule, regulation or requirement, including, without limitation, the United States Americans With Disabilities Act of 1990, as amended (the "ADA"), relating to accessibility to facilities or properties for disabled, handicapped and/or physically challenged persons, or other persons covered by the ADA.

2 4840--9714-0152.8

"Additional Payrrents" means the amounts, other than Payments, payable by the B orrovver pursuant to the provi si ans of this Loan Agreement, including, without Ii mitati on, Issuer Fees and Expenses, amounts pursuant to Section 12.03 hereof, indemnity payments and reimbursement of advances due hereunder.

"Advance'' means each disbursement of Loan Proceeds that is approved by the Lender, to be applied to, or reimbursed to the B orrCMter for, the costs identified in the Budget, suqject to the terms and conditi ans of this Loan Agreement.

"Affiliate'' means, with respect to any Person, any other Person directly or indirectly controlling or controlled by or under common control with such Person. Without limiting the foregoing, the definition of "Affiliate" of any Person shall include any subsidiary of such Person.

"Anti-Terrorism Laws" has the meaning assigned to that term in Section 2. 02.

"Applicable Loan Rate" shall have the meaning set forth in Section 4.14 hereof.

"Approving Opinion" means, with respect to any action relating to the Loans, the occurrence of which requires an opinion of counsel delivered by Band Counsel, to the effect that such action (a) is permitted by this Loan Agreement and the Act, and (b) will not adversely affect the exclusion of interest on the Loans from gross income of the holders for purposes of federal income taxation.

"Assignrrent Agreerrent" means the Assignment Agreement, dated as of June 1, 2020, between the Issuer and the Lender.

"Authorized Borrovver Representative" means the Head of School, Director of Finance or the President of the Board of Trustees of the B orrovver, or any other Person designated from ti me to ti me in writing by the Board of Trustees of the B orrovver.

"Bond Counsel" means any attorney or firm of attorneys, which is admitted to practice law before the highest court of any state in the United States of America or the District of Columbia and nationally recognized and experienced in legal work relating to the issuance of tax-exempt bonds.

"BorrCMter" means (a) Harbor Day School, a California nonprofit public benefit corporation; (b) any surviving, resulting or transferee entity thereof permitted pursuant to the terms of this Loan Agreement; and ( c) except where the context requires otherwise, any assi gnee(s) of the Borrower permitted pursuant to the terms of this Loan Agreement.

"BorrCMter Docurrents" means this Loan Agreement, the Deed of Trust, the Environmental Indemnity Agreement, the Security Agreement, the Construction Disbursement Agreement, the Pledge Receipts Assignment and Transfer Agreement, and the Tax Certificate.

"BorrCMter's Equity Contribution" means, collectively, the Phase I Equity Contribution and the Phase 11 Equity Contribution.

3 4840--9714-0152.8

"BorrCMter Loan" means a loan in an aggregate principal amount up to $35,()()(),()()().00 from the Issuer to the B orrovver made under this Loan Agreement.

"Business Day'' means any day which is not one of the fol I ovvi ng: ( a) a Saturday, Sunday or legal holiday as set forth by the Federal Reserve Bank of San Francisco; or (b) any other day on which banks in New York, New Yark or Los Angeles, California, are authorized or required to be closed by the appropriate regulatory authorities.

"Budget" means the Ii ne item budget for the hard and soft Project Costs for the Prqject as approved by the Lender.

"Cal cul ati on Date" means, the tenth (10th) Business Day prior to J une 1, 2035, or such other date as may be agreed to by the Lender and the B orrovver.

"Closing Date'' meansJ une 2, 2020.

"Code" means the I nternal Revenue Code of 1986, as amended from ti me to ti me.

"Collateral" means, collectively, the Property (as defined in the Deed of Trust), and the Collateral (as defined in the Security Agreement).

"Completion Notice" means a certificate stating that the Project is complete and that no further Draw Requests will be submitted.

"Contracts and P emits Assi gnrrEnt AgreerrEnt" means that certain Contracts and Permits Assignment Agreement, dated as of June 1, 2020, entered into by the B orrovver in favor of the Lender.

"Construction Contract'' means, collectively or severally, the construction contract between the B orrovver and the General Contractor for the Project.

"Construction DisburserrEnt AgreerrEnt" means the Construction Disbursement Agreement, dated as of June 1, 2020, between the Borrovver and the Lender, relating to the payment of the Prqject Costs for the Prqject.

"Deed of Trust" means the Construction Deed of Trust with Assignment of Leases and Rents, Security Agreement and Financing Statement, dated as of J une 1, 2020, by the Borrower for the benefit of the Issuer.

"Default" means an event that, with giving of notice or passage of time or both, would constitute an Event of Default as provided in Article XI hereof.

"Default Rate" means the Applicable Loan Rate plus 5%, but not to exceed the highest rate permitted by I aw.

"Deterrrination of Taxability'' means any determination, decision, decree or advisement by the Cammi ssi oner of I nternal Revenue or any court of competent j uri sdi cti on, or an opinion obtained by the Lender, of counsel qualified in such matters, that an Event of Taxability has

4 4840--9714-0152.8

occurred. A Determination of Taxability also shall be deemed to have occurred on the first to occur of the fol I ovvi ng:

( a) the date when the B orrovver fi I es any statement, supplemental statement, or other tax schedule, return or document, which discloses that an Event of Taxability has occurred;

(b) the effective date of any federal legislation enacted or federal rule or regulation promulgated after the date of this Loan Agreement that causes an Event of Taxability; or

( c) upon the sale, I ease or other deli berate action within the meaning of Treas. Reg.§ 1.141-2(d), the failure to receive an unqualified opinion of Bond Counsel to the effect that such action wi 11 not cause interest on Issuer Loan Obi i gati on to become incl udabl e i n the gross i ncome of the reci pi ent.

"Draw Request" means a Draw Request/ Request for Advance substantially in the form attached hereto as Exhibit F.

"EndO\IVrrent" means (a) the Harbor Day EndO\IVment Corporation a California nonprofit public benefit corporation; and ( b) any assignee, surviving, resulting or transferee entity thereof.

"E nvi ronrrental Indemnity Agreerrent" means that certain Environmental Indemnity Agreement, dated as of J une 1, 2020, entered into by the B orrO\IVer in favor of the Issuer.

"Environrrental Laws" means any federal, state or local law (whether imposed by statute, or administrative or judicial order, or common law), novv or hereafter enacted, governing health, safety, industrial hygiene, the environment or natural resources, or Hazardous Materials, including, such laws governing or regulating the use, generation, storage, removal, recovery, treatment, handling, transport, disposal, control, discharge of, or exposure to, Hazardous Materials.

"Environrrental Liability'' means any claim, demand, obligation, cause of action, allegation, order, violation, damage, injury, judgment, penalty or fine, cost of enforcement, cost of remedial action, diminution in value or any other cost or expense whatsoever, including reasonable attorneys' fees and disbursements, resulting from the presence or use of Hazardous Materials, the violation or alleged violation of any Environmental Law, or the imposition of any Environmental Li en.

"Environrrental Lien" means a security interest in favor of any third party for: (a) any liability under an Environmental Law; or (b) damages arising from or costs incurred by such thi rd party i n response to a rel ease or threatened rel ease of any Hazardous M ateri al s or constituent into the environment.

"Environrrental Study'' means the Phase I Environmental Site Assessment Report, dated December 27, 2019, prepared by EB I Consulting.

" E RI SA'' has the meani ng set forth i n Section 7. 05( h).

5 4840--9714-0152.8

"Event of Default" has the meaning set forth in Section 11.01.

"Event of I ndi rect T axabi I ity'' means the enactment of any federal I egi sl ati on, or the promulgation of any federal rule or regulation, after the date of this Loan Agreement, that has the effect ( no matter hCMt accomplished or implemented) of causing ( a) a reduction in the tax equivalent yield on the Issuer Loan Obligation to the Lender or (b) all or any portion of the interest on the Issuer Loan Obligation to be taken into account under any provision of the Code in such manner as to cause an increase in the federal income tax Ii abi I ity of the Lender.

" Event of T axabi I i ty'' means: ( a) the appl i cation of the proceeds of the I ssuer Loan Obi i gati on, or other amounts treated as "gross proceeds" of the Issuer Loan Obi i gati on, in such manner that such Issuer Loan Obligation becomes an "arbitrage bond" within the meaning of Code Sections 103(b)(2) and 148, and with the result that interest on such Issuer Loan Obi igation is or becomes includable in the gross income (as defined in Code Section 61) of the Holder of such Issuer Loan Obligation; (b) if as the result of any act, failure to act or use of the proceeds of any portion of the Issuer Loan Obligation or the Tax Exempt Financed Facilities or any misrepresentation or inaccuracy in any of the representati ans, warranties or covenants contained in this Loan Agreement by the I ssuer or the B orrCMter or the enactment of any federal I egi sl ati on or the promulgation of any federal rule or regulation after the date of this Loan Agreement, the interest on such Issuer Loan Obligation is or becomes includable in a Holder's gross income (as defined in Code Section 61); or (c) any revocation of the determination letter from the Internal Revenue Service regarding status of the Borrovver as a 501(c)(3) corporation.

"F aci I ities" means collectively (a) al I buildings, structures and other improvements situated, placed or constructed on the Land; and (b) all materials, apparatus and other items of personal property ovvned by the B orrovver and attached to or i nstal I ed i n the bui I di ngs, structures and other improvements situated on the Land or used in connection with the buildings, structures and other improvements situated on the Land, including (without limitation) water, gas, electrical, storm and sanitary sewer facilities and all other utilities whether or not situated in easements.

"F i nal Appraisal" means the appraisal conducted by a MA I certified appraiser selected and engaged by the Lender.

"Force Majeure" means unusually adverse weather conditions which have not been taken into account i n the construction schedule, fi re, earthquake or other acts of God, stri ke, I ockout, acts of public enemy, riot, insurrection, or governmental regulation of the sale or transportation of materials, supplies or I abor or shortages of any of the same, strikes, I ockouts or other I abor disturbances, or any unforeseen circumstances or events, or restrictions on the activities of the Borrovver or the Contractor imposed by a Governmental Authority as a result of a pandemic ( except fi nanci al ci rcumstances of the B orrCMter or events or matters which may be reasonably resolved by the payment of money) beyond the control of the B orrovver or the General Contractor.

"GAAP" shal I refer to generally accepted accounting pri nci pl es in the U nited States as in effect from ti me to ti me.

6 4840--9714-0152.8

"General Contractor" means DPR Construction, to the extent such entity is serving in the capacity of a general contractor, and any other contractor with whom the B orrCM1er has contracted, directly or indirectly, to assist the Borrovver in the construction of the Prqject, and their respective successors and assigns.

"Governrrental Authority'' means any governmental or quasi-Governmental Authority, board, bureau, commission, department, court, administrative tribunal or other instrumentality or authority, and any public utility authorized by federal, state or local laws or regulations as having jurisdiction over the Borrovver or the Project or the development of the Project.

"G ross-U p Rate" means, with respect to the Issuer Loan Obi i gati on, an interest rate equal to the Appl i cable Loan Rate for such I ssuer Loan Obi i gati on pl us a rate sufficient such that the total interest to be paid on any payment date would, after such interest was reduced by the amount of any U.S. federal, state and local income tax (including any interest or penal ti es) actual I y i mposed thereon, equal the amount of i nterest due with respect to such I ssuer Loan Obligation; provided, hovvever, that in no event shall the Gross-Up Rate exceed twelve percent ( 12°/o ) per annum.

"Hazardous Materials" means any:

(a) Substance, product, waste or other material of any nature whatsoever which is or becomes Ii sted, regulated, or addressed pursuant to any or al I of the fol I ovvi ng statutes and regul ati ans, as the same may be amended from ti me to ti me:

4840--9714-0152.8

(i) The Comprehensive Environmental Response, Compensation and Liability Act, 42 U .S.C. Sections 9601, et seq. ("CERCLA");

(ii) The Hazardous Materials Transportation Act, 49 U .S.C. Sections 5101, et seq.;

(iii) The Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq. ("RCRA");

(iv) The Toxic Substances Control Act, 15 U .S.C. Sections 2601, et seq.;

(v) The Clean Water Act, 33 U .S.C. Sections 1251, et seq.;

(vi) The California Hazardous Waste Control Act, California Health and Safety Code Sections 25100, et seq.;

(vii) The California Carpenter-Presley-Tanner Hazardous Substance Account Act, California Health and Safety Code Sections 25300, et seq.;

(viii) The California Safe Drinking Water and Toxic Enforcement Act, California Health and Safety Code Sections 25249.5, et seq.;

7

(ix) California Health and Safety Code Sections 25280, et seq. ( pertai ni ng to underground storage of Hazardous M ateri al s);

(x) The California Hazardous Waste Treatment Reform Act of 1995, California Health and Safety Code Sections 25179.1, et seq.;

(xi) California Health and Safety Code Sections 25500, et seq. ( pertaining to hazardous materials response pl ans and inventory);

(xii) The California Porter-Cologne Water Quality Control Act, California Water Code Sections 13000, et seq.;

(xiii) California Civil Code Section 2929.5 (pertaining to inspections rel ati ng to hazardous substances) ; or

(xiv) All other existing and future federal, state and local laws, ordi nances, rules, regul ati ans, orders, requi rements, and decrees regul ati ng, relating to, or imposing liability or standards of conduct concerning any hazardous, taxi c or dangerous waste, substance or material;

(b) Any substance, product, waste or other material of any nature whatsoever which may give rise to liability (i) under any of the statutes or regulations described in clauses (i) through (xiv) of Section (a) above; (ii) under any statutory or common law theory, including negligence, trespass, intentional tort, nuisance or strict liability; or ( i i i) under any reported deci si ans of any state or federal court;

(c) Petroleum, petroleum products and by-products, gasoline or crude oil, other than petroleum and petroleum products contained within regularly operated motor vehicles (including without Ii mitati on gal f carts and I awn maintenance vehicles); and

(d) Asbestos or asbestos containing materials.

"Holder" means either the Lender or an assignee to which the Loans are assigned pursuant to Section 10.01 hereof.

"Initial P repayrrent Date" means J une 1, 2040.

"Interest-Only Period" means the period from the Closing Date to and including May 31, 2023, or such later date as approved in writing by the Lender.

"I ssuer" means the California Municipal Finance Authority, or its successors and assigns, ajoint exercise of povvers authority formed by aJ oint Exercise of Povvers Agreement, dated as of January 1, 2004 by and among certain California cities, counties and special districts, as may be amended from time to time pursuant to the provisions of the Joint Exercise of Povvers Act, comprising Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the Government Code of the State of California.

8 4840--9714-0152.8

"I ssuer Annual Fee' means the annual fee, paid in advance, by the B orrovver to the Issuer in accordance with Section 3.04 hereof. The Issuer Annual Fee is calculated annually as 1.5 basis points of the then outstanding principal amount of the Issuer Loan Obi i gati on. For purposes of cl ari fi cation, the entire amount of the Issuer Loan Obi i gati on shal I be deemed to be outstanding on the Closing Date for purposes of calculating the Issuer Annual Fee, and shall continue to be deemed to be Outstanding unti I such ti me that no further Advances are permitted under this Loan Agreement, at which ti me the Issuer Annual Fee wi 11 begin to be calculated based on the actual outstanding principal amount of Issuer Loan Obi i gati on then outstanding.

"I ssuer Documents'' means this Loan Agreement, the Assignment Agreement and the Tax Certificate.

"I ssuer Fees and Expenses" means, with respect to this Loan Agreement, the fee payable to Issuer for Issuer's services in connection with the preparation, review and execution of this Loan Agreement and Issuer's fees, costs and expenses, as further defined in Sections 3.04 and 7. 11 hereof.

"Issuer Issuance Fee' means $35,()()() payable on the Closing Date.

"Issuer Loan Obligation" means, collectively, the Issuer Loan Obligation from Lender to Issuer made under this Loan Agreement.

"Land" means the real property identified in Exhibit A hereto, together with any greater estate i n such real property as hereafter may be acqui red by the B orrCMter.

"Laws" means all statutes, laws, ordinances, rules, regulations, orders, writs, judgments, injunctions, decrees or awards of the United States or any state, county, municipality or other Governmental Authority, including, without limitation, all building, zoning, planning, subdivision, fire, traffic, safety, health, disability, labor, discrimination, environmental, air quality, wetlands, shoreline and flood plain laws, ordinances, regulations and rules.

"Lender" means (a) Farmers and Merchants Bank of Long Beach, a California corporation; (b) any surviving, resulting or transferee corporation of Farmers and Merchants Bank of Long Beach; and (c) if this Loan Agreement and the Issuer Loan Obligation have been assigned by the Lender pursuant to Section 1 0. 01 hereof, such assignee shal I be considered the Lender with respect to this Loan Agreement and the Issuer Loan Obligation, subject to Section 10.01.

"Lender Fees" means, with respect to this Loan Agreement, the fee payable to the Lender for the Lender's services in connection with the preparation, review and execution of this Loan Agreement, as further defined in Section 12.03.

"Lender Indemnified Party'' shall have the meaning set forth in Section 7.13(a).

"Lender's Inspector" shall have the meaning set forth in Section 3.02(c) hereof.

"Liquidity Requirement" means an amount equal to $5,()()(),()()().

9 4840--9714-0152.8

" Li en" shal I have the meani ng set forth i n Section 8. 01 hereof.

"Loans" means collectively, the Borrovver Loan and the Issuer Loan Obligation made under this Loan Agreement.

"Loan Agreement" means, collectively, this Loan Agreement, including the Exhibits hereto, as any of the same may be supplemented or amended from ti me to ti me in accordance with the terms hereof.

"Loan Documents" means, collectively, this Loan Agreement, Deed of Trust, the Environmental I ndemnity Agreement, the Assignment Agreement, the Security Agreement, the Construction Disbursement Agreement, the Pledge Receipts Assignment and Transfer Agreement and the Tax Certificate.

"Loan Proceeds" means the amount of $34,943,750 to be paid or pr0vided to the Borrovver (representing the principal amount of the BorrCMter Loan in an amount of $35,000,000, less original issue discount of $56,250.

"Margin Stock'' shall have the meaning assigned to such term in Regulation U promulgated by the Board of Di rectors of the Federal Reserve System, as novv and hereafter from ti me to ti me in effect.

"Maturity Date" meansJune 1, 2053; provided, hovvever, that the Loans shall be prepaid in full on the Prepayment Date, which date shall be deemed to be the maturity date with respect to the Lender's commitment hereunder, unless the Loans are extended at the option of the Lender pursuant to Section 4. 08( f) hereof.

"Net Proceeds'' means any insurance proceeds or condemnation award paid with respect to the Property, to the extent remai ni ng after payment therefrom of al I expenses i ncurred i n the col I ecti on thereof.

"Obligation" means Payments and Additional Payments payable by the Borrovver pursuant to the provi si ans of this Loan Agreement.

"Patriot Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title 111 of Pub. L. 107 56.

"Payments" means those payments of principal and interest with respect to the Loans (excluding, Additional Payments, Issuer Fees and Expenses and Lender Fees payable to the Lender and the I ssuer hereunder) payable by the B orrovver pursuant to the provi si ans of this Loan Agreement. Payments shall be payable by the BorrCMter directly to the Lender as assignee of the Issuer, in the amounts and at the ti mes as set forth in this Loan Agreement.

"Perrritted Debt" shall have the meaning set forth in Section 8.06 hereof.

"Perrritted Encumbrances" means (a) liens and security interests securing indebtedness CMted by the Borrovver to the Issuer and/or the Lender; (b) liens arising by reason of good faith deposits in connection with tenders, leases of real estate, bids or contracts (other than contracts

10 4840--9714-0152.8

for the payment of borrovved money); (c) any lien arising by reason of deposits with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulation for any purpose at any time as required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or license, or to enable the Borrovver to maintain self-insurance or to participate in any funds established to cover any insurance risks or in connection with workers' compensation, unemployment insurance, pensions or profit sharing plans or other social security plans or programs, or to share in the privileges or benefits required for corporations participating in such arrangements; ( d) Ii ens arising by reason of good faith deposits made by or to the B orrovver in the ordinary course of business (for other than borrovved money), deposits by the B orrCMter to secure public or statutory obligations or deposits to secure, or in lieu of, surety, stay or appeal bonds, and deposits as security for the payment of taxes or assessments or other similar charges; (e) attachment or judgment liens not constituting a default hereunder or under the Deed of Trust, or any attachment or judgment Ii en against the B orrovver so I ong as such judgment is being contested in good faith and execution thereon is stayed; (f) rights reserved to or vested in any municipality or public authority by the terms of any right, povver, franchise, grant, Ii cense, permit or provision of law affecting the Property, to: (1) terminate such right, pCMter, franchise, grant, license, or permit, provided, that the exercise of such right would not materially impair the use of such Property in the ordinary course by the B orrovver or materially and adversely affect the value thereof, or (2) purchase, condemn appropriate or recapture, or designate a purchaser of, the Property or any portion thereof; (g) liens for taxes, involuntary assessments, or similar charges either not yet due or being contested in good faith; (h) liens of materialmen, mechanics, warehousemen, or carriers, or other Ii ke Ii ens arising in the ordinary course of business, including, but not limited to, contractors and subcontractors required to complete the Project and securing obligations which are not yet delinquent; or which are being contested in good faith for a period no longer than the ninety (90) days after the due date of such lien; (i) easements, rightsof-way, servitudes, restrictions, deed restrictions, oil, gas, or other mineral reservations and other minor defects, encumbrances, and irregularities in the title to the Property which do not materially impair the use of such Property in the ordinary course by the BorrCMter or materially and adversely affect the value thereof; U) rights reserved to or vested in any municipality or public authority to control or regulate the Property or to use such Property in any manner, which rights do not materially impair the use of such Property or materially and adversely affect the value thereof, to the extent that it affects title to the Property; (k) liens on property received by the B orrCMter through gifts, grants or bequests, such I i ens bei ng due to restri cti ans on such gifts, grants or bequests or the income thereon, so I ong as the fair market value of any such property is greater than the amount of the i ndebtedness secured by the I i en on such property; (I) the exceptions to coverage of the Title Policy as approved by Lender, and (m) first priority-Hens on any property acquired with Permitted Debt; (n) all Liens and other agreements and documents securing or evidencing the obligations under the Subordinate Loan Agreement and (o) Liens approved in writing by the Lender in its sole discretion on a case-by-case basis.

"Person" means an individual, a corporation, a partnership, an association, a joint venture, a trust, a business trust, a limited liability company or any other entity or organization, including a governmental or political subdivision or an agency or instrumentality thereof.

"Phase 1" means the demolition of the existing gymnasium and science/art building, expansion of the existing parking I ot, construction staging, and temporary cl ass rooms, new

11 4840--9714-0152.8

bui I dings for admi ni strati on, kindergarten through 8th grade classrooms, anci 11 ary I andscapi ng, improvements and recreation areas as identified in Exhibit I attached hereto.

"Phase 2" means the construction of hardcourts and play areas, gym and I ockers, outdoor courts, soccer field, and anci 11 ary I andscapi ng and improvements, and at B orrovver' s option a theatre building and associated support spaces, located on the real property, described in Exhibit A attached hereto and as identified in Exhibit I attached hereto.

"Phase I Equity Contribution" means the B orrCMter' s funds in an aggregate principal amount up to $18,355,()()().00.

"Phase II Equity Contribution" means the Borrovver's funds in an aggregate principal amount the amount of $10, 955,()()().00.

" P I ans and S peci fi cati ans" means the B orrovver' s pl ans and speci fi cati ans for the P rqj ect, as amended from time to time, which include a construction budget for the Project and an al I ocati on of the sources and uses of funds for the P raj ect.

"Pledge Receipts Assignrrent and Transfer Agreerrent" means the Pledge Receipts Assignment and Transfer Agreement, dated as of June 1, 2020, between the Endovvment and the B orrovver.

"Prepayrrent Date" means the later of (a) the Initial Prepayment Date; or (b) the date provided by the Lender in response to the Borrovver's written request for an extension pursuant to Section 4. 08( f) hereof.

"Prior I nterest P ayrrent" means a payment of interest on the Issuer Loan Obi i gati on made on or prior to the date of any Determination of Taxability that becomes includable in a Holder' s gross i ncome ( as defi ned i n Code Section 61).

" P raj ect" means ( i) fi nanci ng and refi nanci ng Phase 1 and Phase 2 as identified i n Exhibit I hereto, and (ii) paying certain costs of issuing the Loans.

"Project Costs" means the amount paid or to be paid for any portion of the Prqject incurred by Borrovver in connection with the Project and as permitted under the Act, including cl osi ng costs for the Loans.

"Project Fund" means the Project Fund established pursuant to Section 3.07 of this Loan Agreement.

" P roperty'' means the Land and the F aci I i ti es.

"Qualified Institutional Buyer" shall have the meaning ascribed thereto in Rule 144A of the Securities Act of 1933, as amended.

"Reserved Issuer Rights" means the Issuer's rights to Additional Payments (which incl ude the I ssuer Fees and Expenses), i ndemni fi cation, notices, opi ni ans, certi fi cati ans, information, i nspecti ans and consents pursuant to this Loan Agreement and the Tax Certificate.

12 4840--9714-0152.8

"Restricted Funds" means donor-restricted pl edges, gifts, grants, donati ans and contributions in whatever form they may take and hovvever held and whether received or to be received, if the granting of a security interest in said assets under this Agreement or any other loan document would be inconsistent with the donor restriction (e.g., pledges made for purposes other than the P raj ect).

"Security Agreerrent" means the Security Agreement of even date herewith executed and delivered by the B orrovver for the benefit of the Issuer.

"State" means the State of California

"Subordinate Deed of Trust'' means the Subordinate Deed of Trust with Assignment of Leases and Rents, Security Agreement and Financing Statement, dated as of June 1, 2020, by the B orrovver for the benefit of the Issuer.

"Subordinate Loan" means the tax-exempt loan provided by the Lender to the Issuer and the I oan from the Issuer to the B orrovver under the Subordinate Loan Agreement in the maxi mum outstanding principal amount of $10,000,000.

"Subordinate Loan Agreerrent" means that certain Loan Agreement, dated as of J une 1, 2020, by and among the Issuer, the B orrCMter and the Lender, as any of the same may be supplemented or amended from ti me to ti me in accordance with the terms thereof.

"Subsidiary'' of a Person means (i) any corporation more than So>/o of the outstanding securities having ordinary voting povver of which shall at the time be ovvned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, limited liability company, association, joint venture or similar business organization more than So>/o of the ovvnership interests having ordinary voting povver of which shal I at the ti me be so ovvned or control I ed.

"Swap Agreerrent" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or opti ans or forward bond or forward bond price or forward bond index transacti ans, i nterest rate opti ans, forward foreign exchange transacti ans, cap transacti ans, fl oar transacti ans, col I ar transacti ans, currency swap transacti ans, cross-currency rate swap transacti ans, currency opti ans, spot contracts, or any other si mi I ar transacti ans or any combination of any of the foregoing (including any opti ans to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are suqject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a" Master Agreerrent" ), including any such obligations or liabilities under any Master Agreement.

"Tax Exempt F i nanced F aci I iti es" means the porti ans of the P rqj ect financed with proceeds of the Loans.

13 4840--9714-0152.8

"Tax Certificate'' means the Tax Certificate dated the Closing Date executed and delivered by the Issuer and the Borrovver, together with any supplements or certificates related thereto.

"Title Insurer" means First American Title Insurance Company.

"Title Policy'' means an AL TA (or equivalent) mortgagee policy of title insurance with coverage in an amount equal to the principal amount of the Loans, with reinsurance and endorsements as the Lender may require, containing no exceptions to title (other than Permitted Encumbrances) which are unacceptable to the Lender, and insuring that the Deed of Trust is a fi rst-pri ori ty I i en on the Property securi ng the Loans. W i thout I i mi tati on, such policy shal I ( a) be in the 2006AL TA form or, if not available, AL TA 1992 form (deleting arbitration and creditors' rights, if permissible) or, if not available, the form commonly used in the State, insuring the Lender and its successors and assigns; and (b) include those endorsements and/or affirmative coverages approved by the Lender, as evidenced by the final approved title policy.

"Unencumbered Liquid Assets" is defined as unrestricted cash and readily marketable securities that can be converted into cash within three Business Days. Excluded from Unencumbered Liquid Assets are ( a) permanently restricted assets as determined in accordance with GAAP, (b) deferred revenue identified in the Borrovver's audited financial statements, ( c) retirement accounts, ( d) restricted stock and stock suqj ect to the provi si ans of Rule 144 of the Securities and Exchange Commission, and (e) any of the assets described above which are pledged to the Lender in connection with a loan or other credit extension from the Lender or other than the Loans. " Unencumbered" is defined as free of any Ii ens, security interests or other encumbrances except in favor of Lender.

Section 1.02. Accounting Terms and Determinations. Unless otherwise specified herein, al I accounting terms used herein shal I be interpreted, al I accounting determi nati ans hereunder shal I be made, and al I financial statements required to be delivered hereunder shal I be prepared, in accordance with GAAP. If, after the Closing Date, there shall occur any change in GAAP from those used in the preparation of the financial statements referred to in Section 7.05 hereof and such change shall result in a change in the method of calculation of any financial covenant, standard or term found in this Loan Agreement relating solely to obligations in existence on the Closing Date including, without limitation, a recharacterization of operating I eases to the effect that certain operati ng I eases are to be treated as capital I eases, either B orrovver or Lender may by notice to the other party hereto, requi re that Lender and B orrovver negotiate i n good faith to amend such covenants, standards, and terms so as equitably to reflect such change in accounting principles, with the desired result being that the criteria for evaluating the financial condition of Borrovver shall be the same as if such change had not been made. No delay by Borrovver or Lender in requiring such negotiation shall limit their right to require such a negotiation at any ti me after such a change in accounting pri nci pl es. U nti I any such covenant, standard, or term is amended in accordance with this Section 1.02, financial covenants shall be computed and determined in accordance with GAAP in effect prior to such change in accounting pri nci pl es.

14 4840--9714-0152.8

ARTICLE II

REPRESENTATIONS, WARRANT! ES AND COVENANTS OF ISSUER AND BORROWER

Section 2.01. Representations, Warranties and Covenants of the Issuer. The Issuer represents and warrants as of the date hereof, and covenants, for the benefit of the Lender and the B orrovver, as fol I ovvs:

( a) The I ssuer is a j oi nt exercise of povvers agency duly organized and existing under the laws of the State, and is duly authorized to enter into the Issuer Documents and to perform its obi i gati ans under the Issuer Documents.

(b) All requirements have been met and procedures have occurred in order to authorize the execution and delivery of the Issuer Documents. The Issuer has taken all necessary action and has complied with al I provi si ans of the I aw required to make the Issuer Documents valid and binding obi i gati ans of the Issuer, except to the extent Ii mited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally, by the application of equitable pri nci pl es regard I ess of whether enforcement is sought in a proceeding at law or in equity, or by public policy.

(c) Each of the Issuer Documents has been duly authorized, executed and delivered by the Issuer. Nothing in this Loan Agreement shall be construed as requiring the I ssuer to provide any fi nanci ng or refi nanci ng for the P raj ect other than the proceeds of the Issuer Loan Obligation or to provide sufficient moneys for all of the cost of fi nanci ng or refi nanci ng the P raj ect.

( d) Pursuant to this Loan Agreement, the I ssuer has assigned to the Lender al I of the Issuer's rights ( except Reserved Issuer Rights) in this Loan Agreement, the Payments and any other documents executed by the Borrovver except the Tax Certificate, including the assignment of all rights in any security interest granted to the Issuer by the B orrovver.

( e) To the knCMtl edge of the I ssuer, there is no action, suit, proceedi ng, cl ai m, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body pending or threatened against or affecting the Issuer, chal I engi ng the I ssuer' s authority to enter into this Loan Agreement or the Tax Certificate or any other action wherein an unfavorable ruling or finding would adversely affect the enforceability of this Loan Agreement or the Tax Certificate, or the exclusion of interest on the Issuer Loan Obi i gati on from gross income for federal tax purposes under the Code, or would materially and adversely affect any of the transactions contemplated by this Loan Agreement.

Section 2.02. Representations, Warranties and Covenants of the Borrovver. The B orrovver represents and warrants as of the date hereof, and covenants, for the benefit of the Lender and the I ssuer as fol I ovvs:

15 4840--9714-0152.8

(a) The Borrovver is duly organized and in good standing under the laws of the State of California, authorized to purchase and hold real and personal property and finance or refinance the same, and has full legal right, pc:M1er and authority to enter into the B orrovver Documents and to carry out and consummate al I transacti ans contemplated hereby and by the other Borrovver Documents and by proper corporate action has duly authorized the execution, delivery and performance of the BorrCM1er Documents. The Borrovver is duly licensed to operate and maintain its existing facilities and has all necessary pc:M1er and authority to conduct the business nCM1 being conducted by it and as contemplated by this Loan Agreement.

(b) The Borrovver Documents have been duly authorized, executed and delivered by the B orrovver.

(c) Assuming due execution and delivery by the other parties, this Loan Agreement and the other BorrCM1er Documents constitute the legal, valid and binding agreements of the B orrovver enforceable agai nst the B orrovver by the I ssuer or the Lender, as appropriate, in accordance with their respective terms; except in each case as enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy and by commercial reasonableness.

( d) The execution and delivery of the B orrovver Documents by the B orrovver, the consummation of the transacti ans herein and therein contemplated and the ful fi 11 ment of or compliance with the terms and conditions hereof and thereof by the Borrovver, do not conflict with or constitute a violation or breach of or default (with due notice or the passage of ti me or both) under the articles of incorporation and bylaws of the B orrovver, or with respect to the Borrovver, any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any material indenture, mortgage, deed of trust, I oan agreement, I ease, contract or other material agreement or instrument to which the Borrower is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Borrovver, other than Permitted Encumbrances, which conflict, violation, breach, default, lien, charge or encumbrance may materially and adversely affect the consummation of the transacti ans contemplated by the B orrovver Documents, or the fi nanci al condition, operati ans or business of the B orrovver.

(e) As of the date hereof, no consent or approval of any trustee or holder of any i ndebtedness of the B orrovver or any guarantor of i ndebtedness of or other provider of credit or liquidity to the Borrovver, and with respect to the BorrCM1er, no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except with respect to any state securities or" blue sky" laws) is necessary in connection with the execution and delivery of the Borrovver Documents, or the consummation of any transaction herein or therein contemplated, or the f ul fi 11 ment of or compliance with the terms and conditions hereof or thereof, except as have been obtained or made and as are in f ul I force and effect.

16 4840--9714-0152.8

(f) There is no action, suit, proceeding, inquiry or investigation, before or by any court or federal, state, municipal or other governmental authority, pending, or to the knovvledge of the Borrovver, threatened in writing, against or affecting the Borrovver or the assets, properties or operati ans of the B orrovver:

(i) to restrain or enjoin the issuance or delivery of any of the B orrovver Documents or the payment of Payments hereunder;

(ii) in any way contesting or adversely affecting the authority for or the validity of the B orrovver Documents;

( i i i) in any way contesti ng the corporate existence or povvers of the B orrovver; or

(iv) which, if determined adversely to it, would materially adversely affect the consummation of the transacti ans contemplated by the B orrovver Documents or the ability of the Borrovver to perform its material obligations hereunder or thereunder; or could reasonably be expected to have a material adverse effect on the financial conditions, the operations or business of the B orrovver;

(g) As of the date hereof, no written information, exhibit or report furnished to the I ssuer or the Lender by the B orrovver i n connection with the negotiation of the Borrovver Documents or otherwise in connection with the transactions contemplated hereby and thereby, contains any untrue statement of a material fact regarding the B orrovver, the Property or the B orrovver' s busi ness, or omits to state a material fact regardi ng the B orrCM1er, the Property or the B orrCM1er' s busi ness necessary i n order to make the statements therein, in the light of the circumstances under which they were made, not misleading. All projections, valuations or pro forma financial statements pr0vided to the Issuer or the Lender by the BorrCM1er present the BorrCM1er's good faith opinion as to such projecti ans, val uati ans and pro forma condition and results.

( h) The B orrovver has heretofore furnished to the Issuer and the Lender the audited fi nanci al statements of the B orrovver and the E ndovvment for the fi seal years ended J une 30, 201 7, J une 30, 2018, and J une 30, 2019, and the related statement of revenues, expenditures, transfer and changes in net assets and changes in financial position for the years then ended and information related to the Property. The information rel ati ng to the Property is complete and accurate and those fi nanci al statements present fairly, in all material respects, the financial condition of the Borrovver, and the E ndovvment on the dates thereof, and the activities and cash flovvs for the periods then ended were prepared in accordance with GAA P. 5 i nee J une 30, 2019, there has been no material adverse change in the assets, operations or financial condition of the B orrovver and the E ndovvment, other than as di sci osed i n wri ti ng to the I ssuer and the Lender.

(i) As of the Closing Date, the BorrCM1er has good and marketable fee title to the Property, free and clear from all encumbrances other than Permitted Encumbrances.

17 4840--9714-0152.8

The B orrovver enj o.;s the peaceable and undisturbed possession of al I real and personal property which is material to its operation.

U) As of the Closing Date, the Borrovver is not in default (and no event has occurred and is continuing which with the giving of notice or the passage of time or both could constitute a default) (1) under the Borrovver Documents, or (2) with respect to any order or decree of any court binding against the B orrCM1er or any order, regulation or demand of any federal , state, muni ci pal or other governmental authority bi ndi ng agai nst the Borrovver, which default could reasonably be expected to materially and adversely affect the consummation of the transacti ans contemplated by the B orrovver Documents, or the financial condition, operations or business of the Borrovver.

( k) The B orrovver acknowledges, represents and warrants that, except for the express representati ans and warranties of the I ssuer set forth herei n, it has not rel i ed on the I ssuer or the Lender for any guidance or expertise i n anal yzi ng the fi nanci al or other consequences of the transacti ans contemplated by the B orrCM1er Documents or otherwise relied on the Issuer or the Lender for any advice. The BorrCM1er acknovvledges that it has been advised by, or has had the opportunity to be advised by, its ovvn financial advisors in connection with the Prqject.

(I) No portion of the Property financed with proceeds of the Loans includes any property used or to be used for sectarian i nstructi on or study, as a pl ace for devotional activities or religious worship, or primarily in connection with any part of the program of a school or department of divinity for any religious denomination.

( m) The B orrovver is an organization descri bed i n Section 501 ( c) ( 3) of the Code, does not constitute a private foundation under Section 509(a) of the Code, and the income of the Borrower is exempt from federal taxation under Section 501 ( a) of the Code. The BorrCM1er has received a determination from the Internal Revenue Service to the foregoing effect, and none of the bases for such determination have changed si nee the date thereof.

4840--9714-0152.8

( n) E nvi ronmental Laws.

(i) The BorrCM1er is in compliance in all material respects with all applicable Environmental Laws.

( i i) Neither the B orrovver nor the Property is the subject of a federal , state or I ocal i nvesti gati on evaluating whether any remedial action is needed to respond to any alleged violation of or condition regulated by Environmental Laws or to respond to a rel ease of any Hazardous Materials into the environment.

(iii) Except as otherwise identified in the Environmental Study pr0vided by the Borrovver to the Lender, the Borrovver has no knovvledge of the presence on, under or about the Property, novv or in the past, of any Hazardous Materials, or of the transportation to or from the Property of any Hazardous Materials in violation of applicable law. The Borrovver agrees to construct, operate and maintain the Property strictly in compliance with all Environmental

18

Laws. The BorrCMter will pr0vide the Lender with copies of any environmental reports prepared with respect to the environmental condition of the Property.

(iv) The BorrCMter is in compliance with Division 13, commencing with Section 21000, of the Public Resources Code (the "CEQA Requirements") with respect to the Project and has received all documentation evidencing such compliance, or the Project is not defined as a "prqject" or is "statutorily exempt" or is "categorically exempt" in accordance with the CEQA Requirements.

(o) Neither the Borrovver nor any affiliate of the Borrovver is an "investment company" or a company "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended.

(p) Neither the Borrovver nor any of its affiliates is in violation of any laws relating to terrorism or money laundering ("Anti-Terrorism Laws"), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the "Executive Order''), and the Patriot A ct.

( q) Neither the B orrower nor any of its affi I i ates is any of the fol I ovvi ng:

( i) a person that is I i sted i n the annex to, or is otherwise suqj ect to the pr0visions of, the Executive Order;

( i i) a person CMtned or control I ed by, or acti ng for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(iii) a person with which the Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti -Terrorism Law;

(iv) a person that commits, threatens or conspires to commit or supports "terrorism'' as defined in the Executive Order; or

(v) a person that is named as a "specially designated national and blocked person" on the most current list published by the Office of Foreign Asset Control ("OFAC") or any list of Persons issued by OFAC pursuant to the Executive Order at its official website or any replacement website or other replacement official publ i cation of such Ii st.

(r) Neither the BorrCMter nor any of its affiliates (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in subsection (q) above, (ii) deals in, or otherwise engages i n any transaction rel ati ng to, any property or i nterests i n property blocked pursuant to the Executive Order or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to viol ate, any of the prohi biti ans set forth in any A nti-T errori sm Law.

19 4840--9714-0152.8

(s) The Borrovver is currently in compliance, and in the future will comply, with all applicable nondiscrimination laws.

ARTICLE Ill

ISSUANCE OF LOANS; APPLICATION OF PROCEEDS

Section 3.01. Loans to Finance the Project.

(a) The Lender hereby agrees to loan up to $35,()()(),()()() in the form of the Issuer Loan Obi i gati on to Issuer and Issuer hereby agrees, subject to Ii mitati ans herein, to borrovv such amount from Lender and to I end the Loan Proceeds to B orrovver for the purposes of financing the Project. The Loans are non-revolving, therefore, any portion of the Loans repaid may not be relent.

(b) U pan fulfi 11 ment of the conditions precedent set forth in Article V hereof, the Lender shall disburse the Loan Proceeds of the Loans in the amount of $50,001.00 to the Borrovver to reimburse certain expenditures related to the Project, and shall disburse Loan Proceeds of the Loans from time to time to the Prqject Fund pursuant to Draw Requests. The aggregate principal amount of the Loans outstanding under this Loan Agreement is set forth in Exhibit H hereto, as such Exhibit H may be amended from time to ti me pursuant to Section 5. 03( b) hereof.

( c) The B orrovver shal I design, acquire, construct, improve and equip the Project with all reasonable dispatch, substantially in accordance with the Plans and Specifications. The BorrCMter shall (a) pay when due all fees, costs and expenses incurred in connection with the foregoing from funds made available therefor in accordance with this Loan Agreement, or otherwise, unless any such fees, costs or expenses are being contested by B orrovver in good faith and by appropriate proceedings; (b) as the Borrovver deems reasonably appropriate and in its best interests, ask, demand, sue for, levy, recover and receive all those sums of money, debts and other demands whatsoever which may be due, CMti ng and payable under the terms of any contract, order, receipt, writing and instruction in connection with the design, construction and equipping of the Project; and (c) as Borrovver deems reasonably appropriate and in its best interests, enforce the provi si ans of any contract, agreement, obi i gati on, bond or other performance security with respect thereto. BorrCMter may revise the Plans and Specifications from ti me to ti me, provided that no revision shal I be made which would change the purposes of the P raj ect to other than purposes permitted by the Act. U pan the completion of the Project, BorrCMter shall provide Lender with a Completion Notice.

(d) The Issuer's obligation to repay the Issuer Loan Obligation and the B orrovver' s obi i gati on to repay the B orrovver Loan shal I commence, and interest shal I begin to accrue, on the Closing Date.

(e) The execution and delivery of this Loan Agreement shall not obligate the Lender to execute and deliver any Draw Request or to provide any funds with respect to any Draw Request, unless and until such Draw Request and any related documents have

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been executed and delivered by all other parties thereto and all conditions set forth in this Loan Agreement have been satisfied.

Section 3.02. Advances.

(a) General. Pr0vided that no Default or Event of Default has occurred and is continuing, the Loan Proceeds shall be advanced by the Lender for the Project for the benefit of the B orrovver in accordance with the terms and condi ti ans set forth i n this Section 3.02 and Sections 5.02 and 5.03 of this Loan Agreement and the Construction Disbursement Agreement. All proceeds of the Loans advanced by the Lender shall constitute a loan made to the BorrCMter under this Loan Agreement, secured by the Loan Documents.

(b) Conditions Precedent to Advances. Other than the disbursement of Loan Proceeds on the Closing Date, the Lender's agreement to disburse funds shall be subject to the further conditions precedent set forth in Sections 5.02 and 5.03 of this Loan Agreement. U pan receipt of a Draw Request from the B orrovver and the approval thereof by the Lender, the Lender shal I disburse Loan Proceeds to the P rqj ect Fund, to be applied by the B orrovver for Prqject Costs in accordance with Section 3.07 hereof.

(c) Lender's Inspector. The Lender shall have the right to retain at the Borrovver's expense an inspector (the "Lender's Inspector'') to review and advise the Lender with respect to all Plans and Specifications, construction, architectural and other design professional contracts, change orders, governmental permits and appr0vals, and other matters related to the design, construction, operation and use of the P rqj ect, to monitor the progress of construction and to review on behalf of the Lender all Draw Requests submitted by the Borrovver. The Borrovver acknovvledges that (i) the Lender's Inspector has been retained by the Lender to act as a consultant, and only as a consultant, to the Lender in connection with the construction of the Project, and the Lender's I nspector may be an employee of the Lender, (ii) the Lender's I nspector shal I in no event have any pCMter or authority to make any decision or to give any approval or consent or to do any other thing which is binding upon the Lender, and any such purported decision, approval , consent or act by the Lender' s I nspector on behalf of the Lender shal I be void and of no force or effect, (iii) the Lender reserves the right to make any and all decisions required to be made by the Lender under this Loan Agreement, in its sole and absolute discretion, and without in any instance being bound or Ii mited in any manner whatsoever by any opinion expressed or not expressed by the Lender's I nspector to the Lender or any other person with respect thereto, and (iv) the Lender reserves the right in its sole and absolute discretion to replace the Lender's I nspector with another inspector at any ti me and without prior notice to or approval by the BorrCMter. All inspections by or on behalf of the Lender shal I be solely for the benefit of the Lender, and the B orrovver shal I have no right to claim any I ass or damage against the Lender or the Lender's I nspector (whether or not an employee of the Lender) arising from any alleged (i) negligence or failure to perform such inspections, (ii) failure to monitor loan disbursements or the progress or quality of construction, or (iii) failure to otherwise properly administer the construction aspects of the P raj ect.

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If required by the Lender upon receiving a Draw Request, the Lender's Inspector may determine prior to any disbursement of Loan Proceeds by the Lender:

(i) whether the work completed to the date of such Draw Request has been done satisfactorily and in accordance with the PI ans and S peci fi cati ans;

( i i) the percentage of construction of the P rqj ect completed as of the date of such Draw Request;

( i i i) the hard construction costs actual I y i ncurred by the B orrovver i n connection with the construction of the Project for work in place as part of the Project as of the date of such Draw Request;

(iv) the actual sum necessary to complete construction of the Prqject in accordance with the Plans and Specifications; and

(v) the amount of time from the date of such Draw Request which will be required to complete construction of the Prqject in accordance with the Plans and S peci fi cati ans.

Section 3.03. Term. The term of this Loan Agreement shall commence on the Closing Date and shal I terminate upon the earliest to occur of any of the fol I ovvi ng events:

(a) so long as no Event of Default has occurred and is continuing hereunder, the payment by the Borrovver of all Payments and Additional Payments with respect to the B orrCMter Loan, any rebate payments and any other payments required to be paid by the B orrovver hereunder;

(b) so long as no Event of Default has occurred and is continuing hereunder, the prepayment of the enti re outstandi ng pri nci pal amount, accrued i nterest, any Additional Payments and the other amounts due hereunder; or

( c) The Lender's election to terminate this Loan Agreement under Article X I due to an Event of Default hereunder.

Section 3.04. Costs and Expenses of the Issuer. The Issuer Issuance Fee shall be paid to the Issuer by the B orrovver on the CI osi ng Date. The Borrower shal I al so pay to the Issuer the fol I CMti ng:

( a) A 11 taxes and assessments of any type or character charged to the I ssuer affecting the amount avai I able to the Issuer from payments to be received hereunder or in any way arising due to the transacti ans contemplated hereby (including taxes and assessments assessed or levied by any public agency or governmental authority of whatsoever character having povver to I evy taxes or assessments) but excluding any taxes based upon the capital and/or income of any other person other than the B orrCMter; provided, hCMtever, that the B orrCMter shal I have the right to protest any such taxes or assessments and to requi re the I ssuer, at the B orrCMter expense, to protest and contest any such taxes or assessments assessed or I evi ed upon the I ssuer and that the B orrower shal I

22 4840--9714-0152.8

have the right to withhold payment of any such taxes or assessments pending disposition of any such protest or contest unless such withholding, protest or contest would materially adversely affect the rights or interests of the Issuer, in the sole discretion of the I ssuer, notwi thstandi ng the provi si ans of Section 8. 01 ;

(b) The reasonable fees and expenses of such accountants, consultants, attorneys and other experts as may be engaged by the I ssuer to prepare audits, fi nanci al statements, reports, opinions or provide such other services as are required under the Loan Documents;

( c) The I ssuer I ssuance Fee, I ssuer Annual Fee and the reasonable fees and expenses of the I ssuer or any agent or attorney selected by the I ssuer to act on its behalf in connection with the B orrCMter Loan under this Loan Agreement, the Tax Certificate or any other documents contemplated hereby or thereby, including, without limitation, any and all reasonable expenses incurred in connection with any litigation, investigation, or other proceeding that may at any time be instituted involving this Loan Agreement, the Tax Certificate or any other documents contemplated hereby or thereby, or in connection with the reasonable supervision or inspection of the Borrovver, their properties, assets or operations or otherwise in connection with the administration of this Loan Agreement, the Tax Certificate or any of the other documents contemplated hereby or thereby; and

( d) Such amounts as may be necessary to satisfy the rebate requirements in accordance with the Tax Certificate and to pay the cost of calculation of such rebate requirements when required by the Code if the Borrovver do not do so directly. To the extent B orrCMter do not satisfy any of the excepti ans to rebate, any rebate cal cul ati ans must be computed by a third-party rebate analyst and may not be computed solely by the Borrovver.

The Issuer Fees and Expenses shal I be bi 11 ed to the B orrCMter by the Issuer from ti me to ti me, together with a statement of the Issuer, certifying that the amount bi 11 ed has been incurred or paid by the Issuer for one or more of the above items. After such a demand, amounts so bi 11 ed shall be paid by the Borrovver within thirty (30) days after receipt of the bill by the Borrovver. Notwithstanding the foregoing, the I ssuer shal I not be required to submit a bi 11 to the B orrovver for payment of the Issuer Annual Fee or any amount due with respect to arbitrage rebate under Section 148 of the Code, the calculation and payment for which is the responsibility of the B orrovver. The I ssuer I ssuance Fee and the i ni ti al I ssuer Annual Fee shal I be paid to the I ssuer by the Borrovver on the Closing Date. Thereafter, the Issuer Annual Fee shall be due and payable by the B orrovver in advance on J une 1 of each year, commend ng with the first such date follCMting the Closing Date. The Borrovver' obligation to pay the Issuer Issuance Fee and the Issuer Annual Fee shal I in no way Ii mit the other amounts that may be payable by the Borrower to the I ssuer under the Loan Documents, i ncl udi ng the enforcement thereof.

Section 3.05. Limited Obligations of the Issuer. None of the Issuer, any of its members or any Person executing this Loan Agreement shall be liable personally on the Loans or subject to any personal liability or accountability by reason of the execution hereof. The Issuer Loan Obligation is a limited obligation of the Issuer, payable solely from and secured by the pledge of the Payments hereunder. Neither the Issuer, its members, the State, nor any of its

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political subdivisions shall be directly, indirectly, contingently or morally obligated to use any other moneys or assets to pay all or any portion of the debt service due on the Loans, to levy or to pl edge any form of taxation whatever therefor or to make any appropriation for their payment. The Issuer Loan Obligation is not secured by a pledge of the faith and credit of the Issuer, its members, the State or any of its political subdivisions nor do they constitute indebtedness within the meaning of any constitutional or statutory debt limitation. The Issuer has no taxing povver.

The Issuer shall not be liable for payment of the principal of, prepayment premium, if any, or interest on the Issuer Loan Obi i gati on or any other costs, expenses, I asses, damages, claims or actions of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Loan Agreement or any other documents, except only to the extent amounts are received for the payment thereof from the B orrCMter under this Loan Agreement.

Section 3.06. Invalidity of BorrCMter Loan. If at any time the Borrovver Loan are declared to be invalid or unenforceable for any reason, the Borrovver Loan will be deemed to be a direct loan from the Lender to the Borrovver. All references herein to "Borrovver Loan" and "Issuer Loan Obligation" shall instead refer to the "Loans," as direct Loans from the Lender to the B orrovver.

Section 3.07. Project Fund. The Borrovver shall establish and maintain an account at Farmers and Merchants Bank of Long Beach designated as the "P rqj ect Fund." and designated as account number 26015358. The Borrower shall maintain a separate record of the Prqject Fund on its books and shall account for all deposits and withdrawals from the Project Fund in accordance with the B orrCMter' s accounting procedures. The Lender shal I deposit a portion of the Loan Proceeds into the Project Fund pursuant to Draw Requests. The Borrovver may withdraw amounts from the Project Fund for the payment of Project Costs identified in the related Draw Request. No moneys in the Project Fund shall be used to pay Additional Payments.

ARTICLE IV

REPAYMENT OF THE LOANS

Section 4.01. Interest.

( a) The pri nci pal amount of the Loans outstandi ng under this Loan Agreement, from time to time shall bear interest (computed on the basis of a 360-day year and actual number of days elapsed) at the Applicable Loan Rate. I nterest shal I accrue on the aggregate outstanding principal balance of the Loans from the Closing Date to the Maturity Date or earlier prepayment as provided herein, and shall be payable monthly by the B orrovver in arrears on the first calendar day of each month prior to such date and upon earlier demand in accordance with the terms hereof or prepayment in accordance with Section 4.08 hereof.

(b) Upon the occurrence of a Determination of Taxability, the Borrovver shall pay to the Lender, as assignee of the Issuer, future interest payments calculated at the G ross-U p Rate as such Payments become due. I n addition, the B orrovver shal I make immediately, upon demand of the Lender, a payment to the Lender sufficient to

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reimburse the Lender and to supplement Prior I nterest Payments to equal the Gross-Up Rate applicable to such Prior Interest Payments, and such obligation shall survive the termination of this Loan Agreement. The Lender acknovvledges that payments at the Gross-Up Rate may be amounts that are not excluded from gross income for federal income tax purposes pursuant to Section 103 of the Code.

(c) Upon the occurrence of an Event of Indirect Taxability, the Lender shall notify the Borrovver and the Issuer of such event and shall have the option, without the consent of the B orrovver or the Issuer, to require the B orrovver to provide for the reimbursement of the Lender for the increase, if any, in its federal income tax liability caused by such Event of Indirect Taxability. Any such adjustment shall be suqject to the condition that, prior to such adjustment, the Lender and the Issuer shall have received an opinion of Bond Counsel to the effect that such adjustment complies with the requirements of this Loan Agreement and will not, in and of itself, cause interest with respect to the Issuer Loan Obi i gati on to be included in the gross income of the Lender for federal income tax purposes. The Lender acknCMtledges that any amount received by the Lender pursuant to the application of this Section 4.0l(c) shall be treated as a fee and not as interest that is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Code.

Section 4.02. Payments. The Issuer shall pay the principal of and interest on the Issuer Loan Obligation, but only out of Payments made to the Issuer by the BorrCMter therefor. The B orrovver shal I pay to the Lender, as assignee of the Issuer, Payments in the amounts and at such ti mes as set forth in Section 4.01, Section 4.08 and Section 4.10 hereof.

Section 4.03. Advances of the Loans. Suqject to the satisfaction of the applicable terms and conditions of this Loan Agreement, from and after the Closing Date until the end of the I nterest-Only Period, proceeds of the Loans may be Advanced by the Lender into the P rqj ect Fund pursuant to Draw Requests as may be submitted by the Borrovver to the Lender from time to time. Each Draw Request shall reasonably identify the Project Costs that will be paid with (or for which the BorrCMter will be reimbursed by) such Draw Request. Draw Requests shall be numbered consecutively beginning with " 1." The maxi mum aggregate amount of the Issuer Loan Obligation provided for in all Draw Requests shall be less than or equal to $34,949,999.00 (consisting of the original principal amount of the Loans of $35,000,000, less the disbursement of proceeds of the Issuer Loan Obi i gati on on the CI osi ng Date for the account of the B orrovver in the amount of $50,001.00 in accordance with Section 3.0l(b)). The Loans are not a revolving loan and the total Advances shall not be reduced by any payments made by Borrovver when cal cul ati ng the remaining avai I able proceeds of the Loans to be disbursed.

Section 4.04. Security for the Loans. As security for the repayment of the Issuer Loan Obi i gati on, the I ssuer hereby assigns to the Lender al I of its right, ti tie and i nterest i n this Loan Agreement except for Reserved Issuer Rights, including the Issuer's rights to receive Payments with respect to the B orrCMter Loan (and hereby directs the B orrovver to make such Payments directly to, or at the direction of, the Lender), to collect the Payments and any other payments due to the I ssuer hereunder the recei pt of which is not part of Reserved I ssuer Rights, and to sue in any court for such Payments or other payments, to exercise all rights hereunder with respect to the P raj ect, and to withdraw or settle any cl ai ms, suits or proceedi ngs pertai ni ng to or ari si ng out

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of this Loan Agreement and the B orrCMter Loan upon any terms ( other than any cl ai ms related to Reserved I ssuer Rights). Such assignment by the I ssuer to the Lender shal I be an absol ute assignment without recourse to the Issuer. Such Payments and other payments the receipt of which is not part of Reserved Issuer Rights shall be made by the BorrCMter directly to the Lender, as the Issuer's assignee, without the requirement of notice or demand, at the address pr0vided in Section 12.04, or such other place as the Lender may from time to time designate in writing, and shal I be credited agai nst the I ssuer' s payment obi i gati ans under the related I ssuer Loan Obligation. No provision, covenant or agreement contained in this Loan Agreement or any obligation herein or therein imposed on the Issuer, or the breach thereof, shall constitute or give rise to or impose upon the Issuer a pecuniary liability, a charge upon its general credit or a pledge of its revenues. In making the agreements, provisions and covenants set forth in this Loan Agreement, the Issuer has not obligated itself except with respect to the application of the Payments made by the Borrovver hereunder and thereunder. All amounts required to be paid by the Borrovver hereunder shall be paid in lawful money of the United States of America in immediately available funds. No recourse shall be had by the Lender or the Borrovver for any cl ai m based on this Loan Agreement agai nst any di rector, officer, empl o.;ee or agent of the Issuer al I egi ng personal Ii abi I ity on the part of such person.

To further secure its Obligations and to perform and observe the covenants and agreements contained herein and in B orrovver Documents, B orrovver hereby pl edges to and grants to the Issuer, and the Issuer hereby assigns to the Lender, a first priority I ien and security interest, within the meaning of the California Uniform Commercial Code and to the extent permitted by law in all of its right, title and interest, if any, in the Project Fund (the" Project Fund Col I ateral"). The B orrovver agrees to execute and authorizes the Lender to fi I e such notices of assignment, chattel mortgages, financing statements and other documents, in form satisfactory to the Lender, which the Lender deems necessary or appropriate to establish and maintain the Lender's first priority security interest in the Project Fund Col lateral, including proceeds thereof.

Section 4.05. Deed of Trust and Security Agreement.

(a) To secure the repayment of the Loans, the Borrovver shall, at its expense, record, or cause the recordati on of, the Deed of Trust and al I amendments thereto i n the Official Records of the Office of the County Recorder of Orange County, California. Within 10 days after request for any confirmation of any filing required by this Section, the B orrCMter shal I deliver to the Lender, as assignee of the Issuer, the signed documents requested or evidence satisfactory to the Lender to the effect that such fi Ii ng has been duly accomplished. The B orrovver hereby authorizes the Lender to fi I e such financing statements ( and al I amendments or conti nuati ans thereto) as may be necessary to perfect the Lender's security in a form satisfactory to the Lender and the Borrovver shall, at the Lender's written request, provide to the Lender, within 60 days of the date of delivery of this Loan Agreement, a UCC-1 search certificate with respect to the Borrovver.

(b) To further secure the payment obligations of the Borrovver hereunder, the B orrovver has executed the Security Agreement. The Issuer, the B orrovver and the Lender agree that the Deed of Trust, the Security Agreement and UCC-1 financing statements may be amended or terminated at any time with the prior written consent of the Lender. The consent of the I ssuer shal I not be required for any such amendment or termination.

26 4840--9714-0152.8

(c) As additional security for the Issuer Loan Obi igation, the Issuer has made a complete assignment to the Lender of al I of the I ssuer' s rights, ti tie i nterest and obi i gati ans in, to and under the Deed of Trust and the Security Agreement pursuant to the Assignment Agreement. The Borrovver hereby consents to such assignment, as well as the assignment by the Issuer set forth in Section 4. 04 above.

Section 4.06. Payment on Non Business Days. Whenever any payment to be made hereunder shal I be stated to be due on a day which is not a B usi ness Day, such payment may be made on the next succeeding Business Day.

Section 4.07. Borrovver Payments to Be Unconditional. The obligations of the B orrovver to make Payments required under this Loan Agreement and to make other payments hereunder and thereunder and to perform and observe the covenants and agreements contained herein and therein shall be absolute and unconditional in all events, without abatement, diminution, deduction, setoff or defense for any reason, including (without limitation) any failure of the Prqject or the Property, any defects, malfunctions, breakdovvns or infirmities in the Property or any accident, condemnation, destruction or unforeseen ci rcumstances. Notwithstanding any dispute between the Borrovver and any of the Issuer, the Lender or any other person, the Borrovver shall make all Payments when due and shall not withhold any Payments pending final resolution of such dispute, nor shall the Borrovver assert any right of setoff or counterclaim against its obligation to make such payments required under this Loan Agreement.

Section 4.08. Prepayments.

( a) The I ssuer shal I prepay the I ssuer Loan Obi i gati on but solely to the extent that B orrovver has provided funds to prepay the B orrovver Loan, and the B orrovver may prepay the Borrovver Loan in whole or in part, on any date, in advance of the required Payments set forth in Section 4.10 hereof, by paying the outstanding principal amount of the Loans ( or the portion thereof bei ng prepaid), accrued i nterest to the prepayment date, without any prepayment fee, charge or penalty or cost or expense related to such prepayment, and any outstanding and unpaid Additional Payments due under this Loan Agreement; provided, hovvever, that no partial prepayment shall be made which shall cause the remaining outstanding principal amount of the Loans shal I to be less than $50,000. The Borrower shall provide the Lender written notice of any such prepayment at I east 30 days in advance thereof. U pan any prepayment in part of the B orrovver Loan, the prepayment shal I be applied first to interest accrued thereon, and any outstanding and unpaid Additional Payments, and next to the principal component of the Borrovver Loan, in the inverse order of date due.

I n connection with an opti anal prepayment of the B orrovver Loan pursuant to this Section 4.08(a) in an amount equal to or greater than $1,000,000 at one time, the Borrovver may, concurrently with the delivery of the notice of optional prepayment to the Lender required by this Section, request that the Lender reamortize the Borrovver Loan over the period from the date of such option prepayment and the Maturity Date on a level debt service basis. The Lender shall not be required to reamortize the Borrovver Loan more than once each calendar quarter. The Lender shall, within 15 days follovving the

27 4840--9714-0152.8

prepayment of the Borrovver Loan pr0vide an amended Exhibit D to the BorrCMter. Nothing herein shal I affect the Prepayment Date for the B orrovver Loan.

( b) The Issuer shal I prepay the Issuer Loan Obi i gati on solely to the extent the Borrovver shall prepay the BorrCMter Loan, in whole or in part at any time from insurance or condemnation proceeds pursuant to Article IX hereof by paying some or al I of the outstanding principal amount of the applicable Loans, accrued interest on the applicable Loans to the prepayment date, and any outstanding and unpaid Additional Payments due under this Loan Agreement.

( c) The Issuer shal I prepay the I ssuer Loan Obi i gati on solely to the extent that the B orrovver shal I prepay the B orrovver Loan, and the B orrovver shal I prepay the B orrovver Loan in ful I immediately upon demand therefor of the Lender to the Issuer after the occurrence of an Event of Default by paying the outstanding principal amount of the Loans, accrued interest to the prepayment date, and any outstanding and unpaid Addi ti anal Payments due under this Loan Agreement.

( d) The Issuer shal I prepay the Issuer Loan Obi i gati on solely to the extent the Borrovver shall prepay the Borrower Loan in full immediately, and the Borrovver shall prepay the B orrovver Loan in f ul I immediately upon demand of the Issuer after the occurrence of a Determination of Taxability by paying the outstanding principal amount of the B orrovver Loan, interest at the Gross Up Rate to the date of prepayment as required by Section 4.0l(b), and any outstanding and unpaid Additional Payments due under this Loan Agreement, plus an amount necessary to supplement the Prior Interest Payments to the Gross-Up Rate pursuant to Section 4.01 (b).

( e) The Issuer shal I prepay the I ssuer Loan Obi i gati on solely to the extent that the B orrovver shal I prepay the B orrCMter Loan i n f ul I and the B orrovver may prepay the Borrovver Loan in full immediately upon an Event of Indirect Taxability by paying the outstanding principal amount of the Loans, interest accrued with respect to the Loans to the date of prepayment, and any outstanding and unpaid Additional Payments due under this Loan Agreement.

(f) On the Prepayment Date, the Issuer shal I, to the extent funds are received from the B orrCMter, prepay the I ssuer Loan Obi i gati ans i n f ul I and the B orrovver shal I prepay the Borrovver Loans in full, together with all unpaid and accrued interest on the Borrovver Loans to the Prepayment Date, any Additional Payments then due in accordance with this Loan Agreement and all other amounts payable in accordance with this Loan Agreement. Not later than 180 days prior to the Prepayment Date, the Borrovver may in writing request an extension of the Loans to a date up to and including the Maturity Date. The Lender shall, not later than 6() days follovving receipt of the Borrovver's written request for an extension, provide a written response to the Borrovver indicating whether such extension is approved and the new Applicable Loan Rate, Prepayment Date, and amended Exhibit D. Any fai I ure of the Lender to respond shal I be construed as a denial of the request. If such new Applicable Loan Rate and Prepayment Date, are not acceptable to the B orrovver, the B orrovver shal I prepay the B orrovver Loans on the Prepayment Date. In connection with the extension of the Loans, the Borrovver

28 4840--9714-0152.8

shal I cause to be delivered to the Issuer a notice of such extension and the nevv Applicable Loan Rate, Prepayment Date, and amended Exhibit D, and to the Issuer and the Lender an opinion of Bond Counsel that such extension will not, in and of itself, adversely affect the exclusion of the interest on the Issuer Loan Obligations from the gross income of the recipients thereof for purposes of federal income taxation. The Lender, the Issuer and the Borrovver shall enter into an amendment to this Loan Agreement to reflect the terms of any extension of the Loans pursuant to this Section.

4840--9714-0152.8

(g) Remarketi ng of the Loans.

(i) To the extent the Lender denies the B orrovver' s written request for an extension of the Loans in accordance with Section 4.08(f), the Borrower may enter into a Remarketing Agreement with a Remarketing Agent to remarket the Loans pursuant to the provisions of this paragraph (g). For the avoidance of doubt, nothi ng contai ned i n this paragraph ( g) shal I modify the B orrCMter' s obligation to pay the Borrovver Loans on the Prepayment Date.

(ii) The RemarketingAgent shall use its best efforts to place the Loans (or portions thereof) at a price of par plus accrued interest, if any, on each date that such Loans (or portions thereof) are required to be prepaid pursuant to Section 4.08(f) and if such Loans is not placed on such date, the Remarketing Agent shall continue to use its best efforts to place such Loans at a price of par pl us accrued interest, if any. By 12: 00 noon, California Ti me, on the B usi ness Day prior to each date that the Loans (or portions thereof) is required to be prepaid pursuant to Section 4.08(f), the Remarketing Agent shall give initial notice by telephone ( promptly confirmed in writing) of the principal amount of the Loans for which it has arranged placement, together with the principal amount of the Loans, if any (and such other particulars with respect thereto as the Lender may deem necessary), for which it has not arranged placement, to the Lender and the B orrovver.

(iii) Notwithstanding anything herein to the contrary, the Loans may be remarketed only at a price of par plus accrued interest, if any.

(iv) The B orrovver shal I deliver to the Remarketi ng Agent, the Issuer and the Lender, by 10:00 a.m., California Time, prior to the Prepayment Date, an approving written opinion of Bond Counsel to the effect that under then-existing laws that such action would not cause the interest with respect to the Issuer Loan Obligations to become includable in gross income under the Code or adversely affect the validity of this Loan Agreement.

(v) The Remarketi ng Agent shal I not be required to remarket any Loans pursuant to this Section if it has actual knovvledge that an Event of Default shall have occurred and be continuing hereunder or if the Remarketing Agent determines, in its sole discretion, that the remarketing of the Loans would be unlawful or would be likely to result in the imposition of liability or damages agai nst the I ssuer, the R emarketi ng A gent, the Lender, or the B orrovver.

29

(vi) The Borrovver shall pay all reasonable expenses of the Issuer and the Lender, including reasonable fees and expenses of counsel, in connection with such remarketing and execution of any documents in connection therewith.

Section 4.09. Restrictions on Transfer of Loans.

(a) Notwithstanding any other provision hereof, the Borrovver Loan is nontransferable, except in connection with the transfer of the Issuer Loan Obligation. The Issuer Loan Obi i gati on may be transferred, assigned and reassigned in whole ( but not in part) by the Lender without the consent of the Issuer or the Borrovver, upon 30 days prior written notice to the Issuer and the Borrovver, to an Affiliate or a Qualified Institutional Buyer but only in accordance with the requirements of this Section 4.09; provided, hovvever, that the Lender shal I not transfer or assign the Issuer Loan Obi i gati on other than to an Affiliate prior to the earlier of (i) the date of delivery of a Completion Notice or ( i i) end of the I nterest-Onl y Period. For purposes of the foregoi ng sentence, a transfer or assignment of the Issuer Loan Obi i gati on to an A ffi Ii ate or a change of control of the Lender or a sale of substantially all of the Lender's assets or equity shall not be deemed to be a transfer or assignment of the Issuer Loan Obligation. In the event of a sale, transfer or assignment to an A ffi I i ate, the Lender shal I certify to the I ssuer and the B orrovver that such transferee is an A ffi Ii ate. I n the event of a sale, transfer or assignment by the Lender of the Issuer Loan Obligation to a Qualified Institutional Buyer that is not an Affiliate of the Lender, the Lender shall, prior to any such transfer, provide or cause to be provided to the Issuer and the B orrovver an investor I etter executed by such purchaser or transferee i n the form of E xhi bit B hereto which shal I contai n a certification that the purchaser or transferee is a Qualified Institutional Buyer as provided in this Loan Agreement. The provisions of the investor letter may not be revised without the prior written consent of the Issuer.

In addition, the Lender wi 11 provide to the B orrCMter and the Issuer an Assignment Letter, in the form of Exhibit G hereto, when such assignment is to an Affiliate of the Lender, and the Borrovver and the Issuer shall acknovvledge such assignment. The Lender hereby covenants and agrees that if it transfers or assigns the Issuer Loan Obligation pursuant to this Section, it will simultaneously transfer or assign the Issuer Loan Obligation issued pursuant to the Subordinate Loan Agreement to the same A ffi I i ate or Qual i fi ed I nsti tuti anal B uyer.

(b) Upon assignment, the Borrovver will reflect in a book entry the assignee designated i n the written request of assignment or i n a written certification of an A ffi I i ate delivered to the Issuer and the Borrower pursuant to this Section, and shal I agree to make all payments to the assignee designated in such written request, notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether arising from a breach of this Loan Agreement or otherwise) that the Issuer and the B orrovver may from ti me to ti me have agai nst the Lender or the assignee.

( c) The Issuer agrees to execute al I documents, including notices of assignment, which may be reasonably requested by the Lender or its assignee to protect their interest in the Project and in this Loan Agreement; provided, hovvever, that the

30 4840--9714-0152.8

Issuer shal I not thereby be required or deemed to waive any rights hereunder or under any other document i n connection herevvi th to which the I ssuer is a party or by which it is bound. The Lender or assignee shall pay all reasonable expenses of the Issuer and Borrovver, including reasonable fees and expenses of counsel, in connection with such transfer and assignment and the execution of any documents in connection therewith. Any transfers of interest in the Issuer Loan Obligation shall only be made pursuant to an entry i n a registration book by the B orrovver pursuant to this Section, as requi red by Section 149 of the Code.

Section 4.10. Repayment. The Borrovver shall make payments of interest only on the outstanding principal amount of the B orrovver Loan during the Interest-Only Period, with a final payment of interest only onJ une 1, 2023. Thereafter, fromJ uly 1, 2023 to the Maturity Date the Borrovver shall make monthly payments of interest and principal on the Borrovver Loan in arrears, calculated on the basis of an approximately 30-year amortization, in accordance with a repayment schedule to be provided by the Lender fol I ovvi ng the end of the I nterest-Only Period and attached hereto as Exhibit D. Such repayment schedule shall be prepared by the Lender to require substantially equal monthly installments of principal and interest thereon at the Applicable Loan Rate assuming the Borrovver Loan is outstanding to the Maturity Date, sufficient to repay the B orrovver Loan in f ul I by the Maturity Date. Such repayment schedule may be modified by the Lender for payments due on and after June 1, 2035 andJ une 1, 2040 to reflect the new Applicable Loan Rate; pr0vided, hovvever, the Borrovver shall provide the Lender and the Issuer with an approving written opinion of Bond Counsel to the effect that under thenexi sting I aws that such new repayment schedule would not cause the interest with respect to the Issuer Loan Obi i gati on to become incl udabl e in gross income under the Code. U pan any modification of the repayment schedule, such modified repayment schedule shal I be prepared by the Lender to require substantially equal monthly i nstal I ments of principal and interest thereon at the Applicable Loan Rate.

Section 4.11. Purchase Price of Issuer Loan Obligation. The Lender is purchasing the Issuer Loan Obligation at a discount to the par amount thereof. The Lender's purchase price of the Issuer Loan Obligation, and accordingly, the proceeds of the Borrovver Loan, shall be equal to $34,943,750 (representing the principal amount of the Issuer Loan Obligation less the Lender's original issue discount of $56,250).

Section 4.12. Late Charge. If the Borrovver fails to make any Payment and such failure results in the payment of principal and interest on the Loans to be received more than 10 days after the due date thereof, or if the Borrovver fails to make any Additional Payment within 10 days of the due date thereof, the B orrovver shal I pay to the Lender or the I ssuer a I ate charge equal to 5% of the past due payment.

Section 4.13. Default Rate. If (a) the Borrovver shall fail to pay the principal and accrued interest on the B orrovver Loan when the same shal I become due under this Loan Agreement or (b) a notice of default is issued under the Deed of Trust or the Security Agreement, then the Applicable Loan Rate hereunder shall increase to the Default Rate. All amounts not paid when due under this Loan Agreement (subject to any applicable grace periods) shall be added to the unpaid principal amount hereunder and shall bear interest at the Default Rate until such time as the payment default is cured.

31 4840--9714-0152.8

Section 4.14. Determination of Applicable Loan Rate. The Issuer Loan Obligation (and, correspondingly, the B orrovver Loan) shal I bear interest at the fixed rate of 3.15% per annum, for the period from the Closing Date to and including May 31, 2035. For the period from June 1, 2035 to the Initial Prepayment Date, the Issuer Loan Obligation (and, correspondingly, the B orrovver Loan) shal I bear interest at a fixed rate equal to the 5-Y ear Constant Maturity Treasury Rate pl us 1.25%. The 5-Y ear Treasury Constant Maturity Rate shal I be determined by reference to the quoted 5-year Treasury Constant Maturity on the Calculation Date in the Federal Reserve Statistical Release H.15 (or any successor release). Notwithstanding the foregoing, in no event shall the Applicable Loan Rate be less than 3.15%. On and after June 1, 2040, the Issuer Loan Obligation (and, correspondingly, the BorrCMter Loan) shall bear interest at the interest rate determined in accordance with Section 4.08(f) or Section 4.08(g) hereof. The interest rates set forth or otherwise determined pursuant to this Section 4. 14 shal I be ref erred to in this Loan Agreement as the "Applicable Loan Rate."

ARTICLE V

CONDITIONS PRECEDENT

Section 5.01. Precedent to Loan Agreement. The Issuer's agreement to enter into this Loan Agreement and provide the financing contemplated hereby shal I be subject to the condition precedent that the Issuer shal I have received or waived the requirement for the items set forth bel CMt, each i n form and substance satisfactory to the I ssuer ( other than those i terns that are exclusively within the Issuer's control). The Lender's agreement to enter into this Loan Agreement and provide the financing contemplated hereby shall be subject to the condition precedent that the Lender shall have received or waived the requirement for, all of the follovving, each in form and substance satisfactory to the Lender:

(a) this Loan Agreement, properly executed on behalf of the Issuer, the Borrovver and the Lender, and, if applicable, each of the Exhibits hereto properly completed;

(b) the Tax Certificate, properly executed on behalf of the Borrovver and the Issuer;

(c) the Assignment Agreement; properly executed on behalf of the Borrovver and the I ssuer;

( d) the Deed of Trust, properly executed on behalf of the B orrovver;

(e) the Security Agreement, properly executed on behalf of the B orrovver;

(f) the Environmental Indemnity Agreement, properly executed on behalf of the B orrovver;

(g) the Contracts and Permits Assignment Agreement, properly executed on behalf of the B orrCMter;

32 4840--9714-0152.8

(h) the Pledge Receipts Transfer and Assignment Agreement, properly executed by the B orrCMter and the E ndovvment;

(i) the Construction Disbursement Agreement, properly executed by the B orrovver and the Lender;

U) a certificate of Borrovver, certifying as to (i) the Board of Trustees of the B orrovver authorization of the execution, delivery and performance of B orrovver Documents and any related documents, (ii) the Bylaws of the BorrCMter, (iii) the signatures of the officers or agents of such B orrCMter authorized to execute and deliver Borrovver Documents and other instruments, agreements and certificates on behalf of Borrovver, (iv) the accuracy of the all representations and warranties made by Borrovver, and (v) the absence of any material adverse change in the condition, operations or prospects (financial or otherwise) of such Borrovver, ignoring for such determination the construction of the Prqject and the remote learning caused by the COV I D-19 pandemic;

( k) copies of the Articles of I ncorporati on of the B orrovver certified by the California Secretary of State within 30 days of the Closing Date;

(I) certificates of good standing issued as to the B orrovver by the Secretary of State of the State of California dated not more than thirty (30) days prior to the Closing Date;

( m) a certificate of good standi ng or exemption issued as to the B orrovver by the Franchise Tax B oard of the State dated not more than thi rty ( 30) days prior to the Closing Date;

( n) a resol uti on adopted by the I ssuer authori zi ng the B orrovver Loan and the Issuer Loan Obi i gati on and the transacti ans contemplated hereunder;

( o) a closing certificate of the I ssuer i n a form reasonably acceptable to B orrovver' s Counsel and Lender's Counsel;

(p) evidence that the financing of the Prqject has been approved by the City Council of the City of Newport Beach after a public hearing held upon reasonable notice;

(q) UCC-1 financing statement(s) as required by the Lender to perfect the security i nterests of the I ssuer and assignment to the Lender;

( r) current searches of appropriate fi I i ng offices shovvi ng that ( i) no state or federal tax liens have been filed and remain in effect against the Borrovver, and (ii) no financing statements have been fi I ed and remain in effect against the B orrovver except those fi nanci ng statements fi I ed by the Lender, or fi nanci ng statements which wi 11 be termi nated upon cl osi ng of the fi nanci ng contemplated hereunder;

(s) a completed and executed Farm 8038 or evidence of fi Ii ng thereof with the Secretary of Treasury;

33 4840--9714-0152.8

(t) an opinion of counsel to the BorrCMter, addressed to the Lender and the Issuer, in form and substance acceptable to the Lender and the Issuer and addressing the matters described in Exhibit C hereto;

( u) an opinion of the Lender's Counsel addressed to the Lender and the I ssuer, in form and substance acceptable to the Lender and the Issuer;

(v) evidence of payment of the Issuer Issuance Fee;

(w) evidence of payment to the Lender of the Lender's costs and expenses in connection with the execution of the Loan Documents, including the costs and expenses of Lender's Counsel;

(x) an investor letter of representations executed by the Lender, in the form attached hereto as Exhibit B and such other certificates of the Lender reasonably requested by Lender's Counsel and counsel for the Issuer;

( y) the Fi nal Appraisal of the Property evi denci ng that the I oan-to-v al ue ratio, based on the fair market value of the Property that wi 11 secure the Loans as set forth in the Final Appraisal, is acceptable to the Lender;

(z) the Title Policy, or evidence satisfactory to the Lender in its sole discretion of the Title Insurer's irrevocable commitment to issue the Title Policy immediately upon closing;

(aa) certificates of the insurance required under Section 7.04 of this Loan Agreement containing a lender's loss payable clause or endorsement in favor of the Lender;

(bb) a Docket Search with respect to each of the B orrCMter of the Superior Court in the County of Orange and the United States District Court for the Central District of California;

( cc) evidence satisfactory to the Issuer that the B orrovver has retained the services of a rebate consultant for purposes of compliance with certain requirements of the Tax Certificate; and

(dd) any other documents or items reasonably required by the Lender or the Issuer.

Section 5.02. Conditions Precedent to Subsequent Advances of Loan Proceeds.

(a) Other than the initial disbursement of the Loan Proceeds into the Prqject Fund, the Lender's agreement to make the first Advance of the Loan Proceeds into the Project Fund shall be subject to the conditions precedent that the Borrovver shall have obtained and delivered to the Lender:

34 4840--9714-0152.8

(i) a fully executed Construction Contract between the Borrovver and the General Contractor.

(ii) the consent of the General Contractor to the Contracts and Permits Assignment Agreement substantially in the form attached as Exhibit C to the Contracts and Permits Assignment Agreement.

(iii) the consent of the architect to the Contracts and Permits Assignment Agreement substantially in the form attached as Exhibit C to the Contracts and Permits Assignment Agreement. and

(iv) builder's risk insurance acceptable to the Lender.

(b) In addition to the requirements set forth above, the Lender's agreement to make Advances of the Loan Proceeds shall be subject to the further conditions precedent that the Lender shal I have received or waived the requirement for al I of the fol I ovvi ng for each Draw Request, each in form and substance satisfactory to the Lender:

4840--9714-0152.8

(i) the applicable Borrovver's Equity Contribution has been satisfied in the reasonable opinion of the Lender in accordance with the B udget;

(ii) a fully executed Draw Request substantially in the form attached hereto as Exhibit F, with al I appropriate supporting documents attached thereto;

(iii) an updated Exhibit H to this Loan Agreement;

(iv) payment of Lender Fees, commissions and expenses required by Section 12.03 hereof;

(v) copies of fully executed applications for payments submitted by the General Contractor, and at Lender's option, from the" Major Subcontractors" ( defi ned for purposes of this section and elsewhere herei n as subcontractors performing work in excess of $100,000.00), on AIA Document 702 and 703, with all supporting documentations required thereby, with respect to costs then due to be paid;

(vi) conditional lien waivers and releases of any mechanic's lien, stop notice claim, equitable Lien Claim (as defined in Section 8.01) or other Lien Claim rights from Persons that have actually supplied labor, materials or services in connection with the construction of the P raj ect;

(vii) unconditional lien waivers and releases of any mechanic's lien, stop notice claim, equitable Lien Claim or other Lien Claim rights from Persons that have actually supplied labor, materials or services in connection with the construction of the P rqj ect for al I prior Draw Requests.

35

(viii) the certification by Borrovver that no Event of Default exists, and, to the best of its knovvledge, no event has occurred and no condition exists that, after notice or lapse oftime, or both, would constitute an Event of Default; and

(ix) such other information and documents required pursuant to the Construction Disbursement Agreement or as the Lender may reasonably require related to such disbursement request.

Section 5.03. Limitations to Disbursement. Notwithstanding anything to the contrary contained in this Loan Agreement, other than the initial disbursement of the Loan Proceeds on the Closing Date, Lender need not make any further disbursements pursuant to a Draw Request at any ti me if:

( a) the F aci Ii ti es or P raj ect are material I y damaged by fi re or other casualty and not fully repaired and restored, unless Lender actually receives insurance proceeds or a cash deposit from the B orrovver sufficient i n the Lender' s judgment to pay for the complete repair or replacement of the P raj ect in a timely manner;

(b) the Lender reasonably believes that withholding disbursement in whole or in part is required by applicable mechanics' Ii en or stop notice I aws ( uni ess the Borrower has obtained a bond reasonably satisfactory to the Lender sufficient to allovv the Lender to make such disbursement in accordance with California law);

(c) the Borrovver has not obtained or is not in compliance with all required governmental approvals, including without limitation all necessary building permits, or has not complied with all applicable regulations, laws, ordinances (including without limitation environmental and subdivision map requirements and conditions of approval) to permit the construction of the P rqj ect accordi ng to the PI ans and S peci fi cati ans;

( d) the B orrovver has fai I ed to mai ntai n the i nsurance pol i ci es requi red by Section 7.04 hereof;

(e) the Lender reasonably believes that there has been a material adverse change in the business, operations, properties, liabilities, financial condition or prospects of the BorrCMter such that (i) there is likely to be an impairment of the prospect of repayment of any portion of the Obi i gati ans by the B orrovver under this Loan Agreement, or (ii) the BorrCMter is likely to fail to complete the Project in accordance with terms of this Loan Agreement;

(f) the Lender reasonably believes that that the funds available are inadequate to complete the project and requires Borrovver to provide additional funds to bring the Project and Loans back into balance;

(g) the Borrovver fails timely to proceed with completion of construction of the Project substantially in accordance with the Plans and Specifications approved by the Lender; or

36 4840--9714-0152.8

(h) an Event of Default has occurred and is continuing under this Loan Agreement, any of the other Loan Document, any other agreement between the Lender and the B orrovver, or the B orrovver is in default under any other agreement regarding the development of the Project, including without limitation, any subdivision agreement, improvement agreement, or development agreement.

ARTICLE VI

SECURITY INTEREST

Section 6.01. Change in Name or Corporate Structure of the Borrovver; Change in Location of the BorrCM1er's Principal Place of Business. The Borrovver's chief executive office is located at the address set forth in Section 12.04 hereof, and al I of the B orrovver' s records relating to its business are kept at such location. The Borrovver hereby agrees to provide written notice to the Lender and the Issuer of any change or proposed change in its name, corporate structure, state of its incorporation or organization, place of business, chief executive office or tax i denti fi cation number. Such notice shal I be provided 30 days in advance of the date that such change or proposed change is planned to take effect.

Section 6.02. Security Interest. The Borrovver hereby authorizes the Lender to file any fi nanci ng statement ( and any amendments or conti nuati ans to any fi nanci ng statement) necessary to perfect the security i nterest granted i n this Loan Agreement under the I aws of the State. Pursuant to Section 5451 of the Government Code of the State, the pledge of the Payments by the Issuer for the repayment of the principal of, premium, if any, and interest on the Issuer Loan Obligation constitutes a first lien and security interest which immediately attaches to such Payments, and is effective and binding against the Issuer, the B orrovver, their successors, creditors and all others asserting rights therein irrespective of whether those parties have notice of the pledge, irrespective of whether such amounts are or may be deemed to be a fixture and without the need for physical delivery, recordation, fi Ii ng or further act.

Section 6.03. Assignment of Insurance. As additional security for the payment and performance of the B orrovver' s obi i gati ans under this Loan Agreement, the B orrCM1er hereby assigns to the Lender, as assignee of the Issuer, a security interest in any and all moneys (including, without limitation, proceeds of insurance) due or to become due under, and all other rights of the Borrovver with respect to, any and all policies of insurance novv or at any time hereafter covering the Property or any evidence thereof or any business records or valuable papers pertai ni ng thereto, and the B orrovver shal I di rect the issuer of any such pol icy to pay al I such moneys directly to the Lender for application in accordance with Article IX . The Borrower hereby assigns to the Lender, as assignee of the Issuer, any and al I moneys due or to become due with respect to any condemnation proceeding affecting the Property. Net Proceeds of any insurance award resulting from any damage to or destruction of any portion of the Property by fire or other casualty, as applicable, of any title insurance award, or of any eminent domain or condemnation award resulting from any event described in Section 9.01 hereof shall be applied as provided in Section 9. 02 hereof. At any ti me, whether before or after the occurrence of any Event of Default, the Lender may (but need not) in furtherance of rights pursuant to Article IX hereof, in the Lender's name or in the Borrovver's name, execute and deliver proof of claim, receive al I such moneys, endorse checks and other instruments representing payment of such

37 4840--9714-0152.8

moneys, and adjust, litigate, compromise or release any claim against the issuer of any such policy or party in any condemnation proceeding.

ARTICLE VII

AFFIRMATIVE COVENANTS OF BORROWER

Section 7.01. Maintenance of Property.

( a) Taki ng i nto consideration the construction of the P rqj ect, the B orrovver shall, at its CMtn commercially reasonable expense, maintain, preserve and keep the Property in good repair, working order and condition consistent with its past practice, and shal I from ti me to ti me make al I reasonable repairs and replacements necessary to keep the Property in such condition, and in compliance with State and federal laws, ordinary wear and tear excepted. I n the event that any parts or accessories forming part of any item or items of Property become worn out, lost, destroyed, damaged beyond repair or otherwise rendered unfit for use, the Borrovver, at its CMtn commercially reasonable expense and expeditiously, will replace or cause the replacement of such parts or accessories by replacement parts or accessories free and cl ear of al I I i ens and encumbrances and with a value and utility at least equal to that of the parts or accessories being replaced (assuming that such replaced parts and accessories were otherwise in good working order and repair). A 11 such replacement parts and accessories shal I be deemed to be incorporated immediately into and to constitute an integral portion of the Property and, as such, shal I be subject to the terms of this Loan Agreement. Neither the I ssuer nor the Lender shall have any responsibility in any of these matters, or for the making of repairs to the Property or additions to the Property.

(b) The BorrCMter shall observe and comply with all legal requirements applicable to the CMtnershi p, use and operation of the Property, including the terms and conditions set forth in this Loan Agreement, the Deed of Trust and the Tax Certificate. The Borrovver shall permit the Lender and its agents, representatives and employees, upon reasonable prior notice to the Borrovver, to inspect the Property and conduct such environmental and engineering studies as the Lender may reasonably require, provided such i nspecti ans and studies are conducted during normal business hours and do not materially interfere with the use and operation of the Property. Such environmental and engineering studies shal I be at the B orrovver' s commercially reasonable expense, pr0vided that the Lender provides the B orrovver with evidence of the Lender's reasonable belief that there is an environmental or structural condition at the Property that could have a material adverse effect on the Lender's security under the Loan Documents.

( c) The B orrovver wi 11 defend the Property against al I claims or demands of al I persons ( other than the Lender hereunder) cl ai mi ng the Property or any i nterest therein.

Section 7.02. Compliance With Laws and Obligations. The Borrovver will comply with the requirements of applicable laws and regulations and material contractual obligations, the noncompliance with which would materially and adversely affect its business or its financial

38 4840--9714-0152.8

condition; pr0vided, hO\IVever, nothing herein shall preclude the Borrovver's right to contest in good faith by appropriate proceedings any claim of noncompliance or breach.

Section 7.03. Payment of Taxes and Other Claims. The BorrO\IVer will pay or discharge, when due, (a) all taxes, assessments and g0vernmental charges levied or imposed upon it or upon its income or profits, upon any properties belonging to it (including, without Ii mi tati on, the F aci I i ti es) or upon or agai nst the creation, perfection or conti nuance of the security interest created pursuant to this Loan Agreement or any of the Loan Documents, prior to the date on which penalties attach thereto; (b) all federal, state and local taxes required to be withheld by it; and (c) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a Ii en or charge upon any properties of the Borrower; provided, that the B orrO\IVer shal I not be required to pay any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings. The Borrovver will pay, as the same respectively come due, all gas, water, steam, electricity, heat, povver, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Property; pr0vided, that the Borrovver shall not be required to pay any such charge whose amount, appl i cabi I ity or validity is being contested in good faith by appropriate proceedings.

Section 7.04. Insurance; Indemnity.

(a) The B orrovver shal I, at its ovvn expense, maintain and keep in force commercial comprehensive general liability and automobile liability insurance against cl ai ms ari si ng i n, on or about the Property, i ncl udi ng i n, on or about the si daval ks or premises adjacent to the Property, providing coverage limits not less than $1,000,000 per occurrence and $2,000,000 in aggregate. The B orrovver shal I al so maintain Excess;U mbrel la Liabi I ity C0verage of at least $15,(X)(),000.

(b) The B orrovver shal I, at its ovvn expense, maintain and keep in force insurance of the types and in amounts customarily carried by institutions similar to the Borrovver, including but not limited to fire and extended all-risk coverage (in an amount not less than the full replacement cost of the Facilities, without deductions for depreciation, and i ncl udi ng al I fixtures and personal property and endorsements for any non--conformi ng uses), flood (if the B orrovver' s property is I ocated i n a flood zone), property damage, workers' compensation, business interruption, and abuse or molestation liability coverage, covering, among other items, negligence in employing, investigation, retaining, and supervising "employees" or volunteer workers with all such insurance carried with companies, in amounts and with deductible amounts reasonably satisfactory to the Lender, and deliver to the Lender from time to time at the Lender's request schedules setting forth all insurance then in effect. Alternatively, upon the written approval of the Lender, the BorrO\IVer may insure the Facilities under a blanket insurance policy or policies which cover not only the Facilities, but also other properties of the Borrovver or, upon prior written approval of the Lender, may pr0vide self-insurance acceptable to the Lender.

(c) During the construction of the Project or any improvements to the Facilities with an aggregate cost in excess of $250,000, the Borrower shall maintain builder's risk insurance, including theft, to insure, without limitation, all buildings,

39 4840--9714-0152.8

materials, suppl i es, temporary structures, foundati ans, other underground property, tenant improvements, and all other property on-site and while in transit which is to be used in fabrication, construction, and completion of the portion of the P raj ect bei ng constructed, and to remain in effect unti I al I such improvements being constructed have been completed and accepted by B orrovver and the Lender ( or the Lender' s desi gnee) and a certificate of occupancy has been issued. 5 uch insurance shal I be in an amount not I ess than $35,()()(),()()() and be provided on a replacement cost value basis and shall (i) be on a non-reporting, completed value, form; (ii) cover damage to landscaping and debris removal expense (including removal of pollutants as available by standard underwriting placements); (iii) pr0vide that Borrovver can complete and occupy the premises without further written consent from the insurer; (iv) not exclude losses due to explosions, col lapses, or underground hazards; (v) cover soft costs and continuing expenses not directly involved in the direct cost of construction or renovation, including interest on money borrovved to finance construction or renovation, advertising, promotion, real estate taxes and other assessments, the cost of renegoti ati ng I eases, architectural and engineering costs, legal and accounting costs, and other expenses incurred as the result of property loss or destruction by the insured peril; (vi) cover riots, civil commotion, vandalism, and malicious mischief; (vii) not contain any safeguard warranties that are not fulfilled prior to policy placement; and (viii) not contain any monthly limitation. The B orrovver shal I provide or cause to be provided to the Lender a copy of the bui Ider' s risk insurance policy prior to the commencement of the construction of any impr0vements to the Project with an aggregate cost in excess of $250,()()().

(d) During the construction of the Project or any improvements to the F aci I i ti es with an aggregate cost i n excess of $2 50, ()()(), the B orrovver shal I cause each contractor performing any of such construction work to maintain workers' compensation insurance or other applicable insurance providing coverage for i nj uri es to such contractor's personnel, auto liability insurance, and general liability insurance, all in the amounts and providing c0verage as is reasonably acceptable to the Lender.

( e) A 11 of the i nsurance pol i ci es requi red hereunder shal I be issued by corporate insurers licensed to do business in the State and rated "A" or better by A.M. Best Company, shall contain a waiver of subrogation endorsement, and shall be in form acceptable to the Lender.

( f) A 11 certificates of i nsurance and " blanket" insurance pol i ci es shal I reference the specific project being covered by name and address and shall name the Lender as an additional loss payee. The insurance shall be evidenced by the original pol icy or a true and certified copy of the ori gi nal pol icy, or i n the case of I i abi I i ty insurance, by certificates of insurance. The insurance policies (or true and certified copies thereof) or certificates of al I i nsurance required to be mai ntai ned hereunder shal I be delivered to the Lender contemporaneously with the Borrovver's execution of this Loan Agreement. The Borrovver shall use its best efforts to deliver originals of all policies and renevvals (or certificates evidencing the same), marked "paid" (or evidence satisfactory to the Lender of the continuing coverage) to the Lender at least thirty ( 30) days before the expiration of exi sti ng pol i ci es and, i n any event, the B orrovver shal I deliver originals of such policies or certificates (or other proof of insurance acceptable to

40 4840--9714-0152.8

the Lender) to the Lender at I east fifteen ( 1 5) days before the expi ration of exi sti ng policies. If the Lender has not received satisfactory evidence of such renevval or substitute insurance in the time frame herein specified, the Lender shall have the right, but not the obi i gati on, to purchase such insurance for the Lender's interest only. Nothing contained in this Section shal I require the Lender to incur any expense or take any action hereunder, and inaction by the Lender shall never be considered a waiver of any right accruing to the Lender on account of this Section. If any I ass shal I occur at any ti me while an Event of Default shall have occurred and be continuing, the Lender shall be entitled to the benefit of all insurance policies held or maintained by the Borrovver, to the same extent as if same had been made payable to the Lender. The Lender shall have the right, but not the obi i gati on to make premium payments, at the B orrovver' s expense, to prevent any cancellation, endorsement, alteration or reissuance of any policy of insurance maintained by the B orrovver, and such payments shal I be accepted by the insurer to prevent same.

(g) The BorrCMter shall give to the Lender immediate notice of any loss with an esti mated replacement val ue i n excess of $1 00, ()()() occurring on or with respect to the Property. The BorrCMter shall furnish to the Lender, upon request, certificates of insurance evidencing such coverage whi I e the Loans is outstanding.

(h) Any insurance policy carried or maintained pursuant to this Section (other than the worker's compensation policy) shal I be so written or endorsed as to make I asses, if any, payable to the Lender and the Issuer or the Borrovver, as their respective interests may appear and naming the Lender as additional insured for liability. The Net Proceeds of the i nsurance requi red i n this Section shal I be appl i ed as provided i n Article IX hereof. Each property or liability insurance policy provided for in this Section shall contain a provision to the effect that the insurance company providing such policy shall not either cancel the policy or modify the policy materially and adversely to the interest of the Lender without first giving written notice thereof to the Lender at least 30 days in advance of such cancel I ati on or modification.

(i) As among the Lender, the Issuer and the B orrCMter, the B orrCMter assumes all risks and liabilities from any cause whatsoever, whether or not covered by insurance, for loss or damage to the Property, and for injury to or death of any person or damage to any property, whether such injury or death be with respect to agents or employees of the B orrovver or of thi rd parties, and whether such property damage be to the B orrovver' s property or the property of others. Whether or not covered by insurance, the B orrovver hereby assumes responsi bi I ity for and agrees to reimburse the Lender and the Issuer for and wi 11 indemnify, defend and hold the Lender and the Issuer and any of their assignees, agents, employees, officers and directors harmless from and against all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses (including reasonable attorneys' fees) of whatsoever kind and nature, imposed on, incurred by or asserted agai nst the Lender or the I ssuer or thei r assignees, agents, employees, officers and di rectors that in any way rel ate to or arise out of this Loan Agreement or the Loans, the transacti ans contemplated hereby and thereby and the Property, incl udi ng but not limited to, (i) the ovvnership of the Property, (ii) the delivery, lease, possession, maintenance, use condition, return or operation of components of the Property, (iii) the

41 4840--9714-0152.8

conduct of the Borrovver, its officers, employees and agents, (iv) a breach by the B orrovver of any of its covenants or obi igations hereunder, and (v) any claim, loss, cost or expense involving al I eged damage to the environment relating to the Property, including, but not limited to investigation, removal, cleanup and remedial costs. All amounts payable by the B orrCMter pursuant to the i mrnedi ately preceding sentence shal I be paid immediately upon demand of the Issuer or the Lender or their assignees, agents, employees, officers and di rectors, as the case may be. This provision shal I survive the termination of this Loan Agreement for any reason.

Section 7.05. Reporting Requirements. The Borrovver will deliver, or cause to be delivered, to the Lender, and to the Issuer if requested by the Issuer, each of the fol I ovvi ng, which shall be in form and detail reasonably acceptable to the Lender and the Issuer, as to information requested by the I ssuer:

( a) not I ater than 1 00 days after and as of the end of each fi seal year, financial statements of the B orrovver and the E ndovvment, i ncl udi ng therei n a balance sheet, income statement, statement of cash fl ovvs and reconci I i ati on of the B orrovver' s and the Endovvment's net assets, audited by independent certified public accountants reasonably acceptable to the Lender and certified, without any qualifications, by such accountants to have been prepared in accordance with GAAP consistently applied, together with a certificate of an Authorized B orrovver Representative addressed to the Lender stating that such Authorized Borrovver Representative does not have knovvledge of the existence of any event or condition constituting an uncured Default or an Event of Default;

(b) contemporaneously with the submittal of the financial statement required by subsection (a) above, a certificate of the Borrovver's Treasurer or Chief Financial Officer substantially in the form attached hereto as Exhibit E stating all relevant facts in reasonable detai I to evidence, and the computati ans as to, whether the Borrower is in compliance with the requirements set forth in Section 7.16 hereof applicable to the period covered by the accompanying financial statements;

( c) not I ater than 90 days after and as of each J une 30 and December 31, commencingJ une 30, 2020, internally prepared financial statements (which need not be prepared in accordance with GAAP) of the BorrCMter and the EndCMtment for the sixmonth period ending J une 30 and December 31, in a form reasonably acceptable to the Lender;

(d) internally prepared pledge receivables reports, which shall be in a form and substance reasonably acceptable to the Lender, as fol lovvs:

4840--9714-0152.8

( i) duri ng the I nterest-Onl y Period, no I ater than the 1 5th of each month ( or the fol I ovvi ng B usi ness Day if the 1 5th f al Is on a 5 aturday or 5 unday) as of the i mrnediately preceding month-end; and

(ii) after the Interest-Only Period, as soon as available, hovvever, not I ater than 30 days after the end of each calendar quarter;

42

( e) no I ater than each October 1 5, commend ng October 15, 2020, such enrol I ment data as the Lender may reasonably request;

(f) within 30 days of approval by the B orrCMter' s Board of Trustees, but in any event not I ater than J une 30 of each year, a copy of the financial budget and forecast for the B orrCMter for the upcomi ng fi seal year;

(g) within 30 days of June 30 of each year, commencing June 30, 2020, detailed liquidity statements including computations as to whether the Borrovver is in compliance with the requirements set forth in section 7.16;

(h) promptly upon the occurrence and nature of any Reportable Event or Prohibited Transaction, each as defined in the Employee Retirement Income 5 ecurity A ct of 1974, as amended or recodified from time to time ("ERISA"), or any funding deficiency with respect to any defined employee pension benefit plan (as defined in ER I SA) maintained or contributed to by the B orrovver;

(i) promptly upon knovvledge thereof, notice of any loss or destruction of or damage to any portion of Property (other than in connection with the construction of the Project) in excess of $500,000 or of any material adverse change in the Property;

U) promptly after the amending thereof, copies of any and all amendments to the B orrovver' s articles of i ncorporati on or bylaws;

(k) promptly upon receipt of notice or knCMtledge thereof by an Authorized Borrovver Representative, notice of the violation by the BorrCMter of any law, rule or regulation, the violation of which would have a material adverse effect on the financial or operati ng condition of the B orrovver;

(I) promptly upon written notice or knovvledge thereof, any termination or cancel I ati on of any insurance policy which the B orrovver is required to maintain hereunder, or any uninsured or partially uninsured loss through liability or property damage, or through fi re, theft or any other cause aff ecti ng the B orrovver' s property i n excess of an aggregate of $500,000;

(m) immediately upon the Borrovver's actual knCMtledge thereof, notice in writing of all litigation and of all proceedings before any governmental or regulatory agency affecting the B orrCMter which seek a monetary recovery against the B orrCMter in excess of $500, 000;

( n) as promptly as practicable ( but i n any event not I ater than ten B usi ness Days) after an Authorized Borrovver Representative obtains knovvledge of the occurrence of any event that constitutes a Default or an Event of Default under the Loan Documents, notice of such occurrence, together with a detai I ed statement by an Authorized B orrovver Representative of the steps being taken by the B orrovver to cure the effect of such Default or Event of Default;

43 4840--9714-0152.8

(o) within 60 days of receipt of a written request from the Issuer, a written report, as of the end of the B orrovver' s prior fi seal year, stati ng the status of the P raj ect and the unpaid outstanding balance of the Loans; and

(p) from time to time such other information as the Lender or the Issuer may reasonably request, including, without limitation, other information with respect to any Col I ateral.

Section 7.06. Books and Records; Inspection and Examination. The Borrovver will keep accurate books of record and account for itself separate and apart from those of its affi I i ates, i ncl udi ng its officers, pertai ni ng to the Property and pertai ni ng to the B orrovver' s busi ness and fi nanci al condition and such other matters as the Lender and /or the I ssuer may from time to time reasonably request in which true and complete entries will be made in accordance with GAAP consistently applied and, upon written request of the Lender not more than once per calendar year, at any time after the occurrence of an Event of Default or as often as the Lender reasonably deems necessary to determine whether the BorrCM1er is in compliance with Environmental Laws, will permit any officer, emplo.;ee, attorney or accountant for the Lender and/or the Issuer or, at the written request of the Issuer to the B orrovver and only pursuant to a request from the Internal Revenue Service, a representative of the Internal Revenue Service, to audit, revievv, make extracts from, or copy any and all organization and financial books and records and properties of the B orrovver and to exami ne and i nspect the Property and the Col lateral, and to discuss the affairs of the Borrower with any of its officers, emplo.;ees or agents at all times during ordinary business hours (a) within five Business Days of a written request by the Lender and/or the Issuer, (b) at any time after the occurrence of an Event of Default, or (c) as often as the Lender and/or Issuer reasonably deem necessary to determine whether the B orrovver is in compliance with Environmental Laws.

Section 7.07. Performance by the Lender. If the Borrovver at any time fails to perform or observe any of the covenants or agreements contained in the Loan Documents (except for the Tax Certificate), immediately upon the occurrence of such failure, without notice or lapse of ti me, but after giving effect to any applicable cure peri ads or contest rights of the B orrovver pursuant to the terms such covenants or agreements, the Lender may, but need not, perform or observe such covenant on behalf and in the name, place and stead of the BorrCM1er (or, at the Lender's option, in the Lender's name) and may, but need not, take any and al I other acti ans which the Lender may reasonably deem necessary to cure or correct such failure (including, without limitation, the payment of taxes, the satisfaction of security interests, liens or encumbrances, the performance of obi i gati ans ovved to account debtors or other obi i gars, the procurement and maintenance of insurance, the execution of assignments, security agreements and fi nanci ng statements, and the endorsement of i nstruments) ; and the B orrovver shal I thereupon pay to the Lender on demand the amount of al I moneys expended and al I reasonable costs and expenses (incl udi ng reasonable attorneys' fees and I egal expenses) i ncurred by the Lender i n connection with or as a result of the performance or observance of such agreements or the taking of such action by the Lender, together with interest thereon from the date expended or incurred at the highest rate permitted by I aw; pr0vi ded, hovvever, that such rate shal I not exceed 12°/o per annum. In furtherance of the foregoing, the Borrower hereby irrevocably appoints the Lender, or the delegate of the Lender, acting alone, as the attorney in fact of the Borrovver, with a limited povver of attorney, coupled with an interest, with the right ( but not the duty) from ti me to ti me to

44 4840--9714-0152.8

create, prepare, complete, execute, deliver, endorse or file in the name and on behalf of the B orrovver any and al I i nstruments, documents, assignments, security agreements, fi nanci ng statements, applications for insurance and other agreements and writings relating to the Property required to be obtained, executed, delivered or endorsed by the Borrovver under this Loan Agreement.

Notwithstanding anything herein to the contrary, the Issuer shall have the right to enforce the BorrCM1er's covenants, agreements and representations in the Tax Certificate against the B orrovver pursuant to the terms thereof.

Section 7.08. Preservation of Existence. The Borrovver will preserve and maintain its existence, its status as an organization disregarded for federal income tax purposes whose sole member is an organization described in Section 501(c)(3) of the Code, and all of its rights, privileges and franchises necessary or desirable in the normal conduct of its business; and shall conduct its business in an orderly, efficient and regular manner. The Borrovver shall hold itself out to the public as a legal entity separate and distinct from any other entity (including any affi I i ate thereof). So I ong as the I ssuer Loan Obi i gati on remai ns outstandi ng, the B orrCM1er wi 11 be qual i fi ed to transact busi ness i n the State and wi 11 be engaged i n busi ness i n the State.

Section 7.09. No Liability for Consents or Appointments. Whenever any provision herein provides for the giving of consent or direction by the Issuer, the Issuer shal I not be Ii able to the B orrovver or to the Lender for the giving of such consent or direction or for the withholding of such consent or direction. The Issuer shall have no liability for appointments which are required to be made by it under this Loan Agreement or any related documents.

Section 7.10. Non-liability of the Issuer. No agreements or provisions contained in this Loan Agreement nor any agreement, covenant, or undertaking by the Issuer in connection herewith shall give rise to any pecuniary liability of the Issuer or a charge against its general credit, or shall obligate the Issuer financially in any way, except as may be payable from Payments made pursuant to the BorrCM1er Loan and their application as provided herein. No fai I ure of the Issuer to comply with any term, covenant, or agreement contained herein, or in any document executed by the I ssuer i n connection herevvi th, shal I subject the I ssuer to I i abi I i ty for any cl ai m for damages, costs, or other fi nanci al or pee uni ary charge, except to the extent that the same can be paid or recovered from Payments made pursuant to the Borrovver Loan. Nothing herei n shal I precl ude a proper party i n i nterest from seeki ng and obtai ni ng, to the extent permitted by law, specific performance against the Issuer for any failure to comply with any term, condition, covenant or agreement contained herein, or any obligations imposed upon the I ssuer pursuant hereto, or the breach thereof. I n maki ng the agreements and provi si ans set forth in this Loan Agreement, the Issuer has not obi i gated itself, except with respect to the application of Payments made pursuant to the Borrower Loan hereunder.

Section 7.11. Expenses. The Borrovver covenants and agrees to pay, and to indemnify the I ssuer agai nst al I reasonable costs, charges and expenses, i ncl udi ng fees and disbursements of attorneys, including, without Ii mitati on, fees and expenses of the Issuer's counsel, accountants, consultants and other experts, incurred by the Issuer in good faith in connection with the Loans and the Loan Documents.

45 4840--9714-0152.8

Section 7.12. No Personal Liability.

(a) The Issuer shall not be obligated to pay the principal of, prepayment premium, if any, or interest on the Issuer Loan Obligation, except from Payments under the B orrovver Loan and any other moneys and assets received by the Issuer for such purpose pursuant to this Loan Agreement (but expressly excluding any Additional Payments due to the Issuer). Neither the faith and credit nor the taxing povver of the State or any political subdivision thereof, nor the faith and credit of the Issuer is pledged to the payment of the principal of, prepayment premium, if any, or interest on the Issuer Loan Obi i gati on. Neither the I ssuer nor its officers, di rectors, agents or employees or thei r successors and assigns shal I be Ii able for any costs, expenses, I asses, damages, claims or actions, of any conceivable kind or any conceivable theory, under, by reason of or in connection with this Loan Agreement or the Issuer Loan Obligation, except if and only to the extent amounts are received for the payment thereof from the Borrower under this Loan Agreement.

(b) The Lender and the Borrovver hereby acknovvledge that the Issuer's sole source of moneys to repay the Issuer Loan Obligation will be provided by Payments made by the BorrCM1er under the BorrCM1er Loan pursuant to this Loan Agreement, and the B orrovver hereby agree that if the payments to be made hereunder shal I ever prove insufficient to pay al I pri nci pal of, prepayment premi um, if any, and i nterest on the I ssuer Loan Obligation as the same shall become due (whether by maturity, redemption, acceleration or otherwise), the B orrovver shal I pay such amounts as are requi red from time to time to prevent any deficiency or default in the payment of such principal of, prepayment premium, if any, or interest, including, but not limited to, any deficiency caused by acts, omissions, nonfeasance or malfeasance on the part of the Borrovver, the Issuer or any third party, subject to any right of reimbursement from the Issuer or any such third party, as the case may be, therefor but solely, in the case of the Issuer, from the Payments or Additional Payments (other than funds paid to the Issuer pursuant to Reserved I ssuer Rights), other than with respect to any deficiency caused by the wi 11 f ul misconduct of the Issuer.

(c) No member, officer, agent or employee of the City or the Issuer or any director, officer, trustee, agent or employee of the Borrovver shall be individually or personally liable for the payment of any principal of, prepayment premium, if any, or interest on the Issuer Loan Obi i gati on or the B orrCM1er Loan or any sum hereunder or be subject to any personal liability or accountability by reason of the execution and delivery of this Loan Agreement; but nothing herein contained shall relieve any such member, di rector, officer, agent or employee from the performance of any official duty provided by I aw or by this Loan Agreement.

Section 7.13. The BorrCM1er Indemnification of the Issuer. The BorrCM1ercovenants and agrees as fol I CM1s:

(a) To the fullest extent permitted by law, the Borrovver agree to indemnify, hold harmless and defend the Issuer and its officers, governing members, directors, officials, employees, attorneys and agents ( col I ectively, the " Issuer I ndemni fi ed Parties''),

46 4840--9714-0152.8

against any and al I I asses, damages, claims, acti ans, Ii abi I iti es, costs and expenses of any conceivable nature, kind or character (including, without limitation, reasonable attorneys' fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) to which the Issuer I ndemni fi ed Parties, or any of them, may become suqj ect under any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to:

(i) the Loans or the Loan Documents or the execution or amendment hereof or thereof or in connection with transactions contemplated hereby or thereby;

( i i) any act or om ss1 on of the B orrovver or any of thei r agents, contractors, servants, employees, tenants) or licensees in connection with the P raj ect or the Property, the operation of the P raj ect or the Property, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, i nstal I ati on or construction of the P raj ect or the Property or any part thereof;

( i i i) any Li en or charge upon payments by the B orrovver to the I ssuer and the Lender hereunder, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the I ssuer or the Lender i n respect of any portion of the P raj ect or the Property;

(iv) any violation of any Environmental Laws with respect to, or the release of any Hazardous Materials from, the Project, or the Property or any part thereof;

(v) the defeasance or prepayment, in whole or in part, of the Loans;

(vi) any Determination of Taxability of interest on the Issuer Loan Obi i gati on, or al I egati ans that interest on the Issuer Loan Obi i gati on is taxable or any regulatory audit or inquiry regarding whether interest on the Issuer Loan Obi i gati on is taxable;

(vii) any untrue statement or misleading statement or alleged untrue statement or al I eged mi sl eadi ng statement of a material fact contained in any document or information provided by the B orrovver to the Issuer or the Lender, or any of the documents relating to the Loans, or any omission or al I eged omission from any document or i nformati on provided by the B orrovver to the I ssuer or the Lender of any material fact necessary to be stated therein in order to make the statements made therein, in the Ii ght of the circumstances under which they were made, not misleading;

except to the extent such damages are caused by the wi 11 ful misconduct of such Issuer Indemnified Party. In the event that any action or proceeding is brought against any Issuer Indemnified Party with respect to which indemnity may be sought hereunder, the B orrovver, upon written notice from the I ssuer I ndemni fi ed Party, shal I assume the

47 4840--9714-0152.8

investigation and defense thereof, including the employment of counsel selected by the I ssuer I ndemni fi ed Party, and shal I assume the payment of al I expenses related thereto, with full povver to litigate, compromise or settle the same in its sole discretion; pr0vided that the Issuer I ndemni fi ed Party shal I have the right to revi evv and approve or disapprove any such compromise or settlement. Each Issuer I ndemni fi ed Party shal I have the right to empl o.; separate counsel in any such action or proceeding and participate in the i nvesti gati on and defense thereof, and the B orrovver shal I pay the reasonable fees and expenses of such separate counsel; provided, hovvever, that such Issuer Indemnified Party may only emplo.; separate counsel at the expense of the BorrCMter if in the judgment of such Issuer I ndemni fi ed Party a conflict of interest exists by reason of common representation or if all parties commonly represented do not agree as to the action (or inaction) of counsel.

(b) The rights of any persons to indemnity hereunder and rights to payment of fees and reimbursement of expenses pursuant to this Loan Agreement shall survive the final payment or prepayment of the I ssuer Loan Obi i gati on. The provi si ans of this Section shall survive the termination of this Loan Agreement.

Section 7.14. The B orrovver Indemnification of the Lender. The B orrovver c0venants and agrees as fol I CMts:

( a) to indemnify and hold harmless, to the extent permitted by I aw, the Lender and A ffi Ii ates, their respective i ncorporators, members, commissioners, di rectors, officers, agents and emplo.;ees (collectively, the" Lender Indemnified Persons") against all liability, losses, damages, all reasonable costs and charges (including reasonable fees and disbursements of attorneys, accountants, consultants and other experts), taxes, causes of action, suits, claims, demands and judgments of every conceivable kind, character and nature whatsoever, by or on behalf of any person arising in any manner from the transaction of which this Loan Agreement is a part or arising in any manner in connection with the Project, the Facilities and/or the Property, including, but not limited to, losses, claims, damages, liabilities or reasonable expenses arising out of, resulting from or in any way connected with (i) the work done on the Property or the operation of the Property or the Facilities during the term of this Loan Agreement, including, without limitation, any liability for any loss or damage to property or any injury to or death of any person that may be occasioned by any cause whatsoever pertaining to the Facilities; (ii) any violation of contract, agreement (including this Loan Agreement and the Tax Certificate) or restriction relating to the Property or the Faci I ities; (iii) any violation of law, ordinance or regulation affecting the Property, the Facilities or any part thereof or the CMtnership or occupancy or use thereof; or ( iv) the carrying out of any of the transacti ans contemplated by this Loan Agreement and al I related documents;

( b) promptly after receipt by an Lender I ndemni fi ed Person of notice of the commencement of any action in respect of which i ndemni fi cation may be sought under this Section 7. 14, the Lender I ndemni fi ed Person shal I promptly notify the B orrCMter i n writing, but the delay to so notify the Borrovver will not relieve the Borrovver from any liability which it may have to any Lender Indemnified Person under this Section 7.14 other than to the extent of prejudice caused directly or indirectly by such delay nor affect

48 4840--9714-0152.8

any rights it may have to participate in and/or assume the defense of any action brought agai nst any Lender I ndemni fi ed Person. I n case such claim or action is brought agai nst any Lender Indemnified Person, and such Lender Indemnified Person notifies the Borrovver of the commencement thereof, the Borrovver will be entitled to participate in and, to the extent that it chooses so to do, to assume the investigation and defense thereof (including the employment of counsel reasonably satisfactory to the Lender), and the B orrovver shal I assume the payment of al I fees and expenses rel ati ng to such i nvesti gati on and defense and shal I have the right to negotiate and consent to settlement thereof. Each Lender Indemnified Person shall have the right to employ separate counsel in any such action and to participate in the defense thereof, and after notice from the Borrovver of its election to assume the defense thereof, the fees and expenses of such separate counsel shal I be at the expense of the Borrower, if such Lender I ndemni fi ed Person reasonably determines, with the advice of counsel, that a conflict of interest exists between such party and the Borrower in connection with such action. The Borrovver shall not be obligated to any Lender Indemnified Person pursuant to this paragraph if it has not received notice of the action with respect to which indemnification is sought. The Borrovver shall not be liable for any settlement of any such action effected without its consent, but, if settled with the consent of the B orrovver or if there be a fi nal judgment for the plaintiff in any such action as to which the B orrovver has received notice in writing as hereinabove required, the BorrCMter agrees to indemnify and hold harmless the Lender I ndemni fi ed Person from and against any I 055 or Ii abi I ity by reason of such settlement or judgment to the extent provided in this Section 7.14; and

( c) notwithstanding the previous provi si ans of this Section 7.14, the B orrCMter is not Ii able for or obi i gated to indemnify any Lender I ndemni fi ed Person harmless against any I 055 or damage to property or injury or death to any person or any other I 055 or Ii abi I ity if and to the extent such I ass, damage, Ii abi I ity, injury or death results from the gross negligence or willful misconduct of any Lender Indemnified Person seeking such i ndemnifi cation.

All indemnifications by the Borrovver in this Section 7.14 shall survive the termination of this Loan Agreement and payment of the indebtedness hereunder.

Section 7.15. Covenant to Enter into Agreement or Contract to Provide Ongoing Disclosure. The Borrovver and the Lender intend that this Loan Agreement be exempt from the requirements of Paragraph (b)(S)(i) of the Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as amended ( 17 CFR Part 240, § 240.15c2-12) (the "Rule"). The Borrovver hereby covenants and agrees that if this Loan Agreement ceases to be exempt under the Rule, the Borrovver will enter into an agreement or contract, constituting an undertaking, to provide ongoing disclosure as may be necessary to comply with the Rule as then in effect. In no event will the Issuer have any liability or obligation to provide disclosure under the Rule or to enforce any obi i gati ans of B orrovver to provide di sci 05ure under the Rule.

Section 7.16. Financial Covenants. The Borrovver and the Endovvment shall collectively maintain Unencumbered Liquid Assets in a combined amount of not less than the Liquidity Requirement, measured annually based on the audited financial statements of the Borrovver and the Endovvment, as of eachJ une 30, commencingJ une 30, 2020.

49 4840--9714-0152.8

Section 7.17. Deposit Relationship. The Borrovver and the Lender agree as follovvs:

( a) The B orrovver and the Lender agree that so I ong as the Loans are outstanding and Farmers and Merchants Bank of Long Beach or an A ffi Ii ate thereof is the Lender hereunder, the B orrovver wi 11 maintain an account with the Lender to comply with Section 7.1 7( b) of this Loan Agreement.

(b) The Borrovver authorizes the Lender to make automatic deductions from the follovving deposit account ("Account") maintained by the Borrovver at the Lender's offices i n order to pay, when and as due, al I of the Payments that the B orrovver is requi red or obi i gated to make under this Loan Agreement:

Account No: 26015307

Without Ii miti ng any of the terms of the B orrovver Documents, the B orrovver acknCMtledges and agrees that if the Borrovver defaults in its obligation to make a Payment because the collected funds in the Account are insufficient to make such Payment in full on the date that such Payment is due, then the BorrCMter shall be responsible for al I I ate payment charges and other consequences of such default by the B orrovver under the terms of the B orrovver Documents.

(c) Subject to subparagraph (d) belovv, this authorization shall continue in full force and effect unti I the date which is five ( 5) B usi ness Days after the date on which the Lender actually receives written notice from the Borrovver expressly revoking the authority granted to the Lender to charge the Account for Payments in connection with the Loans. No such revocation by the Borrovver shall in any way release the Borrovver from or otherwise affect the B orrovver' s obi i gati ans under the B orrovver Documents, including the B orrovver' s obi i gati ans to continue to make al I Payments required under the terms of this Loan Agreement.

(d) The Lender, so long as Farmers and Merchants Bank of Long Beach is the Lender hereunder, at its option and in its discretion, reserves the right to terminate the arrangement for automatic deducti ans from the Account pursuant to this subparagraph ( d) at any time effective upon written notice of such election (a "Termination Notice'') given by the Lender to the BorrCMter. Without limiting the generality of the immediately preceding sentence, the Lender may elect to give a T ermi nation Notice to the B orrovver if the BorrCMter fails to comply with any of the Lender's rules, regulations, or policies relating to the Account, including requirements regarding minimum balance, service charges, overdrafts, insufficient funds, uncollected funds, returned items, and limitations on withdrawals.

Section 7.18. Tax Covenants of the Issuer and the BorrCMter.

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( a) The Issuer covenants as fol I ovvs:

( i) The I ssuer shal I not take any action, or fai I to take any action within its control and required of it by the Issuer Documents, if such action or failure to take such action would result in the interest on the Loans not being

50

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excluded from gross income for federal income tax purposes under Section 103 of the Code. Without Ii miti ng the generality of the foregoing, the Issuer covenants that it will comply with the requirements applicable to it of the Tax Certificate which is incorporated herein as if fully set forth herein; provided, hovvever, that with regard to the covenants of the Issuer to act or refuse to act in a certain manner in the future pursuant to this section or the Tax Certificate, the Issuer is relying exclusively on the Borrovver to act or refuse to act in the appropriate manner except to the extent a particular affirmative action by the Issuer is required or prohibited. Any requirement that the Issuer will not permit or allovv an action, or si mi I ar requi rement, shal I pertai n solely to the acti ans of the I ssuer and the Issuer shal I have no obi i gati on to cause or prevent, or to attempt to cause or prevent, any action by the B orrovver, nor shal I the Issuer be deemed to be in breach of this Loan Agreement if it is prevented from complying with its obligations hereunder as a direct or indirect result of the Borrovver's actions or omi ssi ans. This covenant shal I survive the payment in ful I and prepayment of the Issuer Loan Obi i gati on.

( i i) I n the event that at any ti me the I ssuer is of the opi ni on that for purposes of this Section it is necessary to restrict or limit the yield on the investment of any moneys under this Loan Agreement, the Issuer shal I so instruct the BorrCMter in writing accompanied by a supporting opinion of Bond Counsel, and the B orrCMter shal I take such action as may be directed by the Issuer.

( i i i) N otwi thstandi ng any provi si ans of this Section, if the I ssuer provides to the B orrovver an opinion of Band Counsel to the effect that any specified action required under this Section is no longer required or that some further or different action is requi red to mai ntai n the excl usi on from federal income tax of interest on the Issuer Loan Obi i gati on, the B orrovver may conclusively rely on such opinion in complying with the requirements of this Section and the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent.

(b) The B orrovver covenants as fol lovvs:

( i) The B orrovver wi 11 not take any action that would cause the i nterest on the Loans to become incl udabl e in gross income of the recipient for federal income tax purposes under the Code (including, without limitation, intentional acts under Treas. Reg. § 1.148-2( c) or deli berate action within the meaning of Treas. Reg. § 1. 141-2( d)), and the B orrCMter wi 11 take and wi 11 cause its officers, employees and agents to take all affirmative actions legally within its povver necessary to ensure that the interest on the Loans does not become incl udabl e in gross income of the recipient for federal income tax purposes under the Code (including, without limitation, the calculation and payment of any rebate required to preserve such exclusion). Without limiting the generality of the foregoing, the Borrovver covenants that it shall comply with the requirements of the Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shal I survive the payment in f ul I and prepayment of the Loans.

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(ii) The I ssuer has covenanted in this Loan Agreement to take any and all actions within its control necessary to assure compliance with Section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such Section is applicable to the Loans. I n furtherance of this covenant, the Borrovver, on behalf of the Issuer, hereby covenants (A) initially, on or beforeJ une 1, 2025 and on or beforeJ une 1 of every fifth year thereafter, to cal cul ate, or cause to be calculated, the " rebate amount" in accordance with Section 148( f) and Section 1. 148-2 of the R egul ati ans, ( B) to provide such calculations to the Issuer within 30 days of each calculation date, and ( C) to pay the federal government any such " rebate amount" so calculated to the extent required by Section 148( f) of the Code. The B orrovver further agrees to comply with the provisions and requirements of the Tax Certificate relating to the Issuer's obi i gati on to pay the rebate amount as required hereunder and under Section 148 of the Code.

(iii) Notwithstanding any provisions of this Section, if the Borrovver provides to the Issuer an opinion of Band Counsel to the effect that any specified action required under this Section is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Issuer Loan Obligation, the Issuer may conclusively rely on such opinion in complying with the requirements of this Section and the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent.


Section 7.19. Office of Foreign Assets Control; Patriot Act Compliance.

(a) The BorrCM1er is not an entity (i) whose property or interest in property is blocked or subject to blocking pursuant to Sectionl of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) who engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such Person in any manner violate of such Section 2, or (iii) who is on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury's Office of Foreign Assets Control regulation or executive order.

(b) The Borrovver is in compliance with the Patriot Act. No proceeds of the Borrovver Loan will be used, directly or indirectly, for payments to any governmental official or employee, political party or its officials, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

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Section 7.20. Compliance With Documents. The Borrovver agrees that it will perform and comply with each and every covenant and agreement required to be performed or observed by it in each of the Loan Documents to which it is a party. Notwithstanding any termination or expiration of any other Loan Document to which the Lender is a party, the Borrovver shall continue to observe the covenants therein contained for the benefit of the Lender unti I the termination of this Loan Agreement and the payment in ful I of the Loans and al I other Obi i gati ans.

Section 7.21. Compliance With ERISA. Except as would not reasonably be expected to result in a Material Adverse Effect, the Borrovver and each member of the Controlled Group shall (i) remain at all times in compliance with all applicable laws (including any legally available grace periods) with respect to any Plan, (ii) at no time maintain any Plan that has Unfunded Vested Liabilities and (iii) maintain each Plan as to which it may have any liability in compliance in all material respects with the applicable provisions of ERISA, the failure to comply with which could subject the Borrovver or a member of its Controlled Group to any tax or penalty.

Section 7.22. Environmental Laws. The Borrovver shall comply with all applicable Environmental Laws and cure any defect (or cause other Persons to cure any such defect) to the extent necessary to bri ng such real property ovvned, I eased, occupied or operated by the Borrovver back into compliance with Environmental Laws and to comply with any cleanup orders issued by a Governmental Authority havingjurisdiction there over. The Borrovver shall at all times use commercially reasonable efforts to render or maintain any real property ovvned, I eased, occupied or operated by the B orrovver safe and fit for its i ntended uses. The B orrovver shall also promptly notify the Lender of any actual or alleged material failure to so comply with or perform, or any material breach, violation or default under any Environmental Law.

Section 7.23. Annual Reporting Under SB 1029. No later than January 31 of each calendar year ( commend ng J anuary 31, 2021), the B orrovver, on behalf of the Issuer, agrees to provide to the California Debt and Investment Advisory Commission, by any method approved by the California Debt and Investment Advisory Commission, with a copy to the Issuer, the annual report information required by Section 8855(k)(l) of the California Government Code with respect to the Loans. This covenant shall remain in effect until the later of the date (a) the Loans are no longer outstanding, or (b) the proceeds of the Loans have been fully spent.

ARTICLE VIII

NEGATIVE COVENANTS OF BORROWER

So long as the Borrovver Loan shall remain unpaid, the Borrovver agrees that:

Section 8.01. Lien. The Borrovver shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pl edge, Ii en, charge, encumbrance or claim on or with respect to the Property or any other real or personal property of the B orrovver, whether novv ovvned or hereafter acqui red ( each, a " Li en" and together, " Li ens"), other than the rights of the Lender or the Issuer as herein provided and the Permitted Encumbrances, and the Borrovver shall not enter into any amendment, modification, restatement or supplement without the prior written consent

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of the Lender. The Borrovver shall promptly, at its ovvn expense, take such action as may be necessary duly to discharge or remove any such unpermitted Lien. The Borrovver shall reimburse the Lender for any expenses incurred by the Lender to discharge or remove any unpermitted Lien.

"Li en CI aims" means al I claims (including mechanics Ii ens and claims for I abor, services, materials and supplies) that by law have or may become a lien upon any of the Collateral or the Borrovver's interest in the Property or any other property or assets of the BorrCM1er. "I mpositi ans" means al I rents, taxes, assessments and premi urns attributable to the Property. "Lien Claims'' do not, hovvever, include any claims or liens which are Permitted Encumbrances.

Notwithstanding anything herein or in any of the other Loan Documents to the contrary ( except as set forth i n Section 3. 04( a)), the B orrovver shal I not be requi red to pay, discharge or remove any Imposition or Lien Claim so long as the follovving criteria (the "Lien Contest Criteria') shall be satisfied as to the same: (i) the Borrovver shall contest in good faith the validity, applicability or amount of the Imposition or Lien Claim by an appropriate legal proceeding which operates to prevent the col I ecti on of the secured amounts and the sale of the Property or any portion thereof, and (ii) prior to the date on which such Imposition or Lien Claim would otherwise have become delinquent, the Borrovver shall have given the Lender and the I ssuer written notice of its i ntent to contest said I mposi ti on or Li en CI aim, and ( i ii) the B orrovver either shall have complied with the Statutory Bond Criteria set forth belovv or shall have deposited with the Lender (or with a court of competent jurisdiction or other appropriate body approved by the Lender and the Issuer) such additional amounts as are necessary to keep on deposit at al I ti mes, an amount equal to at I east one hundred twenty five percent ( 125%) ( or such higher amount as may be required by applicable I aw) of the total of the balance of such I mpositi on or Li en CI aim then remaining unpaid, pl us al I interest, penal ti es, costs and charges having accrued or accumulated thereon, and (iv) in the reasonable judgment of the Lender, no risk of sale, forfeiture or I ass of the B orrovver' s or the Lender' s i nterest i n the Property or any part thereof wi thi n 30 days arises at any ti me, and ( v) such contest does not, i n the Lender' s reasonable discretion, have a material adverse effect on the Lender's security under the Loan Documents, and (vi) such contest is based on bona fide claims or defenses, and (vii) the Borrovver shall prosecute any such contest with due diligence, and (viii) the BorrCM1er shall promptly pay the amount of such Imposition or Lien Claim as finally determined, together with all interest and penalties payable in connection therewith. Anything to the contrary notwithstanding, the Lender shall have full povver and authority, but no obligation, to advance funds or to apply any amount deposited with the Lender under this Section to the payment of any unpaid Imposition or Lien Claim at any time if an Event of Default shall occur, or if the Lender reasonably determines that a risk of sale, forfeiture or loss of any interest in the Property or any part thereof within 30 days has arisen. The Borrovver shall reimburse the Lender on demand for all such advances, together with interest thereon at the Applicable Loan Rate. Any surplus retained by the Lender after payment or resolution of the Imposition or Li en Claim for which a deposit was made shall be promptly repaid to the Borrovver unless an Event of Default shall have occurred, in which case said surplus may be retained by the Lender and applied by the Lender to any of Obligations, as the Lender may determine in its sole discretion. The "Statutory Bond Criteria' will be deemed satisfied if (i) by statute in the jurisdiction where the Property is located, a bond may be given as security for the particular form of Imposition or Lien Claim in question, with the effect that the Property shall be forever released from any Lien securing such

54 4840--9714-0152.8

I mpositi on or Li en CI aim, and (ii) the B orrCMter shal I cause such a bond to be issued, and the Borrovver shall comply with all other requirements of law such that the Property shall be forever released from such Lien, and (iii) the Borrovver shall pr0vide to the Issuer and the Lender such evidence of the foregoing as the Issuer and/or the Lender may reasonably request.

Section 8.02. Sale of Assets. The Borrovver will not sell, lease (except as otherwise pr0vided in this Section), assign, transfer or otherwise dispose of all or substantially all of its assets ( other than i n the ordi nary course of busi ness, or equi pment or other personal property which has become inadequate, obsolete, worn out, unsuitable, unprofitable, undesirable or unnecessary and the di sposi ti on thereof wi 11 not i mpai r the operati ans of the B orrovver) or of any of the Property or any interest therein (whether in one transaction or in a series of transactions), other than Permitted Encumbrances, without the prior written consent of the Lender (which consent will not be unreasonably withheld) and, if the asset to be sold constitutes Tax Exempt Financed Facilities, the delivery to the Issuer and the Lender of an opinion of Bond Counsel to the effect that any such sale, lease, assignment, transfer or other disposition will not cause the interest on the Issuer Loan Obi i gati on to be included in gross income of the CMtners thereof. Notwithstanding the previous sentence, the Issuer Loan Obligation and the BorrCMter Loan shall become due and payable upon the sale, assignment, transfer or other disposition of the Property or any portion thereof. The B orrovver shal I provide the Issuer and the Lender with prior written notice of its intention to sell, lease, assign, transfer or otherwise dispose of the Facilities, the Property or any interest therein and shall agree in writing to remain liable under the Loan Documents. In the event of a sale, assignment or transfer of the Faci I ities or the Property to an A ffi I i ate of the B orrovver (which shal I al so be subject to the Lender' s prior written consent), such purchaser, assignee or transferee shal I assume i n wri ti ng the B orrower' s obi i gati ans under the Loan Documents.

Section 8.03. Consolidation and Merger. The BorrCMter will not consolidate with or merge into any Person, or permit any other Person to merge into it, or acquire (in a transaction analogous in purpose or effect to a consolidation or merger) al I or substantially al I of the assets of any other Person without the prior written consent of the Lender and the delivery to the Lender and the Issuer of an opinion of Bond Counsel, in form and substance reasonably acceptable to the Lender and the I ssuer, to the effect that under then--exi sti ng I aws the consummation of such merger, consolidation, sale or conveyance wi 11 not cause the interest on the Issuer Loan Obi i gati on to become incl udabl e in gross income under the Code.

Section 8.04. Accounting. The Borrovver will not adopt, permit or consent to any material change in accounting principles other than as required or permitted by GAAP or adopt, permit or consent to any change in its fiscal year unless the Borrovver provides the Lender restated financial statements in comparative form.

Section 8.05. Transfers. Other than as expressly permitted by this Loan Agreement, the B orrovver wi 11 not in any manner transfer any property with a value in excess of $250,000 during any fiscal year, other than transfers made in the ordinary course of business, without prior or present receipt of ful I and adequate consideration; provided, that, the restriction contained in this Section shall not prohibit the BorrCMter from making transfers in furtherance of its educational purposes. N otwi thstandi ng anything herei n to the contrary, the B orrovver may transfer assets to

55 4840--9714-0152.8

the E ndovvment that are not reasonably requi red for the B orrCM1er' s ongoi ng operati ans and compliance with the terms of this Loan Agreement and the Subordinate Loan Agreement.

Section 8.06. Other Indebtedness and Guarantees. Other than the Borrovver Loan, the Subordinate Loan, and additional indebtedness provided by the Lender, the Borrower shall not, without the prior written consent of the Lender, incur any additional indebtedness for borrCM1ed money, secured or unsecured, direct or contingent other than in the ordinary course of business in an aggregate outstanding principal amount of up to $250,()()() (the "Permitted Debt"). The Borrovver shall not guarantee or become liable in any way as surety, endorser (other than as endorser of negotiable instruments for deposit or collection in the ordinary course of business), accommodation endorser, or otherwise for, and shall not pledge or hypothecate the Property or any part thereof as security for, any liabilities or obligations of any other person or entity, except any of the foregoing in favor of the Lender or with the prior written consent of the Lender.

Section 8.07. Other Defaults. The Borrower will not permit any material breach, default or event of default to occur beyond any applicable cure period under any note, loan agreement, indenture, lease, mortgage, contract for deed, security agreement or other contractual obi i gati on binding upon the B orrovver or any judgment, decree, order or determination applicable to the B orrCM1er; provided, hovvever, nothing herein shal I preclude the B orrCM1er' s right to contest in good faith by appropriate proceedings any breach, default or event of default; pr0vided, such contest shall not, and shall not have the potential to, adversely affect the Lender's or the I ssuer' s i nterests hereunder or under any of the other Loan Documents.

Section 8.08. Prohibited Uses. The Borrovver shall not use any portion of the proceeds of the B orrovver Loan to fi nance or refi nance any faci Ii ty, pl ace or bui I di ng used or to be used ( a) for sectarian instruction or study or as a place for devotional activities or religious worship, or (b) by a Person that is not a 501(c)(3) organization or a governmental entity or by an organization (including the B orrovver) described in Section 501 ( c)( 3) of the Code (including the Borrovver) in an unrelated trade or business, in such manner or to such extent as would result in any portion of the Issuer Loan Obi i gati on being treated as an obi i gati on not described in Section 103(a) of the Code.

Section 8. 09. U se of Property. The B orrovver wi 11 not i nstal I , use, operate or mai ntai n the Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Loan Agreement or the Tax Certificate.

Section 8.10. Maintenance of Business. The Borrower shall not change its business activities in any material respect from the business activities conducted by the B orrovver as of the date of this Loan Agreement.

Section 8.11. Restrictive Agreements. The BorrCM1er shall not enter into any agreement containing any pr0vi si on which would be violated or breached by the performance by the Borrovver of its obligations hereunder or under any other Loan Documents or any instrument or document delivered or to be delivered by the B orrovver in connection herewith.

Section 8.12. Tax Exempt Status. The Borrovver will not take any action that would cause the i nterest on the Loans to become i ncl udabl e i n gross i ncome of the reci pi ent for federal

56 4840--9714-0152.8

income tax purposes under the Code (including, without limitation, intentional acts under Treas. Reg. § 1. 148-2( c) or del i berate action wi thi n the rneani ng of Treas. Reg. § 1 . 141-2( d)), and the Borrovver will take and will cause its officers, employees and agents to take all affirmative actions legally within its povver necessary to ensure that the interest on the Loans does not become i ncl udabl e i n gross i ncorne of the reci pi ent for federal i ncome tax purposes under the Code (including, without limitation, the calculation and payment of any rebate required to preserve such exclusion).

Section 8.13. Federal Reserve Board Regulations. The BorrCMterwill not use any part of the proceeds of the Loans for the purpose of purchasing or carrying any Margin Stock and has not i ncurred any indebtedness to be reduced, reti red or purchased by the B orrovver out of such proceeds, and the B orrovver does not ovvn and has no intention of acquiring any Margin Stock.

Section 8.14. Advances. Except as otherwise provided in Section 8.05 hereof, the B orrovver wi 11 not advance or agree to advance any money or assets belonging to the Borrower to any other person or entity.

Section 8.15. Swap Agreement. The Borrovver shall not enter into a Swap Agreement without the priorwritten consent of the Lender.

Section 8.16. Loan Documents. The Borrovver shall not modify, amend or consent to any modification, amendment or waiver in any material respect of any Loan Document without the prior written consent of the Lender.

Section 8.17. Formation of Subsidiaries and Affiliates. The Borrovver shall not create, form or acquire any Subsidiary or Affiliate without the prior written consent of the Lender.

ARTICLE IX

DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS

Section 9.01. Eminent Domain. If all or any portion of the Property shall be taken permanently under the povver of eminent domain or sold to a government threatening to exercise the povver of eminent domain, the Net Proceeds of any eminent domain award shal I be applied to the prepayment of Borrovver Loan and the Issuer Loan Obligation in accordance with Section 4.08(b) of this Loan Agreement, unless otherwise agreed to by the Lender and the Issuer, with an approving written opinion of Bond Counsel to the effect that under then-existing laws that such action would not cause the interest on the Issuer Loan Obligation to become includable in gross income under the Code or adversely affect the validity of this Loan Agreement.

Section 9.02. Application of Net Proceeds.

(a) The Net Proceeds of any insurance award resulting from any damage to or destruction of any portion of the Property by fi re or other casualty, as appl i cable, of any title insurance award, or of any eminent domain award resulting from any event described in Section 9.01 hereof shall be deposited with the Lender, who shall apply such Net Proceeds as provided in Section 9.01 hereof or as set forth belCMt; provided, hovvever,

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that if no Event of Default has occurred and is continuing under the Loan Documents, the Lender shal I rel ease to the B orrovver without further I i mi tati ans al I i nsurance awards of up to $50,()()() received on behalf of the B orrovver in the normal course of business. The Borrovver, except as provided belovv, shall cause the proceeds of such insurance to be uti Ii zed for the repair, reconstruction, or replacement of the damaged or destroyed portion of the Property. Pr0vided that no Default or Event of Default has occurred and is continuing under the Loan Documents, the Lender shall permit withdrawals of the Net Proceeds from ti me to ti me upon receiving the written request of the B orrovver, stating that the Borrovver has expended moneys or incurred liabilities in an amount equal to the amount therein requested to be paid 0ver to it for the purpose of repair, reconstruction or replacement of the Property damaged, destroyed, I ost or taken by eminent domain, and specifying the items for which such moneys were expended or such liabilities were incurred. Any balance of the Net Proceeds required to be used for repayment of the Loans or not required for such repair, reconstruction, or replacement, shall be applied by the Lender as pr0vided in Section 4.08 hereof. If an Event of Default has occurred and is continuing hereunder, the Lender may apply any such proceeds to the Borrovver's obligations under the Loan Documents in any order of priority elected by the Lender in its sole discretion.

(b) Alternatively, the Borrovver, at its option, and if the proceeds of such insurance or eminent domain award, together with any other moneys then available for the purpose, are at I east sufficient to prepay the B orrCMter Loan i n f ul I pursuant to Section 4.08 hereof, may elect not to repair, reconstruct, or replace the damaged or destroyed portion of the Facilities, as applicable, and thereupon shall cause the proceeds to be used for the prepayment of B orrovver Loan in ful I, but not in part. With the written consent of the Lender, the BorrCMter may elect not to repair, reconstruct, or replace the damaged, destroyed, I ost or taken Property and shal I cause such proceeds to prepay the B orrovver Loan in part.

(c) There shall be no abatement of Payments during any period in which, by reason of damage or destruction, there is substantial interference with the use and occupancy by the B orrovver of the Property or any portion thereof.

ARTICLE X

ASSIGNMENT, PARTICIPATION, MORTGAGING AND SELLING

Section 10.01. Assignment by the Lender. This Loan Agreement and related Issuer Loan Obligation and the right to receive Payments from the BorrCMter hereunder, may be assigned and reassigned in whole to one assignee by the Lender, at any time, without the necessity of obtaining the consent of the Issuer or the Borrovver; pr0vided, hovvever, that such assignment or reassignment shall be in accordance with Section 4.09 of this Loan Agreement. The I ssuer and the B orrovver agree to execute al I documents, i ncl udi ng notices of assignment and chattel mortgages or financing statements, which may be reasonably requested by the Lender or its assignee to protect its interest in this Loan Agreement. Notwithstanding anything above to the contrary, all Payments and notices shall be delivered to the Lender. The Lender agrees to hold

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any security i nterests granted hereunder on behalf of any assignee, subassi gnee or parti ci pant described above.

Section 10.02. No Sale, Assignment or Leasing by the Borrovver. This Loan Agreement and the interest of the Borrovver in the Property may not be sold, assumed, assigned or encumbered by the BorrCMter other than as expressly permitted in this Loan Agreement, and Liens in favor of the Lender and the Issuer. No agreement or interest therein and no improvement shall be subject to involuntary assignment, lease, transfer or sale or to assignment, lease, transfer or sale by operation of law in any manner whatsoever except as expressly pr0vided in this Loan Agreement and except for Permitted Encumbrances, and any such attempted assignment, I ease, transfer or sale shal I be void and of no effect and shal I, at the option of the Lender, constitute an Event of Default hereunder.

ARTICLE XI

EVENTS OF DEFAULT AND REMEDIES

Section 11.01. Events of Default. U pan the expiration of any applicable cure period expressly provided in this Loan Agreement, each of the follovving shall constitute an "Event of Default" under this Loan Agreement:

( a) fai I ure by the B orrCMter to pay to the Lender, as assignee of the Issuer any Payment when due, or any Additional Payment or any other amount required to be paid hereunder or under the other Loan Documents within ten ( 10) days of the due date thereof;

(b) failure by the BorrCMter to pay any payment required to be paid under any other material agreement between the Lender or any of its affiliates and the BorrCMter, subject to the appl i cable cure period set forth in such agreement;

(c) failure by the Borrovver to maintain insurance in accordance with Section 7.04 hereof, except for failures that are immaterial and are cured within thirty (30) days after recei pt of written notice from the Lender to the B orrCMter;

( d) fai I ure by the B orrovver to observe and perform any other covenant, condition or agreement on its part to be observed or performed hereunder for a period of thirty (30) days after written notice is given to the Borrovver by the Lender, specifying such failure and requesting that it be remedied;

(e) initiation by the Borrovver or by others of a proceeding under any Federal or State bankruptcy or insolvency law seeking relief under such laws concerning the indebtedness of the Borrovver which proceeding is not dismissed or stayed within sixty (60) days;

(f) the Borrovver shall be or become insolvent, or admit in writing its inability to pay its or his debts as they mature, or make an assignment for the benefit of creditors; or the B orrovver shal I apply for or consent to the appointment of any receiver, trustee or similar officer for it or for all or any substantial part of its property; or such receiver,

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trustee or similar officer shall be appointed without the application or consent of the B orrovver, as the case may be, or the B orrower shal I i nsti tute ( by petition, appl i cation, answer, consent or otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, di ssol uti on, Ii qui dati on or si mi I ar proceeding relating to it under the laws of any jurisdiction which proceeding is not dismissed or stayed within sixty (60) days; or any such proceeding shall be instituted (by petition, application or otherwise) against the B orrovver and remains undi smi ssed or unstayed for sixty ( 60) days; or any judgment, writ, warrant of attachment or execution or similar process shall be issued or I evi ed against a substantial part of the property of the B orrovver;

(g) the making of any order or the entry of any decree by a court of competent jurisdiction enjoining or prohibiting the Borrovver from performing or satisfying its material covenants, obligations or conditions contained herein and such proceedings are not discontinued or such order or decree is not vacated within thirty (30) days after the making or granting thereof;

(h) the Borrovver (i) is determined by the Lender to have made any material false or misleading statement or representation in connection with this Loan Agreement; or (ii) sells, assigns, leases, or otherwise transfers or encumbers all or any part of its interest in this Loan Agreement, the Property, other than Permitted Encumbrances and or in accordance with Section 8.02 hereof;

(i) the occurrence of a default or event of default which represents a liability of the B orrovver in the amount of $500,000 or more under any instrument, agreement or other document evidencing or relating to any indebtedness or other monetary obi i gati on of the B orrovver after giving effect to any grace or cure peri ads applicable under such instruments, agreements or documents; provided, hovvever, nothing herein shall preclude the Borrovver's right to contest in good faith by appropriate proceedings any default or event of default;

U) the sale of the B orrovver to, or merger of the B orrovver i nto, any person, or the merger of any other person i nto the B orrovver, or acqui si ti on ( i n a transaction analogous in purpose or effect to a consolidation or merger) of all or substantially all of the assets of any other person by the Borrovver, or another similar material event, without the prior written consent of the Lender, other than as expressly permitted pursuant to Section 8.02 or 8.03 hereof;

(k) there shall occur any event which the Lender in good faith believes materially and adversely affects the business, operations, properties, liabilities, financial condition or prospects of the Borrovver such that (i) there is likely to be an impairment of the prospect of repayment of any portion of the Obi i gati ans by the B orrovver under this Loan Agreement, or (ii) the Borrovver is likely to fail to complete the Project in accordance with terms of this Loan Agreement;

(I) the occurrence of a default or event of default under any material lease or other agreement rel ati ng to, aff ecti ng or pertai ni ng to the possession or use of any of the Property, after the ex.pi ration of any appl i cable cure period related thereto;

60 4840--9714-0152.8

( m) this Loan Agreement or any Loan Document, including any pl edge or collateral security for the Loans, shall be repudiated by the Borrovver or any material provision in any Loan Document shall become unenforceable or incapable of performance in accordance with its terms;

(n) any judgment, writ, warrant of attachment or execution or similar process shal I be issued or I evi ed against the Borrower or their respective assets in excess of $500, ()()() which is not covered by insurance or which exceeds any applicable insurance policy by more than $500,()()(); provided, hovvever, nothing herein shall preclude the B orrovver' s right to contest in good faith by appropriate proceedings any such judgment, writ, warrant of attachment or execution or si mi I ar process;

(o) the occurrence of a default or an event of default under any other Loan Document or other material agreement between the B orrovver and the Lender after the expiration of any applicable cure period thereunder; or

(p) the occurrence of an event of default under the Subordinate Loan Agreement or other material agreement related thereto between the Borrovver and the Lender after the expiration of any applicable cure period thereunder.

Section 11.02. Remedies on Default. Whenever any Event of Default shall have occurred and be continuing, the Lender shall have the right, at its sole option without any further demand or notice, to take any one or any combination of the follovving remedial actions insofar as the same are avai I able to secured parties under the I aws of the State from ti me to ti me and which are otherwise accorded to the Lender:

( a) by notice to the Issuer and the B orrovver, declare the entire unpaid principal amount of the Loans (and the related Obligations) then outstanding, all interest accrued and unpaid thereon and al I amounts payable under this Loan Agreement to be forthwith due and payable, whereupon such Loans (and the related Obligations), all such accrued interest and all such amounts shall become and be forthwith due and payable, without presentment, notice of dishonor, protest or further notice of any kind, all of which are hereby expressly waived by the Borrovver and the Issuer;

(b) the obligation, if any, of the Lender to extend any further credit under any of the Loan Documents shal I immediately cease and terminate;

( c) exercise al I rights and remedies I egal ly avai I able to the Lender;

( d) proceed by appropriate court action to enforce performance by the I ssuer or the Borrovver of the applicable covenants of the Loan documents or to recover for the breach thereof, including the payment of al I amounts due from the B orrovver, in which event the B orrovver shal I pay or repay to the Lender al I costs of such action or court action including without Ii mitati on, reasonable attorneys' fees; and

(e) to enforce its rights, in which event the Borrower shall pay or repay to the Lender and the I ssuer al I costs of such action or court action, i ncl udi ng, without limitation, reasonable attorneys' fees.

61 4840--9714-0152.8

All proceeds derived from the exercise of any rights and remedies shall be applied in the fol I ovvi ng manner:

Fl RST, to pay the Issuer any Issuer Fees and Expenses;

SECOND, to the United States any rebatabl e arbitrage due or accrued pursuant to Section 148(f)(4) of the Code;

TH IR D, to pay ( a) to the Lender the amount of al I unpaid Payments, if any, which are then due and owing, together with interest and late charges thereon; and (b) to the Lender any Additional Payments payable to the Lender hereunder;

FOURTH, to pay all proper and reasonable costs and expenses associated with the recovery, repair, storage and sale of the Collateral, including reasonable attorneys' fees and expenses; and

FI FTH, to pay the remainder of any such proceeds, purchase moneys or other amounts paid by a buyer of the Col I ateral or other person, to the B orrovver.

Notwithstanding any other remedy exercised hereunder, the Borrovver shall remain obi i gated to pay to the Lender and the Issuer, as their interests may appear, any unpaid Payments and Additional Payments. To the extent permitted by applicable law, the Borrovver hereby waives any rights novv or hereafter conferred by statute or otherwise which might require the Lender to use, sel I, I ease or otherwise dispose of the Property in mitigation of the Lender's damages or which might otherwise limit or modify any of the Lender's rights hereunder.

A 11 rights, povvers and remedies of the Lender may be exercised at any ti me by the Lender, as assignee of the Issuer, and from time to time after the occurrence and continuance of an Event of Default, are cumulative and not exclusive, and shall be in addition to any other rights, povvers or remedies provided by law or equity.

The B orrovver shal I pay or repay to the Lender and the I ssuer al I costs of such action or court action, including, without limitation, reasonable attorneys' fees.

Section 11.03. The Lender's Right to Perform the Obligations. If the Borrovver shall fail, refuse or neglect to make any payment or perform any act required by the Loan Documents to which it is a party, then while any Event of Default exists, and without notice to or demand upon the Borrovver and without waiving or releasing any other right, remedy or recourse the Lender may have because of such Event of Default, the Lender may (but shall not be obligated to) make such payment or perform such act for the account of and at the expense of the B orrovver and interest on such payment shall accumulate from the date of the advance at the Default Rate until such advance is paid, and shall have the right to enter upon the Property for such purpose and to take all such action thereon and with respect to the Property as it may deem necessary or appropriate. If the Lender shall elect to pay any sum due with reference to the Property, the Lender may do so in reliance on any bi 11, statement or assessment procured from the appropriate governmental authority or other issuer thereof without inquiring into the accuracy or validity thereof. Similarly, in making any payments to protect the security intended to be created by this Loan Agreement or other Loan Documents, the Lender shall not be bound to inquire into the

62 4840--9714-0152.8

validity of any apparent or threatened adverse title, lien, encumbrance, claim or charge before making an advance for the purpose of preventing or removing the same. Additionally, if any Hazardous Materials affect or threaten to affect the Property, the Lender may (but shall not be obligated to) give such notices and take such actions as it deems necessary or advisable in order to abate the discharge of any Hazardous Materials or remove the Hazardous Materials. The Borrovver shall indemnify, defend and hold the Lender and the Issuer harmless from and against any and al I I asses, Ii abi I iti es, claims, damages, expenses, obi i gati ans, penal ti es, acti ans, judgments, suits, costs or disbursements of any kind or nature whatsoever, including reasonable attorneys' fees, incurred or accrui ng by reason of any acts performed by the Lender pursuant to the provisions of this Section, except as a result of the Lender's gross negligence or willful misconduct.

Section 11.04. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Lender is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Loan Agreement or novv or hereafter existing at law or in equity. No delay or omission to exercise any right or poNer accruing upon any Event of Default shall impair any such right or poNer or shall be construed to be a waiver thereof, but any such right or poNer may be exercised from ti me to ti me and as often as may be deemed expedient. I n order to enti tie the Lender to exercise any remedy reserved to it i n this Article, it shal I not be necessary to give any notice other than such notice as may be required by this ArticleXI. All remedies hereby conferred upon or reserved to the Lender shall survive the termination of this Loan Agreement.

Section 11.05. Issuer Enforcement of Rights. In the event that BorrCMter fails to comply with any covenant or obligation set forth in this Loan Agreement related to Reserved Issuer Rights, the Issuer may enforce the Reserved Issuer Rights by exercising all rights and remedies legally available to it, including proceeding by appropriate court action to enforce performance by the B orrovver of such covenants and obi i gati ans or to recover for the breach thereof, including the payment of al I amounts due from the B orrovver, in which event the B orrovver shal I pay or repay to the I ssuer al I costs of such action or court action i ncl udi ng without limitation, reasonable attorneys' fees.

ARTICLE XII

MISCELLANEOUS

Section 12.01. Disclaimer of Warranties. THE LENDER AND THE ISSUER MAKE NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS OR WORKMANSHIP, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENTS, TITLE OR FITNESS FOR USE OF THE PROPERTY OR ANY COMPONENT THEREOF OR ANY OTHER WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT THERETO AND, AS TO THE LENDER AND THE ISSUER. All such risks, as between the Lender, the Issuer and the BorrCMter, are to be borne by the BorrCMter. Without limiting the foregoing the Lender and the Issuer shall have no responsibility or liability to the Borrovver or any other person with respect to any of the

63 4840--9714-0152.8

follO\IVing: (a) any liability, loss or damage caused or alleged to be caused directly or indirectly by the Property, any inadequacy thereof, any deficiency or defect (latent or otherwise) therein, or any other circumstances in connection therewith; (b) the use, operation or performance of the Property or any risks relating thereto; (c) any interruption of service, loss of business or anticipated profits or consequential damages; or (d) the delivery, operation, servicing, maintenance, repair, improvement or replacement of the Property. If, and so long as, no default exists under this Loan Agreement, the B orrovver shal I be, and hereby is, authorized to assert and enforce, at the Borrower's sole cost and expense, from ti me to ti me, whatever claims and rights the BorrO\IVer or the Lender may have against any prior title holder or possessor of the Property. I n no event shal I the Lender or the Issuer be Ii able for any I ass or damage in connection with or arising out of this Loan Agreement or the Property.

Section 12.02. Li mitati ans of Li abi I ity. In no event, whether as a result of breach of contract, warranty, tort (including negligence or strict liability), indemnity or otherwise, shall the Lender, its assignees, if any, or the I ssuer be I i able for any special , consequential, i nci dental or punitive damages including, but not limited to, a loss of profit or revenue, loss of use of the Property or any associated equipment, service materials or software, damage to associated equipment, service materials or software, cost of capital, cost of substitute equipment, service materials or software, facilities, services or replacement povver, dovvn time costs or claims of the B orrovver' s members for such damages and the B orrovver shal I i ndemni fy and hold harmless the Lender, its assignees, if any, and the Issuer from any such damages.

Section 12.03. Additional Payments to the Lender. The Borrovver shall pay to the Lender the fol I ovvi ng Addi ti anal Payments hereunder, in addition to the Payments payable by the B orrovver, in such amounts in each year as shal I be required by the Lender in payment of any reasonable costs and expenses, incurred by the Lender in connection with the execution, performance or enforcement of this Loan Agreement, the financing of the P raj ect, including but not Ii mited to payment of al I reasonable fees, costs and expenses and al I reasonable administrative costs of the Lender in connection with the Project, reasonable expense (including, without limitation, reasonable attorneys' fees and disbursements) reasonable fees of auditors, fi nanci al consultants or attorneys, i nsurance premi urns not otherwise paid hereunder and al I other reasonable, direct and necessary administrative costs of the Lender or charges required to be paid by it in order to comply with the terms of, or to enforce its rights under, this Loan Agreement and any of the other Loan Documents. Such Addi ti anal Payments shal I be bi 11 ed to the B orrO\IVer by the Lender from time to time, together with a statement certifying that the amount so billed has been paid or incurred by the Lender for one or more of the items described, or that such amount is then payable by the Lender for such items. Amounts so billed shall be due and payable by the B orrovver within 30 days after receipt of the bi 11 by the Borrower.

Section 12.04. Notices. All notices, certificates, requests, demands and other communications pr0vided for hereunder or under this Loan Agreement shall be in writing and shall be (a) personally delivered; (b) sent by registered class United States mail; (c) sent by 0vernight courier of national reputation; or (d) transmitted by facsimile, in each case addressed to the party to whom notice is being given and, if facsimiled, transmitted to that party at its facsimile number and confirmed by telephone at the telephone number set forth belovv or, as to each party, at such other address or facsimile number as may hereafter be designated by such party in a written notice to the other party complying as to delivery with the terms of this

64 4840--9714-0152.8

Section. All such notices, requests, demands and other communications shall be deemed to have been given on (i) the date received if personally delivered; (ii) when deposited in the mail if delivered by mail; (iii) the date sent if sent by overnight courier; or (iv) the date of transmission if delivered by facsimile. If notice to the Borrovver of any intended disposition of the Property or any other intended acti ans is required by I aw in a particular instance, such notice shal I be deemed commercially reasonable if given (in the manner specified in this Section) at least 10 calendar days prior to the date of i ntended di sposi ti on or other action.

4840--9714-0152.8

If to the Borrovver: Harbor Day School

3443 Pacific Vievv Drive

Corona Del Mar, CA 92625

Telephone: ( 949) 640-1410

Attention: Head of School

With a copy to: Stradling Y occa Carlson & Rauth, A Professional

Corporation

If to I ssuer:

With a copy to:

If to the Lender:

660 Newport Center Drive, Suite 1600

Nevvport Beach, CA 92660-6401

Telephone: ( 949) 725-4193

Attention: Brian Forbath

California Municipal Finance Authority

2111 Palomar Airport Rd., Suite 320

Carlsbad, CA 92011 Telephone: (760) 930-1221

Attention: J ohn P. Stoecker

Jones Hall, A Professional Law Corporation

475 S ansome Street, Suite 1 700

San Francisco, CA 94111

Telephone: ( 41 5) 391-5 700

Attention: Ron Lee

Farmers and Merchants Bank of Long Beach

2411 East Coast Hwy Suite 300,

Corona Del Mar, CA 92625 Telephone: ( 949) 999-4110

Attention: Richard Robinson

65

With a copy to: Kutak Rock LLP

777 South Figueroa Street, Suite 4550 Los Angel es, CA 9CX)l 7

Telephone: (213) 312-4009 Attention: Sam 5. Balisy

Section 12.05. Binding Effect; Time of the Essence. This Loan Agreement shall inure to the benefit of and shal I be binding upon the Lender, the Issuer, the B orrCMter and their respective successors and assigns, if any. Time is of the essence.

Section 12.06. Severability. In the event any provision of this Loan Agreement shall be held invalid or unenforceable by any court of competent j uri sdi cti on, such holding shal I not invalidate or render unenforceable any other provision hereof.

Section 12.07. Amendments. To the extent permitted by law, the terms of this Loan Agreement shall not be waived, altered, modified, supplemented or amended in any manner whatsoever except by written instrument signed by the parties hereto, and then such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given; provided, hCMtever, that the consent of the Issuer shal I not be required for waivers, alternations, modifications, supplements or amendments of or with respect to Sections 7.07, 7.14, 7.16 (other than changes resulting in a change in the Applicable Loan Rate), 8.01, 8.04, 8.06, 8.11, 8.14 or 8.16 of this Loan Agreement (a" Permitted Change''). Prior to the effectiveness of any such waiver, alteration, modification, supplement or amendment other than a Permitted Change, an opinion of Bond Counsel shall be delivered to the Issuer to the effect that such waiver, alteration, modification, amendment or supplement complies with the requirements of this Loan Agreement and that such waiver, alteration, modification, amendment or supplement wi 11 not cause interest on the Issuer Loan Obi i gati on to be included in the gross income of the Lender for federal income tax purposes.

Section 12.08. Execution in Counterparts. This Loan Agreement may be executed in several counterparts, each of which shal I be an original and al I of which shal I constitute one and the same instrument and any of the parties hereto may execute this Loan Agreement by signing any such counterpart.

Section 12.09. Applicable Law. This Loan Agreement is a contract made under the laws of the State of California and shall be governed by and construed in accordance with the Constitution and laws applicable to contracts made and performed in the State of California This Loan Agreement shal I be enforceable in the 5 tate of California, and any action arising out of this Loan Agreement shall be filed and maintained in San Diego County Superior Court, San Diego, California

Section 12.10. Jury Trial Waiver. TO THE EXTENT PERMITTED BY LAW, THE LENDER AND THE BORROWER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY ACTION, PROCEEDING OR HEARING (HEREINAFTER, A "CLAIM") BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS LOAN AGREEMENT OR ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN LENDER OR BORROWER RELATING TO THE SUBJECT MATTER OF THE

66 4840--9714-0152.8

TRANSACTIONS CONTEMPLATED BY THIS LOAN AGREEMENT OR ANY RELATED TRANSACTIONS, AND~R THE RELATIONSHIP THAT IS BEING ESTABLISHED BE1WEEN THE LENDER AND THE BORROWER (EACH, A "CLAIM"). THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TOTH IS LOAN AGREEMENT, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR SUPPLEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS LOAN AGREEMENT OR ANY RELATED TRANSACTIONS. IN THE EVENT OF LITIGATION, THIS LOAN AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TOA TRIAL BY THE COURT.

Section 12.11. Captions. The captions or headings in this Loan Agreement are for convenience only and in no way define, Ii mit or describe the scope or intent of any provi si ans or secti ans of this Loan Agreement.

Section 12.12. E ntireAgreement. This Loan Agreement, together with the exhibits and attachments hereto and thereto, together with the other Loan Documents, constitutes the entire agreement among the Lender, the Issuer and the B orrovver. There are no understandings, agreements, representati ans or warranties, express or i mpl i ed, not specified herei n or therei n regarding this Loan Agreement or the Prqject financed hereunder. Any terms and conditions of any purchase order or other document submitted by the Borrovver in connection with this Loan Agreement which are in addition to or inconsistent with the terms and conditions of this Loan Agreement wi 11 not be binding on the Lender and wi 11 not apply to this Loan Agreement.

Section 12.13. Waiver. The Lender's or the Issuer's fai I ure to enforce at any ti me or for any period of ti me any provision of this Loan Agreement shal I not be construed to be a waiver of such provision or of the right of the Lender or the I ssuer thereafter to enforce each and every provision. No express or implied waiver by the Lender of any Default or remedy of Default shall constitute a waiver of any other Default or remedy of Default or a waiver of any the Lender's rights.

Section 12.14. Survivability. All of the limitations of liability, indemnities and waivers contained in this Loan Agreement shall continue in full force and effect notwithstanding the expiration or early termination of this Loan Agreement and are expressly made for the benefit of, and shal I be enforceable by, the Lender and the Issuer, or their successors and assigns.

Section 12. 1 5. U su ry. It is the i ntenti on of the parties hereto to comply with any applicable usury laws; accordingly, it is agreed that, notwithstanding any provisions to the contrary in this Loan Agreement, in no event shal I this Loan Agreement require the payment or permit the col I ecti on of i nterest or any amount i n the nature of i nterest or fees i n excess of the maximum permitted by applicable law.

67 4840--9714-0152.8

Section 12.16. Third-Party Beneficiary. It is the intention of the parties that any Lender hereunder be a thi rd-party beneficiary of this Loan Agreement.

Section 12.17. Further Assurance and Corrective Instruments. The parties hereto hereby agree that they will, from time to time, execute, acknovvledge and deliver, or cause to be executed, acknovvl edged and delivered, such further acts, instruments, conveyances, transfers and assurances, as any of them reasonably deems necessary or advisable for the implementation, correction, confirmation or perfection of this Loan Agreement or the Tax Certificate and any rights of such party hereunder or thereunder.

Section 12.18. J udicial Reference. In the event that the provisions of Section 12.10 hereof are not enforceable for any reason, the B orrovver and the Lender hereby covenant the fol I O\IVi ng:

(a) Other than the exercise of provisional remedies (any of which may be initiated pursuant to applicable law), any controversy, dispute or claim (each, a "Claim'') between the parties arising out of or relating to this Agreement will be resolved by a reference proceeding in California in accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure ("CCP"), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the CI aim is subject to the reference proceeding. Nothing in this Agreement shall be deemed to apply to or limit the right of the Lender: (i) to exercise self-help remedies such as (but not limited to) setoff; (ii) to foreclose judicially or non-judicially agai nst any real or personal property col I ateral , or to exercise judicial or non-judicial povver of sale rights; (iii) to obtain from a court provisional or ancillary remedies (including, but not limited to, injunctive relief, a writ of possession, prejudgment attachment, a protective order or the appointment of a receiver); or ( iv) to pursue rights agai nst a person i n a thi rd party proceedi ng i n any action brought agai nst the Lender ( i ncl udi ng acti ans i n bankruptcy court), al I of which rights may be exercised before, duri ng or after the pendency of any judicial reference proceedi ng. Neither the exercise of self-help remedies nor the institution or maintenance of an action for foreclosure or provisional or ancillary remedies or the opposition to any such provisional remedies shall constitute a waiver of the right of any party to require submission to judicial reference the merits of the Claim occasioning resort to such remedies. Venue for the reference proceeding will be in the Superior Court or Federal District Court in Orange County, California (the "Court").

(b) The referee shall be a retiredJ udge or Justice selected by mutual written agreement of the parties. If the parties do not agree, the referee shal I be selected by the PresidingJ udge of the Court (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted. The referee shall be appointed to sit with all the p01Vers provided by law. Pending appointment of the referee, the Court has povver to issue temporary or provi si anal remedies.

( c) The parties agree that ti me is of the essence i n conducti ng the reference proceedings. Accordingly, the referee shall be requested, suqject to change in the time

68 4840--9714-0152.8

periods specified herein for good cause shO\IVn, to (i) set the matter for a status and trial setti ng conference wi thi n fifteen ( 1 5) days after the date of selection of the referee, ( i i) if practicable, try all issues of law or fact within ninety (90) days after the date of the conference and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision.

(d) The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or cutoffs for good cause, including a party's fai I ure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shovvn, no party shall be entitled to "priority" in conducting discovery, depositions may be taken by either party upon seven (7) days' written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shal I be submitted to the referee whose decision shal I be final and bi ndi ng.

( e) Except as expressly set forth in this Agreement, the referee shal I determine the manner in which the reference proceeding is conducted including the ti me and pl ace of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. A 11 proceedings and hearings conducted before the referee, except for trial , shal I be conducted without a court reporter, except that when any party so requests, a court reporter wi 11 be used at any hearing conducted before the referee, and the referee wi 11 be provided a courtesy copy of the transcript. The party making such a request shal I have the obi i gati on to arrange for and pay the court reporter. Subject to the referee's power to award costs to the prevailing party, the parties wi 11 equal I y share the cost of the referee and the court reporter at trial .

(f) The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, provide all temporary or provisional remedies, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a trial, including without limitation motions for summary judgment or summary adjudication. The referee shall issue a decision pursuant to CCP Section 644 and the referee's decision shal I be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court. The final judgment or order or from any appeal able decision or order entered by the referee shall be fully appealable as provided by law. The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a differentjudgment, which new trial, if granted, is al so to be a reference proceeding under this provision.

(g) If the enabling legislation which provides for appointment of a referee is repealed ( and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure wi 11 be resolved and determined by arbitration. The arbitration will be conducted by a retired judge or Justice, in accordance with the California Arbitration Act Section 1200 through Section 1294.2 of the CCP as

69 4840--9714-0152.8

amended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.

Section 12.19. Arm's-length Transaction. The BorrCMter acknovvledges and agrees that (i) the advance of the Loans by the Lender pursuant to this Loan Agreement is an arm'sI ength commercial transaction between the B orrovver and the Lender, ( i i) i n connection therevvi th and with the financing di scussi ans, undertakings and procedures I eadi ng up to the consumrnati on of such transaction, the Lender is and has been acti ng solely as a pri nci pal and is not acti ng as the agent or fiduciary of or in any way advising the Borrovver, (iii) the Lender has not assumed an advisory or fiduciary responsibility in favor of the BorrCMter with respect to the financing contemplated hereby or the di scussi ans, undertakings and procedures I eadi ng thereto (irrespective of whether the Lender has provided other services or is currently providing other services to the B orrCMter on other matters) and the Lender has no obi i gati on to the B orrovver with respect to the financing contemplated hereby except the obi i gati ans expressly set forth in this Loan Agreement and (iv) the Borrovver has consulted its ovvn legal, financial and other advisors to the extent it has deemed appropriate.

Section 12.20. Patriot Act. The Lender hereby notifies the Borrovver that pursuant to the requirements of the Patriot Act it is required to obtain, verify and record information that identifies the B orrCMter, which i nf ormati on i ncl udes the name and address of the B orrovver and other information that will allCMt the Lender to identify the BorrCMter in accordance with the Patriot Act. The Borrovver hereby agrees that it shall promptly provide such information upon request by the Lender.

[Rernai nder of this page intentionally left blank]

70 4840--9714-0152.8

IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be executed in their respective corporate names by their duly authorized officers or officials all as of the date first written above.

LENDER:

F AR.l\11.ERS AND MERCHANTS BANK OF LONG BEACH

~, ~ By \ ~1~'-

RichM Robinson, First Vice President

ISSUER:

CALIFORNIA MUNICIPAL FINANCE AUTHORITY

By~~~~~~~~~~~~~~~~~ Authorized Signatory

BORROWER:

HARBOR DAY SCHOOL, a California nonprofit public benefit corporation

[Signature Page to Loan Agreement]

.. "'-

IN ·wrTNESS WHEREOF, the parties hereto have caused this Loan Agreement to be executed in their respective corporate names by their duly authorized officers or officials all as of the date first written above.

LENDER:

FARMERS AND MERCHANTS BANK OF LONG BEACH

BY~~~~~~~~~~~ Richard Robinson, First Vice President

ISSUER:

BORROWER:


By -·---Angela Diane Evans, Head of School


EXHIBIT A

DESCRIPTION OF PROPERTY

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF NEWPORT BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

THAT PORTION OF BLOCK 96 OF IRVINE'S SUBDIVISION, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 1, PAGE 88 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHEASTERLY TERMINUS OF THAT CERTAIN COURSE IN THE SOUTHWESTERLY BOUNDARY OF PACIFIC VIEW MEMORIAL PARK DESCRIBED AS NORTH 41° 38' 18" WEST 565.00 FEET IN THE DEED RECORDED DECEMBER 17, 1958 IN BOOK 4518, PAGE 207 OF OFFICIAL RECORDS; THENCE NORTH 41° 38' 18" WEST 538.39 FEET ALONG SAID CURVE TO A POINT ON A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 50.00 FEET, A RADIAL TO SAID POINT BEARS SOUTH 11° 46' 58" EAST; THENCE WESTERLY AND NORTHWESTERLY 59.22 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 67 51' 50" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 30.00 FEET; THENCE NORTHWESTERLY 21.68 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 41° 24' 34" TO A POINT OF TANGENCY WITH A LINE PARALLEL WITH AND DISTANT SOUTHERLY 60.00 FEET FROM THE SOUTHERLY LINE OF THAT CERTAIN LAND DESCRIBED IN THE DEED TO THE CITY OF NEWPORT BEACH RECORDED DECEMBER 20, 1957 IN BOOK 4143, PAGE 395 OF OFFICIAL RECORDS; THENCE NORTH 75° 19' 42" WEST 246.95 FEET ALONG SAID PARALLEL LINE; THENCE SOUTH 14° 40' 18" WEST 552.79 FEET TO THE NORTHERLY RIGHT OF WAY OF SAN JOAQUIN HILLS ROAD, 128.00 FEET IN WIDTH, AS DESCRIBED IN THE DEED TO THE CITY OF NEWPORT BEACH, RECORDED AUGUST 25, 1969 IN BOOK 9060, PAGE 934 OF SAID OFFICIAL RECORDS; THENCE SOUTH 88' 03' 47' EAST 003.94 FEET ALONG SAID RIGHT OF WAY LINE AND ITS EASTERLY PROLONGATION TO A POINT THAT BEARS SOUTH 1° 36' 13" WEST FROM THE POINT OF BEGINNING; THENCE NORTH 19° 56' 13" EAST 63.73 FEET TO THE POINT OF BEGINNING.

SAID LAND IS ALSO KNOWN AS PARCEL 2 ON A MAP RECORDED IN BOOK 35, PAGE 2 OF PARCEL MAPS, FILED IN THE COUNTY RECORDERS OFFICE OF ORANGE COUNTY, CALIFORNIA.

APN: 458-461-02

A-1 4840--9714-0152.8

EXHIBIT B

FORM OF INVESTOR LETTER OF REPRESENTATIONS

California Municipal Finance Authority Carlsbad, California

Stradling Y occa Carl son Rauth, A Professional Corporation Nevvport Beach, California

Kutak Rock LLP Los Angeles, California

Re: Loan Agreement, dated as of J une 1, 2020, by and among Farmers and Merchants Bank of Long Beach, California Municipal Finance Authority and Harbor Day School.

Ladies and Gentlemen:

The undersigned, Farmers and Merchants Bank of Long Beach, a California statechartered bank ( the " Lender''), is enteri ng i nto that certai n Loan Agreement, dated as of J une 1, 2020 ( the " Loan Agreement"), with the California M uni ci pal Finance Authority (the " Issuer'') and Harbor Day School, a California nonprofit public benefit corporation (the "Borrovver''), pursuant to which the Lender wi 11 make a I oan to the Issuer in the principal amount of up to $35,000,000.00 (the "Issuer Loan Obligation") and the Issuer will in turn make a loan to the B orrovver in the principal amount of up to $35,000,000.00 (the "B orrCMter Loan" and, together with the Issuer Loan Obligation, the "Loans"). Capitalized terms not defined herein shall have the meanings set forth in the Loan Agreement.

The undersigned hereby represents and warrants to you that:

1. The Lender has authority to make the Issuer Loan Obi i gati on pursuant to the Loan Agreement and to execute this letter and any other instruments and documents required to be executed by the Lender in connection with the Issuer Loan Obi i gati on.

2. The Lender is a "Qualified Institutional Buyer'' and a California state-chartered bank. The Lender and has sufficient knovvl edge and experience i n fi nanci al and busi ness matters, including making, originating and funding of loans to municipal entities and is capable of evaluating the merits and risks represented by the Loans and the Loan Agreement. The Lender is able to bear the economic risk of, and entire loss of, its funding of the Loans.

3. The Issuer Loan Obligation is being given and funded by the Lender for its CMtn commercial loan accounts and not with a view to, or for resale in connection with, any di stri buti on of the Issuer Loan Obi i gati on, and the Lender intends to hold the Issuer Loan Obi i gati on for its ovvn account and for an i ndefi ni te period of ti me, and does not i ntend at this time to dispose of all or any part of the Issuer Loan Obligation. The Lender understands that it

B-1 4840--9714-0152.8

may need to bear the risks of the Loans for an indefinite ti me, si nee any transfer prior to maturity may not be possible.

4. The Lender understands that the Loan Agreement and related Loan Documents are intended by the parties to evidence an arm's~ ength commercial I oan transaction, and are not intended to constitute a "security" within the meaning of Section 3(a)(10) of the Securities Exchange Act of 1934, as amended. The Lender further understands that the Loan Agreement is not registered under the Securities Act of 1933, as amended; and further understands that the Loans ( a) are not being registered or otherwise qualified for sale under the "B I ue Sky" I aws and regulations of any state, (b) will not be listed in any stock or other securities exchange, (c) will not carry a rating from any rating service and ( d) wi 11 be delivered in a form which may not be readily marketable. The Lender agrees that it will comply with any applicable state and federal laws then in effect with respect to any disposition of the Loans by it and with the Issuer's sale and disposition limitations as set forth in the Loan Agreement.

5. The undersigned is a duly appointed, qualified and acting officer of the Lender and is authorized to cause the Lender to make the certificates, representati ans and warranties contai ned herei n by execution of this I etter on behalf of the Lender.

6. The Lender acknCMtledges that it has either been supplied with or been given access to i nformati on, i ncl udi ng fi nanci al statements and other fi nanci al i nformati on, to which a reasonable I ender would attach significance in making I ending deci si ans, and the Lender has had the opportunity to ask questi ans and receive answers from knCMtl edgeabl e individuals concerning the B orrovver, the Project, the Property and the Loans and the security therefor so that, as a reasonable lender, the Lender has been able to make a decision to grant the Loans. The Lender acknCMtledges that it has not relied upon the Issuer for any information in connection with the Lender's grant of the Issuer Loan Obligation, the Loan Documents, the validity or enforceability of the Loans or the exclusion of interest thereon from gross income of the Lender for purposes of federal income tax under the Code.

7. The Lender acknovvl edges that the obi i gati ans of the Issuer to make I oan payments with respect to the Issuer Loan Obligation are a special, limited obligation payable solely from the Payments and any other amounts paid to the Issuer from the Borrovver pursuant to the terms of the Loan Agreement and the Issuer shal I not be directly or indirectly or contingently or morally obligated to use any other moneys or assets of the Issuer for all or any portion of such loan payments.

8. The Lender has made its ovvn inquiry and analysis with respect to the Loans and the security therefor, and other material factors affecting the security and payment of the Loans. The Lender is aware that the business and nonprofit activities of the Borrovver involve certain economic variables and risks that could adversely affect the security for the Loans.

9. The Lender acknovvledges that its right to sell and transfer the Loans is suqject to compliance with the transfer restrictions set forth in the Loan Agreement, including the requirement of the delivery to the Issuer and the B orrovver of a purchaser's I etter from the transferee to substantially the same effect as this letter, with no revisions except as may be approved in writing by the Issuer. Failure to deliver such letter to the Issuer and the Borrovver

B-2 4840--9714-0152.8

shall cause the purported transfer to be null and void. The Lender agrees to indemnify and hold harmless the I ssuer with respect to any cl ai m asserted agai nst the I ssuer that is based upon the sale, transfer or other disposition of the Loans in violation of the provisions hereof.

10. None of Stradling Y occa Carlson Rauth, A Professional Corporation (" Bond Counsel"), Kutak Rock LLP, the Issuer, their members, governing body, or any of their employees, counsel or agents will have any responsibility to the Lender for the accuracy or completeness of information obtained by the Lender from any source regarding the B orrCM1er or its financial condition, or regarding the abi I ity of the B orrovver to pay the Borrower Loan, or the sufficiency of any security therefore. No written information has been provided by the Issuer to the Lender with respect to the Loans. The Lender acknCM1ledges that, as between the Lender and all of such parties, the Lender has assumed responsibility for obtaining such information and making such revievv as the Lender deemed necessary or desirable in connection with its decision to grant the Loans.

[Paragraphs 11-14 only apply to the initial Lender.]

11. The Loans are being granted in a direct, private commercial I oan transaction and the terms of the Loans have been established through negotiations between the Lender, the B orrovver and the I ssuer i n an arm' s~ ength transaction.

12. The aggregate price, established as described above, for the Issuer Loan Obi i gati on, to be paid by the Lender pursuant to the terms of this I etter and the Loan Agreement, is an amount equal to $35,()()(),()()().00 (lCXJ>/o of the aggregate principal amount of the Issuer Loan Obligation).

13. As of the date hereof, the price at which the Lender agreed to grant the Issuer Loan Obi i gati on was, to the best knCM1I edge and judgment of the Lender, the fair market value of the Issuer Loan Obligation. The Lender acknovvledges that such price will be relied on by Lender's Counsel as the "issue price" for establishing the yield on the Issuer Loan Obligation, for issuance cost limitations and other federal tax requirements based upon the issue price of the Issuer Loan Obi i gati on.

14. If the Lender transfers, sells or disposes of the Issuer Loan Obligation, or any interest in the Issuer Loan Obligation, either (a) such transfer of any interest in the Issuer Loan Obi i gati on wi 11 not occur within 60 days of the date hereof, during which ti me the Issuer Loan Obligation will be held exclusively for our ovvn account and not suqject to contractual arrangement for such transfer, or ( b) such transfer of the I ssuer Loan Obi i gati on, or i nterest therei n, wi 11 be at a price or prices that, i n the aggregate ( and taki ng i nto account any i nterest in the Issuer Loan Obi i gati on not transferred), is not in excess of par, uni ess Lender's Counsel provides a written opinion that the failure to satisfy this paragraph will not adversely affect the exclusion from gross income of interest on the Issuer Loan Obi i gati on.

B-3 4840--9714-0152.8

We understand that the foregoing information wi 11 be relied upon by the Issuer and the B orrovver with respect to certai n representati ans i n the Tax Certificate dated as of the date hereof or the Exhibits thereto and by Lender's Counsel in connection with its opinion as to the exclusion of the interest on the Issuer Loan Obi i gati on from gross income for federal income tax purposes under 5 ecti on 103 of the I nternal Revenue Code of 1986, as amended.

Very truly yours,

B-4 4840--9714-0152.8

EXHIBIT C

MATTERS TO BE ADDRESSED IN OPINION OF COUNSEL OF THE BORROWER

1. The BorrCMter is a nonprofit public benefit corporation, validly existing and in good standing under the I aws of the State of California

2. The B orrCMter has the povver and authority to enter into and perform al I of its duties contained the I oan documents to which it is a party ( the " Loan Documents").

3. All conditions precedent to the execution of the Loan Documents have been satisfied or waived. The Loan Documents have been duly authorized by all necessary corporate action on the part of the B orrovver and have been duly executed and delivered by the B orrCMter.

4. Each of the Loan Documents constitutes the legal, valid and binding obligation of the B orrovver enforceable against the B orrovver in accordance with its respective terms.

5. The execution and delivery by the BorrCMter of the Loan Documents, the performance by the B orrovver of the duties and covenants of the B orrovver contai ned therei n and the fulfi 11 ment of or compliance by the B orrCMter with the terms and conditions thereof (a) do not and wi 11 not constitute on the part of the B orrovver a breach of or default (with due notice or the passage of time or both), and do not result in the creation or imposition of any prohibited lien, charge or encumbrance upon the property or assets of the B orrower under the articles of incorporation or bylaws of the Borrovver, (b) do not and will not, to our knovvledge, constitute a material breach of the terms, conditions or provisions of, or constitute a default under, any material contract, undertaki ng, i ndenture or other agreement or i nstrument knovvn to us, and ( c) is neither prohibited by, nor subjects the Borrovver to, a fine, penalty, or other similar sanction under, any statute or regulation of the State of California, or any federal statute or regulation, of a type which is typically applicable to transacti ans si mi I ar to those transacti ans contemplated by the documents referred to in this paragraph, and which breach, default, lien, charge or encumbrance would materially and adversely affect the consummation of the transacti ans contemplated by the documents referred to in this paragraph, or the financial condition or operati ans of the Borrower.

6. With respect to requirements imposed on the B orrovver, no consent, approval, authorization of or designation, declaration, or fi Ii ng with any California or United States federal authority (except as may be required under any state or federal blue sky or securities laws) is required in connection with the execution and delivery by the Borrovver of the Loan Documents or is required in connection with the performance of the obi i gati ans and duties of the B orrovver contained therein, except as has been obtained or made on or before the date hereof and as is in f ul I force and effect or which are not requi red to be made or obtai ned unti I after the date hereof, including, but not Ii mited to, fi Ii ngs and recordings required in order to perfect or otherwise protect the security interests under the Loan Documents.

7. The Deed of Trust is in a form sufficient to create a I egal, valid, and perfected Ii en on the fee estate of the real property described therein (the "Property") and the rents thereof in favor of the trustee under the Deed of Trust for the benefit of the beneficiary identified in the

C-1 4840--9714-0152.8

Deed of Trust. In order to provide constructive notice of any lien created by the Deed of Trust, it is necessary to record the Deed of Trust in the Official Records of Orange County, California in accordance with the recording system established pursuant to applicable I aw. I n rendering the opinion in this Paragraph, we have assumed that the description of the fee estate of the Property is legally sufficient to enable a subsequent purchaser, beneficiary under a mortgage, or mortgagee to identify such fee estate.

8. ( a) To our current actual knovvl edge, except as referenced i n the Loan

Documents, there is no action, suit or proceeding pending against the BorrCM1er or its properties

in any court or before any governmental authority or agency, or arbitration board or tribunal

knovvn to us and, which chal I enges the consummation of the financing transacti ans contemplated

by or the validity of the Loans or the Loan Documents, which, if determined adversely to the

Borrovver, would have a material and adverse effect on such consummation or validity.

(b) To our current actual knovvledge, there is no action, suit or proceeding,

pendi ng agai nst the B orrCM1er or its assets, properties or operati ans i n any court or before any

governmental authority or agency, or arbitration board or tribunal knCM1n to us and, which, if

determined adversely to the B orrCM1er, would have a material and adverse effect on the B orrovver

or its financial condition, assets or operations (taken as a whole).

( c) To our current actual knovvl edge, the B orrovver is not i n violation or breach with respect to any specific judicial or administrative adjudicative order or decree knovvn to us and di rected to or aff ecti ng the B orrovver by any federal , state, or muni ci pal court or other governmental authority which violation or breach might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the documents ref erred to i n this paragraph 8 or the fi nanci al condition or operati ans of the B orrCM1er ( taken as a whole).

9. The UCC-1 Financing Statement naming the Borrovver as" Debtor'' and the Issuer as "Secured Party" to be filed with the California Secretary of State (the "Borrovver Financing Statements") in the form presented to us is in adequate and legally sufficient form to perfect a security interest in favor of such party in the right, title and interest of the Borrovver to the Collateral described in the BorrCM1er Financing Statement and the Security Agreement and for which perfection may occur by the fi I i ng the B orrovver Fi nanci ng Statement with the Secretary of State for the State of California (the "Borrovver Collateral"). Assuming that the Borrovver Financing Statement is duly filed with the Secretary of State for the State of California in accordance with the provisions of Section 9516(a) of the California Uniform Commercial Code, the Issuer wi 11 have a perfected security interest in the B orrovver Col I ateral.

C-2 4840--9714-0152.8

EXHIBIT D

SCHEDULE OF PAYMENTS 1

1 This schedule is only an estimate. It is based on assumptions about future loan activity andpr changes. Actual events could affect

these figures. Farmers and Merchants Bank of Long Beach provides this schedule as a guide only, not a prediction.

D-1 4840--9714-0152.8

EXHIBIT E

FORM OF REPORTING CERTI Fl CATE

TO: Farmers and Merchants Bank of Long Beach

RE: Loan Agreement, dated as of J une 1, 2020, by and among Farmers and Merchants Bank of Long Beach, California Municipal Finance Authority and Harbor Day School (the "Loan Agreement")

DA TE: [ Date]

The undersigned Authorized BorrCMter Representative hereby certifies as of the date hereof that [he/she] is the [ ____________________ _] of the Borrovver, and that, as such, [he/she] is authorized to execute and deliver this Certificate to the Lender on the behalf of the B orrovver, and that:

1. The B orrCMter has delivered the year-end audited financial statements required by Section 7.0S(a) of the Loan Agreement for the fiscal year ended as of the above date.

2. A review of the activities of the Borrovver during such fiscal year has been made under the supervision of the undersigned with a view to determining whether during such fi seal year the B orrCMter performed and observed al I its obi igations under the Loan Agreement, and

[select one:]

[ to the best knCMtl edge of the undersigned, duri ng such fi seal year the B orrovver performed and observed each covenant and condition of the Loan Agreement applicable to it, and no Default has occurred and is continuing.]

-or-

[to the best knovvledge of the undersigned, the follovving covenants or conditions have not been performed or observed and the fol I ovvi ng is a Ii st of each such Default and its nature and status:]

3. The financial covenant analyses and information set forth on Schedule A attached hereto are true and accurate on and as of the date of this Certificate.

4. To the best current knovvledge of the undersigned, no Event of Taxability has occurred [or will occur prior to the date of the next upcoming Certificate to be delivered by the B orrovver pursuant to the Loan Agreement].

E-1 4840--9714-0152.8

Defined terms used in this certificate shall have the meaning set forth in the Loan Agreement.

BORROWER:


By~~~~~~~~~~~~~[Name], [Title]

By~~~~~~~~~~~~~[Name], [Title]

4840--9714-0152.8

E-2

Schedule A

Financial Statement Date: [ ________ , ___ _] ("Statement Date")

Section 7.16- Unencumbered Liquid Assets of B orrCMter and E ndCMtment.

( a) Total Unencumbered Liquid Assets of B orrovver and E ndCMtment: '' $ ________ _

(b) cash, cash equivalents and marketable securities: $ _________ _

(c) less permanently restricted assets: $ _________ _

(d) less deferred revenue: $ ________ _

(e) less retirement accounts: $ _________ _

(f) less restricted stock: $ _________ _

(g) less any assets described above pledged to the Lender for other loan or faci I ity: $ _________ _

(h) Net Unencumbered Liquid Assets: $ _________ _

Minimum Unencumbered Liquid Assets Required By Loan Agreement: an amount equal to $5,()()(),()()().

Is the Borrovver in compliance with Section 7.16? Yes _____ No

* The Borrower shall attach to this certificate copies of all relevant bank and brokerage statements in support of the

information reported in this Schedule A.

E-3 4840--9714-0152.8

EXHIBITF

FORM OF DRAW REQUEST /REQUEST FOR ADVANCE

Newport Beach Commercial RE #290

Draw# mount

BorrONer:

Job Site Address:

Loan#

Pl ease deposit funds to Farmers & Merchants Bank Account

# ------------------------------

Dated

A $ __

By signing belON, I certify that I understand that under the laws of the State of California, anyone who performs labor on thejob site must be covered by Worker's Compensation Insurance. Additionally, I certify that I have named Farmers & Merchants Bank as an "additional insured" on lily' policy of Liability Insurance in accordance with the loan documents. Additionally, the undersigned makes the representations and warranties in Exhibit A attached hereto. Capitalized terms shal I have the meanings ascribed thereto in the Loan Agreement.

BORROWER:

By

Authorized Signer (Name & Title)

FARMERS & MERCHANTS BANK

Credit Adni nistration Approval

Date

FARMERS MERCHANTS BANK

Approved by:

Manager Approval

BorrONer: Please provide the follONing items with your draw request:

&

Hard costs: Contractor's progress billing statement, including spreadsheet; conditional lien release for current draw request; unconditional lien release for previous draw request.

Soft/miscellaneous costs: copies of receipts, invoices or other proof of expenses.

Bank use:

122 Endorsement date:

I nspecti on date:

F-1 4840--9714-0152.8

EXHIBIT A

The B orrCMter certifies that ( a) the obi i gati on to make such payment was incurred by the Borrovver in connection with the development, construction, installation, equipping and furnishing of the Property, is a proper charge against the Development B udget, and has not been the basis for any prior requisition which has been paid; (b) neither the BorrCMter nor, to the best of the BorrCMter's knovvledge, the Issuer has received written notice of any lien, right to lien or attachment upon, or claim affecting the right of such payee to receive payment of, any of the money payable under this requi si ti on to any of the persons, firms or corporati ans named herein, or if any notice of any such lien, attachment or claim has been received such lien, attachment or claim has been rel eased or discharged or wi 11 be rel eased or discharged upon payment of this requisition; (c) this requisition contains no items representing payment on account of any retai ned percentages which the B orrCMter is enti tied or requi red to retain at this date under the Loan Agreement or the Disbursement Agreement; ( d) subject to the I ast sentence of this paragraph, the payment of this requisition will not result in (i) less than substantially all (95% or more) of the proceeds of the Issuer Loan Obligation to be expended under this requisition and under all prior requisitions having been used for the acquisition and installation of real property or property of a character suqj ect to the al I CMtance for depreciation under the I nternal Revenue Code of 1986, as amended ( the "Code") or (ii) more than 2°/o of the proceeds of the Issuer Loan Obi i gati on having been used to pay for issuance costs within the meaning of 5 ecti on 147( g) ( 1) of the Code; (e) no" Event of Default," or event which after notice or lapse of time or both would constitute such an "Event of Default" under the Loan Agreement has occurred and not been waived and (f) the advance will be paid prior to _____ _

The B orrovver represents, covenants and warrants that ( a) there has not been any Material Adverse Change, (b) all of its representations and warranties contained in the Loan Agreement were true and accurate as of the date made, remain true and accurate as of the date of this certificate and are hereby reaffirmed; and (c) no event has occurred and is continuing or would result from the loan of proceeds of the Issuer Loan Obligation pursuant to this Draw Request which constitutes a Default, an Event of Default or a Determination of Taxability, and no condition exists which, after notice or lapse of time, or both, would constitute an Event of Default or an Event of Taxability.

[The fol I CMti ng paragraph is to be completed when any requisition and certificate includes any item for payment for labor orto contractors, builders or material men.]

[I hereby certify that insofar as the amount covered by the above requisition includes payments to be made for I abor or to contractors, bui I ders or material men, including materials or supplies, in connection with the development, construction, installation, equipping and furnishing of the Property, (i) all obligations to make such payment have been properly incurred, (ii) any such labor was actually performed and any such materials or supplies were actually furnished or installed in or about the Property and are a proper charge against the Development Budget, and (iii) such materials or supplies either are not subject to any lien or security interest or, if the same are so subject, such lien or security interest will be released or discharged upon payment of this requisition.]

F-2 4840--9714-0152.8

EXHIBIT G

FORM OF ASSIGNMENT LETTER

----------· 20 _

Harbor Day School Corona Del Mar, California

California Municipal Finance Authority San Diego, California

Re: $35,()()(),()()() California Municipal Finance Authority, 2020 Loans


The undersigned, a duly authorized representative of [Lender] ( the " Bank'') hereby advises you that pursuant to Section 10.01 of the Loan Agreement dated as of June 1, 2020 by and among the Bank, the California Municipal Finance Authority and you as Borrovver (the " Loan Agreement"), a 1 CXJ>/o parti ci pati on i nterest i n the I oan which is evidenced i n the Loan Agreement in the aggregate principal amount of$[ _______ _] (the" Loan") has been assigned on this date to [AF FI LI A TE], a whol ly--Ql\fned subsidiary of the Bank. [The Bank wi 11 act as servicer for the Loan.]

[LENDER]

By~~~~~~~~~A uthori zed Representative

AcknCMtledged:

HARBOR DAY SCHOOL

By~~~~~~~~~A uthori zed Representative


G-1

4840--9714-0152.8

EXHIBIT H

AGGREGATE PRINCIPAL AMOUNT OF LOANS OUTSTANDING

Date

Closing Date

TOTAL

4840--9714-0152.8

Draw Request No.

Amount($) of Draw (Request)

H-1

Aggregate Amount of Loan Outstanding

4840--9714-0152.8

EXHIBIT I

PHASING MAP OF PROJECT

1-1

1-2

4840--9714-0152.8

Loan Agreement

LOAN AGREEMENT

among

FARMERS AND MERCHANTS BANK OF LONG BEACH, as the Lender

and

CALIFORNIA MUNICIPAL FINANCE AUTHORITY, as the I ssuer

and

HARBOR DAY SCHOOL as the B orrCM1er

$20, 000,000 California Municipal Finance Authority

Tax-Exempt Loan (Harbor Day School Prqject)

Dated as of J une 1, 2020

Loan Nurmer -!X}-290-0282-4 4828--6890-5659.6


Table of Contents

ARTICLE I DEFINITIONS

Page

Definitions ........................................................................................................ 2 Accounting Terms and Determi nati ans ......................................................... 14

ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS OF ISSUER AND BORROWER


Section 3.01. Section 3.02. Section 3.03. Section 3.04. Section 3.05. Section 3.06. Section 3.07.



4828--6890-5659.6

Representations, Warranties and Covenants of the Issuer ............................. 15 Representations, Warranties and Covenants of the B orrovver ....................... 16

ARTICLE Ill ISSUANCE OF LOANS; APPLICATION OF PROCEEDS

Loans to Finance Project ................................................................................ 20 Advances ........................................................................................................ 21 Term ............................................................................................................... 22 Costs and Expenses of the Issuer ................................................................... 23 Limited Obi i gati ans of the Issuer .................................................................. 24 Invalidity of Borrovver Loan .......................................................................... 24 Project Fund ................................................................................................... 24

ARTICLE IV REPAYMENT OF THE LOANS

I nterest. ........................................................................................................... 2 5 Payments ........................................................................................................ 25 Advances of the Loans ................................................................................... 25 Security for the Loans .................................................................................... 26 Deed of Trust and Security Agreement ......................................................... 27 Payment on Non Business Days .................................................................... 27 B orrovver Payments to Be U nconditi anal ...................................................... 27 Prepayments ................................................................................................... 28 R estri cti ans on Transfer of Loans .................................................................. 29 Repayment ..................................................................................................... 30 Purchase Price of Issuer Loan Obligation ...................................................... 30 Late Charge .................................................................................................... 30 Default Rate ................................................................................................... 30 Applicable Loan Rate .................................................................................... 30

ARTICLE V CONDITIONS PRECEDENT

Precedent to Loan Agreement ........................................................................ 30 Conditions Precedent to Subsequent Advances of Loan Proceeds ................ 33

Section 5.03.

Section 6.01.


Section 7.01. Section 7.02. Section 7.03. Section 7.04. Section 7.05. Section 7.06. Section 7.07. Section 7.08. Section 7.09. Section 7.10. Section 7.11. Section 7.12. Section 7.13. Section 7.14. Section 7.15.

Section 7.16. Section 7.17. Section 7.18. Section 7.19. Section 7.20. Section 7.21. Section 7.22. Section 7.23. Section 7.24.

Section 8.01.

4828--6890-5659.6


Page

Limitations to Disbursement .......................................................................... 34

ARTICLE VI SECURITY INTEREST

Change in Name or Corporate Structure of the Borrovver; Change in Location of the B orrCMter' s P ri nci pal PI ace of B usi ness ............................... 3 5 Security Interest ............................................................................................. 35 Assignment of Insurance ................................................................................ 35

ARTICLE VII AFFIRMATIVE COVENANTS OF BORROWER

Maintenance of Property ................................................................................ 36 Compliance with Laws and Obligations ........................................................ 37 Payment of Taxes and Other Claims ............................................................. 37 Insurance; Indemnity ..................................................................................... 37 Reporting R equi rernents ................................................................................ 40 B oaks and Records; I nspecti on and E xami nation ......................................... 42 Performance by the Lender ............................................................................ 42 Preservation of Existence ............................................................................... 43 No Liability for Consents or Appointments ................................................... 43 Non-liability of the Issuer ............................................................................. 43 Expenses ........................................................................................................ 44 No Personal Liability ..................................................................................... 44 The B orrovver I ndemni fi cation of the I ssuer .................................................. 4 5 The B orrovver I ndemni fi cation of the Lender ................................................ 46 Covenant to Enter into Agreement or Contract to Pr0vide Ongoing Disclosure ...................................................................................................... 47 Financial Covenants ....................................................................................... 48 Deposit Relationship ...................................................................................... 48 Tax C0venants of the Issuer and the B orrovver .............................................. 49 Office of Foreign Assets Control; Patriot Act Campi i ance ........................... 50 Compliancewith Documents ......................................................................... 51 Compliancewith ERISA ................................................................................ 51 Environmental Laws ...................................................................................... 51 Annual Reporting U nder SB 1029 ................................................................. 51 Establishment and Maintenance of the Capital Campaign Pledged Account .......................................................................................................... 51

ARTICLE VIII NEGATIVE COVENANTS OF BORROWER

Lien ................................................................................................................ 52

ii

Section 8.02. Section 8.03. Section 8.04. Section 8.05. Section 8.06. Section 8.07. Section 8. 08. Section 8.09. Section 8.10. Section 8.11. Section 8.12. Section 8.13. Section 8.14. Section 8.15. Section 8.16. Section 8.17.


Page

Sale of Assets ................................................................................................. 53 Consolidation and Merger .............................................................................. 54 Accounting ..................................................................................................... 54 Transfers ........................................................................................................ 54 Other I ndebtedness and Guarantees ............................................................... 54 Other Defaults ................................................................................................ 54 Prohibited Uses .............................................................................................. 55 Use of Property .............................................................................................. 55 Mai ntenance of B usi ness ............................................................................... 5 5 Restrictive Agreements .................................................................................. 55 Tax Exempt Status ......................................................................................... 55 Federal Reserve Board Regulations ............................................................... 55 Advances ........................................................................................................ 55 Swap Agreement ............................................................................................ 55 Loan Documents ............................................................................................ 55 Formation of S ubsi diaries and A ffi Ii ates ....................................................... 56

ARTICLE IX DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS


Eminent Dornai n ............................................................................................ 56 Application of Net Proceeds .......................................................................... 56

ARTICLE X ASSIGNMENT, PARTICIPATION, MORTGAGING AND SELLING

Section 10.01. Assignment by the Lender ............................................................................. 57 Section 10.02. No Sale, Assignment or Leasing by the Borrovver ........................................ 57

Section 11.01. Section 11.02. Section 11.03. Section 11.04. Section 11.05.

Section 12.01. Section 12.02. Section 12.03. Section 12.04.

4828--6890-5659.6

ARTICLE XI EVENTS OF DEFAULT AND REMEDIES

Events of Default ........................................................................................... 58 Remedies on Default ...................................................................................... 60 The Lender's Right to Perform the Obligations ............................................ 61 No Remedy Exel usive .................................................................................... 62 Issuer Enforcement of Rights ......................................................................... 62

ARTICLE XII MISCELLANEOUS

Di sci aimer of Warranties ............................................................................... 62 Limitations of Liability .................................................................................. 63 Additional Payments to the Lender ................................................................ 63 Notices ........................................................................................................... 63

iii

Section 12.05. Section 12.06. Section 12.07. Section 12.08. Section 12.09. Section 12.10. Section 12.11. Section 12.12. Section 12.13. Section 12.14. Section 12.15. Section 12.16. Section 12.17. Section 12.18. Section 12.19. Section 12.20.


Page

B i ndi ng Effect; Ti me of the Essence ............................................................. 64 Severabi I ity .................................................................................................... 64 Amendments .................................................................................................. 64 Execution in Counterparts .............................................................................. 65 Applicable LcJNV .............................................................................................. 65 Jury Trial Waiver ........................................................................................... 65 Capti ans ......................................................................................................... 65 Entire Agreement ........................................................................................... 66 Waiver ............................................................................................................ 66 Survivability ................................................................................................... 66 Usury .............................................................................................................. 66 Thi rd Party B enefi ci ary .................................................................................. 66 Further Assurance and Corrective Instruments .............................................. 66 J udi ci al Reference .......................................................................................... 66 A rm' s Length Transaction ............................................................................. 68 Patriot Act ...................................................................................................... 68

EXHIBIT A DESCRIPTION OF PROPERTY

EXHIBIT B FORM OF INVESTOR LETTER OF REPRESENTATIONS

EXHIBIT( MATTERS TO BE ADDRESSED IN OPINION OF COUNSEL OF THE BORROWER

EXHIBIT D FORM OF REPORTING CERTIFICATE

EXHIBIT E FORM OF DRAW REQUEST /REQUEST FOR ADVANCE

EXHIBIT F FORM OF ASSIGNMENT LETTER

EXHIBIT G AGGREGATE PRINCIPAL AMOUNT OF LOANS OUTSTANDING

EXHIBIT H PHASING MAP OF PROJECT

EXHIBIT I PLEDGE SCHEDULE

EXHIBITJ FORM OF DONOR ACKNOWLEDGEMENT AND REAFFIRMATION

iv 4828--6890-5659.6

LOAN AGREEMENT

This Loan Agreement, dated as of J une 1, 2020 (this " Loan Agreement"), by and among Farmers and Merchants Bank of Long Beach, a California corporation (the "Lender''), California Municipal Finance Authority (the "Issuer) a joint povvers agency duly organized and validly existing under the laws of the State of California (the "State"), as issuer, and Harbor Day School, a California nonprofit public benefit corporation (the" Borrovver'').

WITNESSETH:

WHEREAS, the Issuer was established pursuant to the provisions of the Joint Exercise of Povvers Act, comprising Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the Government Code of the State of California (the "Act"); and

W H E RE AS, the Issuer is authorized by the Act to issue bonds, notes or other e,;i dences of i ndebtedness, or certificates of parti ci pati on in I eases or other agreements, or enter i nto I oan agreements to, among other things, refinance facilities ovvned and/or leased and operated by organizations described in Section 501(c)(3) of the Internal Re,;enue Code of 1986, as amended (the "Code''); and

W H E RE AS, pursuant to the provi si ans of the Act, the public agencies which are members of the Issuer are authorized to jointly exercise any povver common to such public agency members, including, without limitation, the povver to acquire and dispose of property, both real and personal; and

WHEREAS, the Borrovver is a nonprofit public benefit corporation duly incorporated and exi sti ng under the I aws of the State ( as further defi ned herei n, the " State"), and an organization described in Section 501(c)(3) of the Code; and

W H E R EA S, the B orrovver desi res to ( i) finance and refi nance the construction, development, improvement, installation, equipping and furnishing of a new educational facility, totaling up to approximately 100,000 square feet of net space located at 3443 Pacific View Drive, Corona Del Mar, California 92625, to be constructed in three phases (each a "Phase") as identified in Exhibit H hereto, including, but not limited to, (a) the demolition of the existing gymnasium and science/art building, expansion of the existing parking lot, construction staging and temporary classrooms, new bui I dings for admi ni strati on, kindergarten through gth grade classrooms, anci 11 ary I andscapi ng, improvements and recreation areas; and ( b) construction of hardcourts and play areas, gym and I ockers, outdoor courts, soccer field, and anci 11 ary landscaping and improvements and, at the Borrovver's option, a theatre building and associated support spaces, located on the real property, described in Exhibit A attached hereto (the "Land"); and

WHEREAS, Phases 1, 2, and 3 identified on Exhibit H hereto consist ofthe"Project" for purposes of this Loan Agreement; and

4828--6890-5659.6

WHEREAS, to the extent funds are available, the Borrovver intends to pay certain costs of issuance i n connection with the fi nanci ng as part of the P rqj ect on the terms and condi ti ans set forth bel ovv; and

W H E R EA S, i n order to fi nance the P raj ect, the I ssuer i ntends to issue a tax-exempt obligation to the Lender in the aggregate principal amount of up to $20,()()(),()()() (as further defined herein, the " Issuer Loan Obi i gati on"), the interest on which shal I be excluded from income of the Lender for Federal income tax purposes and exempt from State personal income taxes, and lend the proceeds thereof to the Borrovver (as further defined herein, the "Borrovver Loan"); and

W H E RE AS, for and in consideration of such B orrCMter Loan, the B orrovver agrees, inter al i a, to make I oan payments ( as further defi ned herei n, the " Payments") sufficient to pay on the dates specified herein, the principal of, premium, if any, interest thereon and Additional Payments (as defined herein); and

W H E RE AS, the Issuer wi 11 assign the Payments due under B orrCMter Loan pursuant to this Loan Agreement ( except any payments due to the Issuer pursuant to Reserved Issuer Rights ( as herei nafter defi ned)) to the Lender to satisfy the I ssuer' s obi i gati ans under I ssuer Loan Obi i gati on; and

W H E RE AS, the Borrower shal I make Payments ( as hereinafter defined) directly to the Lender as assignee of the I ssuer; and

WHEREAS, the Issuer, the Lender and the Borrovver have duly authorized the execution and delivery of this Loan Agreement;

NOW , TH E RE FORE , in consideration of the payments to be made hereunder and the mutual covenants contained herein, the parties agree as fol I CMts:

ARTICLE I

DEFINITIONS

Section 1.01. Definitions. The follovving terms used herein will have the meanings indicated bel ovv uni ess the context clearly requi res otherwise.

"Account Pledge and Control Agreerrent" means the Account Pledge and Control Agreement, dated as of J une 1, 2020, executed and delivered by B orrovver, with respect to the Pl edged Account.

"Act" means the Joint Exercise of Povvers Act, constituting Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title I of the Government Code of the State of California

"Accessibility Laws" means any federal, state or local law, statute, code, ordinance, rule, regulation or requirement, including, without limitation, the United States Americans With Disabilities Act of 1990, as amended (the "ADA"), relating to accessibility to facilities or

2 4828--6890-5659.6

properties for disabled, handicapped and/or physically challenged persons, or other persons covered by the ADA.

"Additional Payrrents" means the amounts, other than Payments, payable by the B orrovver pursuant to the provi si ans of this Loan Agreement, including, without Ii mitati on, Issuer Fees and Expenses, amounts pursuant to Section 12.03 hereof, indemnity payments and reimbursement of advances due hereunder.

"Advance'' means each disbursement of Loan Proceeds that is approved by the Lender, to be applied to, or reimbursed to the B orrCMter for, the costs identified in the Budget, suqject to the terms and conditi ans of this Loan Agreement.

"Affiliate'' means, with respect to any Person, any other Person directly or indirectly controlling or controlled by or under common control with such Person. Without limiting the foregoing, the definition of "Affiliate" of any Person shall include any subsidiary of such Person.

"Anti-Terrorism Laws" has the meaning assigned to that term in Section 2. 02.

"Applicable Loan Rate" shall have the meaning set forth in Section 4.14 hereof.

"Approving Opinion" means, with respect to any action relating to the Loans, the occurrence of which requires an opinion of counsel delivered by Band Counsel, to the effect that such action (a) is permitted by this Loan Agreement and the Act, and (b) will not adversely affect the exclusion of interest on the Loans from gross income of the holders for purposes of federal income taxation.

"Assignrrent Agreerrent" means the Assignment Agreement, dated as of June 1, 2020, between the Issuer and the Lender.

"Authorized Borrovver Representative" means the Head of School, Director of Finance, the President of the Board of Trustees of the B orrovver, or any other Person designated from ti me to ti me in writing by the Board of Trustees of the B orrovver.

"Bond Counsel" means any attorney or firm of attorneys, which is admitted to practice law before the highest court of any state in the United States of America or the District of Columbia and nationally recognized and experienced in legal work relating to the issuance of tax-exempt bonds.

"BorrCMter" means (a) Harbor Day School, a California nonprofit public benefit corporation; (b) any surviving, resulting or transferee entity thereof permitted pursuant to the terms of this Loan Agreement; and ( c) except where the context requires otherwise, any assi gnee(s) of the Borrower permitted pursuant to the terms of this Loan Agreement.

"BorrCMter Docurrents'' means this Loan Agreement, the Account Pledge and Control Agreement, the Subordinate Deed of Trust, the Environmental Indemnity Agreement, the PI edge Receipts Assignment and Transfer Agreement, the Security Agreement, and the Tax Certificate.

3 4828--6890-5659.6

"BorrCMter Loan" means a loan in an aggregate principal amount up to $20,()()(),()()().00 from the Issuer to the B orrovver made under this Loan Agreement.

"Business Day'' means any day which is not one of the fol I ovvi ng: ( a) a Saturday, Sunday or legal holiday as set forth by the Federal Reserve Bank of San Francisco; or (b) any other day on which banks in New York, New Yark or Los Angeles, California, are authorized or required to be closed by the appropriate regulatory authorities.

"Budget" means the Ii ne item budget for the hard and soft Project Costs for the Prqject as approved by the Lender.

"Capital Campaign" means the capital campaign by the Borrovver and the EndCMtment to raise funds for the Prqject.

"Closing Date'' meansJ une 2, 2020.

"Code" means the I nternal Revenue Code of 1986, as amended from ti me to ti me.

"Collateral" means, collectively, the Property (as defined in the Subordinate Deed of Trust), and the Collateral (as defined in the Security Agreement).

"Completion Notice" means a certificate stating that the Project is complete and that no further Draw Requests will be submitted.

"Contracts and P emits Assi gnrrEnt AgreerrEnt" means that certain Contracts and Permits Assignment Agreement, dated as of June 1, 2020, entered into by the B orrovver in favor of the Lender.

"Default" means an event that, with giving of notice or passage of time or both, would constitute an Event of Default as provided in Article XI hereof.

"Default Rate" means the Applicable Loan Rate plus 5%, but not to exceed the highest rate permitted by I aw.

"Deterrrination of Taxability'' means any determination, decision, decree or advisement by the Cammi ssi oner of I nternal Revenue or any court of competent j uri sdi cti on, or an opinion obtained by the Lender, of counsel qualified in such matters, that an Event of Taxability has occurred. A Determination of Taxability also shall be deemed to have occurred on the first to occur of the fol I ovvi ng:

( a) the date when the B orrovver fi I es any statement, supplemental statement, or other tax schedule, return or document, which discloses that an Event of Taxability has occurred;

(b) the effective date of any federal legislation enacted or federal rule or regulation promulgated after the date of this Loan Agreement that causes an Event of Taxability; or

4 4828--6890-5659.6

( c) upon the sale, I ease or other deli berate action within the meaning of Treas. Reg.§ 1.141-2(d), the failure to receive an unqualified opinion of Bond Counsel to the effect that such action wi 11 not cause interest on Issuer Loan Obi i gati on to become incl udabl e i n the gross i ncome of the reci pi ent.

"Draw Request" means a Draw Request/ Request for Advance substantially in the form attached hereto as Exhibit E.

"EI i gi bl e PI edges" means al I pl edges, gifts, grants, donati ans and contri buti ans, whether novv or in the future, made to or held by Borrovver or Endovvment (excluding Restricted Funds), as such pledges are identified to the Lender in the Pledge Schedule, and which have been reasonably determined by the Lender in good faith as eligible for purposes of this Loan Agreement and the other Loan Documents.

"EndO\IVrrent" means (a) the Harbor Day EndO\IVment Corporation a California nonprofit public benefit corporation; and ( b) any assignee, surviving, resulting or transferee entity thereof.

"E nvi ronrrental Indemnity Agreerrent" means that certain Environmental Indemnity Agreement, dated as of J une 1, 2020, entered into by the B orrO\IVer in favor of the Issuer.

"Environrrental Laws" means any federal, state or local law (whether imposed by statute, or administrative or judicial order, or common law), novv or hereafter enacted, governing health, safety, industrial hygiene, the environment or natural resources, or Hazardous Materials, including, such laws governing or regulating the use, generation, storage, removal, recovery, treatment, handling, transport, disposal, control, discharge of, or exposure to, Hazardous Materials.

"Environrrental Liability'' means any claim, demand, obligation, cause of action, allegation, order, violation, damage, injury, judgment, penalty or fine, cost of enforcement, cost of remedial action, diminution in value or any other cost or expense whatsoever, including reasonable attorneys' fees and disbursements, resulting from the presence or use of Hazardous Materials, the violation or alleged violation of any Environmental Law, or the imposition of any Environmental Li en.

"Environrrental Lien" means a security interest in favor of any third party for: (a) any liability under an Environmental Law; or (b) damages arising from or costs incurred by such thi rd party i n response to a rel ease or threatened rel ease of any Hazardous M ateri al s or constituent into the environment.

"Environrrental Study'' means the Phase I Environmental Site Assessment Report, dated December 27, 2019, prepared by EB I Consulting.

" E RI SA'' has the meani ng set forth i n Section 7. 05( h).

"Event of Default" has the meaning set forth in Section 11.01.

"Event of I ndi rect T axabi I ity'' means the enactment of any federal I egi sl ati on, or the promulgation of any federal rule or regulation, after the date of this Loan Agreement, that has the

5 4828--6890-5659.6

effect ( no matter hCMt accomplished or implemented) of causing ( a) a reduction in the tax equivalent yield on the Issuer Loan Obligation to the Lender or (b) all or any portion of the interest on the Issuer Loan Obligation to be taken into account under any provision of the Code in such manner as to cause an increase in the federal income tax Ii abi I ity of the Lender.

" Event of T axabi I i ty'' means: ( a) the appl i cation of the proceeds of the I ssuer Loan Obi i gati on, or other amounts treated as "gross proceeds" of the Issuer Loan Obi i gati on, in such manner that such Issuer Loan Obligation becomes an "arbitrage bond" within the meaning of Code Sections 103(b)(2) and 148, and with the result that interest on such Issuer Loan Obi igation is or becomes includable in the gross income (as defined in Code Section 61) of the Holder of such Issuer Loan Obligation; (b) if as the result of any act, failure to act or use of the proceeds of any portion of the Issuer Loan Obligation or the Tax Exempt Financed Facilities or any misrepresentation or inaccuracy in any of the representati ans, warranties or covenants contained in this Loan Agreement by the I ssuer or the B orrCMter or the enactment of any federal I egi sl ati on or the promulgation of any federal rule or regulation after the date of this Loan Agreement, the interest on such Issuer Loan Obligation is or becomes includable in a Holder's gross income (as defined in Code Section 61); or (c) any revocation of the determination letter from the Internal Revenue Service regarding status of the Borrovver as a 501(c)(3) corporation.

"F aci I ities" means collectively (a) al I buildings, structures and other improvements situated, placed or constructed on the Land; and (b) all materials, apparatus and other items of personal property ovvned by the B orrovver and attached to or i nstal I ed i n the bui I di ngs, structures and other improvements situated on the Land or used in connection with the buildings, structures and other improvements situated on the Land, including (without limitation) water, gas, electrical, storm and sanitary sewer facilities and all other utilities whether or not situated in easements.

"F i nal Appraisal" means the appraisal conducted by a MA I certified appraiser selected and engaged by the Lender.

"Force Majeure" means unusually adverse weather conditions which have not been taken into account i n the construction schedule, fi re, earthquake or other acts of God, stri ke, I ockout, acts of public enemy, riot, insurrection, or governmental regulation of the sale or transportation of materials, supplies or I abor or shortages of any of the same, strikes, I ockouts or other I abor disturbances, or any unforeseen circumstances or events, or restrictions on the activities of the Borrovver or the Contractor imposed by a Governmental Authority as a result of a pandemic ( except fi nanci al ci rcumstances of the B orrCMter or events or matters which may be reasonably resolved by the payment of money) beyond the control of the B orrovver or the General Contractor.

"GAAP" shal I refer to generally accepted accounting pri nci pl es in the U nited States as in effect from ti me to ti me.

"General Contractor" means DPR Construction, to the extent such entity is serving in the capacity of a general contractor, and any other contractor with whom the B orrCMter has contracted, directly or indirectly, to assist the Borrovver in the construction of the Prqject, and their respective successors and assigns.

6 4828--6890-5659.6

"Governrrental Authority'' means any governmental or quasi-Governmental Authority, board, bureau, commission, department, court, administrative tribunal or other instrumentality or authority, and any public utility authorized by federal, state or local laws or regulations as having jurisdiction over the Borrovver or the Project or the development of the Project.

"G ross-U p Rate" means, with respect to the Issuer Loan Obi i gati on, an interest rate equal to the Appl i cable Loan Rate for such I ssuer Loan Obi i gati on pl us a rate sufficient such that the total interest to be paid on any payment date would, after such interest was reduced by the amount of any U.S. federal, state and local income tax (including any interest or penal ti es) actual I y i mposed thereon, equal the amount of i nterest due with respect to such I ssuer Loan Obligation; provided, hovvever, that in no event shall the Gross-Up Rate exceed twelve percent ( 12°/o ) per annum.

"Hazardous Materials" means any

(a) Substance, product, waste or other material of any nature whatsoever which is or becomes Ii sted, regulated, or addressed pursuant to any or al I of the fol I ovvi ng statutes and regul ati ans, as the same may be amended from ti me to ti me:

4828--6890-5659.6

(i) The Comprehensive Environmental Response, Compensation and Liability Act, 42 U .S.C. Sections 9601, et seq. ("CERCLA");

(ii) The Hazardous Materials Transportation Act, 49 U .S.C. Sections 5101, et seq.;

(iii) The Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq. ("RCRA");

(iv) The Toxic Substances Control Act, 15 U.S.C. Sections 2601, et seq.;

(v) The Clean Water Act, 33 U .S.C. Sections 1251, et seq.;

(vi) The California Hazardous Waste Control Act, California Health and Safety Code Sections 25100, et seq.;

(vii) The California Carpenter-Presley-Tanner Hazardous Substance Account Act, California Health and Safety Code Sections 25300, et seq.;

(viii) The California Safe Drinking Water and Toxic Enforcement Act, California Health and Safety Code Sections 25249.5, et seq.;

(ix) California Health and Safety Code Sections 25280, et seq. ( pertai ni ng to underground storage of Hazardous M ateri al s);

(x) The California Hazardous Waste treatment Reform Act of 1995, California Health and Safety Code Sections 25179.1, et seq.;

7

(xi) California Health and Safety Code Sections 25500, et seq. ( pertaining to hazardous materials response pl ans and inventory);

(xii) The California Porter-Cologne Water Quality Control Act, California Water Code Sections 13000, et seq.;

(xiii) California Civil Code Section 2929.5 (pertaining to inspections rel ati ng to hazardous substances) ; or

(xiv) All other existing and future federal, state and local laws, ordi nances, rules, regul ati ans, orders, requi rements, and decrees regul ati ng, relating to, or imposing liability or standards of conduct concerning any hazardous, taxi c or dangerous waste, substance or material;

(b) Any substance, product, waste or other material of any nature whatsoever which may give rise to liability (i) under any of the statutes or regulations described in clauses (i) through (xiv) of Section (a) above; (ii) under any statutory or common law theory, including negligence, trespass, intentional tort, nuisance or strict liability; or ( i i i) under any reported deci si ans of any state or federal court;

(c) Petroleum, petroleum products and by-products, gasoline or crude oil, other than petroleum and petroleum products contained within regularly operated motor vehicles (including without Ii mitati on gal f carts and I awn maintenance vehicles); and

(d) Asbestos or asbestos containing materials.

"Holder" means either the Lender or an assignee to which the Loans are assigned pursuant to Section 10.01 hereof.

"Initial Draw Date" means the day, which shal I be a Business Day, on which the Lender has made an Advance to the B orrCM1er under this Loan Agreement.

"Interest-Only Period" means the period from the Initial Draw Date to and including the date of delivery of a Notice of Campi eti on by the B orrovver to the Lender.

"I ssuer" means the California Municipal Finance Authority, or its successors and assigns, ajoint exercise of povvers authority formed by aJ oint Exercise of Povvers Agreement, dated as of January 1, 2004 by and among certain California cities, counties and special districts, as may be amended from time to time pursuant to the provisions of the Joint Exercise of Povvers Act, comprising Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the Government Code of the State of California.

"I ssuer Annual Fee' means the annual fee, paid in advance, by the B orrovver to the Issuer in accordance with Section 3.04 hereof. The Issuer Annual Fee is calculated annually as 1.5 basis points of the then outstanding principal amount of the Issuer Loan Obi i gati on. For purposes of clarification, no portion of the Issuer Loan Obligation shall be deemed to be outstanding until the Initial Draw Date.

8 4828--6890-5659.6

"I ssuer Documents'' means this Loan Agreement, the Assignment Agreement and the Tax Certificate.

"I ssuer Fees and Expenses" means, with respect to this Loan Agreement, the fee payable to Issuer for Issuer's services in connection with the preparation, review and execution of this Loan Agreement and Issuer's fees, costs and expenses, as further defined in Sections 3.04 and 7. 11 hereof.

"Issuer Issuance Fee' means $0.00 payable on the Closing Date.

"Issuer Loan Obligation" means, collectively, the Issuer Loan Obligation from Lender to Issuer made under this Loan Agreement.

"Land" means the real property identified in Exhibit A hereto, together with any greater estate i n such real property as hereafter may be acqui red by the B orrCMter.

"Laws" means all statutes, laws, ordinances, rules, regulations, orders, writs, judgments, injunctions, decrees or awards of the United States or any state, county, municipality or other Governmental Authority, including, without limitation, all building, zoning, planning, subdivision, fire, traffic, safety, health, disability, labor, discrimination, environmental, air quality, wetlands, shoreline and flood plain laws, ordinances, regulations and rules.

"Lender" means (a) Farmers and Merchants Bank of Long Beach, a California corporation; (b) any surviving, resulting or transferee corporation of Farmers and Merchants Bank of Long Beach; and (c) if this Loan Agreement and the Issuer Loan Obligation have been assigned by the Lender pursuant to Section 1 0. 01 hereof, such assignee shal I be considered the Lender with respect to this Loan Agreement and the Issuer Loan Obligation, subject to Section 10.01.

"Lender Fees" means, with respect to this Loan Agreement, the fee payable to the Lender for the Lender's services in connection with the preparation, review and execution of this Loan Agreement, as further defined in Section 12.03.

"Lender Indemnified Party'' shall have the meaning set forth in Section 7.13(a).

"Lender's Inspector" shall have the meaning set forth in Section 3.02(c) hereof.

"Liquidity Requirement" means an amount equal to $5,000,000.

" Li en" shal I have the meani ng set forth i n Section 8. 01 hereof.

"Loans" means collectively, the Borrovver Loan and the Issuer Loan Obligation made under this Loan Agreement.

"Loan Agreement" means, collectively, this Loan Agreement, including the Exhibits hereto, as any of the same may be supplemented or amended from ti me to ti me in accordance with the terms hereof.

9 4828--6890-5659.6

"Loan Docurrents" means, collectively, this Loan Agreement, the Account Pledge and Control Agreement, the Subordinate Deed of Trust, the Environmental Indemnity Agreement, the Assignment Agreement, the Security Agreement, the Pledge Receipts Assignment and Transfer Agreement, and the Tax Certificate.

"Loan Comritrrent Armunt" means the maxi mum amount that may be outstanding at any ti me under the Loans and this Loan Agreement which shal I be an amount equal to the I esser of ( a) $1 0, ()()(), ()()(). 00 or ( b) 75% of the E Ii gi bl e PI edges.

" Loan Proceeds" means the amount of up to $20, ()()(), ()()() to be paid or provided to B orrovver.

"Margin Stock'' shall have the meaning assigned to such term in Regulation U promulgated by the Board of Di rectors of the Federal Reserve System, as novv and hereafter from ti me to ti me in effect.

"Maturity Date'' meansJ une 1, 2027.

"Net Proceeds'' means any insurance proceeds or condemnation award paid with respect to the Property, to the extent remai ni ng after payment therefrom of al I expenses i ncurred i n the col I ecti on thereof.

"Notice of Completion" means the document recorded in the city or county in which the Property is located and provided to the General Contractor, giving notice that the construction of the P raj ect has been completed.

"Obligation" means Payments and Additional Payments payable by the Borrovver pursuant to the provi si ans of this Loan Agreement.

"Patriot Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title 111 of Pub. L. 107 56.

"P ayrrents" means those payments of principal and interest with respect to the Loans (excluding, Additional Payments, Issuer Fees and Expenses and Lender Fees payable to the Lender and the I ssuer hereunder) payable by the B orrovver pursuant to the provi si ans of this Loan Agreement. Payments shall be payable by the BorrCMter directly to the Lender as assignee of the Issuer, in the amounts and at the ti mes as set forth in this Loan Agreement.

"Perrritted Debt" shall have the meaning set forth in Section 8.06 hereof.

"Perrritted Encumbrances" means (a) liens and security interests securing indebtedness CMted by the Borrovver to the Issuer and/or the Lender; (b) liens arising by reason of good faith deposits in connection with tenders, leases of real estate, bids or contracts (other than contracts for the payment of borrovved money); (c) any lien arising by reason of deposits with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulation for any purpose at any time as required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or license, or to enable the Borrovver to maintain self-insurance or to participate in any funds

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established to cover any insurance risks or in connection with workers' compensation, unemployment insurance, pensions or profit sharing plans or other social security plans or programs, or to share in the privileges or benefits required for corporations participating in such arrangements; ( d) I i ens arising by reason of good faith deposits made by or to the B orrovver i n the ordinary course of business (for other than borrovved money), deposits by the B orrCMter to secure public or statutory obligations or deposits to secure, or in lieu of, surety, stay or appeal bonds, and deposits as security for the payment of taxes or assessments or other similar charges; (e) attachment or judgment liens not constituting a default hereunder or under the Subordinate Deed of Trust, or any attachment or judgment I i en agai nst the B orrovver so I ong as such judgment is being contested in good faith and execution thereon is stayed; (f) rights reserved to or vested in any municipality or public authority by the terms of any right, povver, franchise, grant, license, permit or provision of law affecting the Property, to: (1) terminate such right, povver, franchise, grant, license, or permit, provided, that the exercise of such right would not materially impair the use of such Property in the ordinary course by the BorrCMter or materially and adversely affect the value thereof, or (2) purchase, condemn appropriate or recapture, or designate a purchaser of, the Property or any portion thereof; (g) liens for taxes, involuntary assessments, or similar charges either not yet due or being contested in good faith; (h) liens of material men, mechanics, warehousemen, or carriers, or other Ii ke Ii ens arising in the ordinary course of business, including, but not Ii mited to, contractors and subcontractors required to complete the P raj ect and securing obi i gati ans which are not yet delinquent; or which are being contested in good faith for a period no longer than the ninety (90) days after the due date of such lien; (i) easements, rights-of-way, servitudes, restrictions, deed restrictions, oil, gas, or other mineral reservations and other minor defects, encumbrances, and irregularities in the title to the Property which do not materially impair the use of such Property in the ordinary course by the Borrovver or materially and adversely affect the value thereof; U) rights reserved to or vested in any muni ci pal i ty or publ i c authority to control or regulate the Property or to use such Property i n any manner, which rights do not materially impair the use of such Property or materially and adversely affect the value thereof, to the extent that it affects title to the Property; (k) liens on property received by the BorrCMter through gifts, grants or bequests, such liens being due to restrictions on such gifts, grants or bequests or the income thereon, so long as the fair market value of any such property is greater than the amount of the indebtedness secured by the Ii en on such property; (I) the exceptions to coverage of the Title Policy as approved by Lender, and (m) first priority-Hens on any property acquired with Permitted Debt; (n) all Liens and other agreements and documents securing or evidencing the obligations under the Senior Loan Agreement and (o) Liens approved in writing by the Lender in its sole discretion on a case--bycase basis.

"Person" means an individual, a corporation, a partnership, an association, a joint venture, a trust, a business trust, a limited liability company or any other entity or organization, including a governmental or political subdivision or an agency or instrumentality thereof.

"Phase 1" means the demolition of the existing gymnasium and science/art building, expansion of the existing parking I ot, construction staging and temporary classrooms, new bui I dings for admi ni strati on, kindergarten through 8th grade classrooms, anci 11 ary I andscapi ng, improvements and recreation areas as identified in Exhibit H attached hereto.

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"Phase 2" means the construction of hardcourts and play areas, gym and I ockers, outdoor courts, soccer field, and ancillary landscaping and impr0vements, as identified in Exhibit H attached hereto.

" P hase 3" means, at B orrovver' s option, a theatre bui I di ng and associated support spaces, located on the real property, described in Exhibit A attached hereto and as identified in Exhibit H attached hereto.

" P I ans and S peci fi cati ans" means the B orrovver' s pl ans and speci fi cati ans for the P rqj ect, as amended from time to time, which include a construction budget for the Project and an al I ocati on of the sources and uses of funds for the P raj ect.

"PI edged Account" means the account established and maintained in accordance with Section 7.24 hereof.

"PI edge(s)" means any and al I signed donor pl edges, gifts, grants, donati ans and contri buti ans in connection with the Capital Campaign of the B orrCMter.

"Pledge Receipts Assignrrent and Transfer Agreerrent" means the Pledge Receipts Assignment and Transfer Agreement, dated as of June 1, 2020, between the Endovvment and the B orrovver.

"PI edge Schedule" means a schedule substantially in the form attached hereto as Exhibit I and i denti fyi ng the PI edges i n sufficient detai Is as may be requested by the Lender.

"Prior I nterest P ayrrent" means a payment of interest on the Issuer Loan Obi i gati on made on or prior to the date of any Determination of Taxability that becomes includable in a Holder' s gross i ncome ( as defi ned i n Code Section 61).

" P raj ect" means ( i) fi nanci ng and refi nanci ng Phase 1, Phase 2 and Phase 3, as identified in E xhi bit H hereto, and (ii) paying certai n costs of i ssui ng the Loans.

"Project Costs" means the amount paid or to be paid for any portion of the Prqject incurred by Borrovver in connection with the Project and as permitted under the Act, including capitalized interest on, and closing costs for, the Loans.

"Project Fund" means the Project Fund established pursuant to Section 3.07 of this Loan Agreement.

" P roperty'' means the Land and the F aci I i ti es.

"Qualified Institutional Buyer" shall have the meaning ascribed thereto in Rule 144A of the Securities Act of 1933, as amended.

"Reserved Issuer Rights" means the Issuer's rights to Additional Payments (which incl ude the I ssuer Fees and Expenses), i ndemni fi cation, notices, opi ni ans, certi fi cati ans, information, i nspecti ans and consents pursuant to this Loan Agreement and the Tax Certificate.

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"Restricted Funds" means donor-restricted pl edges, gifts, grants, donati ans and contributions in whatever form they may take and hovvever held and whether received or to be received, if the granting of a security interest in said assets under this Agreement or any other loan document would be inconsistent with the donor restriction (e.g., pledges made for purposes other than the P raj ect).

"Security Agreerrent" means that certain Security Agreement of even date herevvith executed and delivered by the B orrovver for the benefit of the Issuer.

"Senior Deed of Trust" means that certain Construction Deed of Trust with Assignment of Leases and Rents, Security Agreement and Financing Statement, dated as of June 1, 2020, by the B orrovver for the benefit of the Issuer.

"Senior Loan Agreerrent" means that certain Loan Agreement, dated as of J une 1, 2020, by and among the I ssuer, the B orrCMter and the Lender, providing for a I oan by the Lender to the Issuer and from the Issuer to the B orrovver in the maxi mum principal amount of $35,000,000, as the same may be supplemented or amended from time to time in accordance with the terms thereof.

"Senior Loan Docurrents" means the Senior Deed of Trust, the Senior Loan Agreement and al I documents thereunder and related thereto.

"Senior Loans" means the loans made pursuant to the Senior Loan Agreement.

"State" means the State of California

"Subordinate Deed of Trust" means that certain Subordinate Deed of Trust with Assignment of Leases and Rents, Security Agreement and Financing Statement, dated as of June 1, 2020, by the B orrovver for the benefit of the Issuer.

"Subsidiary'' of a Person means (i) any corporation more than So>/o of the outstanding securities having ordinary voting povver of which shall at the time be ovvned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, limited liability company, association, joint venture or similar business organization more than So>/o of the ovvnership interests having ordinary voting povver of which shal I at the ti me be so ovvned or control I ed.

"Swap Agreerrent" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or opti ans or forward bond or forward bond price or forward bond index transacti ans, i nterest rate opti ans, forward foreign exchange transacti ans, cap transacti ans, fl oar transacti ans, col I ar transacti ans, currency swap transacti ans, cross-currency rate swap transacti ans, currency opti ans, spot contracts, or any other si mi I ar transacti ans or any combination of any of the foregoing (including any opti ans to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are suqject to the terms and conditions of, or governed by, any form of master agreement published by the

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International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a" Master Agreerrent" ), including any such obligations or liabilities under any Master Agreement.

"Tax E xerrpt F i nanced F aci I i ti es" means the porti ans of the P rqj ect fi nanced with proceeds of the Loans.

"Tax Certificate'' means the Tax Certificate dated the Closing Date executed and delivered by the Issuer and the Borrovver, together with any supplements or certificates related thereto.

"Title Insurer" means First American Title Insurance Company.

"Title Policy'' means an AL TA (or equivalent) mortgagee policy of title insurance with coverage in an amount equal to the principal amount of the Loans, with reinsurance and endorsements as the Lender may require, containing no exceptions to title (other than Permitted Encumbrances) which are unacceptable to the Lender, and insuring that the Subordinate Deed of Trust is a second-priority lien on the Property securing the Loans. Without limitation, such policy shall (a) be in the 2006 AL TA form or, if not available, AL TA 1992 form (deleting arbitration and creditors' rights, if permissible) or, if not available, the form commonly used in the State, insuring the Lender and its successors and assigns; and (b) include those endorsements and/or affirmative coverages approved by the Lender, as evidenced by the final approved title policy.

"Unencumbered Liquid Assets" is defined as unrestricted cash and readily marketable securities that can be converted into cash within three Business Days. Excluded from Unencumbered Liquid Assets are ( a) permanently restricted assets as determined in accordance with GAAP, (b) deferred revenue identified in the Borrovver's audited financial statements, ( c) retirement accounts, ( d) restricted stock and stock suqj ect to the provi si ans of Rule 144 of the Securities and Exchange Commission, and (e) any of the assets described above which are pledged to the Lender in connection with a loan or other credit extension from the Lender or other than the Loans. " Unencumbered" is defined as free of any Ii ens, security interests or other encumbrances except in favor of Lender.

Section 1.02. Accounting Terms and Determinations. Unless otherwise specified herein, al I accounting terms used herein shal I be interpreted, al I accounting determi nati ans hereunder shal I be made, and al I financial statements required to be delivered hereunder shal I be prepared, in accordance with GAAP. If, after the Closing Date, there shall occur any change in GAAP from those used in the preparation of the financial statements referred to in Section 7.05 hereof and such change shall result in a change in the method of calculation of any financial covenant, standard or term found in this Loan Agreement relating solely to obligations in existence on the Closing Date including, without limitation, a recharacterization of operating I eases to the effect that certain operati ng I eases are to be treated as capital I eases, either B orrovver or Lender may by notice to the other party hereto, requi re that Lender and B orrovver negotiate i n good faith to amend such covenants, standards, and terms so as equitably to reflect such change in accounting principles, with the desired result being that the criteria for evaluating the financial

14 4828--6890-5659.6

condition of Borrovver shall be the same as if such change had not been made. No delay by Borrovver or Lender in requiring such negotiation shall limit their right to require such a negotiation at any ti me after such a change in accounting pri nci pl es. U nti I any such covenant, standard, or term is amended in accordance with this Section 1.02, financial covenants shall be computed and determined in accordance with GAAP in effect prior to such change in accounting pri nci pl es.

ARTICLE II

REPRESENTATIONS, WARRANT! ES AND COVENANTS OF ISSUER AND BORROWER

Section 2.01. Representations, Warranties and Covenants of the Issuer. The Issuer represents and warrants as of the date hereof, and covenants, for the benefit of the Lender and the B orrovver, as fol I ovvs:

(a) The Issuer is a joint exercise of povvers agency duly organized and existing under the laws of the State, and is duly authorized to enter into the Issuer Documents and to perform its obligations under the Issuer Documents.

(b) All requirements have been met and procedures have occurred in order to authorize the execution and delivery of the Issuer Documents. The Issuer has taken all necessary action and has complied with al I provi si ans of the I aw required to make the Issuer Documents valid and binding obi i gati ans of the Issuer, except to the extent Ii mited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally, by the application of equitable pri nci pl es regard I ess of whether enforcement is sought in a proceeding at law or in equity, or by public policy.

(c) Each of the Issuer Documents has been duly authorized, executed and delivered by the Issuer. Nothing in this Loan Agreement shall be construed as requiring the I ssuer to provide any fi nanci ng or refi nanci ng for the P raj ect other than the proceeds of the Issuer Loan Obligation or to provide sufficient moneys for all of the cost of fi nanci ng or refi nanci ng the P raj ect.

( d) Pursuant to this Loan Agreement, the I ssuer has assigned to the Lender al I of the Issuer's rights ( except Reserved Issuer Rights) in this Loan Agreement, the Payments and any other documents executed by the Borrovver except the Tax Certificate, including the assignment of al I rights i n any security i nterest granted to the I ssuer by the B orrCMter.

(e) To the knovvledge of the Issuer, there is no action, suit, proceeding, claim, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body pending or threatened against or affecting the Issuer, chal I engi ng the I ssuer' s authority to enter into this Loan Agreement or the Tax Certificate or any other action wherein an unfavorable ruling or finding would adversely affect the enforceability of this Loan Agreement or the Tax Certificate, or the exclusion of interest on the Issuer Loan Obi i gati on from gross income for federal tax purposes under the

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Code, or would materially and adversely affect any of the transactions contemplated by this Loan Agreement.

Section 2.02. Representations, Warranties and Covenants of the Borrovver. The B orrovver represents and warrants as of the date hereof, and covenants, for the benefit of the Lender and the I ssuer as fol I ovvs:

(a) The Borrovver is duly organized and in good standing under the laws of the State of California, authorized to purchase and hold real and personal property and finance or refinance the same, and has full legal right, pc:M1er and authority to enter into the B orrovver Documents and to carry out and consummate al I transacti ans contemplated hereby and by the other Borrovver Documents and by proper corporate action has duly authorized the execution, delivery and performance of the BorrCM1er Documents. The Borrovver is duly licensed to operate and maintain its existing facilities and has all necessary pc:M1er and authority to conduct the business nCM1 being conducted by it and as contemplated by this Loan Agreement.

(b) The Borrovver Documents have been duly authorized, executed and delivered by the B orrovver.

(c) Assuming due execution and delivery by the other parties, this Loan Agreement and the other BorrCM1er Documents constitute the legal, valid and binding agreements of the B orrovver enforceable agai nst the B orrovver by the I ssuer or the Lender, as appropriate, in accordance with their respective terms; except in each case as enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy and by commercial reasonableness.

( d) The execution and delivery of the B orrCM1er Documents by the B orrovver, the consummation of the transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof and thereof by the Borrovver, do not conflict with or constitute a violation or breach of or default (with due notice or the passage of ti me or both) under the articles of incorporation and bylaws of the B orrovver, or with respect to the Borrovver, any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any material indenture, mortgage, deed of trust, I oan agreement, I ease, contract or other material agreement or instrument to which the Borrower is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Borrovver, other than Permitted Encumbrances, which conflict, violation, breach, default, lien, charge or encumbrance may materially and adversely affect the consummation of the transacti ans contemplated by the B orrovver Documents, or the fi nanci al condition, operati ans or business of the B orrovver.

(e) As of the date hereof, no consent or approval of any trustee or holder of any indebtedness of the B orrovver or any guarantor of indebtedness of or other provider of

16 4828--6890-5659.6

credit or liquidity to the Borrovver, and with respect to the Borrovver, no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except with respect to any state securities or" blue sky" laws) is necessary in connection with the execution and delivery of the Borrovver Documents, or the consummation of any transaction herein or therein contemplated, or the f ul fi 11 ment of or compliance with the terms and conditions hereof or thereof, except as have been obtained or made and as are in f ul I force and effect.

(f) There is no action, suit, proceeding, inquiry or investigation, before or by any court or federal, state, municipal or other governmental authority, pending, or to the knovvledge of the Borrovver, threatened in writing, against or affecting the Borrovver or the assets, properties or operati ans of the B orrovver:

(i) to restrain or enjoin the issuance or delivery of any of the B orrovver Documents or the payment of Payments hereunder;

(ii) in any way contesting or adversely affecting the authority for or the validity of the B orrovver Documents;

( i i i) in any way contesti ng the corporate existence or povvers of the B orrovver; or

(iv) which, if determined adversely to it, would materially adversely affect the consummation of the transacti ans contemplated by the B orrovver Documents or the ability of the Borrovver to perform its material obligations hereunder or thereunder; or could reasonably be expected to have a material adverse effect on the financial conditions, the operations or business of the Borrovver;

(g) As of the date hereof, no written information, exhibit or report furnished to the I ssuer or the Lender by the B orrovver i n connection with the negotiation of the Borrovver Documents or otherwise in connection with the transactions contemplated hereby and thereby, contains any untrue statement of a material fact regarding the B orrovver, the Property or the B orrovver' s busi ness, or omits to state a material fact regardi ng the B orrCM1er, the Property or the B orrCM1er' s busi ness necessary i n order to make the statements therein, in the light of the circumstances under which they were made, not misleading. All projections, valuations or pro forma financial statements provided to the Issuer or the Lender by the BorrCM1er present the BorrCM1er's good faith opinion as to such projecti ans, val uati ans and pro forma condition and results.

( h) The B orrovver has heretofore furnished to the Issuer and the Lender the audited fi nanci al statements of the B orrovver and the E ndovvment for the fi seal years ended J une 30, 201 7, J une 30, 2018, and J une 30, 2019, and the related statement of revenues, expenditures, transfer and changes in net assets and changes in financial position for the years then ended and information related to the Property. The information rel ati ng to the Property is complete and accurate and those fi nanci al statements present fairly, in all material respects, the financial condition of the Borrovver,

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and the E ndovvment on the dates thereof, and the activities and cash flovvs for the periods then ended were prepared in accordance with GAA P. Si nee J une 30, 2019, there has been no material adverse change in the assets, operations or financial condition of the B orrovver and the E ndovvment, other than as di sci osed i n wri ti ng to the I ssuer and the Lender.

(i) As of the Closing Date, the Borrovver has good and marketable fee title to the Property, free and cl ear from al I encumbrances other than Permitted Encumbrances. The Borrovver enjoys the peaceable and undisturbed possession of all real and personal property which is material to its operation.

U) As of the Closing Date, the Borrovver is not in default (and no event has occurred and is continuing which with the giving of notice or the passage of time or both could constitute a default) (1) under the Borrovver Documents, or (2) with respect to any order or decree of any court binding against the B orrCM1er or any order, regulation or demand of any federal, state, municipal or other governmental authority binding against the Borrovver, which default could reasonably be expected to materially and adversely affect the consummation of the transacti ans contemplated by the B orrovver Documents, or the financial condition, operations or business of the Borrovver.

( k) The B orrovver acknovvl edges, represents and warrants that, except for the express representati ans and warranties of the I ssuer set forth herei n, it has not rel i ed on the I ssuer or the Lender for any guidance or expertise i n anal yzi ng the fi nanci al or other consequences of the transacti ans contemplated by the B orrCM1er Documents or otherwise relied on the Issuer or the Lender for any advice. The BorrCM1er acknovvledges that it has been advised by, or has had the opportunity to be advised by, its ovvn financial advisors in connection with the Prqject.

(I) No portion of the Property fi nanced with proceeds of the Loans i ncl udes any property used or to be used for sectarian instruction or study, as a place for devotional activities or religious worship, or primarily in connection with any part of the program of a school or department of divinity for any religious denomination.

(m) The Borrovver is an organization described in Section 501(c)(3) of the Code, does not constitute a private foundation under Section 509(a) of the Code, and the income of the Borrovver is exempt from federal taxation under Section SOl(a) of the Code. The Borrovver has received a determination from the Internal Revenue Service to the foregoing effect, and none of the bases for such determination have changed si nee the date thereof.

( n) Environmental Laws.

(i) The BorrCM1er is in compliance in all material respects with all applicable Environmental Laws.

( i i) Neither the B orrovver nor the Property is the subject of a federal , state or I ocal i nvesti gati on evaluating whether any remedial action is needed to

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respond to any alleged violation of or condition regulated by Environmental Laws or to respond to a rel ease of any Hazardous Materials into the environment.

(iii) Except as otherwise identified in the Environmental Study pr0vided by the Borrovver to the Lender, the Borrovver has no knovvledge of the presence on, under or about the Property, novv or in the past, of any Hazardous Materials, or of the transportation to or from the Property of any Hazardous Materials in violation of applicable law. The Borrovver agrees to construct, operate and maintain the Property strictly in compliance with all Environmental Laws. The BorrCMter will pr0vide the Lender with copies of any environmental reports prepared with respect to the environmental condition of the Property.

(iv) The BorrCMter is in compliance with Division 13, commencing with Section 21000, of the Public Resources Code (the "CEQA Requirements") with respect to the Project and has received all documentation evidencing such compliance, or the Project is not defined as a "prqject" or is "statutorily exempt" or is "categorically exempt" in accordance with the CEQA Requirements.

(o) Neither the Borrovver nor any affiliate of the Borrovver is an "investment company" or a company "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended.

(p) Neither the Borrovver nor any of its affiliates is in violation of any laws relating to terrorism or money laundering ("Anti-Terrorism Laws"), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the "Executive Order''), and the Patriot A ct.

4828--6890-5659.6

( q) Neither the B orrower nor any of its affi I i ates is any of the fol I ovvi ng:

( i) a person that is I i sted i n the annex to, or is otherwise suqj ect to the pr0visions of, the Executive Order;

( i i) a person CMtned or control I ed by, or acti ng for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(iii) a person with which the Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti -Terrorism Law;

(iv) a person that commits, threatens or conspires to commit or supports "terrorism'' as defined in the Executive Order; or

(v) a person that is named as a "specially designated national and blocked person" on the most current list published by the Office of Foreign Asset Control ("OFAC") or any list of Persons issued by OFAC pursuant to the Executive Order at its official website or any replacement website or other replacement official publ i cation of such Ii st;

19

(r) Neither the Borrovver nor any of its affiliates (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in subsection (q) above, (ii) deals in, or otherwise engages i n any transaction rel ati ng to, any property or i nterests i n property blocked pursuant to the Executive Order or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to viol ate, any of the prohi biti ans set forth in any A nti-T errori sm Law.

(s) The Borrovver is currently in compliance, and in the future will comply, with al I applicable nondi scri mi nation I aws.

ARTICLE Ill

ISSUANCE OF LOANS; APPLICATION OF PROCEEDS

Section 3.01. Loans to Finance Project.

(a) The Lender hereby agrees to make one or more loans to the BorrCM1er during the period from the Closing Date up to and including the Maturity Date in the aggregate principal amount not to exceed $20,()()(),()()() in the form of the Issuer Loan Obi igation to I ssuer and the I ssuer hereby agrees, subject to I i mi tati ans herei n, to borrCM1 such amount from the Lender and to I end the Loan Proceeds to the B orrovver for the purposes of financing the Prqject. The Loans are non-revolving. Any portion of the Loans repaid may not be re-drawn. Follovving the Initial Draw Date until the Maturity Date or earlier prepayment of the Loans, the Borrovver shall cause an amount not less than $5,()()() to remain outstanding during such period.

(b) Upon fulfillment of the conditions precedent set forth in Sections 4.03, 5.02 and 5.03 hereof, the Lender shall disburse the Loan Proceeds from time to time into the Project Fund pursuant to Draw Requests; provided, hovvever, that the outstanding amount of the Loans may not exceed the Loan Commitment Amount at any time. The aggregate principal amount of the Loans outstanding under this Agreement is set forth in Exhibit G hereto, as such Exhibit G may be amended from time to time pursuant to Section 5.02(b) hereof.

( c) The B orrovver shal I design, acquire, construct, improve and equip the P raj ect with all reasonable dispatch, substantially in accordance with the Plans and Specifications. The BorrCM1er shall (a) pay when due all fees, costs and expenses incurred in connection with the foregoing from funds made available therefor in accordance with this Loan Agreement, or otherwise, unless any such fees, costs or expenses are being contested by B orrovver in good faith and by appropriate proceedings; (b) as the Borrovver deems reasonably appropriate and in its best interests, ask, demand, sue for, levy, recover and receive all those sums of money, debts and other demands whatsoever which may be due, CM1i ng and payable under the terms of any contract, order, receipt, writing and instruction in connection with the design, construction and equipping of the Project; and (c) as the Borrovver deems reasonably appropriate and in its best interests, enforce the provi si ans of any contract, agreement, obi i gati on, bond or other

20 4828--6890-5659.6

performance security with respect thereto. The BorrCM1er may revise the Plans and Specifications from time to time, pr0vided that no revision shall be made which would change the purposes of the Project to other than purposes permitted by the Act. U pan the completion of the P raj ect, the B orrovver shal I provide Lender with a Campi eti on Notice.

(d) The Issuer's obligation to repay the Issuer Loan Obligation and the B orrovver' s obi i gati on to repay the B orrovver Loan shal I commence, and i nterest shal I begin to accrue, on the Initial Draw Date.

(e) The execution and delivery of this Loan Agreement shall not obligate the Lender to execute and deliver any Draw Request or to provide any funds with respect to any Draw Request, unless and until such Draw Request and any related documents have been executed and delivered by all other parties thereto and all conditions set forth in this Loan Agreement have been satisfied.

Section 3.02. Advances.

(a) General. Provided that no Default or Event of Default has occurred and is continuing, the Loan Proceeds shall be advanced by the Lender for the Project for the benefit of the B orrovver in accordance with the terms and condi ti ans set forth i n this Section 3.02 and Sections 5.02 and 5.03 of this Loan Agreement. All proceeds of the Loans advanced by the Lender shall constitute a loan made to the Borrovver under this Loan Agreement, secured by the Loan Documents.

(b) Conditions Precedent to Advances. The Lender's agreement to disburse funds shall be subject to the further conditions precedent set forth in Sections 5.02 and 5. 03 of this Loan Agreement. U pan receipt of a Draw Request from the B orrovver and the appr0val thereof by the Lender, the Lender shall disburse Loan Proceeds to the Project Fund, to be applied by the BorrCM1er for Project Costs in accordance with Section 3.07 hereof.

(c) Lender's Inspector. The Lender shall have the right to retain at the Borrovver's expense an inspector (the "Lender's Inspector'') to review and advise the Lender with respect to all Plans and Specifications, construction, architectural and other design professional contracts, change orders, governmental permits and appr0vals, and other matters related to the design, construction, operation and use of the P rqj ect, to monitor the progress of construction and to review on behalf of the Lender all Draw Requests submitted by the Borrovver. The Borrovver acknovvledges that (i) the Lender's Inspector has been retained by the Lender to act as a consultant, and only as a consultant, to the Lender in connection with the construction of the Project, and the Lender's I nspector may be an employee of the Lender, (ii) the Lender's I nspector shal I in no event have any pCM1er or authority to make any decision or to give any approval or consent or to do any other thing which is binding upon the Lender, and any such purported decision, approval , consent or act by the Lender' s I nspector on behalf of the Lender shal I be void and of no force or effect, (iii) the Lender reserves the right to make any and all decisions required to be made by the Lender under this Loan Agreement, in its sole and absolute discretion, and without in any instance being bound or Ii mited in any manner whatsoever

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by any opinion expressed or not expressed by the Lender's I nspector to the Lender or any other person with respect thereto, and (iv) the Lender reserves the right in its sole and absolute discretion to replace the Lender's I nspector with another inspector at any ti me and without prior notice to or approval by the BorrCMter. All inspections by or on behalf of the Lender shal I be solely for the benefit of the Lender, and the B orrovver shal I have no right to claim any I ass or damage against the Lender or the Lender's I nspector (whether or not an employee of the Lender) arising from any alleged (i) negligence or failure to perform such inspections, (ii) failure to monitor loan disbursements or the progress or quality of construction, or (iii) failure to otherwise properly administer the construction aspects of the P raj ect.

If required by the Lender upon receiving a Draw Request, the Lender's Inspector may determine prior to any disbursement of Loan Proceeds by the Lender:

(i) whether the work completed to the date of such Draw Request has been done satisfactorily and in accordance with the PI ans and S peci fi cati ans;

( i i) the percentage of construction of the P rqj ect completed as of the date of such Draw Request;

( i i i) the hard construction costs actual I y i ncurred by the B orrovver i n connection with the construction of the Project for work in place as part of the Project as of the date of such Draw Request;

(iv) the actual sum necessary to complete construction of the Prqject in accordance with the Plans and Specifications; and

(v) the amount of time from the date of such Draw Request which will be required to complete construction of the Prqject in accordance with the Plans and S peci fi cati ans.

Section 3.03. Term. The term of this Loan Agreement shall commence on the Closing Date and shal I terminate upon the earliest to occur of any of the fol I ovvi ng events:

(a) so long as no Event of Default has occurred and is continuing hereunder, the payment by the Borrovver of all Payments and Additional Payments with respect to the B orrovver Loan, any rebate payments and any other payments required to be paid by the B orrovver hereunder;

(b) so long as no Event of Default has occurred and is continuing hereunder, the prepayment of the entire outstanding principal amount, accrued interest, any Additional Payments and the other amounts due hereunder; or

(c) The Lender's election to terminate this Loan Agreement under Article XI due to an Event of Default hereunder.

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Section 3.04. Costs and Expenses of the Issuer. The Issuer Issuance Fee shall be paid to the Issuer by the B orrovver on the CI osi ng Date. The Borrower shal I al so pay to the Issuer the fol I O\IVi ng:

( a) A 11 taxes and assessments of any type or character charged to the I ssuer affecting the amount avai I able to the Issuer from payments to be received hereunder or in any way arising due to the transacti ans contemplated hereby (including taxes and assessments assessed or levied by any public agency or governmental authority of whatsoever character having povver to I evy taxes or assessments) but excluding any taxes based upon the capital and/or income of any other person other than the B orrO\IVer; provided, hO\IVever, that the B orrO\IVer shal I have the right to protest any such taxes or assessments and to requi re the I ssuer, at the B orrO\IVer expense, to protest and contest any such taxes or assessments assessed or I evi ed upon the I ssuer and that the B orrower shal I have the right to withhold payment of any such taxes or assessments pending disposition of any such protest or contest unless such withholding, protest or contest would materially adversely affect the rights or interests of the Issuer, in the sole discretion of the I ssuer, notwi thstandi ng the provi si ans of 5 ecti on 8. 01 ;

(b) The reasonable fees and expenses of such accountants, consultants, attorneys and other experts as may be engaged by the I ssuer to prepare audits, fi nanci al statements, reports, opi ni ans or provide such other services as are requi red under the Loan Documents;

(c) The Issuer Issuance Fee, the Issuer Annual Fee and the reasonable fees and expenses of the I ssuer or any agent or attorney selected by the I ssuer to act on its behalf in connection with the B orrO\IVer Loan under this Loan Agreement, the Tax Certificate or any other documents contemplated hereby or thereby, including, without limitation, any and all reasonable expenses incurred in connection with any litigation, investigation, or other proceeding that may at any time be instituted involving this Loan Agreement, the Tax Certificate or any other documents contemplated hereby or thereby, or in connection with the reasonable supervision or inspection of the Borrovver, their properties, assets or operations or otherwise in connection with the administration of this Loan Agreement, the Tax Certificate or any of the other documents contemplated hereby or thereby; and

( d) 5 uch amounts as may be necessary to satisfy the rebate requi rements i n accordance with the Tax Certificate and to pay the cost of calculation of such rebate requirements when required by the Code if the Borrovver do not do so directly. To the extent B orrO\IVer do not satisfy any of the excepti ans to rebate, any rebate cal cul ati ans must be computed by a third party rebate analyst and may not be computed solely by the B orrovver.

The I ssuer Fees and Expenses shal I be bi 11 ed to the B orrO\IVer by the I ssuer from ti me to ti me, together with a statement of the Issuer, certifying that the amount bi 11 ed has been incurred or paid by the Issuer for one or more of the above items. After such a demand, amounts so bi 11 ed shall be paid by the Borrovver within thirty (30) days after receipt of the bill by the Borrovver. N otwi thstandi ng the foregoi ng, the I ssuer shal I not be requi red to submit a bi 11 to the B orrovver for payment of the Issuer Annual Fee or any amount due with respect to arbitrage rebate under

23 4828--6890-5659.6

Section 148 of the Code, the calculation and payment for which is the responsibility of the B orrovver. The I ssuer I ssuance Fee and the i ni ti al I ssuer Annual Fee shal I be paid to the I ssuer by the B orrovver on the CI osi ng Date. Thereafter, the Issuer Annual Fee shal I be due and payable by the B orrovver in advance on J une 1 of each year, commend ng with the first such date follO\IVing the Closing Date. The Borrovver' obligation to pay the Issuer Issuance Fee and the Issuer Annual Fee shal I in no way Ii mit the other amounts that may be payable by the Borrower to the I ssuer under the Loan Documents, i ncl udi ng the enforcement thereof.

Section 3.05. Limited Obligations of the Issuer. None of the Issuer, any of its members or any Person executing this Loan Agreement shall be liable personally on the Loans or subject to any personal liability or accountability by reason of the execution hereof. The Issuer Loan Obligation is a limited obligation of the Issuer, payable solely from and secured by the pledge of the Payments hereunder. Neither the Issuer, its members, the State, nor any of its political subdivisions shall be directly, indirectly, contingently or morally obligated to use any other moneys or assets to pay all or any portion of the debt service due on the Loans, to levy or to pl edge any form of taxation whatever therefor or to make any appropriation for their payment. The Issuer Loan Obligation is not secured by a pledge of the faith and credit of the Issuer, its members, the State or any of its political subdivisions nor do they constitute indebtedness within the meaning of any constitutional or statutory debt limitation. The Issuer has no taxing povver.

The Issuer shall not be liable for payment of the principal of, prepayment premium, if any, or interest on the Issuer Loan Obi i gati on or any other costs, expenses, I asses, damages, claims or actions of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Loan Agreement or any other documents, except only to the extent amounts are received for the payment thereof from the B orrO\IVer under this Loan Agreement.

Section 3.06. Invalidity of BorrO\IVer Loan. If at any time the Borrovver Loan are declared to be invalid or unenforceable for any reason, the Borrovver Loan will be deemed to be a direct loan from the Lender to the Borrovver. All references herein to "Borrovver Loan" and "Issuer Loan Obligation" shall instead refer to the "Loans," as direct Loans from the Lender to the B orrovver.

Section 3.07. Project Fund. The Borrovver shall establish and maintain an account at Farmers and Merchants Bank of Long Beach designated as the "P rqj ect Fund." and designated as account number 26015293. The Borrower shall maintain a separate record of the Prqject Fund on its books and shall account for all deposits and withdrawals from the Project Fund in accordance with the B orrO\IVer' s accounting procedures. The Lender shal I deposit a portion of the Loan Proceeds into the Project Fund pursuant to Draw Requests. The Borrovver may withdraw amounts from the Project Fund for the payment of Project Costs identified in the related Draw Request. No moneys in the Project Fund shall be used to pay Additional Payments.

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ARTICLE IV

REPAYMENT OF THE LOANS

Section 4.01. Interest.

(a) The principal amount of the Loans outstanding under this Loan Agreement, from ti me to ti me shal I bear interest ( computed on the basis of a 360-day year and actual number of days elapsed) at the Applicable Loan Rate. Interest shall accrue on the aggregate outstanding principal balance of the Loans from the Closing Date to the Maturity Date or earlier prepayment as pr0vided herein, and shall be payable monthly by the Borrower in arrears on the first calendar day of each month prior to such date and upon earlier demand in accordance with the terms hereof or prepayment in accordance with Section 4.08 hereof.

(b) Upon the occurrence of a Determination ofTaxability, the Borrovver shall pay to the Lender, as assignee of the Issuer, future interest payments calculated at the GrossU p Rate as such Payments become due. In addition, the BorrCMter shall make immediately, upon demand of the Lender, a payment to the Lender sufficient to reimburse the Lender and to supplement Prior I nterest Payments to equal the Gross-Up Rate applicable to such Prior Interest Payments, and such obligation shall survive the termination of this Loan Agreement. The Lender acknovvledges that payments at the Gross-Up Rate may be amounts that are not excluded from gross income for federal income tax purposes pursuant to Section 103 of the Code.

(c) U pan the occurrence of an Event of Indirect Taxability, the Lender shall notify the Borrovver and the Issuer of such event and shall have the option, without the consent of the B orrovver or the Issuer, to require the B orrovver to provide for the reimbursement of the Lender for the increase, if any, in its federal income tax liability caused by such Event of Indirect Taxability. Any such adjustment shall be suqject to the condition that, prior to such adjustment, the Lender and the Issuer shall have received an opinion of Bond Counsel to the effect that such adjustment complies with the requirements of this Loan Agreement and will not, in and of itself, cause interest with respect to the Issuer Loan Obi i gati on to be included in the gross income of the Lender for federal income tax purposes. The Lender acknCMtledges that any amount received by the Lender pursuant to the application of this Section 4.01(c) shall be treated as a fee and not as interest that is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Code.

Section 4.02. Payments. The Issuer shall pay the principal of and interest on the Issuer Loan Obligation, but only out of Payments made to the Issuer by the BorrCMter therefor. The B orrovver shal I pay to the Lender, as assignee of the Issuer, Payments in the amounts and at such ti mes as set forth in Section 4.01, Section 4.08 and Section 4.10 hereof.

Section 4.03. Advances of the Loans. Subject to the satisfaction of the conditions set forth in Sections 5.02 and 5.03 hereof, proceeds of the Loans may be Advanced by the Lender into the Prqject Fund pursuant to Draw Requests as may be submitted by the Borrovver to the

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Lender from time to time substantially in the form set forth in Exhibit E hereto. Each Draw Request shall reasonably identify the Project Costs that will be paid with (or for which the B orrovver wi 11 be reimbursed by) such Draw Request. Draw Requests shal I be designated to identify the Loans and shall be numbered consecutively beginning with "1." No single Draw Request may pr0vide for an advance of less than $50,()()() (other than the final Draw Request, which may be for a lesser amount). The maximum aggregate amount of the Loans provided for in all Draw Requests shall be less than or equal to $20,()()(),()()().00; pr0vided, hovvever, that the outstanding amount of the Loans may not exceed the Loan Commitment Amount at any ti me.

Section 4.04. Security for the Loans. As security for the repayment of the Issuer Loan Obi i gati on, the I ssuer hereby assigns to the Lender al I of its right, ti tie and i nterest i n this Loan Agreement except for Reserved Issuer Rights, including the Issuer's rights to receive Payments with respect to the B orrCMter Loan (and hereby directs the B orrovver to make such Payments directly to, or at the direction of, the Lender), to collect the Payments and any other payments due to the I ssuer hereunder the recei pt of which is not part of Reserved I ssuer Rights, and to sue in any court for such Payments or other payments, to exercise all rights hereunder with respect to the P raj ect, and to withdraw or settle any cl ai ms, suits or proceedi ngs pertai ni ng to or ari si ng out of this Loan Agreement and the B orrCMter Loan upon any terms ( other than any claims related to Reserved I ssuer Rights). Such assignment by the I ssuer to the Lender shal I be an absol ute assignment without recourse to the Issuer. Such Payments and other payments the receipt of which is not part of Reserved Issuer Rights shall be made by the BorrCMter directly to the Lender, as the Issuer's assignee, without the requirement of notice or demand, at the address pr0vided in Section 12.04, or such other place as the Lender may from time to time designate in writing, and shal I be credited agai nst the I ssuer' s payment obi i gati ans under the related I ssuer Loan Obligation. No provision, covenant or agreement contained in this Loan Agreement or any obligation herein or therein imposed on the Issuer, or the breach thereof, shall constitute or give rise to or impose upon the Issuer a pecuniary liability, a charge upon its general credit or a pledge of its revenues. In making the agreements, provisions and covenants set forth in this Loan Agreement, the Issuer has not obligated itself except with respect to the application of the Payments made by the Borrovver hereunder and thereunder. All amounts required to be paid by the Borrovver hereunder shall be paid in lawful money of the United States of America in immediately available funds. No recourse shall be had by the Lender or the Borrovver for any claim based on this Loan Agreement against any di rector, officer, empl o.;ee or agent of the Issuer al I egi ng personal Ii abi I ity on the part of such person.

To further secure its Obligations and to perform and observe the covenants and agreements contained herein and in B orrovver Documents, B orrovver hereby pl edges to and grants to the Issuer, and the Issuer hereby assigns to the Lender, a first priority I ien and security interest, within the meaning of the California Uniform Commercial Code and to the extent permitted by law in all of its right, title and interest, if any, in the Project Fund (the" Project Fund Collateral"). The Borrovver agrees to execute and authorizes the Lender to file such notices of assignment, chattel mortgages, financing statements and other documents, in form satisfactory to the Lender, which the Lender deems necessary or appropriate to establish and maintain the Lender's first priority security interest in the Project Fund Col lateral, including proceeds thereof.

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Section 4.05. Deed of Trust and Security Agreement.

(a) To secure the repayment of the Loans, the BorrCMter shall, at its expense, record, or cause the recordation of, the Subordinate Deed of Trust and all amendments thereto in the Official Records of the Office of the County Recorder of Orange County, California. Within 10 days after request for any confirmation of any filing required by this Section, the B orrovver shal I deliver to the Lender, as assignee of the Issuer, the signed documents requested or evidence satisfactory to the Lender to the effect that such filing has been duly accomplished. The Borrovver hereby authorizes the Lender to file such financing statements ( and al I amendments or conti nuati ans thereto) as may be necessary to perfect the Lender's security in a form satisfactory to the Lender and the Borrovver shal I, at the Lender's written request, pr0vide to the Lender, within 60 days of the date of delivery of this Loan Agreement, a UCC-1 search certificate with respect to the B orrovver.

(b) To further secure the payment obligations of the Borrovver hereunder, the B orrovver has executed the Security Agreement. The Issuer, the B orrovver and the Lender agree that the Subordinate Deed of Trust, the Security Agreement and UCC-1 financing statements may be amended or terminated at any time with the prior written consent of the Lender. The consent of the Issuer shall not be required for any such amendment or termination.

(c) As additional security for the Issuer Loan Obligation, the Issuer has made a complete assignment to the Lender of al I of the I ssuer' s rights, ti tie i nterest and obligations in, to and under the Subordinate Deed of Trust and the Security Agreement pursuant to the Assignment Agreement. The Borrovver hereby consents to such assignment, as well as the assignment by the Issuer set forth in Section 4.04 above.

Section 4.06. Payment on Non Business Days. Whenever any payment to be made hereunder shal I be stated to be due on a day which is not a B usi ness Day, such payment may be made on the next succeeding Business Day.

Section 4.07. Borrovver Payments to Be Unconditional. The obligations of the B orrovver to make Payments required under this Loan Agreement and to make other payments hereunder and thereunder and to perform and observe the covenants and agreements contained herein and therein shall be absolute and unconditional in all events, without abatement, diminution, deduction, setoff or defense for any reason, including (without limitation) any failure of the Prqject or the Property, any defects, malfunctions, breakdovvns or infirmities in the Property or any accident, condemnation, destruction or unforeseen ci rcumstances. Notwithstanding any dispute between the Borrovver and any of the Issuer, the Lender or any other person, the Borrovver shall make all Payments when due and shall not withhold any Payments pending final resolution of such dispute, nor shall the Borrovver assert any right of setoff or counterclaim against its obligation to make such payments required under this Loan Agreement.

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Section 4.08. Prepayments.

( a) The Issuer shal I prepay the Issuer Loan Obi i gati on but solely to the extent that Borrovver has provided funds to prepay the Borrovver Loan, and the Borrovver may prepay the Borrovver Loan in whole or in part, on any date, in advance of the required Payments set forth in Section 4.10 hereof, by paying the outstanding principal amount of the Loans ( or the portion thereof being prepaid), accrued i nterest to the prepayment date, without any prepayment fee, charge or penalty or cost or expense related to such prepayment, and any outstanding and unpaid Additional Payments due under this Loan Agreement; provided, hO\IVever, that no partial prepayment shal I be made which shal I cause the remaining outstanding principal amount of the Loans shall to be less than $50,000. Except as provided in Section 7.24 of this Loan Agreement, the Borrovver shall provide the Lender written notice of any such prepayment at least 30 days in advance thereof. U pan any prepayment in part of the B orrovver Loan, the prepayment shal I be applied first to interest accrued thereon, and any outstanding and unpaid Additional Payments, and next to the principal component of the B orrO\IVer Loan, in the inverse order of date due.

(b) The Issuer shall prepay the Issuer Loan Obligation solely to the extent the Borrovver shall prepay the BorrO\IVer Loan, in whole or in part at any time from insurance or condemnation proceeds pursuant to Article IX hereof by paying some or al I of the outstanding principal amount of the applicable Loans, accrued interest on the applicable Loans to the prepayment date, and any outstanding and unpaid Additional Payments due under this Loan Agreement.

(c) The Issuer shal I prepay the Issuer Loan Obi igation solely to the extent that the B orrovver shal I prepay the B orrovver Loan, and the B orrovver shal I prepay the B orrovver Loan in ful I immediately upon demand therefor of the Lender to the Issuer after the occurrence of an Event of Default by paying the outstanding principal amount of the Loans, accrued interest to the prepayment date, and any outstanding and unpaid Addi ti anal Payments due under this Loan Agreement.

(d) The Issuer shall prepay the Issuer Loan Obligation solely to the extent the B orrovver shal I prepay the B orrower Loan i n f ul I i mmedi atel y, and the B orrovver shal I prepay the B orrovver Loan in f ul I immediately upon demand of the Issuer after the occurrence of a Determination of Taxability by paying the outstanding principal amount of the B orrovver Loan, interest at the Gross Up Rate to the date of prepayment as required by Section 4.0l(b), and any outstanding and unpaid Additional Payments due under this Loan Agreement, plus an amount necessary to supplement the Prior Interest Payments to the Gross-Up Rate pursuant to Section 4.01 (b).

( e) The I ssuer shal I prepay the I ssuer Loan Obi i gati on solely to the extent that the B orrovver shal I prepay the B orrO\IVer Loan in ful I and the B orrovver may prepay the Borrovver Loan in full immediately upon an Event of Indirect Taxability by paying the outstanding principal amount of the Loans, interest accrued with respect to the Loans to the date of prepayment, and any outstanding and unpaid Additional Payments due under this Loan Agreement.

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Section 4.09. Restrictions on Transfer of Loans.

(a) Notwithstanding any other provision hereof, the Borrovver Loan is nontransferable, except in connection with the transfer of the Issuer Loan Obligation. The Issuer Loan Obi i gati on may be transferred, assigned and reassigned in whole ( but not in part) by the Lender without the consent of the Issuer or the Borrovver, upon 30 days prior written notice to the Issuer and the Borrovver, to an Affiliate or a Qualified Institutional Buyer but only in accordance with the requirements of this Section 4.09; provided, hovvever, that the Lender shal I not transfer or assign the Issuer Loan Obi i gati on other than to an Affiliate prior to the earlier of (i) the date of delivery of a Completion Notice or (ii) the end of the Interest-Only Period. For purposes of the foregoing sentence, a transfer or assignment of the Issuer Loan Obligation to an Affiliate or a change of control of the Lender or a sale of substantially all of the Lender's assets or equity shall not be deemed to be a transfer or assignment of the Issuer Loan Obi i gati on. In the event of a sale, transfer or assignment to an A ffi Ii ate, the Lender shal I certify to the I ssuer and the B orrovver that such transferee is an A ffi Ii ate. I n the event of a sale, transfer or assignment by the Lender of the Issuer Loan Obligation to a Qualified Institutional Buyer that is not an Affiliate of the Lender, the Lender shall, prior to any such transfer, provide or cause to be provided to the Issuer and the B orrovver an investor I etter executed by such purchaser or transferee i n the form of E xhi bit B hereto which shal I contai n a certification that the purchaser or transferee is a Qualified Institutional Buyer as provided in this Loan Agreement. The provisions of the investor letter may not be revised without the prior written consent of the Issuer.

In addition, the Lender wi 11 provide to the B orrCMter and the Issuer an Assignment Letter, in the form of Exhibit F hereto, when such assignment is to an Affiliate of the Lender, and the B orrovver and the Issuer shal I acknovvl edge such assignment.

The Lender hereby covenants and agrees that if it transfers or assigns the Issuer Loan Obligation pursuant to this Section, it will simultaneously transfer or assign the Issuer Loan Obi i gati on issued pursuant to the Senior Loan Agreement to the same A ffi I i ate or Qual i fi ed I nsti tuti anal B uyer.

U pan assignment, the B orrovver wi 11 reflect in a book entry the assignee designated i n the written request of assignment or i n a written certification of an A ffi I i ate delivered to the Issuer and the Borrower pursuant to this Section, and shal I agree to make all payments to the assignee designated in such written request, notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether arising from a breach of this Loan Agreement or otherwise) that the Issuer and the B orrovver may from ti me to ti me have agai nst the Lender or the assignee.

(b) The Issuer agrees to execute all documents, including notices of assignment, which may be reasonably requested by the Lender or its assignee to protect their interest in the Project and in this Loan Agreement; provided, hovvever, that the Issuer shal I not thereby be required or deemed to waive any rights hereunder or under any other document in connection herevvith to which the Issuer is a party or by which it is bound. The Lender or assignee shall pay all reasonable expenses of the Issuer and

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Borrovver, including reasonable fees and expenses of counsel, in connection with such transfer and assignment and the execution of any documents in connection therewith. Any transfers of interest in the Issuer Loan Obligation shall only be made pursuant to an entry i n a registration book by the B orrovver pursuant to this Section, as requi red by Section 149 of the Code.

Section 4.10. Repayment. The Borrovver shall make payments of interest only on the outstanding principal amount of the Borrovver Loan. The Borrovver shall apply or cause to be applied amounts held in the Capital Campaign Pledged Account to the payment of the principal amount of the Borrovver Loan in accordance with Section 7.24 of this Loan Agreement. The B orrovver shal I pay the outstanding principal amount of the B orrovver Loan on the Maturity Date.

Section 4.11. Purchase Price of Issuer Loan Obligation. The Lender is purchasing the Issuer Loan Obligation at the principal amount of the Issuer Loan Obligation. The Lender's purchase price of the Issuer Loan Obligation, and accordingly, the proceeds of the Borrovver Loan shal I be equal to the principal amount of the Issuer Loan Obi i gati on.

Section 4.12. Late Charge. If the Borrovver fails to make any Payment and such failure results in the payment of principal and interest on the Loans to be received more than 10 days after the due date thereof, or if the BorrCMter fails to make any Additional Payment within 10 days of the due date thereof, the B orrovver shal I pay to the Lender or the I ssuer a I ate charge equal to 5% of the past due payment.

Section 4.13. Default Rate. If (a) the Borrovver shall fail to pay the principal and accrued interest on the B orrCMter Loan when the same shal I become due under this Loan Agreement or (b) a notice of default is issued under the Subordinate Deed of Trust or the Security Agreement, then the Applicable Loan Rate hereunder shall increase to the Default Rate. A 11 amounts not paid when due under this Loan Agreement (subject to any applicable grace peri ads) shal I be added to the unpaid pri nci pal amount hereunder and shal I bear i nterest at the Default Rate until such time as the payment default is cured.

Section 4.14. Applicable Loan Rate. The Issuer Loan Obligation (and, correspondingly, the B orrCMter Loan) shal I bear interest at the fixed rate of 3.05% per annum, for the period from the Closing Date to the Maturity Date. The interest rates set forth or otherwise determined pursuant to this Section 4.14 shal I be referred to in this Loan Agreement as the "Applicable Loan Rate."

ARTICLE V

CONDITIONS PRECEDENT

Section 5.01. Precedent to Loan Agreement. The Issuer's agreement to enter into this Loan Agreement and provide the financing contemplated hereby shal I be subject to the condition precedent that the Issuer shal I have received or waived the requirement for the items set forth bel CMt, each i n form and substance satisfactory to the I ssuer ( other than those i terns that are exclusively within the Issuer's control). The Lender's agreement to enter into this Loan Agreement and provide the financing contemplated hereby shall be subject to the condition

30 4828--6890-5659.6

precedent that the Lender shal I have received or waived the requirement for, al I of the fol I ovvi ng, each in form and substance satisfactory to the Lender:

(a) this Loan Agreement, properly executed on behalf of the Issuer, the Borrower and the Lender, and, if applicable, each of the Exhibits hereto properly completed;

( b) the Tax Certificate, properly executed by the B orrCMter and the Issuer;

( c) the Assignment Agreement, properly executed by the Issuer and the Lender;

(d) the Subordinate Deed of Trust, properly executed by the BorrCMter;

(e) the Security Agreement, properly executed by B orrCMter;

(f) the Environmental Indemnity Agreement, properly executed by the B orrovver;

(g) the Contracts and Permits Assignment Agreement, properly executed on behalf of the B orrCMter;

(h) the Pledge Receipts Assignment and Transfer Agreement, property executed by the B orrovver and the E ndovvment.

(i) the Account Pledge and Control Agreement, properly executed by the B orrovver;

U) a certificate of Borrovver, certifying as to (i) the Board of Trustees of the B orrovver authorization of the execution, delivery and performance of B orrovver Documents and any related documents, (ii) the Bylaws of the B orrCMter, (iii) the signatures of the officers or agents of such B orrCMter authorized to execute and deliver Borrovver Documents and other instruments, agreements and certificates on behalf of Borrovver, (iv) the accuracy of the all representations and warranties made by Borrovver, and (v) the absence of any material adverse change in the condition, operations or prospects (financial or otherwise) of such Borrovver, ignoring for such determination the construction of the Prqject and the remote learning caused by the COV I D-19 pandemic;

( k) copies of the Articles of I ncorporati on of the B orrCMter certified by the California Secretary of State within 30 days of the Closing Date;

(I) certificates of good standi ng issued as to the B orrovver by the Secretary of State of the State of California dated not more than thirty (30) days prior to the Closing Date;

( m) a certificate of good standi ng or exemption issued as to the B orrovver by the Franchise Tax Board of the State dated not more than thirty ( 30) days prior to the CI osi ng Date;

( n) a resol uti on adopted by the I ssuer authorizing the B orrovver Loan and the Issuer Loan Obi i gati on and the transacti ans contemplated hereunder;

31 4828--6890-5659.6

( o) a cl osi ng certificate of the I ssuer i n a form reasonably acceptable to B orrovver' s Counsel and Lender's Counsel;

(p) evidence that the financing of the Prqject has been approved by the City Council of the City of Newport Beach after a public hearing held upon reasonable notice;

(q) UCC-1 financing statement(s) as required by the Lender to perfect the security i nterests of the I ssuer and assignment to the Lender;

( r) current searches of appropriate fi I i ng offices shovvi ng that ( i) no state or federal tax liens have been filed and remain in effect against the Borrovver, and (ii) no financing statements have been fi I ed and remain in effect against the B orrovver except those fi nanci ng statements fi I ed by the Lender, or fi nanci ng statements which wi 11 be termi nated upon cl osi ng of the fi nanci ng contemplated hereunder;

(s) a completed and executed Form 8038 or evidence of filing thereof with the Secretary of Treasury;

(t) an opinion of counsel to the B orrCMter, addressed to the Lender and the Issuer, in form and substance acceptable to the Lender and the Issuer and addressing the matters described in Exhibit C hereto;

( u) an opinion of the Lender's Counsel addressed to the Lender and the Issuer, in form and substance acceptable to the Lender and the Issuer;

(v) evidence of payment of the Issuer Issuance Fee;

(w) evidence of payment to the Lender of the Lender's costs and expenses in connection with the execution of the Loan Documents, including the costs and expenses of Lender's Counsel;

(x) an investor letter of representations executed by the Lender, in the form attached hereto as Exhibit B and such other certificates of the Lender reasonably requested by Lender's Counsel and counsel for the Issuer;

(y) the Final Appraisal of the Property evidencing that the loan-to-value ratio, based on the fair market value of the Property that wi 11 secure the Loans as set forth in the Final Appraisal, is acceptable to the Lender;

(z) the Title Policy, or evidence satisfactory to the Lender in its sole discretion of the Title Insurer's irrevocable commitment to issue the Title Policy immediately upon closing;

(aa) certificates of the insurance required under Section 7.04 of this Loan Agreement containing a lender's loss payable clause or endorsement in favor of the Lender;

32 4828--6890-5659.6

(bb) a Docket Search with respect to each of the Borrovver of the Superior Court in the County of Orange and the United States District Court for the Central District of California;

( cc) evidence satisfactory to the Issuer that the Borrower has retained the services of a rebate consultant for purposes of compliance with certain requirements of the Tax Certificate; and

(dd) any other documents or items reasonably required by the Lender or the Issuer.

Section 5.02. Conditions Precedent to Subsequent Advances of Loan Proceeds.

(a) The Lender's agreement to make the first Advance of the Loan Proceeds into the Project Fund shal I be subject to the conditions precedent that the B orrovver shal I have obtained and delivered to the Lender:

(i) a fully executed Construction Contract between the Borrovver and the General Contractor.

(ii) the consent of the General Contractor to the Contracts and Permits Assignment Agreement substantially in the form attached as Exhibit C to the Contracts and Permits Assignment Agreement.

(iii) the consent of the architect to the Contracts and Permits Assignment Agreement substantially in the form attached as Exhibit C to the Contracts and Permits Assignment Agreement. and

(iv) builder's risk insurance acceptable to the Lender.

(b) In addition to the requirements set forth above, the Lender's agreement to make Advances of the Loan Proceeds shall be subject to the further conditions precedent that the Lender shal I have received or waived the requirement for al I of the fol I ovvi ng for each Draw Request, each in form and substance satisfactory to the Lender:

(i) a fully executed Draw Request substantially in the form attached hereto as Exhibit E, with all appropriate supporting documents attached thereto;

(ii) an updated Exhibit G to this Loan Agreement;

(iii) payment of Lender Fees, commi ssi ans and expenses required by Section 12.03 hereof;

(iv) Evidence of Eligible Pledges in an amount equal to 133°/o of the Draw Request, identified to the Lender in a current PI edge Schedule;

33 4828--6890-5659.6

(v) Donor Acknovvledgement and Reaffirmation forms with respect to Pledges in amounts equal to or exceeding $250,()()(), substantially in the form attached as ExhibitJ to this Loan Agreement;

(vi) the certification by the Borrovver that no Event of Default exists, and, to the best of its knCMtledge, no event has occurred and no condition exists that, after notice or lapse of time, or both, would constitute an Event of Default; and

(vii) such other information and documents as the Lender may reasonably requi re related to such disbursement request.

Section 5.03. Limitations to Disbursement. Notwithstanding anything to the contrary contained in this Loan Agreement, other than the initial disbursement of the Loan Proceeds on the Closing Date, Lender need not make any further disbursements pursuant to a Draw Request at any ti me if:

(a) the Facilities or Prqject are materially damaged by fire or other casualty and not fully repaired and restored, unless Lender actually receives insurance proceeds or a cash deposit from the Borrovver sufficient in the Lender's judgment to pay for the complete repair or replacement of the P raj ect in a timely manner;

(b) the Lender reasonably believes that withholding disbursement in whole or in part is requi red by appl i cable mechanics' I i en or stop notice I aws ( uni ess the B orrovver has obtained a bond reasonably satisfactory to the Lender sufficient to allovv the Lender to make such disbursement in accordance with California law);

(c) the BorrCMter has not obtained or is not in compliance with all required governmental approvals, including without limitation all necessary building permits, or has not complied with all applicable regulations, laws, ordinances (including without limitation environmental and subdivision map requirements and conditions of approval) to permit the construction of the P rqj ect accordi ng to the PI ans and 5 peci fi cati ans;

( d) the B orrovver has fai I ed to maintain the i nsurance pol i ci es requi red by 5 ecti on 7.04 hereof;

(e) the Lender reasonably believes that there has been a material adverse change in the business, operations, properties, liabilities, financial condition or prospects of the B orrovver such that ( i) there is I i kel y to be an i mpai rment of the prospect of repayment of any portion of the Obligations by the Borrovver under this Loan Agreement, or (ii) the Borrovver is likely to fail to complete the Project in accordance with the terms of this Loan Agreement;

(f) the Lender reasonably believes that that the funds available are inadequate to complete the prqject and requires BorrCMter to provide additional funds to bring the Project and Loans back into balance;

34 4828--6890-5659.6

(g) The Borrovver fails timely to proceed with completion of construction of the Project substantially in accordance with the Plans and Specifications approved by the Lender;

(h) an Event of Default has occurred and is continuing under this Loan Agreement, any of the other Loan Document, any other agreement between the Lender and the B orrovver, or the B orrovver is in default under any other agreement regarding the development of the Project, including without limitation, any subdivision agreement, improvement agreement, or development agreement; provided, hovvever, nothing herein shall preclude the Borrovver's right to contest in good faith by appropriate proceedings any such default; or

( i) the disbursement would cause the aggregate principal amount outstanding under the Loan Agreement to exceed the Loan Commitment Amount.

ARTICLE VI

SECURITY INTEREST

Section 6.01. Change in Name or Corporate Structure of the Borrovver; Change in Location of the Borrovver's Principal Place of Business. The Borrovver's chief executive office is located at the address set forth in Section 12.04 hereof, and al I of the B orrovver' s records relating to its business are kept at such location. The Borrovver hereby agrees to provide written notice to the Lender and the Issuer of any change or proposed change in its name, corporate structure, state of its incorporation or organization, place of business, chief executive office or tax i denti fi cation number. Such notice shal I be provided 30 days in advance of the date that such change or proposed change is planned to take effect.

Section 6.02. Security Interest. The Borrovver hereby authorizes the Lender to file any fi nanci ng statement ( and any amendments or conti nuati ans to any fi nanci ng statement) necessary to perfect the security i nterest granted i n this Loan Agreement under the I aws of the State. Pursuant to Section 5451 of the Government Code of the State, the pledge of the Payments by the Issuer for the repayment of the principal of, premium, if any, and interest on the Issuer Loan Obligation constitutes a first lien and security interest which immediately attaches to such Payments, and is effective and binding against the Issuer, the B orrovver, their successors, creditors and all others asserting rights therein irrespective of whether those parties have notice of the pledge, irrespective of whether such amounts are or may be deemed to be a fixture and without the need for physical delivery, recordation, fi Ii ng or further act.

Section 6.03. Assignment of Insurance. As additional security for the payment and performance of the Borrovver's obligations under this Loan Agreement, and subject to the rights of the Lender and the Issuer under the Senior Loan Documents, the B orrovver hereby assigns to the Lender, as assignee of the Issuer, a security interest in any and al I moneys (including, without limitation, proceeds of insurance) due or to become due under, and all other rights of the B orrovver with respect to, any and al I policies of insurance novv or at any ti me hereafter covering the Property or any evidence thereof or any business records or valuable papers pertaining thereto, and the B orrovver shal I di rect the issuer of any such pol icy to pay al I such moneys

35 4828--6890-5659.6

directly to the Lender for application in accordance with Article IX. Subject to the rights of the Lender and the Issuer under the Senior Loan Documents, the BorrCM1er hereby assigns to the Lender, as assignee of the Issuer, any and all moneys due or to become due with respect to any condemnation proceeding affecting the Property. Net Proceeds of any insurance award resulting from any damage to or destruction of any portion of the Property by fire or other casualty, as applicable, of any title insurance award, or of any eminent domain or condemnation award resulting from any event described in Section 9.01 hereof shall be applied as provided in Section 9.02 hereof. At any time, whether before or after the occurrence of any Event of Default, the Lender may ( but need not) i n furtherance of rights pursuant to Article IX hereof, i n the Lender' s name or in the B orrovver' s name, execute and deliver proof of claim, receive al I such moneys, endorse checks and other instruments representing payment of such moneys, and adjust, litigate, compromise or rel ease any claim against the issuer of any such policy or party in any condemnation proceeding.

ARTICLE VII

AFFIRMATIVE COVENANTS OF BORROWER

Section 7.01. Maintenance of Property.

( a) Taki ng i nto consideration the construction of the P rqj ect, the B orrCM1er shal I , at its CM1n commercially reasonable expense, maintain, preserve and keep the Property in good repair, working order and condition consistent with its past practice, and shall from ti me to ti me make al I reasonable repairs and replacements necessary to keep the Property in such condition, and in compliance with State and federal laws, ordinary wear and tear excepted. In the event that any parts or accessories forming part of any item or items of Property become worn out, I ost, destroyed, damaged beyond repair or otherwise rendered unfit for use, the Borrovver, at its ovvn commercially reasonable expense and expeditiously, will replace or cause the replacement of such parts or accessories by replacement parts or accessories free and clear of all liens and encumbrances and with a val ue and uti I i ty at I east equal to that of the parts or accessories being replaced ( assumi ng that such replaced parts and accessories were otherwise in good working order and repair). A 11 such replacement parts and accessories shal I be deemed to be incorporated immediately into and to constitute an integral portion of the Property and, as such, shall be subject to the terms of this Loan Agreement. Neither the Issuer nor the Lender shall have any responsibility in any of these matters, or for the making of repairs to the Property or additions to the Property.

(b) The BorrCM1er shall observe and comply with all legal requirements applicable to the CM1nershi p, use and operation of the Property, including the terms and conditions set forth in this Loan Agreement, the Subordinate Deed of Trust and the Tax Certificate. The Borrovver shall permit the Lender and its agents, representatives and employees, upon reasonable prior notice to the Borrovver, to inspect the Property and conduct such environmental and engineering studies as the Lender may reasonably require, provided such inspections and studies are conducted during normal business hours and do not materially interfere with the use and operation of the Property. Such environmental and engineering studies shal I be at the B orrCM1er' s commercially

36 4828--6890-5659.6

reasonable expense, provided that the Lender provides the BorrCMterwith evidence of the Lender' s reasonable bel i ef that there is an envi ronmental or structural condition at the Property that could have a material adverse effect on the Lender's security under the Loan Documents.

(c) The Borrovver will defend the Property against all claims or demands of all persons ( other than the Lender hereunder) cl ai mi ng the Property or any i nterest therein.

Section 7.02. Compliance with Laws and Obligations. The Borrower will comply with the requirements of applicable laws and regulations and material contractual obligations, the noncompliance with which would materially and adversely affect its business or its financial condition; provided, hCMtever, nothing herein shall preclude the Borrovver's right to contest in good faith by appropriate proceedings any claim of noncompliance or breach.

Section 7.03. Payment of Taxes and Other Claims. The BorrCMter will pay or discharge, when due, (a) all taxes, assessments and governmental charges levied or imposed upon it or upon its income or profits, upon any properties belonging to it (including, without Ii mi tati on, the F aci I i ti es) or upon or agai nst the creation, perfection or conti nuance of the security interest created pursuant to this Loan Agreement or any of the Loan Documents, prior to the date on which penalties attach thereto; (b) all federal, state and local taxes required to be withheld by it; and (c) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a Ii en or charge upon any properties of the Borrower; provided, that the B orrCMter shal I not be required to pay any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings. The Borrovver will pay, as the same respectively come due, all gas, water, steam, electricity, heat, povver, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Property; provided, that the Borrovver shall not be required to pay any such charge whose amount, appl i cabi I ity or validity is being contested in good faith by appropriate proceedings.

Section 7.04. Insurance; Indemnity.

(a) The Borrovver shall, at its ovvn expense, maintain and keep in force commercial comprehensive general liability and automobile liability insurance against cl ai ms ari si ng i n, on or about the Property, i ncl udi ng i n, on or about the si daval ks or premises adjacent to the Property, providing coverage limits not less than $1,000,000 per occurrence and $2,000,000 in aggregate. The B orrovver shal I al so maintain Excess;U mbrel la Liabi I ity Coverage of at least $15,(X)(),000.

(b) The Borrovver shall, at its ovvn expense, maintain and keep in force insurance of the types and in amounts customarily carried by institutions similar to the BorrCMter, including but not limited to fire and extended all-risk coverage (in an amount not less than the full replacement cost of the Facilities, without deductions for depreciation, and incl udi ng al I fixtures and personal property and endorsements for any non--conformi ng uses), flood (if the B orrCMter' s property is I ocated i n a flood zone), property damage, workers' compensation, business interruption, and abuse or molestation liability coverage, covering, among other items, negligence in employing, investigation, retaining, and supervising "employees' or volunteer workers with all such insurance carried with

37 4828--6890-5659.6

companies, in amounts and with deductible amounts reasonably satisfactory to the Lender, and deliver to the Lender from time to time at the Lender's request schedules setting forth al I insurance then in effect. Alternatively, upon the written approval of the Lender, the Borrovver may insure the Facilities under a blanket insurance policy or policies which cover not only the Facilities, but also other properties of the Borrovver or, upon prior written approval of the Lender, may provide self-insurance acceptable to the Lender.

(c) During the construction of the Prqject or any improvements to the Facilities with an aggregate cost i n excess of $2 50, ()()(), the B orrovver shal I mai ntai n bui Ider' s risk insurance, including theft, to insure, without limitation, all buildings, materials, supplies, temporary structures, foundations, other underground property, tenant improvements, and all other property on-site and while in transit which is to be used in fabrication, construction, and completion of the portion of the P rqj ect bei ng constructed, and to remain in effect unti I al I such improvements being constructed have been completed and accepted by Borrovver and the Lender (or the Lender's designee) and a certificate of occupancy has been issued. 5 uch insurance shal I be in an amount not I ess than $45,()()(),()()() and be provided on a replacement cost value basis and shall (i) be on a non-reporting, completed value, form; (ii) cover damage to landscaping and debris removal expense (including removal of pollutants as available by standard underwriting placements); (iii) provide that Borrovver can complete and occupy the premises without further written consent from the insurer; (iv) not exclude losses due to explosions, col lapses, or underground hazards; (v) cover soft costs and continuing expenses not directly involved in the direct cost of construction or renovation, including interest on money borrovved to finance construction or renovation, advertising, promotion, real estate taxes and other assessments, the cost of renegoti ati ng I eases, architectural and engineering costs, legal and accounting costs, and other expenses incurred as the result of property loss or destruction by the insured peril; (vi) cover riots, civil commotion, vandalism, and malicious mischief; (vii) not contain any safeguard warranties that are not fulfilled prior to policy placement; and (viii) not contain any monthly limitation. The B orrovver shal I provide or cause to be provided to the Lender a copy of the bui Ider' s risk insurance policy prior to the commencement of the construction of any improvements to the Project with an aggregate cost in excess of $250,()()().

(d) During the construction of the Project or any improvements to the Facilities with an aggregate cost in excess of $250,()()(), the Borrower shal I cause each contractor performing any of such construction work to maintain workers' compensation insurance or other applicable insurance providing coverage for injuries to such contractor's personnel, auto liability insurance, and general liability insurance, all in the amounts and providing coverage as is reasonably acceptable to the Lender.

( e) A 11 of the i nsurance pol i ci es requi red hereunder shal I be issued by corporate insurers licensed to do business in the State and rated "A" or better by A.M. Best Company, shall contain a waiver of subrogation endorsement, and shall be in form acceptable to the Lender.

38 4828--6890-5659.6

( f) A 11 certificates of i nsurance and " blanket" i nsurance pol i ci es shal I reference the specific prqj ect being covered by name and address and shal I name the Lender as an additional loss payee. The insurance shall be evidenced by the original policy or a true and certified copy of the ori gi nal pol icy, or i n the case of Ii abi I i ty i nsurance, by certificates of i nsurance. The i nsurance pol i ci es ( or true and certified copies thereof) or certificates of al I insurance required to be maintained hereunder shal I be delivered to the Lender contemporaneously with the Borrovver's execution of this Loan Agreement. The Borrovver shall use its best efforts to deliver originals of all policies and renewals (or certificates evidencing the same), marked "paid" (or evidence satisfactory to the Lender of the continuing coverage) to the Lender at I east thirty ( 30) days before the expiration of existing policies and, in any event, the B orrovver shal I deliver originals of such policies or certificates ( or other proof of i nsurance acceptable to the Lender) to the Lender at I east fifteen ( 1 5) days before the expiration of existing policies. If the Lender has not received satisfactory evidence of such renevval or substitute insurance in the time frame herein specified, the Lender shal I have the right, but not the obi i gati on, to purchase such insurance for the Lender' s i nterest only. N othi ng contai ned i n this Section shal I requi re the Lender to incur any expense or take any action hereunder, and inaction by the Lender shall never be considered a waiver of any right accruing to the Lender on account of this Section. If any loss shall occur at any time while an Event of Default shall have occurred and be conti nui ng, the Lender shal I be enti tied to the benefit of al I i nsurance pol i ci es held or maintained by the Borrovver, to the same extent as if same had been made payable to the Lender. The Lender shall have the right, but not the obligation to make premium payments, at the Borrower's expense, to prevent any cancellation, endorsement, alteration or rei ssuance of any policy of insurance maintained by the B orrovver, and such payments shal I be accepted by the insurer to prevent same.

(g) The Borrovver shall give to the Lender immediate notice of any loss with an estimated replacement value in excess of $100,000 occurring on or with respect to the Property. The BorrCMter shall furnish to the Lender, upon request, certificates of insurance evidencing such coverage whi I e the Loans is outstanding.

( h) Any i nsurance pol icy carried or mai ntai ned pursuant to this Section ( other than the worker's compensation policy) shal I be so written or endorsed as to make I asses, if any, payable to the Lender and the Issuer or the Borrovver, as their respective interests may appear and naming the Lender as additional insured for liability. The Net Proceeds of the i nsurance requi red i n this Section shal I be appl i ed as provided i n Article IX hereof. Each property or liability insurance policy provided for in this Section shall contain a provision to the effect that the insurance company providing such policy shall not either cancel the policy or modify the policy materially and adversely to the interest of the Lender without first giving written notice thereof to the Lender at least 30 days in advance of such cancel I ati on or modification.

(i) As among the Lender, the Issuer and the B orrovver, the B orrovver assumes al I risks and liabilities from any cause whatsoever, whether or not covered by insurance, for loss or damage to the Property, and for injury to or death of any person or damage to any property, whether such injury or death be with respect to agents or employees of the B orrovver or of thi rd parties, and whether such property damage be to the B orrovver' s

39 4828--6890-5659.6

property or the property of others. Whether or not covered by insurance, the B orrovver hereby assumes responsi bi I ity for and agrees to reimburse the Lender and the Issuer for and wi 11 indemnify, defend and hold the Lender and the Issuer and any of their assignees, agents, employees, officers and directors harmless from and against all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses (including reasonable attorneys' fees) of whatsoever kind and nature, imposed on, incurred by or asserted agai nst the Lender or the I ssuer or thei r assignees, agents, employees, officers and di rectors that in any way rel ate to or arise out of this Loan Agreement or the Loans, the transacti ans contemplated hereby and thereby and the Property, incl udi ng but not limited to, (i) the ovvnership of the Property, (ii) the delivery, lease, possession, maintenance, use condition, return or operation of components of the Property, (iii) the conduct of the Borrovver, its officers, employees and agents, (iv) a breach by the B orrovver of any of its covenants or obi igations hereunder, and (v) any claim, loss, cost or expense involving al I eged damage to the environment relating to the Property, including, but not limited to investigation, removal, cleanup and remedial costs. All amounts payable by the B orrCMter pursuant to the i mrnedi ately preceding sentence shal I be paid immediately upon demand of the Issuer or the Lender or their assignees, agents, employees, officers and di rectors, as the case may be. This provision shal I survive the termination of this Loan Agreement for any reason.

Section 7.05. Reporting Requirements. The Borrovver will deliver, or cause to be delivered, to the Lender, and to the Issuer if requested by the Issuer, each of the fol I ovvi ng, which shall be in form and detail reasonably acceptable to the Lender and the Issuer, as to information requested by the I ssuer:

( a) not I ater than 1 80 days after and as of the end of each fi seal year, fi nanci al statements of the B orrovver and the E ndovvment, i ncl udi ng therei n a balance sheet, income statement, statement of cash fl ovvs and reconci I i ati on of the B orrovver' s and the E ndovvment' s net assets, audited by i ndependent certified publ i c accountants reasonably acceptable to the Lender and certified, without any qualifications, by such accountants to have been prepared in accordance with GAAP consistently applied, together with a certificate of an Authorized B orrovver Representative addressed to the Lender stating that such Authorized Borrovver Representative does not have knovvledge of the existence of any event or condition constituting an uncured Default or an Event of Default;

(b) contemporaneously with the submittal of the financial statement required by subsection (a) above, a certificate of the B orrovver' s Treasurer or Chief Financial Officer substantially in the form attached hereto as Exhibit D stating all relevant facts in reasonable detai I to evidence, and the computati ans as to, whether the Borrower is in compliance with the requirements set forth in Section 7.16 hereof applicable to the period covered by the accompanying financial statements;

( c) not I ater than 90 days after and as of each J une 30 and December 31, commencingJ une 30, 2020, internally prepared financial statements (which need not be prepared in accordance with GAAP) of the BorrCMter and the EndCMtment for the sixmonth period ending J une 30 and December 31, in a form reasonably acceptable to the Lender;

40 4828--6890-5659.6

(d) internally prepared pledge receivables reports, which shall be in a form and substance reasonably acceptable to the Lender, as fol lovvs:

( i) duri ng the I nterest-Onl y Period, no I ater than the 1 5th of each month ( or the fol I ovvi ng B usi ness Day if the 1 5th f al Is on a 5 aturday or 5 unday) as of the immediately preceding month-end; and

(ii) after the Interest-Only Period, as soon as available, hovvever, not I ater than 30 days after the end of each calendar quarter;

(e) no later than each October 15, commencing October 15, 2020, such enrol I ment data as the Lender may reasonably request;

(f) within 30 days of approval by the B orrCMter' s Board of Trustees, but in any event not I ater than J une 30 of each year, a copy of the financial budget and forecast for the B orrovver for the upcomi ng fi seal year;

(g) within 30 days of June 30 of each year, commencingJ une 30, 2020, detailed liquidity statements including computations as to whether the Borrovver is in compliance with the requi rements set forth i n section 7. 16;

(h) promptly upon the occurrence and nature of any Reportable Event or Prohibited Transaction, each as defined in the Employee Retirement Income 5 ecurity A ct of 1974, as amended or recodified from time to time ("ERISA"), or any funding deficiency with respect to any defined employee pension benefit plan (as defined in ER I SA) maintained or contributed to by the B orrovver;

(i) promptly upon knovvledge thereof, notice of any loss or destruction of or damage to any portion of Property (other than in connection with the construction of the Project) in excess of $500,000 or of any material adverse change in the Property;

U) promptly after the amending thereof, copies of any and all amendments to the B orrovver' s articles of i ncorporati on or bylaws;

(k) promptly upon receipt of notice or knovvledge thereof by an Authorized Borrovver Representative, notice of the violation by the BorrCMter of any law, rule or regulation, the violation of which would have a material adverse effect on the financial or operati ng condition of the B orrovver;

(I) promptly upon written notice or knovvledge thereof, any termination or cancel I ati on of any i nsurance pol icy which the B orrovver is requi red to mai ntai n hereunder, or any uninsured or partially uninsured loss through liability or property damage, or through fi re, theft or any other cause aff ecti ng the B orrovver' s property i n excess of an aggregate of $500,000;

(m) immediately upon the B orrovver' s actual knovvledge thereof, notice in writing of all litigation and of all proceedings before any governmental or regulatory agency

41 4828--6890-5659.6

aff ecti ng the B orrovver which seek a monetary recovery agai nst the B orrovver i n excess of $500, ()()();

( n) as promptly as practicable ( but i n any event not I ater than ten B usi ness Days) after an Authorized BorrCM1er Representative obtains knovvledge of the occurrence of any event that constitutes a Default or an Event of Default under the Loan Documents, notice of such occurrence, together with a detai I ed statement by an Authorized B orrovver Representative of the steps being taken by the B orrovver to cure the effect of such Default or Event of Default;

( o) wi thi n 60 days of recei pt of a written request from the I ssuer, a written report, as of the end of the B orrovver' s prior fi seal year, stati ng the status of the P raj ect and the unpaid outstanding balance of the Loans; and

(p) from time to time such other information as the Lender or the Issuer may reasonably request, including, without limitation, other information with respect to any Col I ateral.

Section 7.06. Books and Records; Inspection and Examination. The Borrovver will keep accurate books of record and account for itself separate and apart from those of its affi I i ates, i ncl udi ng its officers, pertai ni ng to the Property and pertai ni ng to the B orrovver' s busi ness and fi nanci al condition and such other matters as the Lender and /or the I ssuer may from time to time reasonably request in which true and complete entries will be made in accordance with GAAP consistently applied and, upon written request of the Lender not more than once per calendar year, at any time after the occurrence of an Event of Default or as often as the Lender reasonably deems necessary to determine whether the BorrCM1er is in compliance with Environmental Laws, will permit any officer, emplo.;ee, attorney or accountant for the Lender and/or the Issuer or, at the written request of the Issuer to the B orrovver and only pursuant to a request from the Internal Revenue Service, a representative of the Internal Revenue Service, to audit, revievv, make extracts from, or copy any and all organization and financial books and records and properties of the B orrovver and to exami ne and i nspect the Property and the Col lateral, and to discuss the affairs of the Borrower with any of its officers, emplo.;ees or agents at all times during ordinary business hours (a) within five Business Days of a written request by the Lender and/or the Issuer, (b) at any ti me after the occurrence of an Event of Default, or (c) as often as the Lender and/or Issuer reasonably deem necessary to determine whether the B orrovver is in compliance with Environmental Laws.

Section 7.07. Performance by the Lender. If the Borrovver at any time fails to perform or observe any of the covenants or agreements contained in the Loan Documents (except for the Tax Certificate), immediately upon the occurrence of such failure, without notice or lapse of ti me, but after giving effect to any applicable cure peri ads or contest rights of the B orrovver pursuant to the terms such covenants or agreements, the Lender may, but need not, perform or observe such covenant on behalf and in the name, place and stead of the BorrCM1er (or, at the Lender's option, in the Lender's name) and may, but need not, take any and al I other acti ans which the Lender may reasonably deem necessary to cure or correct such failure (including, without limitation, the payment of taxes, the satisfaction of security interests, liens or encumbrances, the performance of obi i gati ans ovved to account debtors or other obi i gars, the

42 4828--6890-5659.6

procurement and maintenance of insurance, the execution of assignments, security agreements and fi nanci ng statements, and the endorsement of i nstruments) ; and the B orrovver shal I thereupon pay to the Lender on demand the amount of al I moneys expended and al I reasonable costs and expenses (including reasonable attorneys' fees and legal expenses) incurred by the Lender in connection with or as a result of the performance or observance of such agreements or the taking of such action by the Lender, together with interest thereon from the date expended or incurred at the highest rate permitted by I aw; pr0vi ded, hovvever, that such rate shal I not exceed 12°/o per annum. In furtherance of the foregoing, the Borrower hereby irrevocably appoints the Lender, or the delegate of the Lender, acting alone, as the attorney in fact of the Borrovver, with a limited povver of attorney, coupled with an interest, with the right (but not the duty) from time to time to create, prepare, complete, execute, deliver, endorse or file in the name and on behalf of the B orrovver any and al I i nstruments, documents, assignments, security agreements, fi nanci ng statements, applications for insurance and other agreements and writings relating to the Property required to be obtained, executed, delivered or endorsed by the Borrovver under this Loan Agreement.


Section 7.08. Preservation of Existence. The Borrovver will preserve and maintain its existence, its status as an organization disregarded for federal income tax purposes whose sole member is an organization described in Section 501(c)(3) of the Code, and all of its rights, privileges and franchises necessary or desirable in the normal conduct of its business; and shall conduct its business in an orderly, efficient and regular manner. The Borrovver shall hold itself out to the public as a legal entity separate and distinct from any other entity (including any affi I i ate thereof). So I ong as the I ssuer Loan Obi i gati on remai ns outstandi ng, the B orrCM1er wi 11

be qual i fi ed to transact busi ness i n the State and wi 11 be engaged i n busi ness i n the State.

Section 7.09. No Liability for Consents or Appointments. Whenever any pr0vision herein pr0vi des for the giving of consent or direction by the Issuer, the Issuer shal I not be Ii able to the B orrovver or to the Lender for the giving of such consent or direction or for the withholding of such consent or direction. The Issuer shall have no liability for appointments which are required to be made by it under this Loan Agreement or any related documents.

Section 7.10. Non-liability of the Issuer. No agreements or provisions contained in this Loan Agreement nor any agreement, covenant, or undertaking by the Issuer in connection herewith shall give rise to any pecuniary liability of the Issuer or a charge against its general credit, or shall obligate the Issuer financially in any way, except as may be payable from Payments made pursuant to the BorrCM1er Loan and their application as provided herein. No fai I ure of the Issuer to comply with any term, covenant, or agreement contained herein, or in any document executed by the I ssuer i n connection herevvi th, shal I subject the I ssuer to I i abi I i ty for any cl ai m for damages, costs, or other fi nanci al or pee uni ary charge, except to the extent that the same can be paid or rec0vered from Payments made pursuant to the Borrovver Loan. Nothing herei n shal I precl ude a proper party i n i nterest from seeki ng and obtai ni ng, to the extent permitted by law, specific performance against the Issuer for any failure to comply with any term, condition, covenant or agreement contained herein, or any obligations imposed upon the

43 4828--6890-5659.6

I ssuer pursuant hereto, or the breach thereof. I n maki ng the agreements and provi si ans set forth in this Loan Agreement, the Issuer has not obi i gated itself, except with respect to the application of Payments made pursuant to the Borrower Loan hereunder.

Section 7.11. Expenses. The Borrovver covenants and agrees to pay, and to indemnify the I ssuer agai nst al I reasonable costs, charges and expenses, i ncl udi ng fees and disbursements of attorneys, including, without Ii mitati on, fees and expenses of the Issuer's counsel, accountants, consultants and other experts, incurred by the Issuer in good faith in connection with the Loans and the Loan Documents.

Section 7.12. No Personal Liability.

(a) The Issuer shall not be obligated to pay the principal of, prepayment premium, if any, or interest on the Issuer Loan Obligation, except from Payments under the B orrovver Loan and any other moneys and assets received by the Issuer for such purpose pursuant to this Loan Agreement (but expressly excluding any Additional Payments due to the Issuer). Neither the faith and credit nor the taxing povver of the State or any political subdivision thereof, nor the faith and credit of the Issuer is pledged to the payment of the principal of, prepayment premium, if any, or interest on the Issuer Loan Obi i gati on. Neither the I ssuer nor its officers, di rectors, agents or employees or thei r successors and assigns shal I be I i able for any costs, expenses, I asses, damages, cl ai ms or actions, of any conceivable kind or any conceivable theory, under, by reason of or in connection with this Loan Agreement or the Issuer Loan Obligation, except if and only to the extent amounts are received for the payment thereof from the Borrower under this Loan Agreement.

(b) The Lender and the B orrCMter hereby acknCMtledge that the Issuer's sole source of moneys to repay the Issuer Loan Obligation will be provided by Payments made by the BorrCMter under the BorrCMter Loan pursuant to this Loan Agreement, and the B orrovver hereby agree that if the payments to be made hereunder shal I ever prove insufficient to pay al I pri nci pal of, prepayment premi um, if any, and i nterest on the I ssuer Loan Obligation as the same shall become due (whether by maturity, redemption, acceleration or otherwise), the B orrovver shal I pay such amounts as are required from time to time to prevent any deficiency or default in the payment of such principal of, prepayment premium, if any, or interest, including, but not limited to, any deficiency caused by acts, omissions, nonfeasance or malfeasance on the part of the Borrovver, the Issuer or any third party, subject to any right of reimbursement from the Issuer or any such third party, as the case may be, therefor but solely, in the case of the Issuer, from the Payments or Additional Payments (other than funds paid to the Issuer pursuant to Reserved I ssuer Rights), other than with respect to any deficiency caused by the wi 11 f ul misconduct of the Issuer.

(c) No member, officer, agent or employee of the City or the Issuer or any director, officer, trustee, agent or employee of the Borrovver shall be individually or personally liable for the payment of any principal of, prepayment premium, if any, or interest on the Issuer Loan Obi i gati on or the B orrCMter Loan or any sum hereunder or be subject to any personal liability or accountability by reason of the execution and delivery

44 4828--6890-5659.6

of this Loan Agreement; but nothing herein contained shall relieve any such member, di rector, officer, agent or empl o.;ee from the performance of any official duty provided by I aw or by this Loan Agreement.

Section 7.13. The BorrCM1er Indemnification of the Issuer. The BorrCM1ercovenants and agrees as fol I CM1s:

(a) To the fullest extent permitted by law, the Borrovver agree to indemnify, hold harmless and defend the Issuer and its officers, governing members, directors, officials, emplo.;ees, attorneys and agents (collectively, the "Issuer Indemnified Parties"), against any and al I I asses, damages, claims, acti ans, Ii abi I iti es, costs and expenses of any conceivable nature, kind or character (including, without limitation, reasonable attorneys' fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) to which the Issuer I ndemni fi ed Parties, or any of them, may become suqj ect under any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to:

4828--6890-5659.6

(i) the Loans or the Loan Documents or the execution or amendment hereof or thereof or in connection with transactions contemplated hereby or thereby;

( i i) any act or om ss1 on of the B orrovver or any of thei r agents, contractors, servants, emplo.;ees, tenants) or licensees in connection with the P raj ect or the Property, the operation of the P raj ect or the Property, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, i nstal I ati on or construction of the P raj ect or the Property or any part thereof;

( i i i) any Li en or charge upon payments by the B orrovver to the I ssuer and the Lender hereunder, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the I ssuer or the Lender i n respect of any portion of the P raj ect or the Property;

(iv) any violation of any Environmental Laws with respect to, or the release of any Hazardous Materials from, the Project, or the Property or any part thereof;

(v) the defeasance or prepayment, in whole or in part, of the Loans;

(vi) any Determination of Taxability of interest on the Issuer Loan Obi i gati on, or al I egati ans that interest on the Issuer Loan Obi i gati on is taxable or any regulatory audit or inquiry regarding whether interest on the Issuer Loan Obi i gati on is taxable;

(vii) any untrue statement or misleading statement or alleged untrue statement or al I eged mi sl eadi ng statement of a material fact contained in any document or information provided by the B orrovver to the Issuer or the Lender, or

45

any of the documents relating to the Loans, or any omission or al I eged omission from any document or i nformati on provided by the B orrovver to the I ssuer or the Lender of any material fact necessary to be stated therein in order to make the statements made therein, in the Ii ght of the circumstances under which they were made, not misleading;

except to the extent such damages are caused by the wi 11 ful misconduct of such Issuer Indemnified Party. In the event that any action or proceeding is brought against any Issuer Indemnified Party with respect to which indemnity may be sought hereunder, the Borrovver, upon written notice from the Issuer Indemnified Party, shall assume the investigation and defense thereof, including the employment of counsel selected by the I ssuer I ndemni fi ed Party, and shall assume the payment of all expenses related thereto, with full pc:M1er to litigate, compromise or settle the same in its sole discretion; pr0vided that the Issuer Indemnified Party shal I have the right to revi etv and appr0ve or di sappr0ve any such compromise or settlement. Each Issuer I ndemni fi ed Party shal I have the right to employ separate counsel in any such action or proceeding and participate in the i nvesti gati on and defense thereof, and the B orrovver shal I pay the reasonable fees and expenses of such separate counsel; provided, hovvever, that such Issuer I ndemni fi ed Party may only employ separate counsel at the expense of the B orrovver if in the judgment of such Issuer I ndemni fi ed Party a conflict of interest exists by reason of common representation or if al I parties commonly represented do not agree as to the action ( or inaction) of counsel.

(b) The rights of any persons to indemnity hereunder and rights to payment of fees and reimbursement of expenses pursuant to this Loan Agreement shall survive the final payment or prepayment of the I ssuer Loan Obi i gati on. The provi si ans of this Section shall survive the termination of this Loan Agreement.

Section 7.14. The B orrovver Indemnification of the Lender. The B orrovver c0venants and agrees as fol I otvs:

(a) to indemnify and hold harmless, to the extent permitted by law, the Lender and A ffi Ii ates, their respective i ncorporators, members, commissioners, di rectors, officers, agents and employees (collectively, the "Lender Indemnified Persons") against all liability, losses, damages, all reasonable costs and charges (including reasonable fees and disbursements of attorneys, accountants, consultants and other experts), taxes, causes of action, suits, claims, demands and judgments of every conceivable kind, character and nature whatsoever, by or on behalf of any person arising in any manner from the transaction of which this Loan Agreement is a part or arising in any manner in connection with the Project, the Facilities and/or the Property, including, but not limited to, losses, claims, damages, liabilities or reasonable expenses arising out of, resulting from or in any way connected with (i) the work done on the Property or the operation of the Property or the Facilities during the term of this Loan Agreement, including, without limitation, any liability for any loss or damage to property or any injury to or death of any person that may be occasioned by any cause whatsoever pertaining to the Facilities; (ii) any violation of contract, agreement (including this Loan Agreement and the Tax Certificate) or restriction relating to the Property or the Facilities; (iii) any violation of law, ordinance or regulation affecting the Property, the Facilities or any part thereof or the otvnership or

46 4828--6890-5659.6

occupancy or use thereof; or ( iv) the carrying out of any of the transacti ans contemplated by this Loan Agreement and al I related documents;

( b) promptly after recei pt by an Lender I ndemni fi ed Person of notice of the commencement of any action in respect of which i ndemni fi cation may be sought under this Section 7. 14, the Lender I ndemni fi ed Person shal I promptly notify the B orrCMter i n writing, but the delay to so notify the Borrovver will not relieve the Borrovver from any liability which it may have to any Lender Indemnified Person under this Section 7.14 other than to the extent of prejudice caused directly or indirectly by such delay nor affect any rights it may have to participate in and/or assume the defense of any action brought agai nst any Lender I ndemni fi ed Person. I n case such claim or action is brought agai nst any Lender Indemnified Person, and such Lender Indemnified Person notifies the Borrovver of the commencement thereof, the Borrovver will be entitled to participate in and, to the extent that it chooses so to do, to assume the investigation and defense thereof (including the employment of counsel reasonably satisfactory to the Lender), and the B orrovver shal I assume the payment of al I fees and expenses rel ati ng to such i nvesti gati on and defense and shal I have the right to negotiate and consent to settlement thereof. Each Lender Indemnified Person shall have the right to employ separate counsel in any such action and to participate in the defense thereof, and after notice from the Borrovver of its election to assume the defense thereof, the fees and expenses of such separate counsel shal I be at the expense of the Borrower, if such Lender I ndemni fi ed Person reasonably determines, with the advice of counsel, that a conflict of interest exists between such party and the Borrower in connection with such action. The Borrovver shall not be obligated to any Lender Indemnified Person pursuant to this paragraph if it has not received notice of the action with respect to which indemnification is sought. The Borrovver shall not be liable for any settlement of any such action effected without its consent, but, if settled with the consent of the B orrovver or if there be a fi nal judgment for the plaintiff in any such action as to which the B orrovver has received notice in writing as hereinabove required, the BorrCMter agrees to indemnify and hold harmless the Lender I ndemni fi ed Person from and against any I ass or Ii abi I ity by reason of such settlement or judgment to the extent provided in this Section 7.14; and

(c) notwithstanding the previous provisions of this Section 7.14, the BorrCMter is not Ii able for or obi i gated to indemnify any Lender I ndemni fi ed Person harmless against any I ass or damage to property or injury or death to any person or any other I ass or liability if and to the extent such loss, damage, liability, injury or death results from the gross negligence or willful misconduct of any Lender Indemnified Person seeking such i ndemnifi cation.

A 11 i ndemni fi cati ans by the Borrower in this Section 7.14 shal I survive the termination of this Loan Agreement and payment of the indebtedness hereunder.

Section 7.15. Covenant to Enter into Agreement or Contract to Provide Ongoing Disclosure. The Borrovver and the Lender intend that this Loan Agreement be exempt from the requirements of Paragraph (b)(S)(i) of the Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as amended ( 17 CFR Part 240, § 240.15c2-12) (the "Rule"). The Borrovver hereby covenants and agrees that if this Loan Agreement ceases to be

47 4828--6890-5659.6

exempt under the Rule, the Borrovver will enter into an agreement or contract, constituting an undertaking, to provide ongoing disclosure as may be necessary to comply with the Rule as then in effect. In no event will the Issuer have any liability or obligation to provide disclosure under the Rule or to enforce any obi i gati ans of B orrovver to provide di sci osure under the Rule.

Section 7.16. Financial Covenants. The Borrovver and the Endovvment shall collectively maintain Unencumbered Liquid Assets in a combined amount of not less than the Liquidity Requirement, measured annually based on the audited financial statements of the Borrovver and the Endovvment, as of eachJ une 30, commencingJ une 30, 2020.

Section 7.17. Deposit Relationship. The Borrovver and the Lender agree as follovvs:

(a) The B orrovver and the Lender agree that so long as the Loans are outstanding and Farmers and Merchants Bank of Long Beach or an A ffi Ii ate thereof is the Lender hereunder, the BorrCMter will maintain an account with the Lender to comply with Section 7.1 7( b) of this Loan Agreement.

(b) The BorrCMter authorizes the Lender to make automatic deductions from the follCMting deposit account ("Account") maintained by the BorrCMter at the Lender's offices i n order to pay, when and as due, al I of the Payments that the B orrovver is requi red or obi i gated to make under this Loan Agreement:

Account No: 26015307

Without Ii miti ng any of the terms of the B orrovver Documents, the B orrovver acknCMtledges and agrees that if the Borrovver defaults in its obligation to make a Payment because the collected funds in the Account are insufficient to make such Payment in full on the date that such Payment is due, then the BorrCMter shall be responsible for al I I ate payment charges and other consequences of such default by the B orrovver under the terms of the B orrovver Documents.

(c) Subject to subparagraph (d) belovv, this authorization shall continue in full force and effect unti I the date which is five ( 5) B usi ness Days after the date on which the Lender actually receives written notice from the Borrovver expressly revoking the authority granted to the Lender to charge the Account for Payments in connection with the Loans. No such revocation by the Borrovver shall in any way release the Borrovver from or otherwise affect the B orrovver' s obi i gati ans under the B orrovver Documents, including the B orrovver' s obi i gati ans to continue to make al I Payments required under the terms of this Loan Agreement.

(d) The Lender, so long as Farmers and Merchants Bank of Long Beach is the Lender hereunder, at its option and in its discretion, reserves the right to terminate the arrangement for automatic deducti ans from the Account pursuant to this subparagraph (d) at any time effective upon written notice of such election (a "Termination Notice'') given by the Lender to the Borrovver. Without limiting the generality of the immediately preceding sentence, the Lender may elect to give a Termination Notice to the BorrCMter if the Borrovver fails to comply with any of the Lender's rules, regulations, or policies relating to the Account, including requirements regarding minimum balance,

48 4828--6890-5659.6

service charges, overdrafts, insufficient funds, uncollected funds, returned items, and Ii mitati ans on withdrawals.

Section 7.18. Tax Covenants of the Issuer and the BorrCMter.

4828--6890-5659.6

( a) The Issuer covenants as fol I otvs:

( i) The I ssuer shal I not take any action, or fai I to take any action within its control and required of it by the Issuer Documents, if such action or failure to take such action would result in the interest on the Loans not being excluded from gross income for federal income tax purposes under Section 103 of the Code. Without Ii miti ng the generality of the foregoing, the Issuer covenants that it will comply with the requirements applicable to it of the Tax Certificate which is incorporated herein as if fully set forth herein; provided, hotvever, that with regard to the covenants of the Issuer to act or refuse to act in a certain manner in the future pursuant to this section or the Tax Certificate, the Issuer is relying exclusively on the Borrotver to act or refuse to act in the appropriate manner except to the extent a particular affirmative action by the Issuer is required or prohibited. Any requirement that the Issuer will not permit or allotv an action, or si mi I ar requi rement, shal I pertai n solely to the acti ans of the I ssuer and the Issuer shal I have no obi i gati on to cause or prevent, or to attempt to cause or prevent, any action by the B orrotver, nor shal I the Issuer be deemed to be in breach of this Loan Agreement if it is prevented from complying with its obligations hereunder as a direct or indirect result of the Borrotver's actions or omi ssi ans. This covenant shal I survive the payment in ful I and prepayment of the Issuer Loan Obi i gati on.

( i i) I n the event that at any ti me the I ssuer is of the opi ni on that for purposes of this Section it is necessary to restrict or limit the yield on the investment of any moneys under this Loan Agreement, the Issuer shal I so instruct the BorrCMter in writing accompanied by a supporting opinion of Bond Counsel, and the B orrCMter shal I take such action as may be directed by the Issuer.

( i i i) N otwi thstandi ng any provi si ans of this Section, if the I ssuer provides to the B orrotver an opinion of Band Counsel to the effect that any specified action required under this Section is no longer required or that some further or different action is requi red to mai ntai n the excl usi on from federal income tax of interest on the Issuer Loan Obi i gati on, the B orrotver may conclusively rely on such opinion in complying with the requirements of this Section and the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent.

(b) The B orrotver covenants as fol lotvs:

( i) The B orrotver wi 11 not take any action that would cause the interest on the Loans to become incl udabl e in gross income of the recipient for federal income tax purposes under the Code (including, without limitation, intentional

49

acts under Treas. Reg. § 1.148-2( c) or deli berate action within the meaning of Treas. Reg. § 1. 141-2( d)), and the B orrCMter wi 11 take and wi 11 cause its officers, employees and agents to take all affirmative actions legally within its povver necessary to ensure that the interest on the Loans does not become incl udabl e in gross income of the recipient for federal income tax purposes under the Code (including, without limitation, the calculation and payment of any rebate required to preserve such exclusion). Without limiting the generality of the foregoing, the Borrovver covenants that it shall comply with the requirements of the Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shal I survive the payment in f ul I and prepayment of the Loans.

(ii) The I ssuer has covenanted in this Loan Agreement to take any and all actions within its control necessary to assure compliance with Section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such Section is applicable to the Loans. In furtherance of this covenant, the Borrovver, on behalf of the Issuer, hereby covenants (A) initially, on or beforeJ une 1, 2025 and on or beforeJ une 1 of every fifth year thereafter, to cal cul ate, or cause to be calculated, the " rebate amount" in accordance with Section 148(f) and Section 1.148-2 of the Regulations, (B) to pr0vide such calculations to the Issuer within 30 days of each calculation date, and ( C) to pay the federal government any such " rebate amount" so calculated to the extent required by Section 148( f) of the Code. The B orrovver further agrees to comply with the provisions and requirements of the Tax Certificate relating to the Issuer's obi i gati on to pay the rebate amount as required hereunder and under Section 148 of the Code.

(iii) Notwithstanding any pr0visions of this Section, if the Borrovver pr0vi des to the Issuer an opinion of Band Counsel to the effect that any specified action required under this Section is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Issuer Loan Obligation, the Issuer may conclusively rely on such opinion in complying with the requirements of this Section and the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent.

Notwithstanding anything herein to the contrary, the Issuer shall have the right to enforce the BorrCMter's covenants, agreements and representations in the Tax Certificate against the B orrovver pursuant to the terms thereof.

Section 7.19. Office of Foreign Assets Control; Patriot Act Compliance.

(a) The Borrovver is not an entity (i) whose property or interest in property is blocked or subject to blocking pursuant to Sectionl of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) who engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such Person in any manner violate of such

50 4828--6890-5659.6

Section 2, or (iii) who is on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury's Office of Foreign Assets Control regulation or executive order.

(b) The Borrovver is in compliance with the Patriot Act. No proceeds of the Borrovver Loan will be used, directly or indirectly, for payments to any governmental official or employee, political party or its officials, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

Section 7.20. Compliance with Documents. The Borrovver agrees that it will perform and comply with each and every covenant and agreement required to be performed or observed by it in each of the Loan Documents to which it is a party. Notwithstanding any termination or expiration of any other Loan Document to which the Lender is a party, the Borrovver shall continue to observe the covenants therein contained for the benefit of the Lender unti I the termination of this Loan Agreement and the payment in ful I of the Loans and al I other Obi i gati ans.

Section 7.21. Compliance with E RI SA. Except as would not reasonably be expected to result in a Material Adverse Effect, the Borrovver and each member of the Controlled Group shall (i) remain at all times in compliance with all applicable laws (including any legally available grace periods) with respect to any Plan, (ii) at no time maintain any Plan that has Unfunded Vested Liabilities and (iii) maintain each Plan as to which it may have any liability in compliance in all material respects with the applicable provisions of ERISA, the failure to comply with which could subject the Borrovver or a member of its Controlled Group to any tax or penalty.

Section 7.22. Environmental Laws. The Borrovver shall comply with all applicable Environmental Laws and cure any defect (or cause other Persons to cure any such defect) to the extent necessary to bri ng such real property ovvned, I eased, occupied or operated by the Borrovver back into compliance with Environmental Laws and to comply with any cleanup orders issued by a Governmental Authority havingjurisdiction there over. The Borrovver shall at all times use commercially reasonable efforts to render or maintain any real property ovvned, I eased, occupied or operated by the B orrovver safe and fit for its i ntended uses. The B orrovver shall also promptly notify the Lender of any actual or alleged material failure to so comply with or perform, or any material breach, violation or default under any Environmental Law.

Section 7.23. Annual Reporting Under SB 1029. No later than January 31 of each calendar year ( commend ng J anuary 31, 2021), the B orrovver, on behalf of the Issuer, agrees to provide to the California Debt and Investment Advisory Commission, by any method approved by the California Debt and Investment Advisory Commission, with a copy to the Issuer, the annual report information required by Section 8855(k)(l) of the California Government Code with respect to the Loans. This covenant shall remain in effect until the later of the date (a) the Loans are no longer outstanding, or (b) the proceeds of the Loans have been fully spent.

51 4828--6890-5659.6

Section 7.24. Establishment and Maintenance of the Capital Campaign Pledged Account. W hi I e the Loans are outstanding, the B orrCMter shal I establish and rnai ntai n an account at Farmers and Merchants Bank of Long Beach designated as the "Capital Campaign Pledged Account (account number 26015315) (the "Pledged Account"). The Borrovver shall maintain a separate record of the Pledged Account on its books and shall account for all deposits and withdrawals from the PI edged Account in accordance with the B orrovver' s accounting procedures. The Pledged Account shall be suqject to the terms of the Account Pledge and Control Agreement, dated of even date herevvith.

U pan receipt of a payment with respect to a Pl edge identified on the PI edge Schedule for which an Advance has been made by the Lender under this Loan Agreement, not less than 75% of such payment shall be deposited by the Endovvment or the Borrovver into the Capital Campaign Pledged Account. On the first day of each month, the Lender shall apply amounts in the Capital Campaign Pledged Account for the payment of interest (to the extent not paid from other sources) and principal of the outstanding Loans. Receipts of payments on account of Pledges or portions thereof for which no Advance has been made do not need to be deposited into the Capital Campaign Pledged Account.

ARTICLE VIII

NEGATIVE COVENANTS OF BORROWER

So long as the BorrCMter Loan shall remain unpaid, the Borrovver agrees that:

Section 8.01. Lien. The Borrovver shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pl edge, Ii en, charge, encumbrance or claim on or with respect to the Property or any other real or personal property of the B orrovver, whether nCMt ovvned or hereafter acqui red ( each, a " Li en" and together, " Li ens"), other than the rights of the Lender or the Issuer as herein provided and the Permitted Encumbrances, and the Borrovver shall not enter into any amendment, modification, restatement or supplement without the prior written consent of the Lender. The Borrovver shall promptly, at its ovvn expense, take such action as may be necessary duly to discharge or remove any such unpermitted Lien. The Borrovver shall reimburse the Lender for any expenses incurred by the Lender to discharge or remove any unpermitted Lien.

"Li en CI aims" means al I claims (including mechanics Ii ens and claims for I abor, services, materials and supplies) that by law have or may become a lien upon any of the Collateral or the Borrovver's interest in the Property or any other property or assets of the BorrCMter. "I mpositi ans" means al I rents, taxes, assessments and premi urns attributable to the Property. "Lien Claims'' do not, hovvever, include any claims or liens which are Permitted Encumbrances.

Notwithstanding anything herein or in any of the other Loan Documents to the contrary (except as set forth in Section 3.04(a)), the Borrovver shall not be required to pay, discharge or remove any Imposition or Lien Claim so long as the follovving criteria (the" Lien Contest Criteria') shall be satisfied as to the same: (i) the Borrovver shall contest in good faith the validity, applicability or amount of the I mpositi on or Li en Claim by an appropriate I egal proceeding which operates to prevent the col I ecti on of the secured amounts and the sale of the Property or any portion thereof,

52 4828--6890-5659.6

and (ii) prior to the date on which such I mpositi on or Li en CI aim would otherwise have become delinquent, the Borrovver shall have given the Lender and the Issuer written notice of its intent to contest said Imposition or Lien Claim, and (iii) the Borrovver either shall have complied with the Statutory Bond Criteria set forth belovv or shall have deposited with the Lender (or with a court of competent jurisdiction or other appropriate body approved by the Lender and the Issuer) such additional amounts as are necessary to keep on deposit at all times, an amount equal to at least one hundred twenty five percent ( 125%) ( or such higher amount as may be required by applicable law) of the total of the balance of such Imposition or Lien Claim then remaining unpaid, plus all interest, penalties, costs and charges having accrued or accumulated thereon, and (iv) in the reasonable judgment of the Lender, no risk of sale, forfeiture or loss of the B orrovver's or the Lender's interest in the Property or any part thereof within 30 days arises at any ti me, and (v) such contest does not, in the Lender's reasonable discretion, have a material adverse effect on the Lender's security under the Loan Documents, and (vi) such contest is based on bona fide claims or defenses, and (vii) the Borrovver shall prosecute any such contest with due diligence, and (viii) the Borrovver shall promptly pay the amount of such Imposition or Lien Claim as finally determined, together with all interest and penalties payable in connection therewith. Anything to the contrary notwithstanding, the Lender shall have full povver and authority, but no obligation, to advance funds orto apply any amount deposited with the Lender under this Section to the payment of any unpaid Imposition or Lien Claim at any time if an Event of Default shall occur, or if the Lender reasonably determines that a risk of sale, forfeiture or loss of any interest in the Property or any part thereof within 30 days has arisen. The Borrovver shall reimburse the Lender on demand for all such advances, together with interest thereon at the Applicable Loan Rate. Any surplus retained by the Lender after payment or resolution of the Imposition or Lien Claim for which a deposit was made shal I be promptly repaid to the B orrovver unless an Event of Default shall have occurred, in which case said surplus may be retained by the Lender and applied by the Lender to any of Obligations, as the Lender may determine in its sole discretion. The "Statutory Bond Criteria' will be deemed satisfied if (i) by statute in the jurisdiction where the Property is located, a bond may be given as security for the particular form of Imposition or Lien Claim in question, with the effect that the Property shall be forever released from any Lien securing such I mpositi on or Li en CI aim, and (ii) the B orrCMter shal I cause such a bond to be issued, and the Borrovver shall comply with all other requirements of law such that the Property shall be forever released from such Lien, and (iii) the Borrovver shall provide to the Issuer and the Lender such evidence of the foregoing as the Issuer and/or the Lender may reasonably request.

Section 8.02. Sale of Assets. The Borrovver will not sell, lease (except as otherwise pr0vided in this Section), assign, transfer or otherwise dispose of all or substantially all of its assets ( other than i n the ordi nary course of busi ness, or equi pment or other personal property which has become inadequate, obsolete, worn out, unsuitable, unprofitable, undesirable or unnecessary and the disposition thereof wi 11 not impair the operati ans of the B orrovver) or of any of the Property or any interest therein (whether in one transaction or in a series of transactions), other than Permitted Encumbrances, without the prior written consent of the Lender (which consent will not be unreasonably withheld) and, if the asset to be sold constitutes Tax Exempt Financed Facilities, the delivery to the Issuer and the Lender of an opinion of Bond Counsel to the effect that any such sale, lease, assignment, transfer or other disposition will not cause the interest on the Issuer Loan Obi i gati on to be included in gross income of the CMtners thereof. Notwithstanding the previous sentence, the Issuer Loan Obligation and the BorrCMter Loan shall

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become due and payable upon the sale, assignment, transfer or other disposition of the Property or any portion thereof. The B orrovver shal I provide the Issuer and the Lender with prior written notice of its intention to sell, lease, assign, transfer or otherwise dispose of the Facilities, the Property or any interest therein and shall agree in writing to remain liable under the Loan Documents. In the event of a sale, assignment or transfer of the Faci I ities or the Property to an A ffi I i ate of the B orrovver (which shal I al so be subject to the Lender' s prior written consent), such purchaser, assignee or transferee shal I assume i n wri ti ng the B orrower' s obi i gati ans under the Loan Documents.

Section 8.03. Consolidation and Merger. The BorrCMter will not consolidate with or merge into any Person, or permit any other Person to merge into it, or acquire (in a transaction analogous in purpose or effect to a consolidation or merger) al I or substantially al I of the assets of any other Person without the prior written consent of the Lender and the delivery to the Lender and the Issuer of an opinion of Bond Counsel, in form and substance reasonably acceptable to the Lender and the I ssuer, to the effect that under then--exi sti ng I aws the consummation of such merger, consolidation, sale or conveyance wi 11 not cause the interest on the Issuer Loan Obi i gati on to become incl udabl e in gross income under the Code.

Section 8.04. Accounting. The Borrovver will not adopt, permit or consent to any material change in accounting principles other than as required or permitted by GAAP or adopt, permit or consent to any change in its fiscal year unless the Borrovver provides the Lender restated financial statements in comparative form.

Section 8.05. Transfers. Other than as expressly permitted by this Loan Agreement, the B orrovver wi 11 not in any manner transfer any property with a value in excess of $250,000 during any fiscal year, other than transfers made in the ordinary course of business, without prior or present receipt of ful I and adequate consideration; provided, that, the restriction contained in this Section shall not prohibit the BorrCMter from making transfers in furtherance of its educational purposes. N otwi thstandi ng anything herei n to the contrary, the B orrovver may transfer assets to the E ndovvment that are not reasonably requi red for the B orrCMter' s ongoi ng operati ans and compliance with the terms of this Loan Agreement and the Senior Loan Agreement.

Section 8.06. Other Indebtedness and Guarantees. Other than the Borrovver Loan, the Borrovver's obligations under Senior Loan Agreement, and additional indebtedness provided by the Lender, the Borrovver shall not, without the prior written consent of the Lender, incur any addi ti anal i ndebtedness for borrovved money, secured or unsecured, di rect or conti ngent other than in the ordinary course of business in an aggregate outstanding principal amount of up to $250,000 (the "Permitted Debt"). The Borrovver shall not guarantee or become liable in any way as surety, endorser (other than as endorser of negotiable instruments for deposit or collection in the ordinary course of business), accommodation endorser, or otherwise for, and shal I not pl edge or hypothecate the Property or any part thereof as security for, any liabilities or obligations of any other person or entity, except any of the foregoing in favor of the Lender or with the prior written consent of the Lender.

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Section 8.07. Other Defaults. The Borrower will not permit any material breach, default or event of default to occur beyond any applicable cure period under any note, loan agreement, indenture, lease, mortgage, contract for deed, security agreement or other contractual obi i gati on binding upon the Borrower or any judgment, decree, order or determination applicable to the B orrCMter; provided, however, nothing herein shal I preclude the B orrCMter' s right to contest in good faith by appropriate proceedings any breach, default or event of default; pr0vided, such contest shall not, and shall not have the potential to, adversely affect the Lender's or the I ssuer' s i nterests hereunder or under any of the other Loan Documents.

Section 8.08. Prohibited Uses. The Borrower shall not use any portion of the proceeds of the BorrCMter Loan to finance or refinance any facility, place or building used or to be used (a) for sectarian instruction or study or as a place for devotional activities or religious worship, or (b) by a Person that is not a 501(c)(3) organization or a g0vernmental entity or by an organization (including the Borrower) described in Section 501(c)(3) of the Code (including the Borrower) in an unrelated trade or business, in such manner or to such extent as would result in any portion of the Issuer Loan Obligation being treated as an obligation not described in Section 103(a) of the Code.

Section 8. 09. U se of Property. The B orrower wi 11 not i nstal I , use, operate or mai ntai n the Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Loan Agreement or the Tax Certificate.

Section 8.10. Maintenance of Business. The Borrower shall not change its business activities in any material respect from the business activities conducted by the Borrower as of the date of this Loan Agreement.

Section 8.11. Restrictive Agreements. The BorrCMter shall not enter into any agreement containing any pr0vi si on which would be violated or breached by the performance by the Borrower of its obligations hereunder or under any other Loan Documents or any instrument or document delivered or to be delivered by the Borrower in connection herewith.

Section 8.12. Tax Exempt Status. The Borrower will not take any action that would cause the i nterest on the Loans to become i ncl udabl e i n gross i ncome of the reci pi ent for federal income tax purposes under the Code (including, without limitation, intentional acts under Treas. Reg. § 1. 148-2( c) or del i berate action wi thi n the meani ng of Treas. Reg. § 1. 141-2( d)), and the Borrower will take and will cause its officers, employees and agents to take all affirmative actions legally within its pCMter necessary to ensure that the interest on the Loans does not become incl udabl e in gross income of the recipient for federal income tax purposes under the Code (including, without limitation, the calculation and payment of any rebate required to preserve such exclusion).

Section 8.13. Federal Reserve Board Regulations. The BorrCMterwill not use any part of the proceeds of the Loans for the purpose of purchasing or carrying any Margin Stock and has not i ncurred any indebtedness to be reduced, reti red or purchased by the B orrower out of such proceeds, and the B orrower does not own and has no i ntenti on of acqui ri ng any M argi n Stock.

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Section 8.14. Advances. Except as otherwise provided in Section 8.05 hereof, the B orrovver wi 11 not advance or agree to advance any money or assets belonging to the Borrower to any other person or entity.

Section 8.15. Swap Agreement. The Borrovver shall not enter into a Swap Agreement without the priorwritten consent of the Lender.

Section 8.16. Loan Documents. The Borrovver shall not modify, amend or consent to any modification, amendment or waiver in any material respect of any Loan Document without the prior written consent of the Lender.

Section 8.17. Formation of Subsidiaries and Affiliates. The Borrovver shall not create, form or acquire any Subsidiary or Affiliate without the prior written consent of the Lender.

ARTICLE IX

DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS

Section 9.01. Eminent Domain. If all or any portion of the Property shall be taken permanently under the povver of eminent domain or sold to a government threatening to exercise the povver of eminent domain, the Net Proceeds of any eminent domain award shal I be applied to the prepayment of Borrovver Loan and the Issuer Loan Obligation in accordance with Section 4.08(b) of this Loan Agreement, unless otherwise agreed to by the Lender and the Issuer, with an approving written opinion of Bond Counsel to the effect that under then-existing laws that such action would not cause the interest on the Issuer Loan Obligation to become includable in gross income under the Code or adversely affect the validity of this Loan Agreement.

Section 9.02. Application of Net Proceeds.

( a) At al I ti mes that the Senior Loans remain outstanding, the provi si ans of Section 9.02 of the Senior Loan Agreement shall control over the provisions in this Section 9.02, and the Net Proceeds shall be applied first in accordance with Section 9.02 of the Senior Loan Agreement. To the extent that any Net Proceeds remain after application as set forth in Section 9.02 of the Senior Loan Agreement, the remainder of such Net Proceeds shall be applied in accordance with Section 4.08 hereof. From and after the date that the Senior Loans are repaid in accordance with the Senior Loan Agreement, the provisions in this Section 9.02 shall control. The Net Proceeds of any insurance award resulting from any damage to or destruction of any portion of the Property by fire or other casualty, as applicable, of any title insurance award, or of any eminent domain award resulting from any event described in Section 9.01 hereof shall be deposited with the Lender, who shall apply such Net Proceeds as provided in Section 9.01 hereof or as set forth belovv; provided, hovvever, that if no Event of Default has occurred and is continuing under the Loan Documents, the Lender shal I rel ease to the Borrovver without further limitations all insurance awards of up to $50,000 received on behalf of the B orrCM1er in the normal course of business. The B orrCM1er, except as provided belovv, shall cause the proceeds of such insurance to be utilized for the repair,

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reconstruction, or replacement of the damaged or destroyed portion of the Property. Provided that no Default or Event of Default has occurred and is continuing under the Loan Documents, the Lender shall permit withdrawals of the Net Proceeds from time to ti me upon receiving the written request of the B orrCM1er, stating that the B orrCM1er has expended moneys or incurred liabilities in an amount equal to the amount therein requested to be paid over to it for the purpose of repair, reconstruction or replacement of the Property damaged, destroyed, I ost or taken by eminent domain, and specifying the items for which such moneys were expended or such liabilities were incurred. Any balance of the Net Proceeds required to be used for repayment of the Loans or not required for such repair, reconstruction, or replacement, shall be applied by the Lender as pr0vided in Section 4.08 hereof. If an Event of Default has occurred and is continuing hereunder, the Lender may apply any such proceeds to the Borrovver's obligations under the Loan Documents in any order of priority elected by the Lender in its sole discretion.

(b) Alternatively, the B orrCM1er, at its option, and if the proceeds of such insurance or eminent domain award, together with any other moneys then available for the purpose, are at I east sufficient to prepay the B orrCM1er Loan i n f ul I pursuant to Section 4.08 hereof, may elect not to repair, reconstruct, or replace the damaged or destroyed portion of the Facilities, as applicable, and thereupon shall cause the proceeds to be used for the prepayment of B orrovver Loan in ful I, but not in part. With the written consent of the Lender, the BorrCM1er may elect not to repair, reconstruct, or replace the damaged, destroyed, I ost or taken Property and shal I cause such proceeds to prepay the B orrovver Loan in part.

(c) There shall be no abatement of Payments during any period in which, by reason of damage or destruction, there is substantial interference with the use and occupancy by the B orrovver of the Property or any portion thereof.

ARTICLE X

ASSIGNMENT, PARTICIPATION, MORTGAGING AND SELLING

Section 10.01. Assignment by the Lender. This Loan Agreement and related Issuer Loan Obligation and the right to receive Payments from the BorrCM1er hereunder, may be assigned and reassigned in whole to one assignee by the Lender, at any time, without the necessity of obtaining the consent of the Issuer or the Borrovver; pr0vided, hovvever, that such assignment or reassignment shall be in accordance with Section 4.09 of this Loan Agreement. The I ssuer and the B orrovver agree to execute al I documents, i ncl udi ng notices of assignment and chattel mortgages or financing statements, which may be reasonably requested by the Lender or its assignee to protect its interest in this Loan Agreement. Notwithstanding anything above to the contrary, all Payments and notices shall be delivered to the Lender. The Lender agrees to hold any security i nterests granted hereunder on behalf of any assignee, subassi gnee or parti ci pant described above.

Section 10.02. No Sale, Assignment or Leasing by the Borrovver. This Loan Agreement and the interest of the Borrovver in the Property may not be sold, assumed, assigned or encumbered by the BorrCM1er other than as expressly permitted in this Loan Agreement, and

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Liens in favor of the Lender and the Issuer. No agreement or interest therein and no improvement shall be subject to involuntary assignment, lease, transfer or sale or to assignment, lease, transfer or sale by operation of law in any manner whatsoever except as expressly pr0vided in this Loan Agreement and except for Permitted Encumbrances, and any such attempted assignment, I ease, transfer or sale shal I be void and of no effect and shal I, at the option of the Lender, constitute an Event of Default hereunder.

ARTICLE XI

EVENTS OF DEFAULT AND REMEDIES

Section 11.01. Events of Default. U pan the expiration of any applicable cure period expressly provided in this Loan Agreement, each of the follovving shall constitute an "Event of Default" under this Loan Agreement:

(a) failure by the Borrovver to pay to the Lender, as assignee of the Issuer any Payment when due, or any Additional Payment or any other amount required to be paid hereunder or under the other Loan Documents within ten ( 10) days of the due date thereof;

(b) failure by the Borrovver to pay any payment required to be paid under any other material agreement between the Lender or any of its affiliates and the BorrCMter, subject to the appl i cable cure period set forth in such agreement;

(c) fai I ure by the B orrovver to maintain insurance in accordance with Section 7.04 hereof, except for failures that are immaterial and are cured within thirty (30) days after receipt of written notice from the Lender to the B orrovver;

(d) fai I ure by the B orrovver to observe and perform any other c0venant, condition or agreement on its part to be observed or performed hereunder for a period of thirty (30) days after written notice is given to the Borrovver by the Lender, specifying such failure and requesting that it be remedied;

( e) i ni ti ati on by the B orrovver or by others of a proceedi ng under any Federal or State bankruptcy or insolvency law seeking relief under such laws concerning the indebtedness of the Borrovver which proceeding is not dismissed or stayed within sixty (60) days;

(f) the B orrovver shal I be or become insolvent, or admit in writing its i nabi I ity to pay its or his debts as they mature, or make an assignment for the benefit of creditors; or the B orrovver shal I apply for or consent to the appointment of any receiver, trustee or similar officer for it or for all or any substantial part of its property; or such receiver, trustee or similar officer shall be appointed without the application or consent of the B orrovver, as the case may be, or the B orrower shal I i nsti tute ( by petition, appl i cation, answer, consent or otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, di ssol uti on, Ii qui dati on or si mi I ar proceeding relating to it under the laws of any jurisdiction which proceeding is not dismissed or stayed within sixty (60) days; or any such proceeding shall be instituted (by petition, application or

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otherwise) against the B orrovver and remai ns undi smi ssed or unstayed for sixty ( 60) days; or any judgment, writ, warrant of attachment or execution or similar process shall be issued or I evi ed against a substantial part of the property of the Borrower;

( g) the making of any order or the entry of any decree by a court of competent jurisdiction enjoining or prohibiting the Borrovver from performing or satisfying its material covenants, obligations or conditions contained herein and such proceedings are not discontinued or such order or decree is not vacated within thirty (30) days after the maki ng or granti ng thereof;

(h) the Borrovver (i) is determined by the Lender to have made any material false or misleading statement or representation in connection with this Loan Agreement; or (ii) sells, assigns, leases, or otherwise transfers or encumbers all or any part of its interest in this Loan Agreement, the Property, other than Permitted Encumbrances and or in accordance with Section 8.02 hereof;

(i) the occurrence of a default or event of default which represents a liability of the B orrovver in the amount of $500, 000 or more under any instrument, agreement or other document evidencing or relating to any indebtedness or other monetary obi i gati on of the B orrovver after giving effect to any grace or cure peri ads applicable under such instruments, agreements or documents; provided, hO\IVever, nothing herein shall preclude the Borrovver's right to contest in good faith by appropriate proceedings any default or event of default;

U) the sale of the B orrO\IVer to, or merger of the B orrovver i nto, any person, or the merger of any other person into the Borrovver, or acquisition (in a transaction analogous in purpose or effect to a consol i dati on or merger) of al I or substantial I y al I of the assets of any other person by the Borrovver, or another similar material event, without the prior written consent of the Lender, other than as expressly permitted pursuant to Section 8.02 or 8.03 hereof;

(k) there shall occur any event which the Lender in good faith believes materially and adversely affects the business, operations, properties, liabilities, financial condition or prospects of the borrO\IVer such that (i) there is likely to be an impairment of the prospect of repayment of any portion of the Obi i gati ans by the B orrovver under this Loan Agreement, or (ii) the BorrO\IVer is likely to fail to complete the Prqject in accordance with the terms of this Loan Agreement;

(I) the occurrence of a default or event of default under any material lease or other agreement rel ati ng to, aff ecti ng or pertai ni ng to the possession or use of any of the Property, after the expi ration of any appl i cable cure period related thereto;

(m) this Loan Agreement or any Loan Document, including any pledge or collateral security for the Loans, shall be repudiated by the Borrovver or any material provision in any Loan Document shall become unenforceable or incapable of performance in accordance with its terms;

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(n) any judgment, writ, warrant of attachment or execution or similar process shal I be issued or I evi ed against the Borrower or their respective assets in excess of $500, ()()() which is not covered by insurance or which exceeds any applicable insurance policy by more than $500,()()(); provided, hO\IVever, nothing herein shall preclude the Borrower's right to contest in good faith by appropriate proceedings any such judgment, writ, warrant of attachment or execution or si mi I ar process;

(o) the occurrence of an event of default under any other Loan Document or other material agreement between the B orrower and the Lender after the expi ration of any applicable cure period thereunder; or

(p) the occurrence of an event of default under the Senior Loan Agreement or other material agreement related thereto between the B orrower and the Lender after the expiration of any applicable cure period thereunder.

Section 11.02. Remedies on Default. Whenever any Event of Default shall have occurred and be continuing, the Lender shall have the right, at its sole option without any further demand or notice, to take any one or any combination of the follO\IVing remedial actions insofar as the same are avai I able to secured parties under the I aws of the State from ti me to ti me and which are otherwise accorded to the Lender:

( a) by notice to the I ssuer and the B orrO\IVer, declare the enti re unpaid pri nci pal amount of the Loans (and the related Obligations) then outstanding, all interest accrued and unpaid thereon and all amounts payable under this Loan Agreement to be forthvvith due and payable, whereupon such Loans (and the related Obligations), all such accrued interest and all such amounts shall become and be forthwith due and payable, without presentment, notice of dishonor, protest or further notice of any kind, al I of which are hereby expressly waived by the Borrower and the Issuer;

(b) the obligation, if any, of the Lender to extend any further credit under any of the Loan Documents shal I immediately cease and terminate;

(c) exercise all rights and remedies legally available to the Lender;

( d) proceed by appropriate court action to enforce performance by the I ssuer or the Borrower of the applicable covenants of the Loan documents or to recover for the breach thereof, including the payment of al I amounts due from the Borrower, in which event the Borrower shal I pay or repay to the Lender al I costs of such action or court action including without Ii mitati on, reasonable attorneys' fees; and

(e) to enforce its rights, in which event the Borrower shall pay or repay to the Lender and the I ssuer al I costs of such action or court action, i ncl udi ng, without limitation, reasonable attorneys' fees.

All proceeds derived from the exercise of any rights and remedies shall be applied in the fol I O\IVi ng manner:

Fl RST, to pay the Issuer any Issuer Fees and Expenses;

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SECOND, to the United States any rebatabl e arbitrage due or accrued pursuant to Section 148(f)(4) of the Code;

TH IR D, to pay ( a) to the Lender the amount of al I unpaid Payments, if any, which are then due and ovvi ng, together with interest and late charges thereon; and (b) to the Lender any Additional Payments payable to the Lender hereunder;

FOURTH, to pay all proper and reasonable costs and expenses associated with the recovery, repair, storage and sale of the Collateral, including reasonable attorneys' fees and expenses; and

FI FTH, to pay the remainder of any such proceeds, purchase moneys or other amounts paid by a buyer of the Col I ateral or other person, to the B orrovver.

Notwithstanding any other remedy exercised hereunder, the Borrovver shall remain obi i gated to pay to the Lender and the Issuer, as their interests may appear, any unpaid Payments and Additional Payments. To the extent permitted by applicable law, the Borrovver hereby waives any rights novv or hereafter conferred by statute or otherwise which might require the Lender to use, sel I, I ease or otherwise dispose of the Property in mitigation of the Lender's damages or which might otherwise limit or modify any of the Lender's rights hereunder.

A 11 rights, povvers and remedies of the Lender may be exercised at any ti me by the Lender, as assignee of the Issuer, and from time to time after the occurrence and continuance of an Event of Default, are cumulative and not exclusive, and shall be in addition to any other rights, povvers or remedies provided by law or equity.

The B orrovver shal I pay or repay to the Lender and the I ssuer al I costs of such action or court action, including, without limitation, reasonable attorneys' fees.

Section 11.03. The Lender's Right to Perform the Obligations. If the Borrovver shall fail, refuse or neglect to make any payment or perform any act required by the Loan Documents to which it is a party, then while any Event of Default exists, and without notice to or demand upon the Borrovver and without waiving or releasing any other right, remedy or recourse the Lender may have because of such Event of Default, the Lender may (but shall not be obligated to) make such payment or perform such act for the account of and at the expense of the B orrovver and interest on such payment shall accumulate from the date of the advance at the Default Rate until such advance is paid, and shall have the right to enter upon the Property for such purpose and to take all such action thereon and with respect to the Property as it may deem necessary or appropriate. If the Lender shall elect to pay any sum due with reference to the Property, the Lender may do so in reliance on any bi 11, statement or assessment procured from the appropriate governmental authority or other issuer thereof without inquiring into the accuracy or validity thereof. Similarly, in making any payments to protect the security intended to be created by this Loan Agreement or other Loan Documents, the Lender shall not be bound to inquire into the validity of any apparent or threatened adverse title, lien, encumbrance, claim or charge before making an advance for the purpose of preventing or removing the same. Additionally, if any Hazardous Materials affect or threaten to affect the Property, the Lender may (but shall not be obligated to) give such notices and take such actions as it deems necessary or advisable in order

61 4828--6890-5659.6

to abate the discharge of any Hazardous Materials or remove the Hazardous Materials. The Borrovver shall indemnify, defend and hold the Lender and the Issuer harmless from and against any and al I I asses, Ii abi I iti es, claims, damages, expenses, obi i gati ans, penal ti es, acti ans, judgments, suits, costs or disbursements of any kind or nature whatsoever, including reasonable attorneys' fees, incurred or accrui ng by reason of any acts performed by the Lender pursuant to the provisions of this Section, except as a result of the Lender's gross negligence or willful misconduct.

Section 11.04. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Lender is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Loan Agreement or novv or hereafter existing at law or in equity. No delay or omission to exercise any right or poNer accruing upon any Event of Default shall impair any such right or poNer or shall be construed to be a waiver thereof, but any such right or poNer may be exercised from ti me to ti me and as often as may be deemed expedient. I n order to enti tie the Lender to exercise any remedy reserved to it i n this Article, it shal I not be necessary to give any notice other than such notice as may be required by this Article XI. All remedies hereby conferred upon or reserved to the Lender shall survive the termination of this Loan Agreement.

Section 11.05. Issuer Enforcement of Rights. In the event that BorrCMter fails to comply with any covenant or obligation set forth in this Loan Agreement related to Reserved Issuer Rights, the Issuer may enforce the Reserved Issuer Rights by exercising all rights and remedies legally available to it, including proceeding by appropriate court action to enforce performance by the B orrovver of such covenants and obi i gati ans or to recover for the breach thereof, including the payment of al I amounts due from the B orrovver, in which event the B orrovver shal I pay or repay to the I ssuer al I costs of such action or court action i ncl udi ng without limitation, reasonable attorneys' fees.

ARTICLE XII

MISCELLANEOUS

Section 12.01. Disclaimer of Warranties. THE LENDER AND THE ISSUER MAKE NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS OR WORKMANSHIP, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENTS, TITLE OR FITNESS FOR USE OF THE PROPERTY OR ANY COMPONENT THEREOF OR ANY OTHER WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT THERETO AND, AS TO THE LENDER AND THE ISSUER. All such risks, as between the Lender, the Issuer and the BorrCMter, are to be borne by the BorrCMter. Without limiting the foregoing the Lender and the Issuer shall have no responsibility or liability to the Borrovver or any other person with respect to any of the follCMting: (a) any liability, loss or damage caused or alleged to be caused directly or indirectly by the Property, any inadequacy thereof, any deficiency or defect (latent or otherwise) therein, or any other circumstances in connection therewith; (b) the use, operation or performance of the Property or any risks relating thereto; (c) any interruption of service, loss of business or

62 4828--6890-5659.6

anticipated profits or consequential damages; or (d) the delivery, operation, servicing, maintenance, repair, improvement or replacement of the Property. If, and so long as, no default exists under this Loan Agreement, the B orrovver shal I be, and hereby is, authorized to assert and enforce, at the Borrower's sole cost and expense, from ti me to ti me, whatever claims and rights the BorrCMter or the Lender may have against any prior title holder or possessor of the Property. I n no event shal I the Lender or the Issuer be Ii able for any I ass or damage in connection with or arising out of this Loan Agreement or the Property.

Section 12.02. Li mitati ans of Li abi I ity. In no event, whether as a result of breach of contract, warranty, tort (including negligence or strict liability), indemnity or otherwise, shall the Lender, its assignees, if any, or the I ssuer be I i able for any special , consequential, i nci dental or punitive damages including, but not limited to, a loss of profit or revenue, loss of use of the Property or any associated equipment, service materials or software, damage to associated equipment, service materials or software, cost of capital, cost of substitute equipment, service materials or software, facilities, services or replacement povver, dovvn time costs or claims of the B orrovver' s members for such damages and the B orrovver shal I i ndemni fy and hold harmless the Lender, its assignees, if any, and the Issuer from any such damages.

Section 12.03. Additional Payments to the Lender. The Borrovver shall pay to the Lender the fol I ovvi ng Addi ti anal Payments hereunder, in addition to the Payments payable by the B orrovver, in such amounts in each year as shal I be required by the Lender in payment of any reasonable costs and expenses, incurred by the Lender in connection with the execution, performance or enforcement of this Loan Agreement, the financing of the P raj ect, including but not Ii mited to payment of al I reasonable fees, costs and expenses and al I reasonable administrative costs of the Lender in connection with the Project, reasonable expense (including, without limitation, reasonable attorneys' fees and disbursements) reasonable fees of auditors, fi nanci al consultants or attorneys, i nsurance premi urns not otherwise paid hereunder and al I other reasonable, direct and necessary administrative costs of the Lender or charges required to be paid by it in order to comply with the terms of, or to enforce its rights under, this Loan Agreement and any of the other Loan Documents. Such Addi ti anal Payments shal I be bi 11 ed to the B orrCMter by the Lender from time to time, together with a statement certifying that the amount so billed has been paid or incurred by the Lender for one or more of the items described, or that such amount is then payable by the Lender for such items. Amounts so billed shall be due and payable by the B orrovver within 30 days after receipt of the bi 11 by the Borrower.

Section 12.04. Notices. All notices, certificates, requests, demands and other communications pr0vided for hereunder or under this Loan Agreement shall be in writing and shall be (a) personally delivered; (b) sent by registered class United States mail; (c) sent by 0vernight courier of national reputation; or (d) transmitted by facsimile, in each case addressed to the party to whom notice is being given at its address set forth belCMt and, if facsimiled, transmitted to that party at its facsimile number set forth belCMt and confirmed by telephone at the telephone number set forth bel CMt or, as to each party, at such other address or facsi mi I e number as may hereafter be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section. All such notices, requests, demands and other communications shall be deemed to have been given on (i) the date received if personally delivered; (ii) when deposited in the mai I if delivered by mai I; (iii) the date sent if sent by 0vernight courier; or (iv) the date of transmission if delivered by facsimile. If notice to the

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B orrovver of any intended disposition of the Property or any other intended acti ans is required by law in a particular instance, such notice shall be deemed commercially reasonable if given (in the manner specified i n this 5 ecti on) at I east 1 0 calendar days prior to the date of i ntended disposition or other action.

If to the B orrovver: Harbor Day 5 chool 3443 Pacific Vievv Drive Corona Del Mar, CA 92625 Telephone: ( 949) 640-1410 Attention: Head of School

With a copy to: Stradling Y occa Carlson & Rauth, A Professional Corporation 660 Newport Center Drive, Suite 1600 Nevvport Beach, CA 92660-6401 Telephone: ( 949) 725-4193 Attention: Brian Forbath

If to I ssuer: California Municipal Finance Authority 2111 Palomar Airport Rd., Suite 320 Carlsbad, CA 92011 Telephone: (760) 930-1221 Attention: J ohn P. 5 toecker

With a copy to: Jones Hall, A Professional Law Corporation 475 5 ansome 5 treet, 5 uite 1 700 San Francisco, CA 94111 Telephone: ( 41 5) 391-5 700 Attention: Ron Lee

If to the Lender: Farmers and Merchants Bank of Long Beach 2411 East Coast Hwy Suite 300, Corona Del Mar, CA 92625 Telephone: ( 949) 999-4110 Attention: Richard Robinson

With a copy to: Kutak Rock LLP 777 South Figueroa Street, Suite 4550 Los Angeles, CA 90017 Telephone: (213) 312-4009 Attention: Sam 5. Balisy, Esq.

Section 12.05. Binding Effect; Time of the Essence. This Loan Agreement shall inure to the benefit of and shal I be binding upon the Lender, the Issuer, the B orrCMter and their respective successors and assigns, if any. Time is of the essence.

64 4828--6890-5659.6

Section 12.06. Severability. In the event any provision of this Loan Agreement shall be held invalid or unenforceable by any court of competent j uri sdi cti on, such holding shal I not invalidate or render unenforceable any other provision hereof.

Section 12.07. Amendments. To the extent permitted by law, the terms of this Loan Agreement shall not be waived, altered, modified, supplemented or amended in any manner whatsoever except by written instrument signed by the parties hereto, and then such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given; provided, h01Vever, that the consent of the Issuer shal I not be required for waivers, alternations, modifications, supplements or amendments of or with respect to Sections 7. 07, 7.14, 7.16 ( other than changes resulting in a change in the Applicable Loan Rate), 8.01, 8.04, 8.06, 8.11, 8.14 or 8.16 of this Loan Agreement (a "Permitted Change"). Prior to the effectiveness of any such waiver, alteration, modification, supplement or amendment other than a Permitted Change, an opinion of Bond Counsel shall be delivered to the Issuer to the effect that such waiver, alteration, modification, amendment or supplement complies with the requirements of this Loan Agreement and that such waiver, alteration, modification, amendment or supplement wi 11 not cause interest on the Issuer Loan Obi i gati on to be included in the gross income of the Lender for federal income tax purposes.

Section 12.08. Execution in Counterparts. This Loan Agreement may be executed in several counterparts, each of which shal I be an original and al I of which shal I constitute one and the same instrument and any of the parties hereto may execute this Loan Agreement by signing any such counterpart.

Section 12.09. Applicable Law. This Loan Agreement is a contract made under the laws of the State of California and shall be governed by and construed in accordance with the Constitution and laws applicable to contracts made and performed in the State of California This Loan Agreement shal I be enforceable in the State of California, and any action arising out of this Loan Agreement shall be filed and maintained in San Diego County Superior Court, San Diego, California

Section 12.10. Jury Trial Waiver. TO THE EXTENT PERMITTED BY LAW, THE LENDER AND THE BORROWER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY ACTION, PROCEEDING OR HEARING (HEREINAFTER, A "CLAIM") BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS LOAN AGREEMENT OR ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN LENDER OR BORROWER RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED BY THIS LOAN AGREEMENT OR ANY RELATED TRANSACTIONS, AND~R THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN THE LENDER AND THE BORROWER (EACH, A "CLAIM"). THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TOTH IS LOAN AGREEMENT, ANY

65 4828--6890-5659.6

RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR SUPPLEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS LOAN AGREEMENT OR ANY RELATED TRANSACTIONS. IN THE EVENT OF LITIGATION, THIS LOAN AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TOA TRIAL BY THE COURT.

Section 12.11. Captions. The captions or headings in this Loan Agreement are for convenience only and in no way define, Ii mit or describe the scope or intent of any provi si ans or secti ans of this Loan Agreement.

Section 12.12. E ntireAgreement. This Loan Agreement, together with the exhibits and attachments hereto and thereto, together with the other Loan Documents, constitutes the entire agreement among the Lender, the Issuer and the B orrovver. There are no understandings, agreements, representati ans or warranties, express or i mpl i ed, not specified herei n or therei n regarding this Loan Agreement or the Prqject financed hereunder. Any terms and conditions of any purchase order or other document submitted by the Borrovver in connection with this Loan Agreement which are in addition to or inconsistent with the terms and conditions of this Loan Agreement wi 11 not be binding on the Lender and wi 11 not apply to this Loan Agreement.

Section 12.13. Waiver. The Lender's or the Issuer's fai I ure to enforce at any ti me or for any period of ti me any provision of this Loan Agreement shal I not be construed to be a waiver of such provision or of the right of the Lender or the I ssuer thereafter to enforce each and every provision. No express or implied waiver by the Lender of any Default or remedy of Default shall constitute a waiver of any other Default or remedy of Default or a waiver of any the Lender's rights.

Section 12.14. Survivability. All of the limitations of liability, indemnities and waivers contained in this Loan Agreement shall continue in full force and effect notwithstanding the expiration or early termination of this Loan Agreement and are expressly made for the benefit of, and shal I be enforceable by, the Lender and the Issuer, or their successors and assigns.

Section 12. 1 5. U su ry. It is the i ntenti on of the parties hereto to comply with any applicable usury laws; accordingly, it is agreed that, notwithstanding any provisions to the contrary in this Loan Agreement, in no event shal I this Loan Agreement require the payment or permit the col I ecti on of i nterest or any amount i n the nature of i nterest or fees i n excess of the maximum permitted by applicable law.

Section 12.16. Third Party Beneficiary. It is the intention of the parties that any Lender hereunder be a thi rd party beneficiary of this Loan Agreement.

Section 12.17. Further Assurance and Corrective Instruments. The parties hereto hereby agree that they will, from time to time, execute, acknovvledge and deliver, or cause to be executed, acknovvl edged and delivered, such further acts, instruments, conveyances, transfers and assurances, as any of them reasonably deems necessary or advisable for the implementation, correction, confirmation or perfection of this Loan Agreement or the Tax Certificate and any rights of such party hereunder or thereunder.

66 4828--6890-5659.6

Section 12.18. J udicial Reference. In the event that the provisions of Section 12.10 hereof are not enforceable for any reason, the B orrovver and the Lender hereby covenant the fol I ovvi ng:

(a) Other than the exercise of provisional remedies (any of which may be initiated pursuant to applicable law), any controversy, dispute or claim (each, a "Claim'') between the parties arising out of or relating to this Agreement will be resolved by a reference proceeding in California in accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure ("CCP"), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the CI aim is subject to the reference proceeding. Nothing in this Agreement shall be deemed to apply to or limit the right of the Lender: (i) to exercise self-help remedies such as (but not limited to) setoff; (ii) to foreclose judicially or non-judicially agai nst any real or personal property col I ateral , or to exercise judicial or non-judicial povver of sale rights; (iii) to obtain from a court provisional or ancillary remedies (including, but not limited to, injunctive relief, a writ of possession, prejudgment attachment, a protective order or the appointment of a receiver); or ( iv) to pursue rights agai nst a person i n a thi rd party proceedi ng i n any action brought agai nst the Lender ( i ncl udi ng acti ans i n bankruptcy court), al I of which rights may be exercised before, duri ng or after the pendency of any judicial reference proceedi ng. Neither the exercise of self-help remedies nor the institution or maintenance of an action for foreclosure or provisional or ancillary remedies or the opposition to any such provisional remedies shall constitute a waiver of the right of any party to require submission to judicial reference the merits of the Claim occasioning resort to such remedies. Venue for the reference proceeding will be in the Superior Court or Federal District Court in Orange County, California (the "Court").

(b) The referee shall be a retired Judge or Justice selected by mutual written agreement of the parties. If the parties do not agree, the referee shal I be selected by the PresidingJ udge of the Court (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted. The referee shall be appointed to sit with all the povvers provided by law. Pending appointment of the referee, the Court has povver to issue temporary or provi si anal remedies.

( c) The parties agree that ti me is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, suqject to change in the time periods specified herein for good cause shovvn, to (i) set the matter for a status and trial setti ng conference wi thi n fifteen ( 1 5) days after the date of selection of the referee, ( i i) if practicable, try all issues of law or fact within ninety (90) days after the date of the conference and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision.

(d) The referee will have povver to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or cutoffs for good cause, including a party's fai I ure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shovvn, no party shall be entitled to

67 4828--6890-5659.6

"priority" in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shal I be submitted to the referee whose decision shal I be final and bi ndi ng.

(e) Except as expressly set forth in this Agreement, the referee shall determine the manner in which the reference proceeding is conducted including the ti me and pl ace of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. A 11 proceedings and hearings conducted before the referee, except for trial , shal I be conducted without a court reporter, except that when any party so requests, a court reporter wi 11 be used at any hearing conducted before the referee, and the referee wi 11 be provided a courtesy copy of the transcript. The party making such a request shal I have the obi i gati on to arrange for and pay the court reporter. Subject to the referee's povver to award costs to the prevailing party, the parties wi 11 equal I y share the cost of the referee and the court reporter at trial .

(f) The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empovvered to enter equitable as well as legal relief, provide all temporary or provisional remedies, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a trial, including without limitation motions for summary judgment or summary adjudication. The referee shall issue a decision pursuant to CCP Section 644 and the referee's decision shal I be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court. The final judgment or order or from any appeal able decision or order entered by the referee shall be fully appealable as provided by law. The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a differentjudgment, which new trial, if granted, is al so to be a reference proceeding under this provision.

(g) If the enabling legislation which provides for appointment of a referee is repealed ( and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure wi 11 be resolved and determined by arbitration. The arbitration will be conducted by a retired judge or Justice, in accordance with the California Arbitration Act Section 1200 through Section 1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.

Section 12.19. Arm's Length Transaction. The BorrCMter acknovvledges and agrees that ( i) the advance of the Loans by the Lender pursuant to this Loan Agreement is an arm'sI ength commercial transaction between the Borrovver and the Lender, (ii) in connection therewith and with the financing di scussi ans, undertakings and procedures I eadi ng up to the consummation of such transaction, the Lender is and has been acti ng solely as a pri nci pal and is not acti ng as the agent or fiduciary of or in any way advising the Borrovver, (iii) the Lender has not assumed an advisory or fiduciary responsibility in favor of the BorrCMter with respect to the financing contemplated hereby or the di scussi ans, undertakings and procedures I eadi ng thereto

68 4828--6890-5659.6

(irrespective of whether the Lender has pr0vided other services or is currently providing other services to the B orrCM1er on other matters) and the Lender has no obi igation to the B orrovver with respect to the financing contemplated hereby except the obi i gati ans expressly set forth in this Loan Agreement and (iv) the Borrovver has consulted its ovvn legal, financial and other advisors to the extent it has deemed appropriate.

Section 12.20. Patriot Act. The Lender hereby notifies the Borrovver that pursuant to the requirements of the Patriot Act it is required to obtain, verify and record information that identifies the B orrCM1er, which i nf ormati on i ncl udes the name and address of the B orrovver and other information that will allCMI the Lender to identify the BorrCM1er in accordance with the Patriot Act. The Borrovver hereby agrees that it shall promptly provide such information upon request by the Lender.

[Rernai nder of this page intentionally left blank]

69 4828--6890-5659.6

IN WITNESS WHEREOF~ the parties hereto have caused this Loan Agreement to be executed in their respective corporate names by their duly authorized officers or officials all as of the date first written above.

LENDER:

FARMERS AND MERCHANTS BANK OF LONG Brf-CH

r; ; i I ;\ i. i i. ·q \ !;1

By \, A \.Aj\/\ Rici\ta?a Robin;=on, First Vice President

ISSUER:


By~-~---~-~--~-----Authorized Signatory

BORROWER:


By_---'--±!---____; Angela Diane Evans, Head of School


IN ·wrTNESS WHEREOF, the parties hereto have caused this Loan Agreement to be executed in their respective corporate names by their duly authorized officers or officials all as of the date first written above.

LENDER:

FARMERS AND MERCHANTS BANK OF LONG BEACH

BY~~~~~~~~~~~ Richard Robinson, First Vice President

ISSUER:

BORROWER:


By -·---Angela Diane Evans, Head of School


EXHIBIT A

DESCRIPTION OF PROPERTY

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF NEWPORT BEACH, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

THAT PORTION OF BLOCK 96 OF IRVINE'S SUBDIVISION, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 1, PAGE 88 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHEASTERLY TERMINUS OF THAT CERTAIN COURSE IN THE SOUTHWESTERLY BOUNDARY OF PACIFIC VIEW MEMORIAL PARK DESCRIBED AS NORTH 41° 38' 18" WEST 565.00 FEET IN THE DEED RECORDED DECEMBER 17, 19581N BOOK 4518, PAGE 207 OF OFFICIAL RECORDS; THENCE NORTH 41° 38' 18" WEST 538.39 FEET ALONG SAID CURVE TO A POINT ON A NON-TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 50.00 FEET, A RADIAL TO SAi D POI NT BEARS SOUTH 11° 46' 58" EAST; THENCE WESTERLY AND NORTHWESTERLY 59.22 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 67 51' 50" TO THE BEGINNING OF A REVERSE CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 30.00 FEET; THENCE NORTHWESTERLY 21.68 FEET ALONG SAID CURVE THROUGH AN ANGLE OF 41° 24' 34" TO A POINT OF TANGENCY WITH A LINE PARALLEL WITH AND DISTANT SOUTHERLY 60.00 FEET FROM THE SOUTHERLY LINE OF THAT CERTAIN LAND DESCRIBED IN THE DEED TO THE CITY OF NEWPORT BEACH RECORDED DECEMBER 20, 1957 IN BOOK 4143, PAGE 395 OF OFFICIAL RECORDS; THENCE NORTH 75° 19' 42" WEST 246.95 FEET ALONG SAID PARALLEL LINE; THENCE SOUTH 14° 40' 18" WEST 552.79 FEET TO THE NORTHERLY RIGHT OF WAY OF SAN JOAQUIN HILLS ROAD, 128.00 FEET IN WIDTH, AS DESCRIBED IN THE DEED TO THE CITY OF NEWPORT BEACH, RECORDED AUGUST 25, 1969 IN BOOK 9060, PAGE 934 OF SAID OFFICIAL RECORDS; THENCE SOUTH 88' 03' 47' EAST 003.94 FEET ALONG SAID RIGHT OF WAY LINE AND ITS EASTERLY PROLONGATION TO A POINT THAT BEARS SOUTH 1° 36' 13" WEST FROM THE POINT OF BEGINNING; THENCE NORTH 19° 56' 13" EAST 63.73 FEET TO THE POINT OF BEGINNING.

SAID LAND IS ALSO KNOWN AS PARCEL 2 ON A MAP RECORDED IN BOOK 35, PAGE 2 OF PARCEL MAPS, FILED IN THE COUNTY RECORDERS OFFICE OF ORANGE COUNTY, CALIFORNIA.

APN: 458-461-02

A-1 4828--6890-5659.6

EXHIBIT B

FORM OF INVESTOR LETTER OF REPRESENTATIONS


Stradling Y occa Carl son Rauth, A Professional Corporation Nevvport Beach, California

Kutak Rock LLP Los Angeles, California

Re: Loan Agreement, dated as of J une 1, 2020, by and among Farmers and Merchants Bank of Long Beach, California Municipal Finance Authority and Harbor Day School.


The undersigned, Farmers and Merchants Bank of Long Beach, a California statechartered bank ( the " Lender''), is enteri ng i nto that certai n Loan Agreement, dated as of J une 1, 2020 ( the " Loan Agreement"), with the California M uni ci pal Finance Authority (the " Issuer'') and Harbor Day School, a California nonprofit public benefit corporation (the "Borrovver''), pursuant to which the Lender wi 11 make a I oan to the Issuer in the principal amount of up to $20,000,000. 00 (the " Issuer Loan Obi i gati on") and the Issuer wi 11 in turn make a I oan to the B orrovver in the principal amount of up to $20,000,000.00 (the "B orrCMter Loan" and, together with the Issuer Loan Obligation, the "Loans"). Capitalized terms not defined herein shall have the meanings set forth in the Loan Agreement.

The undersigned hereby represents and warrants to you that:

1. The Lender has authority to make the Issuer Loan Obi i gati on pursuant to the Loan Agreement and to execute this letter and any other instruments and documents required to be executed by the Lender in connection with the Issuer Loan Obi i gati on.

2. The Lender is a "Qualified Institutional Buyer'' and a California state-chartered bank. The Lender and has sufficient knovvl edge and experience i n fi nanci al and busi ness matters, including making, originating and funding of loans to municipal entities and is capable of evaluating the merits and risks represented by the Loans and the Loan Agreement. The Lender is able to bear the economic risk of, and entire loss of, its funding of the Loans.

3. The Issuer Loan Obligation is being given and funded by the Lender for its CMtn commercial loan accounts and not with a view to, or for resale in connection with, any di stri buti on of the Issuer Loan Obi i gati on, and the Lender intends to hold the Issuer Loan Obi i gati on for its ovvn account and for an i ndefi ni te period of ti me, and does not i ntend at this time to dispose of all or any part of the Issuer Loan Obligation. The Lender understands that it

B-1 4828--6890-5659.6

may need to bear the risks of the Loans for an indefinite ti me, si nee any transfer prior to maturity may not be possible.

4. The Lender understands that the Loan Agreement and related Loan Documents are intended by the parties to evidence an arm's~ ength commercial I oan transaction, and are not intended to constitute a " security" wi thi n the meani ng of 5 ecti on 3( a)( 10) of the 5 ecuri ti es Exchange Act of 1934, as amended. The Lender further understands that the Loan Agreement is not registered under the Securities Act of 1933, as amended; and further understands that the Loans ( a) are not bei ng registered or otherwise qual i fi ed for sale under the " B I ue 5 ky" I aws and regulations of any state, (b) will not be listed in any stock or other securities exchange, (c) will not carry a rating from any rating service and ( d) wi 11 be delivered in a form which may not be readily marketable. The Lender agrees that it will comply with any applicable state and federal laws then in effect with respect to any disposition of the Loans by it and with the Issuer's sale and disposition limitations as set forth in the Loan Agreement.

5. The undersigned is a duly appointed, qualified and acting officer of the Lender and is authorized to cause the Lender to make the certificates, representati ans and warranties contai ned herei n by execution of this I etter on behalf of the Lender.

6. The Lender acknCMtledges that it has either been supplied with or been given access to i nformati on, i ncl udi ng fi nanci al statements and other fi nanci al i nformati on, to which a reasonable I ender would attach significance in making I ending deci si ans, and the Lender has had the opportunity to ask questi ans and receive answers from knCMtl edgeabl e individuals concerning the B orrovver, the Project, the Property and the Loans and the security therefor so that, as a reasonable lender, the Lender has been able to make a decision to grant the Loans. The Lender acknCMtledges that it has not relied upon the Issuer for any information in connection with the Lender's grant of the Issuer Loan Obligation, the Loan Documents, the validity or enforceability of the Loans or the exclusion of interest thereon from gross income of the Lender for purposes of federal income tax under the Code.

7. The Lender acknovvl edges that the obi i gati ans of the Issuer to make I oan payments with respect to the Issuer Loan Obligation are a special, limited obligation payable solely from the Payments and any other amounts paid to the Issuer from the Borrovver pursuant to the terms of the Loan Agreement and the Issuer shal I not be directly or indirectly or contingently or morally obligated to use any other moneys or assets of the Issuer for all or any portion of such loan payments.

8. The Lender has made its ovvn inquiry and analysis with respect to the Loans and the security therefor, and other material factors affecting the security and payment of the Loans. The Lender is aware that the business and nonprofit activities of the Borrovver involve certain economic variables and risks that could adversely affect the security for the Loans.

9. The Lender acknovvledges that its right to sell and transfer the Loans is suqject to compliance with the transfer restrictions set forth in the Loan Agreement, including the requirement of the delivery to the Issuer and the B orrovver of a purchaser's I etter from the transferee to substantially the same effect as this letter, with no revisions except as may be approved in writing by the Issuer. Failure to deliver such letter to the Issuer and the Borrovver

B-2 4828--6890-5659.6

shall cause the purported transfer to be null and void. The Lender agrees to indemnify and hold harmless the I ssuer with respect to any cl ai m asserted agai nst the I ssuer that is based upon the sale, transfer or other disposition of the Loans in violation of the provisions hereof.

10. None of Stradling Y occa Carlson Rauth, A Professional Corporation (" Bond Counsel"), Kutak Rock LLP, the Issuer, their members, governing body, or any of their employees, counsel or agents will have any responsibility to the Lender for the accuracy or completeness of information obtained by the Lender from any source regarding the B orrCM1er or its financial condition, or regarding the abi I ity of the B orrovver to pay the Borrower Loan, or the sufficiency of any security therefore. No written information has been provided by the Issuer to the Lender with respect to the Loans. The Lender acknCM1ledges that, as between the Lender and all of such parties, the Lender has assumed responsibility for obtaining such information and making such revievv as the Lender deemed necessary or desirable in connection with its decision to grant the Loans.

[Paragraphs 11-14 only apply to the initial Lender.]

11. The Loans are being granted in a direct, private commercial I oan transaction and the terms of the Loans have been established through negotiations between the Lender, the B orrovver and the I ssuer i n an arm' s~ ength transaction.

12. The aggregate price, established as described above, for the Issuer Loan Obi i gati on, to be paid by the Lender pursuant to the terms of this I etter and the Loan Agreement, is an amount equal to $20, ()()(), ()()(). 00 ( 1 CXJ>/o of the aggregate pri nci pal amount of the I ssuer Loan Obligation).

13. As of the date hereof, the price at which the Lender agreed to grant the Issuer Loan Obi i gati on was, to the best knCM1I edge and judgment of the Lender, the fair market value of the Issuer Loan Obligation. The Lender acknovvledges that such price will be relied on by Lender's Counsel as the "issue price" for establishing the yield on the Issuer Loan Obligation, for issuance cost limitations and other federal tax requirements based upon the issue price of the Issuer Loan Obi i gati on.

14. If the Lender transfers, sells or disposes of the Issuer Loan Obligation, or any interest in the Issuer Loan Obligation, either (a) such transfer of any interest in the Issuer Loan Obi i gati on wi 11 not occur within 60 days of the date hereof, during which ti me the Issuer Loan Obligation will be held exclusively for our ovvn account and not suqject to contractual arrangement for such transfer, or ( b) such transfer of the Issuer Loan Obi i gati on, or interest therei n, wi 11 be at a price or prices that, i n the aggregate ( and taki ng i nto account any i nterest in the Issuer Loan Obi i gati on not transferred), is not in excess of par, uni ess Lender's Counsel provides a written opinion that the failure to satisfy this paragraph will not adversely affect the exclusion from gross income of interest on the Issuer Loan Obi i gati on.

B-3 4828--6890-5659.6

We understand that the foregoing information wi 11 be relied upon by the Issuer and the B orrovver with respect to certai n representati ans i n the Tax Certificate dated as of the date hereof or the Exhibits thereto and by Lender's Counsel in connection with its opinion as to the exclusion of the interest on the Issuer Loan Obi i gati on from gross income for federal income tax purposes under 5 ecti on 103 of the I nternal Revenue Code of 1986, as amended.

Very truly yours,

B-4 4828--6890-5659.6

EXHIBIT C

MATTERS TO BE ADDRESSED IN OPINION OF COUNSEL OF THE BORROWER

1. The BorrCMter is a nonprofit public benefit corporation, validly existing and in good standing under the I aws of the State of California

2. The B orrCMter has the povver and authority to enter into and perform al I of its duties contained the I oan documents to which it is a party ( the " Loan Documents").

3. All conditions precedent to the execution of the Loan Documents have been satisfied or waived. The Loan Documents have been duly authorized by all necessary corporate action on the part of the B orrovver and have been duly executed and delivered by the B orrCMter.

4. Each of the Loan Documents constitutes the legal, valid and binding obligation of the B orrovver enforceable against the B orrovver in accordance with its respective terms.

5. The execution and delivery by the BorrCMter of the Loan Documents, the performance by the B orrovver of the duties and covenants of the B orrovver contai ned therei n and the fulfi 11 ment of or compliance by the B orrCMter with the terms and conditions thereof (a) do not and wi 11 not constitute on the part of the B orrovver a breach of or default (with due notice or the passage of time or both), and do not result in the creation or imposition of any prohibited lien, charge or encumbrance upon the property or assets of the B orrower under the articles of incorporation or bylaws of the Borrovver, (b) do not and will not, to our knovvledge, constitute a material breach of the terms, conditions or provisions of, or constitute a default under, any material contract, undertaki ng, i ndenture or other agreement or i nstrument knovvn to us, and ( c) is neither prohibited by, nor subjects the Borrovver to, a fine, penalty, or other similar sanction under, any statute or regulation of the State of California, or any federal statute or regulation, of a type which is typically applicable to transacti ans si mi I ar to those transacti ans contemplated by the documents referred to in this paragraph, and which breach, default, lien, charge or encumbrance would materially and adversely affect the consummation of the transacti ans contemplated by the documents referred to in this paragraph, or the financial condition or operati ans of the Borrower.

6. With respect to requirements imposed on the B orrovver, no consent, approval, authorization of or designation, declaration, or fi Ii ng with any California or United States federal authority (except as may be required under any state or federal blue sky or securities laws) is required in connection with the execution and delivery by the Borrovver of the Loan Documents or is required in connection with the performance of the obi i gati ans and duties of the B orrovver contained therein, except as has been obtained or made on or before the date hereof and as is in f ul I force and effect or which are not requi red to be made or obtai ned unti I after the date hereof, including, but not Ii mited to, fi Ii ngs and recordings required in order to perfect or otherwise protect the security interests under the Loan Documents.

7. The Deed of Trust is in a form sufficient to create a I egal, valid, and perfected Ii en on the fee estate of the real property described therein (the "Property") and the rents thereof in favor of the trustee under the Deed of Trust for the benefit of the beneficiary identified in the

C-1 4828--6890-5659.6

Deed of Trust. In order to provide constructive notice of any lien created by the Deed of Trust, it is necessary to record the Deed of Trust in the Official Records of Orange County, California in accordance with the recording system established pursuant to applicable I aw. I n rendering the opinion in this Paragraph, we have assumed that the description of the fee estate of the Property is legally sufficient to enable a subsequent purchaser, beneficiary under a mortgage, or mortgagee to identify such fee estate.

8. ( a) To our current actual knovvl edge, except as referenced i n the Loan Documents, there is no action, suit or proceeding pending against the BorrCM1er or its properties in any court or before any governmental authority or agency, or arbitration board or tribunal knovvn to us and, which chal I enges the consummation of the financing transacti ans contemplated by or the validity of the Loans or the Loan Documents, which, if determined adversely to the Borrovver, would have a material and adverse effect on such consummation or validity.

(b) To our current actual knovvledge, there is no action, suit or proceeding, pendi ng agai nst the B orrCM1er or its assets, properties or operati ans i n any court or before any governmental authority or agency, or arbitration board or tribunal knCM1n to us and, which, if determined adversely to the B orrCM1er, would have a material and adverse effect on the B orrovver or its financial condition, assets or operations (taken as a whole).

( c) To our current actual knovvl edge, the B orrovver is not i n violation or breach with respect to any specific judicial or administrative adjudicative order or decree knovvn to us and di rected to or aff ecti ng the B orrovver by any federal , state, or muni ci pal court or other governmental authority which violation or breach might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the documents ref erred to i n this paragraph 8 or the fi nanci al condition or operati ans of the B orrCM1er ( taken as a whole).

9. The UCC-1 Financing Statement naming the Borrovver as" Debtor'' and the Issuer as "Secured Party" to be filed with the California Secretary of State (the "Borrovver Financing Statements") in the form presented to us is in adequate and legally sufficient form to perfect a security interest in favor of such party in the right, title and interest of the Borrovver to the Collateral described in the BorrCM1er Financing Statement and the Security Agreement and for which perfection may occur by the fi I i ng the B orrovver Fi nanci ng Statement with the Secretary of State for the State of California (the "Borrovver Collateral"). Assuming that the Borrovver Financing Statement is duly filed with the Secretary of State for the State of California in accordance with the provisions of Section 9516(a) of the California Uniform Commercial Code, the Issuer wi 11 have a perfected security interest in the B orrovver Col I ateral.

C-2 4828--6890-5659.6

TO:

RE:

DATE:

EXHIBIT D

FORM OF REPORTING CERTI Fl CATE

Farmers and Merchants Bank of Long Beach

Loan Agreement, dated as of J une 1, 2020, by and among Farmers and Merchants Bank of Long Beach, California Municipal Finance Authority and Harbor Day

School (the" Loan Agreement")

[Date]

The undersigned Authorized BorrCMter Representative hereby certifies as of the date hereof that [he/she] is the [ ____________________ _] of the Borrovver, and that, as such, [he/she] is authorized to execute and deliver this Certificate to the Lender on the behalf of the B orrovver, and that:

1. The B orrCMter has delivered the year-end audited financial statements required by Section 7.0S(a) of the Loan Agreement for the fiscal year ended as of the above date.

2. A review of the activities of the Borrovver during such fiscal year has been made under the supervision of the undersigned with a view to determining whether during such fi seal year the B orrCMter performed and observed al I its obi igations under the Loan Agreement, and

[select one:]

[ to the best knovvl edge of the undersigned, during such fi seal year the B orrCMter performed and observed each covenant and condition of the Loan Agreement applicable to it, and no Default has occurred and is continuing.]

-or-

[to the best knCMtledge of the undersigned, the follovving covenants or conditions have not been performed or observed and the follovving is a list of each such Default and its nature and status:]

3. The financial covenant analyses and information set forth on Schedule A attached hereto are true and accurate on and as of the date of this Certificate.

4. To the best current knovvledge of the undersigned, no Event of Taxability has occurred [or will occur prior to the date of the next upcoming Certificate to be delivered by the B orrovver pursuant to the Loan Agreement].

D-1 4828--6890-5659.6

Defined terms used in this certificate shall have the meaning set forth in the Loan Agreement.

4828--6890-5659.6

BORROWER:


By~~~~~~~~~~~~~~~~ [Name], [Title]

By~~~~~~~~~~~~~~~~ [Name], [Title]

D-2

Schedule A

Financial Staterrent Date: [ ________ , ___ _] ("Staterrent Date'')

Section 7.16 - Unencumbered Liquid Assets.

(a) Total Unencumbered Liquid Assets of Borrovver:'' $ _________ _

(b) cash, cash equivalents and marketable securities: $ _________ _

(c) less permanently restricted assets: $ _________ _

(d) less deferred revenue: $ ________ _

(e) less retirement accounts: $ _________ _

(f) less restricted stock: $ _________ _

(g) less any assets described above pledged to the Lender for other loan or facility: $ ________ _

(h) Net Unencumbered Liquid Assets: $ _________ _

Minimum Unencumbered Liquid Assets Required By Loan Agreement: an amount equal to $5,()()(),()()().

Is the Borrovver in compliance with Section 7.16? Yes _____ No

* The Borrower shall attach to this certificate copies of all relevant bank and brokerage statements in support of the

information reported in this Schedule A.

D-3 4828--6890-5659.6

EXHIBIT E

FORM OF DRAW REQUEST /REQUEST FOR ADVANCE

Newport Beach Commercial RE #290 Date

Draw# Amount $

BorrONer:

Job Site Address:

Loan#

Pl ease deposit funds to Farmers & Merchants

Bank Account# ------------------------------By signing belON, I certify that I understand that under the laws of the State of California, anyone who performs labor on the job site must be covered by Worker's Compensation Insurance. Additionally, I certify that I have named Farmers & Merchants Bank as an "additional insured" on lily' policy of Liability Insurance in accordance with the loan documents. Additionally, the undersigned makes the representations and warranties in Exhibit A attached hereto. Capitalized terms shal I have the meanings ascribed thereto in the Loan Agreement.

FARMERS & MERCHANTS BORROWER: BANK

By

Authorized Signer (Name & Title)

FARMERS & MERCHANTS BANK

Credit A dni ni strati on Approval

Date

Approved by:

Manager Approval

BorrONer: Please provide the follONing items with your draw request: Hard costs: contractor's progress billing statement, including spreadsheet; conditional lien release for current draw request; unconditional lien release for previous draw request.

Soft/miscellaneous costs: copies of receipts, invoices or other proof of expenses.

Bank use:

122 Endorsement date:

I nspecti on date:

E-1 4828--6890-5659.6

EXHIBIT A

The B orrCMter certifies that ( a) the obi i gati on to make such payment was incurred by the Borrovver in connection with the development, construction, installation, equipping and furnishing of the Property, is a proper charge against the Development B udget, and has not been the basis for any prior requisition which has been paid; (b) neither the BorrCMter nor, to the best of the BorrCMter's knovvledge, the Issuer has received written notice of any lien, right to lien or attachment upon, or claim affecting the right of such payee to receive payment of, any of the money payable under this requi si ti on to any of the persons, firms or corporati ans named herein, or if any notice of any such lien, attachment or claim has been received such lien, attachment or claim has been rel eased or discharged or wi 11 be rel eased or discharged upon payment of this requisition; (c) this requisition contains no items representing payment on account of any retai ned percentages which the B orrCMter is enti tied or requi red to retain at this date under the Loan Agreement or the Disbursement Agreement; (d) subject to the last sentence of this paragraph, the payment of this requisition will not result in (i) less than substantially all (95% or more) of the proceeds of the Issuer Loan Obligation to be expended under this requisition and under all prior requisitions having been used for the acquisition and installation of real property or property of a character suqj ect to the al I CMtance for depreciation under the I nternal Revenue Code of 1986, as amended ( the "Code") or (ii) more than 2% of the proceeds of the Issuer Loan Obi i gati on having been used to pay for issuance costs within the meaning of 5 ecti on 147( g) ( 1) of the Code; (e) the payment of this requisition will not, taking into account the current aggregate principal amount of the Loan outstanding, cause the aggregate principal amount outstanding to exceed the Loan Commitment Amount; (f) no" Event of Default," or event which after notice or I apse of ti me or both would constitute such an " Event of Default" under the Loan Agreement has occurred and not been waived and (g) the advance will be paid prior to _____ _

The B orrovver represents, covenants and warrants that ( a) there has not been any Material Adverse Change, (b) all of its representations and warranties contained in the Loan Agreement were true and accurate as of the date made, remain true and accurate as of the date of this certificate and are hereby reaffirmed; and (c) no event has occurred and is continuing or would result from the loan of proceeds of the Issuer Loan Obligation pursuant to this Draw Request which constitutes a Default, an Event of Default or a Determination of Taxability, and no condition exists which, after notice or lapse of time, or both, would constitute an Event of Default or an Event of Taxability.

[The fol I CMti ng paragraph is to be completed when any requisition and certificate includes any item for payment for labor orto contractors, builders or material men.]

[I hereby certify that insofar as the amount covered by the above requisition includes payments to be made for I abor or to contractors, bui I ders or material men, including materials or supplies, in connection with the development, construction, installation, equipping and furnishing of the Property, (i) all obligations to make such payment have been properly incurred, (ii) any such labor was actually performed and any such materials or supplies were actually furnished or installed in or about the Property and are a proper charge against the Development B udget, and ( i i i) such materials or suppl i es either are not subject to any I i en or security i nterest or, if the same are so subject, such lien or security interest will be released or discharged upon payment of this requisition.]

E-2 4828--6890-5659.6

EXHIBITF

FORM OF ASSIGNMENT LETTER

----------· 20 _

Harbor Day School Corona Del Mar, California


Re: $20,000,000 California Municipal Finance Authority, 2020 Loans


The undersigned, a duly authorized representative of [Lender] ( the " Bank'') hereby advises you that pursuant to Section 10.01 of the Loan Agreement dated as of June 1, 2020 by and among the Bank, the California Municipal Finance Authority and you as Borrovver (the " Loan Agreement"), a 1 CXJ>/o parti ci pati on i nterest i n the I oan which is evidenced i n the Loan Agreement in the aggregate principal amount of$[ _______ _] (the" Loan") has been assigned on this date to [AF FI LI A TE], a whol ly--Ql\fned subsidiary of the Bank. [The Bank wi 11 act as servicer for the Loan.]

AcknCMtledged:

HARBOR DAY SCHOOL

By~~~~~~~~~~ Authorized Representative

[LENDER]

By~~~~~~~~~~~~~~ Authorized Representative


F-1

4828--6890-5659.6

EXHIBIT G

AGGREGATE PRINCIPAL AMOUNT OF LOANS OUTSTANDING

Date

Closing Date

TOTAL

4828--6890-5659.6

Draw Request No.

Amount($) of Draw (Request)

G-1

AggregateAmount of Loan Outstanding

4828--6890-5659.6

EXHIBIT H

PHASING MAP OF PROJECT

H-1

H-2

4828--6890-5659.6

EXHIBIT I PLEDGE SCHEDULE

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Donor Date Type

Pledge Dates of PI edge Amounts of Pledge Date of Final Identification Amount Payments Payments Payment

1-1

EXHIBITJ

FORM OF DONOR ACKNOWLEDGEMENT AND REAFFIRMATION

Date

Addressee

Dear [First names],

Thank you for your extraordinary commitment to Harbor Day School and its future campus. N ovv more than ever, we have come to appreciate the importance of ' pl ace' in the equation that leads to an outstanding educational experience. We want the best for our students and faculty, and your gift is making the nevv facility a reality.

We are in the final stages of securing a I oan with Farmers & Merchants Bank of Long Beach that allCMts us to begin construction immediately and maintain our previously planned occupation of Phase I classrooms in the 2021-2022 school year. As a part of this process, our lender is asking our committed families to certify their pledge status. Please find belovv the details we have to date.

We ask that you sign and post this page with the enclosed envelope. Should you wish to speak with the bankers directly, please reach out to our contact belovv:

Rick Robinson First Vice President, Rel ati onshi p Manager Farmers & Merchants Bank Tel. ( 949) 999-4110 I M obi I e ( 949) 291-7236 2411 East Coast Hwy Suite 300, Coronadel Mar, CA 92625 rick. robi [email protected]

If you have any additional questions or would like an update on the project at any time, I look forward to speaking with you.

Sincerely,

A ngi Evans' 75 Head of School

I Pledged Gift

Signature

Date

I Received to date I Remaining Balance I Date of completion

On behalf of

J-1

RESOLUTION NO. 20-066

A RESOLUTION OF THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY AUTHORIZING ONE OR MORE TAX-EXEMPT LOANS IN A PRINCIPAL AMOUNT NOT TO EXCEED $55,000,000 TO FINANCE THE DEMOLITION AND CONSTRUCTION OF CERTAIN EDUCATIONAL FACILITIES FOR THE BENEFIT OF HARBOR DAY SCHOOL, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION, AND OTHER MATTERS RELATING THERETO.

WHEREAS, pursuant to the provisions of the Joint Exercise of Powers Act, comprising Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 ( commencing with Section 6500) of the Government Code of the State of California (the "JPA Act"), a number of California cities, counties and special districts entered into a joint exercise of powers agreement (the "Agreement") pursuant to which the California Municipal Finance Authority (the "Authority") was organized; and

WHEREAS, the Authority is authorized by the Agreement to issue bonds, notes or other evidences of indebtedness, or certificates of participation in leases or other agreements for all purposes permitted by the JP A Act and described in the Agreement; and

WHEREAS, pursuant to the provisions of the JP A Act, the cities, counties and special districts that are the contracting parties comprising the membership of the Authority are authorized to jointly exercise any power common to such contracting parties, including, without limitation, the power to acquire and dispose of property, both real and personal; and

WHEREAS, Harbor Day School, a California nonprofit public benefit corporation (the "Borrower"), wishes to finance the costs of the demolition of the Borrower's existing facilities and the construction of a new, approximately 100, 000 square foot campus, which will include several buildings, and all associated design, engineering and planning costs related thereto at the Borrower's primary school facility, which is located at 3443 Pacific View Drive, Corona del Mar, California, as well as related capital project costs and paying related expenses incurred with respect to the Loans (as defined below) (collectively, the "Project"), such Project being owned and operated by the Borrower and located in the City of Newport Beach, California (the "City"); and

WHEREAS, the Borrower has requested that the Authority to make one or more tax-exempt loans to the Borrower in a principal amount not to exceed $55,000,000.00 ( the "Loans") to the Borrower to finance the Project; and

WHEREAS, the City is a Member of the Authority and the City is authorized to acquire and dispose of property, both real and personal, pursuant to the provisions of Article 1, Chapter 5, Part 2 of Division 3 of Title 4 of the Government Code of the State of California; and

WHEREAS, the City has by resolution approved the issuance of the Loans by the Authority, following notice and a public hearing as required by Section 147(£) of the Internal Revenue Code of 1986, as amended and Section 4 of the Agreement; and

WHEREAS, pursuant to one or more loan agreements, dated as of May 1, 2020 ( or such other date as approved by the Authority) (the "Loan Agreements"), among the Authority, the Borrower, and Farmers and Merchants Bank of Long Beach, a California banking corporation (or such other commercial bank acceptable to the Borrower) (the "Bank"), the Authority will make the Loans to the Borrower for the purpose, among others, of financing the Project; and

WHEREAS, based on representations of the Borrower, the Borrower is expected to provide significant public benefits to the residents of the City and surrounding communities; and

WHEREAS, there have been placed on file with the Authority prior to this meeting the following documents and agreements:

1. Proposed forms of the Loan Agreements; and

2. Proposed forms of Assignment Agreements, each between the Authority and the Lender (the "Assignment Agreement"); and

WHEREAS, pursuant to California Government Code Section 5852.1, certain information regarding the Loans, attached hereto as Attachment I, has been presented to the Authority by the Borrower based on a good faith estimates by the Lender;

NOW THEREFORE, BE IT RESOLVED by the Board of Directors (the "Board") of the California Municipal Finance Authority, as follows:

Section 1. and correct.

The Board hereby finds and determines that the foregoing recitals are true

Section 2. Pursuant to the JP A Act and the Loan Agreements, the Authority is hereby authorized to make one or more loans to the Borrowers pursuant to the terms of the Loan Agreements in an aggregate principal amount not to exceed $55,000,000. The Loans shall be made and secured in accordance with the terms of and shall be in the form or forms set forth in the Loan Agreements, with such changes, deletions or insertions as may be approved by any member of the Board or the Executive Director of the Authority ( each an "Authorized Signatory") and counsel to the Authority, such approvals being conclusively evidenced by the manual or facsimile execution and delivery thereof.

Section 3. The Loan Agreements, in substantially the form placed on file with the Authority, are hereby approved. Any Authorized Signatory is hereby authorized and directed, for and on behalf of the Authority, to execute and deliver the Loan Agreements in substantially said form, with such changes and insertions therein as such Authorized Signatory, with the advice of counsel to the Authority, may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 4. The Assignment Agreements, in substantially the form placed on file with the Authority, are hereby approved. Any Authorized Signatory is hereby authorized and directed, for and on behalf of the Authority, to execute and deliver the Assignment Agreements in substantially said form, with such changes and insertions therein as such Authorized

Signatory, with the advice of counsel to the Authority, may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 5. Any Authorized Signatory and any agent of the Authority are hereby authorized and directed, jointly and severally, for and in the name and on behalf of the Authority, to execute and deliver any and all documents, including, without limitation, any and all documents and certificates to be executed in connection with securing credit support, if any, for Loans, and to do any and all things and take any and all actions which may be necessary or advisable, in their discretion, to effectuate the actions which the Authority has approved in this Resolution; provided that no such documents or certificates shall create any obligation or liability of the Authority other than with respect to the revenues and assets derived from the proceeds of the Loans or otherwise securing the Loans under the financing documents described and authorized herein.

Section 6. Any Authorized Signatory, acting alone, is hereby authorized to execute and deliver future amendments to the documents authorized to be executed and delivered pursuant to this Resolution ("Authorized Documents"), without further action of the Authority, for the purpose of: (i) adding to the covenants and agreements of the Borrowers; (ii) assigning or pledging additional security for the Loan Agreements which security shall be provided by the Borrowers; (iii) curing any ambiguity, inconsistency or omission or supplementing any defective provisions of the Authorized Documents; (iv) providing for any additional procedures, covenants or agreements necessary to maintain the tax-exempt status of interest on the Loans; (v) modifying the provisions relating to the Loans pursuant the Loan Agreements, providing such amendments (1) are made pursuant to a written request of the Borrowers, (2) are made pursuant to the terms of the Loan Agreements, (3) are consistent with such documents, ( 4) do not require the consent of the holders of the lenders which consent has not already been obtained, ( 5) will not result in a reissuance of the Loans for federal income tax purposes, as evidenced by a letter from qualified bond counsel delivered to the Authority, and ( 6) do not provide for any additional duties or costs with respect to the Authority for which the Borrowers do not agree in advance to reimburse or indemnify the Authority therefor.

Section 7. All actions heretofore taken by any Authorized Signatory and other appropriate officers, attorneys and agents of the Authority with respect to the Loan Agreements are hereby ratified, confirmed and approved.

Section 8. This Resolution shall take effect from and after its adoption.

PASSED AND ADOPTED by the California Municipal Finance Authority this 15th day of May, 2020 by the following vote:

AYES: Adams, Alexander (Alt.), Connors, De Foor (Alt.), Watanabe

NOES: None

ABSENT: None

ABSTAIN: McCarthy, Moreno

* * * * *

I, the undersigned, a duly authorized official of the California Municipal Finance Authority, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Board of said Autl1o~ty at a duly called meeting of the Board of said Authority held in ~:9cordance with law on May 1,. 2020. _..../···--1 /'J /l /

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Authorizea g:ignatory By:

[Authorizing Resolution -Harbor Day School]

ATTACHMENT I PUBLIC DISCLOSURES RELATING TO CONDUIT REVENUE OBLIGATIONS

Pursuant to California Government Code Section 5852.1 (the "Code Section"), Harbor Day School, a California nonprofit public benefit corporation ( the "Borrower"), has provided the following required information to the California Municipal Finance Authority (the "Issuer"), as conduit financing provider, prior to the Issuer's regular meeting on May 15, 2020 (the "Meeting") of its Board of Directors (the "Board") at which Meeting, the Board will consider the authorization of conduit revenue obligations in the aggregate principal amount not to exceed $55,000,000 (the "Loans").

For purposes of meeting the requirements of the Code Section, the Borrower has made the following assumptions:

• Payments made under the Loan Agreement are based on a draw on the full amount of the Loan at closing, no prepayments are made until the applicable Maturity Date, and the interest rate does not change through the term of the Loan. The Loan Agreement provides that the Borrower will draw on the Loan as construction progresses and the Loan may be prepaid at any time, and the interest rate in month 181 from the Closing Date is subject to change, therefore the actual interest cost could vary significantly.

• Payments made under the Subordinate Loan Agreement are based on a single draw two years from the Closing Date, and no principal payments are made until the applicable Maturity Date. The Subordinate Loan Agreement provides that the Borrower needs to meet certain Pledge Receipt requirements to draw on the Subordinate Loan and such Loan is expected to be paid off prior to maturity when sufficient Pledge Receipts are received. Therefore, the actual interest cost can vary significantly.

• For purposes of calculating the True Interest Cost, any Lender closing fees have not been treated as Original Issue Discount. Such fees may be treated as Original Issue Discount at closing and would impact the True Interest Cost calculation. The actual True Interest Cost will also vary depending on upon dates when draws on each of the Loans occur, and, if and when prepayments are made.

Based on the above assumptions, the required good faith estimates provided by the Borrower relating to the Loans are as follows:

A The true interest cost of the Loans, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Loans (to the nearest ten-thousandth of one percent): 3.143%

B. The finance charge of the Obligations, which means the sum of all fees and charges paid to third parties: $350,000

C. The amount of proceeds received by the public body for sale of the Obligations less the finance charge of the Obligations described in subparagraph (B) and not including any capitalized interest paid or funded with proceeds of the Obligations: $44,650,000

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D. The total payment amount, which means the sum total of all payments the Borrower will make to pay debt service on the Loan plus the finance charge of the Loans described in subparagraph (B) not paid with the proceeds of the Loans (which total payment amount shall be calculated to the final maturity of the Loans): $64,763,000

The good faith estimates provided above were based on the information which was presented to the governing board of the Borrower, or presented to the official or officials or committee designated by the governing board of the Borrower to obligate the Borrower in connection with the Obligations or, in the absence of a governing board, presented to the official or officials of the Borrower having authority to obligate the Borrower in connection with the Obligations.

The foregoing estimates constitute good faith estimates only. The actual principal amount of the Loans issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to a variety of factors.

The Issuer is authorized to make this document available to the public at the Meeting of the Issuer.

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