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2015-1637

WHEREAS, the Facilities are located within the territorial limits of the County of San Diego (the "County") and the Board of Supervisors of the County (the "Board'') is the elected legislative body of the County; and

WHEREAS, the Authority and the Borrower have requested that the Board approve the issuance of the Obligations and the financing and refinancing of the Facilities with the proceeds of the Obligations solely for purposes of complying with Section 147(f) of the Code and the Act; and

WHEREAS, a public hearing was held by the Board on this 4th day of A~ 2015, at the meeting which commenced at the hour of 9:00 a.m., in the Board Chambers, 1600 Pacific Highway, Room 310, San Diego, California, following duly published notice thereof in a newspaper of general circulation in the County of San Diego, on July 21, 2015, and all persons desiring to be heard have been heard; and

WHEREAS, it is intended that this Resolution shall comply with the public approval requirements of Section 147(f) of the Code; provided, however, that this Resolution is neither intended to nor shall it constitute an approval by the Board of the Facilities for any other purpose, ·including, but not limited to, compliance with the California Environmental Quality Act (California Public Resources Code, Section 21100, et seq.) (''CEQA'');

NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the Board of Supervisors of the County of San Diego, State of California as follows:

Section 1. The foregoing resolutions are true and correct

Section 2. The Board hereby approves the issuance of the Obligations by the Authority which Obligations may be tax-exempt and/or taxable as approved by the Authority in its resolution, in an amount not to exceed $23,500,000 to finance and refinance the cost of the Facilities. This resolution shall constitute ''host" approval of the issuance of the Obligations within the meaning of Section 147(f) of the Code and shall constitute the approval of the issuance of the Obligations within the meaning of the Act; provided, however, that this Resolution shall not constitute an approval by the Board of Supervisors of the Facilities for any other purposes, including compliance thereof with CEQ A, nor does it constitute an approval of the underlying credit or financial structure of the Obligations. The County shall not bear any responsibility for the issuance of the Obligations, the tax-exempt status of the Obligations, the repayment of the Obligations or any other matter related to the Obligations.

Section 3. All actions heretofore taken by the officers, employees and agents of the County with respect to the approval of the issuance of the Obligations are hereby approved, confirmed and ratified, and the officers and employees of the County and their authorized deputies and agents are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all certificates and documents which they or bond counsel may deem necessary or advisable in order to consummate the issuance of the Obligations and otherwise to effectuate the purposes of this Resolution.

2

Section 4. The adoption of this Resolution shall not obligate the County or any department thereof to (i) provide any financing for the Facilities; (rl) approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the acquisition, construction, rehabilitation or operation of the Facilities; or (iii) make any contribution or advance any funds whatsoever to the Authority.

Section 5. The officers of the County are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing transaction approved hereby.

Section 6. This Resolution shall take effect immediately upon its adoption.

APPROVED AS TO FORM AND LEGALITY THOMAS E. MONTGOMERY, COUNTY COUNSEL

By: RACHEL H. wriT, SENIOR DEPUTY

ON MOTION of Supervisor R. Roberts, seconded by Supervisor Jacob, the above Resolution was passed and adopted by the Board of Supervisors, County of San Diego, State of California, on this 4th day of August, 2015, by the following vote:

AYES: Cox, Jacob, D. Roberts, R. Roberts, Hom

STATE OF CALIFORNIA) County of San Diego )88

I hereby certify that the foregoing is a full, true and correct copy of the Original Resolution entered in the Minutes of the Board of Supervisors.

DAVID HALL Clerk ofthe Board of Supervisors

By: b1 ?'YY'CI IA.J~?..-.. Diana Lopez, De uty

Resolution No. 15-105 Meeting Date: 08/04/15 (13)

3

MASTER LOAN AGREEMENT

among

MUFG UNION BANK, N.A.,

as the Lender

and

CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY,

as the Issuer

and

ST. AUGUSTINE’S SCHOOL OF SAN DIEGO,

as the Borrower

Dated as of October 1, 2015

2015-1637

ARTICLE I

DEFINITIONS ............................................................. 2

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS OF ISSUER AND BORROWER

Section 2.01. Representations, Warranties and Covenants of the Issuer ............................. 16

Section 2.02. Representations, Warranties and Covenants of the Borrower ....................... 17

ARTICLE III

ISSUANCE OF LOAN; APPLICATION OF PROCEEDS

Section 3.01. Loan To Refinance the Prior Obligations and Finance the

Improvements ................................................................................................ 23

Section 3.02. Establishment and Application of Project Fund ............................................ 24

Section 3.03. Term ............................................................................................................... 26

Section 3.04. Costs and Expenses of the Issuer ................................................................... 26

Section 3.05. Limited Obligations of the Issuer .................................................................. 27

Section 3.06. Invalidity of the Borrower Loans ................................................................... 28

ARTICLE IV

REPAYMENT OF THE LOANS

Section 4.01. Interest............................................................................................................ 28

Section 4.02. Payments ........................................................................................................ 29

Section 4.03. Draws ............................................................................................................. 29

Section 4.04. Security for the Loan ..................................................................................... 29

Section 4.05. Deed of Trust ................................................................................................. 30

Section 4.06. Payment on Non Business Days .................................................................... 31

Section 4.07. Borrower Payments to Be Unconditional ...................................................... 31

Section 4.08. Prepayments ................................................................................................... 31

Section 4.09. Restrictions on Transfer of Loans .................................................................. 33

Section 4.10. Repayment of Principal.................................................................................. 34

Section 4.11. Loan Fee......................................................................................................... 34

Section 4.12. Late Charge .................................................................................................... 34

Section 4.13. Default Rate ................................................................................................... 34

Section 4.14. Increased Costs .............................................................................................. 35

Section 4.15. Net of Taxes, Etc............................................................................................ 36

ARTICLE V

CONDITIONS PRECEDENT

Section 5.01. Conditions Precedent to Loan Agreement ..................................................... 37

Section 5.02. Conditions Precedent to Subsequent Draw Requests .................................... 40

Section 5.03. Limitations to Disbursement .......................................................................... 41

ii

ARTICLE VI

SECURITY INTEREST

Section 6.01. Change in Name or Corporate Structure of the Borrower; Change in

Location of the Borrower’s Principal Place of Business ............................... 42

Section 6.02. Security Interest ............................................................................................. 42

Section 6.03. Assignment of Insurance................................................................................ 42

ARTICLE VII

AFFIRMATIVE COVENANTS OF BORROWER

Section 7.01. Maintenance of Facilities ............................................................................... 43

Section 7.02. Compliance with Laws and Obligations ........................................................ 43

Section 7.03. Payment of Taxes and Other Claims ............................................................. 44

Section 7.04. Insurance; Indemnity ..................................................................................... 44

Section 7.05. Reporting Requirements ................................................................................ 47

Section 7.06. Books and Records; Inspection and Examination ......................................... 49

Section 7.07. Performance by the Lender ............................................................................ 49

Section 7.08. Preservation of Existence ............................................................................... 50

Section 7.09. No Liability for Consents or Appointments................................................... 50

Section 7.10. Non-Liability of the Issuer ............................................................................. 50

Section 7.11. Expenses ........................................................................................................ 50

Section 7.12. No Personal Liability ..................................................................................... 51

Section 7.13. Borrower Indemnification of the Issuer ......................................................... 51

Section 7.14. Borrower Indemnification of the Lender ....................................................... 53

Section 7.15. Covenant to Enter into Agreement or Contract to Provide Ongoing

Disclosure ...................................................................................................... 54

Section 7.16. Financial Covenants ....................................................................................... 54

Section 7.17. Deposit Relationship ...................................................................................... 54

Section 7.18. Tax Covenants of the Issuer and the Borrower .............................................. 55

Section 7.19. Office of Foreign Assets Control; Patriot Act Compliance ........................... 57

Section 7.20. Compliance With Documents ........................................................................ 57

Section 7.21. Compliance with ERISA................................................................................ 58

Section 7.22. Environmental Laws ...................................................................................... 58

ARTICLE VIII

NEGATIVE COVENANTS OF BORROWER

Section 8.01. Lien ................................................................................................................ 58

Section 8.02. Sale of Assets ................................................................................................. 58

Section 8.03. Consolidation and Merger.............................................................................. 59

Section 8.04. Accounting ..................................................................................................... 59

Section 8.05. Transfers ........................................................................................................ 59

Section 8.06. Other Indebtedness......................................................................................... 59

Section 8.07. Other Defaults ................................................................................................ 59

Section 8.08. Prohibited Uses .............................................................................................. 60

Section 8.09. Use of Facilities ............................................................................................. 60

Section 8.10. Maintenance of Business ............................................................................... 60

iii

Section 8.11. Restrictive Agreements .................................................................................. 60

Section 8.12. Tax Exempt Status ......................................................................................... 60

Section 8.13. Federal Reserve Board Regulations ............................................................... 60

Section 8.14. Swap Agreements .......................................................................................... 60

Section 8.15. Loan Documents ............................................................................................ 60

Section 8.16. Formation of Subsidiaries and Affiliates ....................................................... 60

ARTICLE IX

DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS

Section 9.01. Eminent Domain ............................................................................................ 61

Section 9.02. Application of Net Proceeds .......................................................................... 61

ARTICLE X

ASSIGNMENT, PARTICIPATION, MORTGAGING AND SELLING

Section 10.01. Assignment by the Lender ............................................................................. 62

Section 10.02. No Sale, Assignment or Leasing by the Borrower ........................................ 62

ARTICLE XI

EVENTS OF DEFAULT AND REMEDIES

Section 11.01. Events of Default ........................................................................................... 62

Section 11.02. Remedies on Default ...................................................................................... 65

Section 11.03. The Lender’s Right to Perform the Obligations ............................................ 67

Section 11.04. No Remedy Exclusive.................................................................................... 67

ARTICLE XII

MISCELLANEOUS

Section 12.01. Disclaimer of Warranties ............................................................................... 67

Section 12.02. Limitations of Liability .................................................................................. 68

Section 12.03. Additional Payments to the Lender................................................................ 68

Section 12.04. Notices ........................................................................................................... 69

Section 12.05. Binding Effect; Time of the Essence ............................................................. 70

Section 12.06. Severability .................................................................................................... 70

Section 12.07. Amendments .................................................................................................. 70

Section 12.08. Execution in Counterparts.............................................................................. 70

Section 12.09. Applicable Law .............................................................................................. 70

Section 12.10. Jury Trial Waiver ........................................................................................... 70

Section 12.11. Captions ......................................................................................................... 71

Section 12.12. Entire Agreement ........................................................................................... 71

Section 12.13. Waiver ............................................................................................................ 71

Section 12.14. Survivability ................................................................................................... 71

Section 12.15. Usury .............................................................................................................. 71

Section 12.16. Third Party Beneficiary.................................................................................. 72

Section 12.17. Further Assurance and Corrective Instruments.............................................. 72

Section 12.18. Dispute Resolution; Provisional Remedies .................................................... 72

Section 12.19. Arm’s Length Transaction ............................................................................. 73

iv

Section 12.20. Patriot Act ...................................................................................................... 73

EXHIBIT A PROPERTY DESCRIPTION .....................................................................................

EXHIBIT B FORM OF INVESTOR LETTER ...............................................................................

EXHIBIT C MATTERS TO BE ADDRESSED IN OPINION OF COUNSEL OF BORROWER

EXHIBIT D-1 SCHEDULE OF SERIES A LOAN PRINCIPAL PAYMENTS ............................

EXHIBIT D-2 SCHEDULE OF SERIES B LOAN PRINCIPAL PAYMENTS ............................

EXHIBIT E ASSIGNMENT LETTER ...........................................................................................

EXHIBIT F FORM OF PROJECT FUND DRAW REQUEST ......................................................

EXHIBIT G AGGREGATE PRINCIPAL AMOUNT OF SERIES B LOAN OUTSTANDING ..

EXHIBIT H FORM OF REPORTING CERTIFICATE .................................................................

EXHIBIT I FORM OF CERTIFICATE OF COMPLETION .........................................................

MASTER LOAN AGREEMENT

THIS MASTER LOAN AGREEMENT, dated as of October 1, 2015 (this “Loan

Agreement”), among MUFG UNION BANK, N.A., a national banking association (as further

defined herein, the “Lender”), CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY

(the “Issuer”), a public entity duly organized and validly existing under the laws of the State of

California (the “State”), as issuer, and ST. AUGUSTINE’S SCHOOL OF SAN DIEGO, a

California nonprofit religious corporation (as further defined herein, the “Borrower”).

W I T N E S S E T H :

WHEREAS, the Issuer is a joint exercise of powers authority organized and operating

under the provisions of Article 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 (the “Act”); and

WHEREAS, the Issuer is authorized by the Act to issue bonds, notes or other

evidences of indebtedness, or certificates of participation in leases or other agreements, or

enter into loan agreements to, among other things, finance or refinance facilities owned

and/or leased and operated by organizations described in Section 501(c)(3) of the Internal

Revenue Code of 1986, as amended (the “Code”); and

WHEREAS, the County of San Diego is an associate member of the Issuer; and

WHEREAS, in furtherance of the purposes of the Issuer set forth above, the Issuer

proposes to finance and refinance the cost of design, acquisition, construction, installation,

equipping or furnishing of the Project (as defined herein) on the real property described in

Exhibit A hereto to be owned and operated by the Borrower; and

WHEREAS, the Borrower is a nonprofit religious corporation duly incorporated and

existing under the laws of the State, and an organization described in Section 501(c)(3) of the

Code (as defined herein);

WHEREAS, the Borrower desires to finance and refinance the Project from time to time

on the terms and conditions set forth below;

WHEREAS, in order to finance and refinance the Project, the Issuer intends to issue two

tax-exempt obligations to the Lender (as further defined herein, the “Issuer Loan Obligations”),

the interest on each of which shall 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

Borrower (as further defined herein, the “Borrower Loans”); and

WHEREAS, for and in consideration of the Borrower Loans, the Borrower agrees, inter

alia, to make loan payments (as further defined herein, 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

WHEREAS, the Issuer will assign the Payments due under the Borrower Loans pursuant

to this Loan Agreement (except any payments due to the Issuer pursuant to Reserved Issuer

2

Rights (as hereinafter defined)) to the Lender to satisfy the Issuer’s obligations under the Issuer

Loan Obligations; and

WHEREAS, the Borrower shall make Payments directly to the Lender as assignee of the

Issuer; and

WHEREAS, the Issuer, the Lender and the Borrower have duly authorized the execution

and delivery of this Loan Agreement;

NOW, THEREFORE, in consideration of the payments to be made hereunder and the

mutual covenants contained herein, the parties agree as follows:

ARTICLE I

DEFINITIONS

The following terms used herein will have the meanings indicated below unless the

context clearly requires otherwise.

“Act” means the Joint Powers Act, comprising Articles 1, 2, 3, and 4, of Chapter 5 of

Division 7 of Title 1 of the Government Code of the State (commencing with Section 6500), as

now in effect.

“Additional Payments” means the amounts, other than Payments, payable by the

Borrower pursuant to the provisions of this Loan Agreement, including, without limitation, the

Issuer Fees and Expenses, amounts pursuant to Section 12.03 hereof, indemnity payments and

reimbursement of advances due hereunder.

“Affiliate” means, with respect to any Person, any Person that directly or indirectly

through one or more intermediaries, controls, or is controlled by, or is under common control

with, such first Person. A Person shall be deemed to control another Person for the purposes of

this definition if such first Person possesses, directly or indirectly, the power to direct, or cause

the direction of, the management and policies of the second Person, whether through the

ownership of voting securities, common directors, trustees or officers, by contract or otherwise

and, with respect to the Lender, includes any affiliate of the Lender or any related entity, 100%

of whose common stock or ownership interests is directly or indirectly owned by the Lender.

“Anti-Terrorism Laws” has the meaning set forth in Section 2.02(y) hereof.

“Applicable Factor” means (i) during the period from and including the Closing Date

through the Initial Prepayment Date, 70%; and (ii) during any other period, 70%, or, with a

favorable opinion of Special Counsel, such other percentage as may be designated in writing by

the Lender as the Applicable Factor for such period pursuant to Section 4.08(e) hereof.

“Applicable Loan Rate” means, with respect for each Interest Period, the interest rate per

annum established on each Computation Date equal to the product of (x) sum of (a) the

Applicable Spread plus (b) the product of (i) the LIBOR Rate and (ii) the Applicable Factor and

(y) the Margin Rate Factor.

3

“Applicable Spread” means the following:

(a) During the period from and including the Closing Date through the Initial

Prepayment Date, one hundred seven basis points (1.07%).

(b) During any period after any Prepayment Date, the number of basis points

determined by the Market Agent on or before the first day of such period and designated by the

Borrower in accordance with Section 4.08(e) hereof that, when added to the product of the

LIBOR Index multiplied by the Applicable Factor (and multiplied by the Margin Rate Factor), as

applicable, would equal the minimum interest rate per annum that would enable the Loans to be

sold or advanced on such date at a price equal to the principal amount thereof (without regard to

accrued interest, if any, thereon).

“Architect” means the architect for the Improvements selected by the Borrower, and its

successors and assigns.

“Assignment Agreement” means the Assignment Agreement, dated as of October 1, 2015,

between the Issuer and the Lender.

“Authorized Borrower Representative” means any two or more of the Prior Provincial of

the Province of St. Augustine in California of the Order of St. Augustine, the President of the

Borrower’s St. Augustine High School, and the Executive Director of Finance and Facilities of

the Borrower, or any other person designated in writing by the Members of the Borrower to

Lender and the Issuer; provided; however, that solely for purposes of making draws under the

Series B Borrower Loan, only one Authorized Borrower Representative need sign a Project Fund

Draw Request.

“Borrower” means (a) St. Augustine’s School of San Diego, a California nonprofit

religious 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

assignee(s) of the Borrower permitted pursuant to the terms of this Loan Agreement.

“Borrower Documents” means this Loan Agreement, the Deed of Trust, Environmental

Compliance Agreement, the Project Fund Disbursement Agreement and the Tax Regulatory

Agreement.

“Borrower Loans” means, collectively, the Series A Borrower Loan and the Series B

Borrower Loan made to the Borrower from the Issuer pursuant to this Loan Agreement.

“Business Day” means a day other than a Saturday or Sunday on which banks in the State

of California are open for business for the funding of corporate loans; provided however, that

when used in connection with any LIBOR Rate determination, “Business Day” means a day

which is also both (i) a day on which dealings in U.S. Dollar deposits in London, England, may

be carried on by the Lender; and (ii) a day which is not a Saturday or Sunday on which banks in

New York City, New York, are open for business for the funding of corporate loans.

“Capital Campaign Contributions” means contributions and pledges associated with any

capital campaign of the Borrower.

4

“Change in Law” means the occurrence, after the Closing Date, of any of the following:

(a) the adoption or taking effect of any Law, including, without limitation, Risk-Based Capital

Guidelines, (b) any change in any Law or in the administration, interpretation, implementation or

application thereof by any Governmental Authority or (c) the making or issuance of any request,

rule, ruling, guideline, regulation or directive (whether or not having the force of law) by any

Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the

Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, ruling,

guidelines, regulations or directives thereunder or issued in connection therewith and (ii) all

requests, rules, rulings, guidelines, regulations or directives promulgated by the Bank for

International Settlements, the Basel Committee on Banking Supervision (or any successor or

similar authority) or the United States of America or foreign regulatory authorities shall in each

case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

“Closing Date” means October 1, 2015, subject to the satisfaction of, or waiver by the

Lender, of the conditions precedent set forth in Section 5.01 hereof.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Collateral” means the Project Fund Collateral (as defined in Section 4.04 hereof).

“Completion Notice” means a certificate stating that the Improvements are complete and

that no further Draw Requests will be submitted.

“Computation Date” means the second Business Day immediately preceding each Reset

Date.

“Contractor” means, collectively or severally, as the context thereof shall suggest or

require the General Contractor and any other person or entity with whom the Borrower contracts

for the construction of the Improvements or any portion thereof.

“Contracts and Permits Assignment Agreements” means, collectively, the (a) Assignment

of Architect’s Agreement and Plans and Specifications, dated as of even date herewith, by the

Borrower for the benefit of the Issuer and consented to by the Architect, and (b) Assignment of

Construction Contract, dated as of even date herewith, by the Borrower for the benefit of the

Issuer and consented to by the General Contractor, in each case, which is being assigned to the

Lender pursuant to the Assignment Agreement.

“Controlled Group” means all members of a controlled group of corporations and all

trades or businesses (whether or not incorporated) under common control which, together with

the Borrower, are treated as a single employer under Section 414 of the Code.

“Debt Service Coverage Ratio” means for each fiscal year, the sum of (i) operating

profits (excluding non-cash contributions and restricted contributions but including unrestricted

cash contributions and cash contributions released from restriction) plus (ii) depreciation plus

(iii) interest expense divided by the sum of (A) the current portion of long-term debt plus (B)

interest expense.

5

“Deed of Trust” means the Construction Deed of Trust, Assignment of Rents, Security

Agreement and Fixture Filing (Construction Trust Deed), dated as of even date herewith,

executed by the Borrower for the benefit of the Issuer, and any modifications thereto with respect

to the real property located at 3266 Nutmeg Street, San Diego, California 92104, which is being

assigned to the Lender pursuant to the Assignment Agreement.

“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 3%, but not to exceed the highest

rate permitted by applicable law.

“Determination of Taxability” means any determination, decision, decree or advisement

by the Commissioner of Internal Revenue, or any District Director of Internal Revenue or any

court of competent jurisdiction, or a written opinion obtained by the Lender and provided to the

Borrower, of nationally recognized bond 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 following:

(a) the date when the Borrower files 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) if upon sale, lease or other deliberate action within the meaning of Treas.

Reg. § 1.141-2(d), the failure to receive an unqualified opinion of Special Counsel to the

effect that such action will not cause interest on the Issuer Loan Obligations to become

includable in the gross income of the recipient.

“Draw Request” means a Project Fund Draw Request substantially in the form attached

hereto as Exhibit F.

“Environmental Compliance Agreement” means the Environmental Compliance

Agreement, dated as of October 1, 2015, by the Borrower for the benefit of the Issuer, which is

being assigned to the Lender pursuant to the Assignment Agreement.

“Environmental Laws” means any federal, state or local law (whether imposed by statute,

or administrative or judicial order, or common law), now 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.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,

and any successor statute of similar import, and regulations thereunder, in each case as in effect

6

from time to time. References to Sections of ERISA shall be construed also to refer to any

successor Sections.

“ERISA Event” means (a) a reportable event (as defined in ERISA) with respect to a

Plan; (b) a withdrawal by the Borrower or any member of the Controlled Group from a Plan

subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as

defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a

withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the

Borrower or any member of the Controlled Group or notification that a Plan is in reorganization;

(d) the filing of a notice of intent to terminate a Plan, the treatment of a Plan amendment as a

termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by

the PBGC to terminate a Plan; (e) an event or condition which constitutes grounds under

Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any

Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC

premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any

member of the Controlled Group.

“Event of Default” has the meaning set forth in Section 11.01 hereof.

“Event of Taxability” means: (a) the application of the proceeds of the Issuer Loan

Obligations, or other amounts treated as “gross proceeds” of the Issuer Loan Obligation, in such

manner that such the Issuer Loan Obligations become an “arbitrage bond” within the meaning of

Code Sections 103(b)(2) and 148, and with the result that interest on such the Issuer Loan

Obligations is or becomes includable in the gross income (as defined in Code Section 61) of the

Holder of the Issuer Loan Obligations; (b) if as the result of any act, failure to act or use of the

proceeds of any portion of the Issuer Loan Obligations or the Project or any misrepresentation or

inaccuracy in any of the representations, warranties or covenants contained in this Loan

Agreement by the Issuer or the Borrower or the enactment of any federal legislation or the

promulgation of any federal rule or regulation or a change in the interpretation of any law after

the date of this Loan Agreement, the interest on the Issuer Loan Obligations is or becomes

includable in a Holder’s gross income (as defined in Code Section 61); (c) any revocation of the

determination letter from the Internal Revenue Service regarding status of the Borrower as a

501(c)(3) corporation or (d) the entry of any decree or judgment by a court of competent

jurisdiction, or the taking of any official action by the Internal Revenue Service or the

Department of the Treasury, which decree, judgment or action shall be final under applicable

procedural law, in either case, which has the effect of causing interest paid or payable on the

Issuer Loan Obligations to become includable, in whole or in part, in the gross income of the

Holder’s for federal income tax purposes with respect to the Loan .

“Excess Interest Amount” has the meaning set forth in Section 4.01(c) hereof.

“Excluded Taxes” means, with respect to the Lender, (a) taxes imposed on or measured

by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of

net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of

which the Lender is organized or in which its principal office is located, and (b) any branch

profits taxes imposed by the United States of America or any similar tax imposed by any other

jurisdiction in which the Borrower is located.

7

“Facilities” means, collectively, (a) the Improvements and all buildings, structures and

other improvements situated, placed or constructed on the Property; and (b) all materials,

apparatus and other items of personal property owned by the Borrower and attached to or

installed in the Facilities, including (without limitation) water, gas, electrical, storm and sanitary

sewer facilities and all other utilities whether or not situated in easements.

“Financed Facilities” means collectively the portion of the Improvements financed with

the proceeds of the Borrower Loans.

“Fiscal Year” means the twelve month period from July 1 through the following June 30.

“GAAP” shall refer to generally accepted accounting principles in the United States as in

effect from time to time.

“General Contractor” means the general contractor for the Improvements selected by the

Borrower, and its successors and assigns.

“Governmental Authority” means the government of the United States of America or any

other nation or any political subdivision thereof or any governmental or quasi-governmental

entity, including any court, department, commission, board, bureau, agency, administration,

central bank, service, district or other instrumentality of any governmental entity or other entity

exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative

powers or functions of or pertaining to government (including any supra-national bodies such as

the European Union or European Central Bank), or any arbitrator, mediator or other Person with

authority to bind a party at law.

“Hazardous Materials” means any

(a) Substance, product, waste or other material of any nature whatsoever

which is or becomes listed, regulated, or addressed pursuant to any or all of the following

statutes and regulations, as the same may be amended from time to time:

(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

1801, 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.;

8

(vii) The California 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.

(pertaining to underground storage of Hazardous Materials);

(x) The California Hazardous Waste Management Act, 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 plans 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

relating to hazardous substances); or

(xiv) All other existing and future federal, state and local laws,

ordinances, rules, regulations, orders, requirements, and decrees regulating,

relating to, or imposing liability or standards of conduct concerning any

hazardous, toxic 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 (iii)

under any reported decisions 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 limitation golf carts and lawn maintenance vehicles); and

(d) Asbestos or asbestos containing materials.

“Holder” means either the Lender or an assignee to which the Loan is assigned pursuant

to Section 10.01 hereof.

“Improvements” means the capital improvements to be financed in part, from time to

time, with proceeds of the Borrower Loans and include a new two story, approximately 51,000

square foot student activities center, a new surface parking lot with approximately 48 parking

spaces, a new athletic practice field and related infrastructure and other ancillary facilities located

at the Property and financed with the Borrower Loans.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

9

“Initial Prepayment Date” means November 1, 2027.

“Interest-Only Period” means, with respect to the Series B Loan, the period from the

Closing Date to (but not including) November 1, 2017.

“Interest Period” means the period from, and including, the first Business Day of each

calendar month to, but excluding, the first Business Day of the next succeeding calendar month;

provided, however, that the first Interest Period shall begin on (and include) the Closing Date and

the final Interest Period shall end on the day next preceding the Maturity Date.

“Issuer” means California Enterprise Development Authority, acting as issuer under this

Loan Agreement.

“Issuer Annual Fee” means $1,500 per year, and payable in accordance with Section 3.04

hereof.

“Issuer Documents” means this Loan Agreement, the Assignment Agreement and the Tax

Regulatory Agreement.

“Issuer Fees and Expenses” means, with respect to this Loan Agreement, the fee payable

to the Issuer for the Issuer’s services in connection with the preparation, review and execution of

this Loan Agreement and the Issuer’s fees, costs and expenses, as further defined in Sections

3.04 and 7.11 hereof.

“Issuer Issuance Fee” means $25,000, payable on the Closing Date.

“Issuer Loan Obligations” means, collectively, the Series A Issuer Loan Obligation and

the Series B Issuer Loan Obligation.

“Law” means any treaty or any federal, regional, state and local law, statute, rule,

ordinance, regulation, code, license, authorization, decision, injunction, interpretation, order or

decree of any court or other Governmental Authority.

“Lender” means (a) MUFG Union Bank, N.A., a national banking association; (b) any

surviving, resulting or transferee corporation of MUFG Union Bank, N.A.; and (c) if this Loan

Agreement and the Issuer Loan Obligations have been assigned by the Lender pursuant to

Section 10.01 hereof, such assignee shall be considered the Lender with respect to this Loan

Agreement and the Issuer Loan Obligations, subject to Section 10.01 hereof.

“Lender Fees” means, with respect to this Loan Agreement, the fees and expenses

payable to the Lender for the Lender’s services in connection with the preparation, review and

execution of this Loan Agreement, any enforcement of this Loan Agreement and such other fees

expenses as further set forth in this Loan Agreement (including, without limitation, those fees

and expenses further defined in Section 12.03 hereof).

“Lender’s Inspector” shall have the meaning set forth in Section 3.02(c) hereof.

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“LIBOR Rate” means the rate of interest per annum determined by the Lender based on

the rate for United States dollar deposits for delivery on the Reset Date for a period equal to one

month as reported on Reuters Screen LIBOR01 page (or any successor page) at approximately

11:00 a.m., London time, on each Computation Date (or if not so reported, then as determined by

the Lender from another recognized source of interbank quotation).

“Lien” shall have the meaning set forth in Section 8.01 hereof.

“Loans” means, collectively, the Series A Loan and the Series B Loan.

“Loan Agreement” means, collectively, this Master Loan Agreement, including the

Exhibits hereto, as any of the same may be supplemented or amended from time to time in

accordance with the terms hereof.

“Loan Documents” means, collectively, this Loan Agreement, the Assignment

Agreement, the Deed of Trust, the Contracts and Permits Assignment Agreements, the

Environmental Compliance Agreement, the Project Fund Disbursement Agreement and the Tax

Regulatory Agreement.

“Loan Proceeds” means the aggregate amount of up to $23,500,000 to be paid or

provided by the Issuer to the Borrower (representing the principal amount of the Loans in an

amount up to $23,500,000).

“Margin Rate Factor” means the greater of (i) 1.0 and (ii) the product of (A) one minus

the Maximum Federal Corporate Tax Rate multiplied by (B) 1.53846. The effective date of any

change in the Margin Rate Factor shall be the effective date of the decrease or increase (as

applicable) in the Maximum Federal Corporate Tax Rate resulting in such change.

“Margin Stock” shall have the meaning assigned to such term in Regulation U

promulgated by the Board of Directors of the Federal Reserve System, as now and hereafter from

time to time in effect.

“Market Agent” means a third-party financial advisory firm, investment banking firm,

commercial bank (including, without limitation, MUFG Union Bank, N.A.) or any other

financial institution with experience in pricing information for tax-exempt municipal securities,

as appointed by the Borrower (with consent of the Lender), which consent shall not be

unreasonably withheld) to act as Market Agent hereunder and the successors thereof.

“Material Adverse Effect” means: (a) a material adverse change in, or a material adverse

effect upon, the operations, business, properties, liabilities (actual or contingent), condition

(financial or otherwise) or prospects of the Borrower; (b) a material impairment of the ability of

the Borrower to perform its obligations under any Loan Document; or (c) a material adverse

effect upon the legality, validity, binding effect or enforceability against the Borrower of any

Loan Document to which it is a party.

“Maturity Date” means (a) November 1, 2047, with respect to the Series A Loan, and (b)

and November 1, 2047, with respect to the Series B Loan.

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“Maximum Federal Corporate Tax Rate” means the maximum rate of income taxation

imposed on corporations pursuant to Section 11(b) of the Code, as in effect from time to time

(or, if as a result of a change in the Code, the rate of income taxation imposed on corporations

generally shall not be applicable to the Lender, the maximum statutory rate of federal income

taxation which could apply to the Lender).

“Net Proceeds” means any insurance proceeds or condemnation award paid with respect

to the Facilities or the Property, to the extent remaining after payment therefrom of all reasonable

expenses incurred in the collection thereof.

“Net Unrestricted Cash and Investments” means the sum of the following unrestricted

(excluding items specifically restricted (whether permanently or temporarily) as to use for a use

that is inconsistent with the payment of debt service on Indebtedness of the Borrower) and

unencumbered items: cash, cash equivalents and long-term marketable and liquid investments

less the aggregate face amount of any short-term indebtedness; provided that unrestricted and

unencumbered cash, cash equivalents, long term marketable securities and liquid investments

shall exclude the following: trustee-held funds, debt service funds, construction funds, debt

service reserve funds, malpractice funds, litigation reserves, self-insurance and captive insurer

funds, deferred revenues, tuition paid in advance, pension and retirement funds and the set aside

or reserve for any liability other than operating expenses, any collateral posted pursuant to the

terms of a Swap Contract and investments that are not readily marketable such as hedge funds,

alternative investments, limited partnerships and equity investments in joint ventures.

“Obligation” means Payments and Additional Payments payable by the Borrower

pursuant to the provisions of this Loan Agreement.

“OFAC” means Office of Foreign Assets Control.

“Other Taxes” means all present or future stamp or documentary taxes or any other

excise or property taxes, charges or similar levies arising from any payment made hereunder or

under any other Loan Document or from the execution, delivery or enforcement of, or otherwise

with respect to, this Loan Agreement or any other Loan Document.

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate

Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. 107 56.

“Payments” means those payments of principal and interest (including, without

limitation, Excess Interest pursuant to Section 4.01(c) hereof) with respect to the Loans

(excluding, Additional Payments, the Issuer Fees and Expenses and Lender Fees payable to the

Lender and the Issuer hereunder) payable by the Borrower pursuant to the provisions of this

Loan Agreement. Payments shall be payable by the Borrower directly to the Lender as assignee

of the Issuer, in the amounts and at the times as set forth in this Loan Agreement.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Permitted Encumbrances” means (a) liens and security interests securing indebtedness

owed by the Borrower to the Issuer and/or the Lender (b) liens arising by reason of good faith

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deposits in connection with tenders, leases of real estate, bids or contracts (other than contracts

for the payment of borrowed 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 Borrower 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) liens arising by reason of good faith deposits made by or to the Borrower in

the ordinary course of business (for other than borrowed money), deposits by the Borrower 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 lien against the Borrower so long 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, power, franchise, grant, license, permit

or provision of law affecting the Property, to: (1) terminate such right, power, 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 Borrower 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, assessments, or similar charges either not yet

due or being contested in good faith; (h) liens of materialmen, mechanics, warehousemen, or

carriers, or other like liens arising in the ordinary course of business 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, 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 Borrower or materially and adversely affect

the value thereof; (j) 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 Borrower

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 lien on such property; (l) liens on equipment

purchased or leased with proceeds of indebtedness permitted by Section 8.06 hereof; and (m)

Liens approved in writing by the Lender in its sole discretion on a case-by-case basis.

“Person” means any individual, corporation, not for profit corporation, partnership,

limited liability company, joint venture, association, professional association, joint stock

company, trust, unincorporated organization, government or any agency or political subdivision

thereof or any other form of entity.

“Plan” means, with respect to the Borrower at any time, an employee pension benefit

plan which is covered by Title IV of ERISA or subject to the minimum funding standards under

Section 412 of the Code and either (i) is maintained, or has within the preceding five plan years

13

been maintained, by a member of the Controlled Group for employees of a member of the

Controlled Group of which the Borrower is a part, (ii) is maintained pursuant to a collective

bargaining agreement or any other arrangement under which more than one employer makes

contributions and to which a member of the Controlled Group of which the Borrower is a part is

then making or accruing an obligation to make contributions or has within the preceding five

plan years made contributions.

“Plans and Specifications” means the Borrower’s plans and specifications for the

Improvements, as amended from time to time, which include a construction budget for the

Improvements and an allocation of the sources and uses of funds for the Improvements.

“Prepayment Date” means (i) the Initial Prepayment Date, and (ii) the date provided by

the Lender in response to the Borrower’s written request for an extension pursuant to Section

4.08(e) hereof.

“Prepayment Fee” means an amount equal to the present value of the product of: (i) the

difference (but not less than zero) between (a) the interest rate applicable to the principal amount

which is being prepaid, and (b) the return which the Lender could obtain if it used the amount of

such prepayment of principal to purchase at bid price regularly quoted securities issued by the

United States having a maturity date most closely coinciding with the sooner of the next Reset

Date or the Maturity Date, and such securities were held by the Lender until such date (“Yield

Rate”); (ii) a fraction, the numerator of which is the number of days in the period between the

date of prepayment and the sooner of the next Reset Date or the Maturity Date and the

denominator of which is 360; and (iii) the amount of the principal so prepaid. Present value

under this Loan Agreement is determined by discounting the above product to present value

using the Yield Rate as the annual discount factor. The Lender shall provide the Borrower a

statement setting forth the computation of the Prepayment Fee in reasonable detail and such

statement shall be conclusive if reasonably determined. The Borrower acknowledges that (i) the

Lender establishes an interest rate upon the understanding that it applies for the entire Interest

Period, and (ii) the Lender would not lend to the Borrower without the Borrower’s express

agreement to pay the Lender the prepayment fee described above.

“Prior Interest Payment” means a payment of interest on the Issuer Loan Obligations

made on or prior to the date of any Determination of Taxability that becomes includable in a

Holder’s gross income (as defined in Code Section 61).

“Prior Obligations” means the Borrower’s obligations under the Loan Agreement, dated

as of June 1, 2006, by and among Lender, the California Municipal Finance Authority and the

Borrower, currently outstanding in the aggregate principal amount of approximately

$10,443,461.66.

“Project” means (i) financing of design, acquisition, construction, installation, equipping

or furnishing of the Improvements, (ii) refinancing the cost of acquiring, improving, renovating,

remodeling, furnishing and equipping various portions of the Property financed with proceeds of

the Prior Obligations, and (iii) paying certain costs of issuing the Loan.

14

“Project Costs” means the amount paid or to be paid for any portion of the Project

incurred by the Borrower in connection with the Project and as permitted under the Act,

including closing costs for the Loan.

“Project Fund” means the Project Fund established pursuant to Section 3.04 of this Loan

Agreement.

“Project Fund Disbursement Agreement” means the Construction Fund Disbursement

Agreement dated as of the date hereof by and between the Lender and the Borrower.

“Property” means the real property identified as the “Property” in Exhibit A hereto,

together with any greater estate therein as hereafter may be acquired by the Borrower.

“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, the Issuer

Fees and Expenses, indemnification, notices, opinions, certifications, information, inspections

and consents pursuant to this Loan Agreement and the Tax Regulatory Agreement.

“Reset Date” means the first Business Day of each calendar month.

“Risk-Based Capital Guidelines” means (i) the risk-based capital guidelines in effect in

the United States on the Closing Date, including transition rules, and (ii) the corresponding

capital regulations promulgated by regulatory authorities outside the United States including

transition rules, and any amendments to such regulations adopted prior to the Closing Date.

“Series A Borrower Loan” means the $10,443,461.66 loan from the Issuer to the

Borrower made under this Loan Agreement.

“Series A Issuer Loan Obligation” means the $10,443,461.66 loan from Lender to the

Issuer made under this Loan Agreement.

“Series A Loan” means the loan from the Lender to the Issuer evidenced by the Series A

Issuer Loan Obligation and by the Issuer to the Borrower evidenced by the related Series A

Borrower Loan under this Loan Agreement.

“Series B Borrower Loan” means the $13,056,538.34 loan from the Issuer to the

Borrower made under Loan Agreement.

“Series B Issuer Loan Obligation” means the $13,056,538.34 loan from Lender to the

Issuer made under this Loan Agreement.

“Series B Loan” means the loan from the Lender to the Issuer evidenced by the Series B

Issuer Loan Obligation and by the Issuer to the Borrower evidenced by the related Series B

Borrower Loan under this Loan Agreement.

15

“Special Counsel” means any firm of nationally recognized municipal bond attorneys,

selected by the Issuer and acceptable to the Lender and the Borrower, experienced in the

issuance of municipal bonds and matters relating to the exclusion of the interest thereon from

gross income for federal income tax purposes.

“State” means the State of California.

Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding

securities having ordinary voting power of which shall at the time be owned 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 50% of the ownership interests having

ordinary voting power of which shall at the time be so owned or controlled.

“Swap Agreement” 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 options or forward bond or forward bond price or forward bond index

transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor

transactions, collar transactions, currency swap transactions, cross-currency rate swap

transactions, currency options, spot contracts, or any other similar transactions or any

combination of any of the foregoing (including any options 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 subject 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 Agreement”), including any such obligations or liabilities under

any Master Agreement.

“Taxable Date” means the date on which interest on the Issuer Loan Obligations is first

includable in gross income of the Lender thereof as a result of an Event of Taxability as such a

date is established pursuant to a Determination of Taxability.

“Taxable Equivalent Rate” means, with respect to any interest payment (including

payments made prior to a Determination of Taxability) on the Issuer Loan Obligations, an annual

interest rate equal to the product of (i) the Applicable Loan Rate (as in effect from time to time)

and (ii) 1.54.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,

withholdings (including backup withholding), assessments, fees or other charges imposed by any

Governmental Authority, including any interest, fines, additions to tax or penalties applicable

thereto.

“Tax Regulatory Agreement” means the Tax Regulatory Agreement dated the Closing

Date executed and delivered by the Issuer and the Borrower, together with any supplements or

certificates related thereto.

16

“Title Insurer” means Fidelity National Title.

“Title Policy” means an ALTA (or equivalent) mortgagee policy of title insurance with

coverage in an amount equal to the principal amount of the Loan, with reinsurance and

endorsements as Lender may require, containing no exceptions to title (other than Permitted

Encumbrances) which are unacceptable to Lender, and insuring that the Deed of Trust is a first-

priority lien on the Property. Without limitation, such policy shall (a) be in the 2006 ALTA form

or, if not available, the form commonly used in the State, insuring Lender and its successors and

assigns; and (b) include those endorsements and/or affirmative coverages approved by Lender, as

evidenced by the final approved title policy.

“Unfunded Vested Liabilities” means, with respect to any Plan at any time, the amount

(if any) by which (i) the present value of all vested nonforfeitable accrued benefits under such

Plan exceeds (ii) the fair market value of all Plan assets allocable to such benefits, all determined

as of the then most recent valuation date for such Plan, but only to the extent that such excess

represents a potential liability of a member of the Controlled Group to the PBGC or such Plan

under Title IV of ERISA.

“Welfare Plan” means a “welfare plan,” as such term is defined in Section 3(1) of

ERISA.

ARTICLE II

REPRESENTATIONS, WARRANTIES 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 Borrower, as follows:

(a) The Issuer is a public entity duly organized and existing under the law of

the State. Under the provisions of the Act, the Issuer has the power to enter into the

transactions contemplated by this Loan Agreement and to carry out its obligations

hereunder and under the other the Issuer Documents. By proper action, the Issuer has

duly authorized the execution, delivery and performance of its obligations under the

Issuer Documents.

(b) All applicable requirements have been met and procedures have occurred

such that the Issuer Documents are valid and binding obligations of the Issuer

enforceable in accordance with their respective terms except as enforcement may be

limited by bankruptcy, insolvency, moratorium, or similar laws affecting the enforcement

of creditors’ rights generally, by equitable principles, by the exercise of judicial

discretion in appropriate cases and by the limitation on legal remedies against agencies of

the State. The Issuer has taken all necessary action and has complied with all applicable

provisions of the Act, including but not limited to the making of any findings required by

the Act, required to make the Issuer Documents the valid and binding obligations of the

Issuer.

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(c) Pursuant to this Loan Agreement and the Assignment Agreement, the

Issuer has assigned to the Lender all of the Issuer’s rights (except Reserved Issuer Rights)

in the Project, this Loan Agreement, the Payments and all other Borrower Documents

(except the Tax Regulatory Agreement), including the assignment of all rights in any

security interest in the Collateral granted to the Issuer by the Borrower.

(d) The execution and delivery of the Issuer Documents and compliance with

the provisions of the Issuer Documents under the circumstances contemplated thereby

will not in any respect conflict with, or constitute on the part of the Issuer a material

breach or default under any agreement or other instrument to which the Issuer is a party,

or any existing law, administrative regulation, court order or consent decree to which the

Issuer is subject in a manner that is reasonably likely to have a material adverse effect on

the Issuer’s ability to issue or deliver the Issuer Loan Obligations, or its ability to

execute, deliver or comply with the Issuer Documents and the transactions contemplated

thereby.

(e) To the current actual knowledge of the officers of the Issuer, there is no

action, suit or proceeding pending before or by any court for which service of process has

been duly completed as to the Issuer and, to the current actual knowledge of the Issuer’s

officers, there is no action, suit or proceeding before any court threatened against the

Issuer or any proceeding, inquiry or investigation threatened by or pending before any

public body against the Issuer, (i) challenging the Issuer’s authority to enter into the

Issuer Documents or (ii) wherein an unfavorable ruling or finding would materially

adversely affect the enforceability of the Issuer Documents, the exclusion of the interest

from gross income for federal tax purposes under the Code, or would have a material

adverse effect on the Issuer’s ability to perform its obligations with respect to any of the

transactions contemplated by this Loan Agreement.

(f) The Issuer will submit or cause to be submitted to the Internal Revenue

Service a Form 8038 (or other information reporting statement) at the time and in the

form required by the Code.

(g) To the best knowledge of the Issuer’s officers, no officer or other official

of the Issuer has any financial interest in the Borrower or in the transactions contemplated

by this Loan Agreement.

Section 2.02. Representations, Warranties and Covenants of the Borrower. The

Borrower represents and warrants, as of the date hereof, and covenants, for the benefit of the

Lender and the Issuer as follows:

(a) The Borrower is a nonprofit religious corporation duly organized, validly

existing 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, power and authority to enter into the Loan Documents and to carry out all

of its obligations under and consummate all transactions contemplated hereby and by the

other Loan Documents and by proper corporate action has duly authorized the execution,

delivery and performance of the other Loan Documents. The Borrower is duly licensed

18

to operate and maintain its existing facilities and has all necessary power and authority to

conduct the business now being conducted by it and as contemplated by this Loan

Agreement

(b) The Borrower Documents have been duly authorized, executed and

delivered by the Borrower.

(c) Assuming due execution and delivery by the other parties thereto, this

Loan Agreement and the other Borrower Documents constitute the legal, valid and

binding agreements of the Borrower enforceable against the Borrower by the Issuer 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 Loan Documents by the Borrower, 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 Borrower, do not

conflict with or constitute a violation or breach of or default (with due notice or the

passage of time or both) under the articles of incorporation and bylaws of the Borrower,

or with respect to the Borrower, 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, loan agreement, lease, 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

Borrower, other than Permitted Encumbrances, which conflict, violation, breach, default,

lien, charge or encumbrance may materially and adversely affect the consummation of

the transactions contemplated by the Loan Documents, or the financial condition,

operations or business of the Borrower.

(e) As of the date hereof, no consent or approval of any trustee or holder of

any indebtedness of the Borrower or any guarantor of indebtedness of or other provider

of credit or liquidity to the Borrower, and with respect to the Borrower, 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 Loan Documents, or the

consummation of any transaction herein or therein contemplated, or the fulfillment of or

compliance with the terms and conditions hereof or thereof, except as have been obtained

or made and as are in full 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

knowledge of the Borrower, after reasonable investigation, threatened, against or

affecting the Borrower or the financial condition, operations or business of the Borrower:

19

(i) to restrain or enjoin the issuance or delivery of any of the Loan

Documents or the payment of Payments or Additional Payments hereunder;

(ii) in any way contesting or adversely affecting the authority for or

the validity of the Loan Documents;

(iii) in any way contesting the corporate existence or powers of the

Borrower;

(iv) which, if determined adversely to it, would materially adversely

affect the consummation of the transactions contemplated by the Loan Documents

or the ability of the Borrower to perform its material obligations hereunder or

thereunder; or could reasonably be expected to have a material adverse effect on

the financial conditions, operations or business of the Borrower; or

(v) contesting the Borrower’s status as an organization described in

Section 501(c)(3) of the Code or which would subject any income of the

Borrower to federal income taxation to such extent as would result in loss of the

exclusion from gross income for federal income tax purposes of interest on any

portion of the Issuer Loan Obligations under Section 103 of the Code.

(g) As of the date hereof, no written information, exhibit or report furnished to

the Issuer or the Lender by the Borrower in connection with the negotiation of the Loan

Documents or otherwise in connection with the transactions contemplated hereby and

thereby, contains any untrue statement of a material fact regarding the Borrower, the

Facilities or the Borrower’s business, or omits to state a material fact regarding the

Borrower, the Facilities or the Borrower’s business necessary in 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 Borrower present the Borrower’s good faith opinion as to

such projections, valuations and pro forma condition and results.

(h) The Borrower has heretofore furnished to the Issuer and the Lender the

audited financial statements of the Borrower for its Fiscal Years ended June 30, 2014 and

June 30, 2015, and the related statement of revenues, expenditures, transfer and changes

in net assets and changes in financial position for the Fiscal Years then ended and

information related to the Project. The information relating to the Project is complete and

accurate and those financial statements present fairly, in all material respects, the

financial condition of the Borrower on the dates thereof, and the activities and cash flows

for the periods then ended were prepared in accordance with GAAP. Since June 30,

2015, there has been no material adverse change in the assets, operations or financial

condition of the Borrower that could reasonably be expected to have a Material Adverse

Effect .

(i) The Borrower has good and marketable fee title to the Property and the

Facilities located thereon, in each case free and clear from all encumbrances other than

20

Permitted Encumbrances. The Borrower enjoys the peaceable and undisturbed

possession of all real and personal property which is material to its operation.

(j) The Borrower 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 Borrower Documents, or (2) with respect to any order or decree

of any court binding against the Borrower or any order, regulation or demand of any

federal, state, municipal or other governmental authority binding against the Borrower,

which default could reasonably be expected to materially and adversely affect the

consummation of the transactions contemplated by the Borrower Documents, or the

financial condition, operations or business of the Borrower.

All material certificates, approvals, permits and authorizations of applicable local governmental

agencies, and agencies of the State and the federal government were obtained, or will be

obtained during the course of construction of the Project, with respect to the construction and

installation of the Improvements and operation of the Facilities, and the Facilities have been or

will be constructed, installed operated pursuant to and in accordance with such certificates,

approvals, permits and authorizations.

(k) The Borrower acknowledges, represents and warrants that, except for the

express representations and warranties of the Issuer set forth herein, it has not relied on

the Issuer or Lender for any guidance or expertise in analyzing the financial or other

consequences of the transactions contemplated by the Borrower Documents or otherwise

relied on the Issuer or Lender for any advice. The Borrower acknowledges that it has

been advised by, or has had the opportunity to be advised by, its own financial advisors in

connection with the financing and refinancing of the Project.

(l) No portion of the Financed Facilities includes 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 Borrower 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 Borrower is exempt from federal taxation under Section 501(a) of the

Code. The Borrower has received a determination from the Internal Revenue Service to

the foregoing effect, and none of the bases for such determination have changed since the

date thereof.

(n) Environmental Laws.

(i) The Borrower is in compliance in all material respects with all

applicable Environmental Laws.

(ii) Neither the Borrower nor the Property is the subject of a federal,

state or local investigation 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 release of any Hazardous Materials into the environment.

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(iii) The Borrower does not have any material contingent liability in

connection with any release of any Hazardous Materials into the environment.

(iv) The Borrower 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 “project” or is “statutorily exempt”

or is “categorically exempt” in accordance with the CEQA Requirements.

(o) Neither the Borrower nor any Affiliate of the Borrower 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. The Borrower is not

engaged in the business of extending credit for the purpose of purchasing or carrying

Margin Stock, and no part of the proceeds from the of the Loans will be used to purchase

or carry any such Margin Stock or extend credit to others for the purpose of purchasing or

carrying any such Margin Stock.

(p) Neither the Borrower 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 Act.

(q) Neither the Borrower nor any of its affiliates is any of the following:

(i) a person that is listed in the annex to, or is otherwise subject to the

provisions of, the Executive Order;

(ii) a person owned or controlled by, or acting 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 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 publication of such list;

(r) Neither the Borrower 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)(ii) above, (ii) deals in, or otherwise

engages in any transaction relating to, any property or interests in property blocked

pursuant to the Executive Order or (iii) engages in or conspires to engage in any

22

transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts

to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

(s) The Borrower is currently in compliance, and in the future will comply,

with (i) all applicable Laws, including, without limitation all nondiscrimination laws.

(t) Each Plan of the Borrower and each member of the Controlled Group is in

compliance in all material respects with ERISA and other laws to the extent applicable

thereto, and neither the Borrower nor a member of the Controlled Group has received

notice to the contrary from the PBGC or any other Governmental Authority. Neither the

Borrower nor a member of the Controlled Group has any Unfunded Vested Liabilities.

No condition exists or event or transaction has occurred with respect to any Plan which

could reasonably be expected to result in the incurrence by the Borrower or a member of

the Controlled Group of any material liability, fine or penalty. No ERISA Event has

occurred which could reasonably be expected to result in a Material Adverse Effect.

Neither the Borrower nor its Subsidiaries has any contingent liability with respect to any

post-retirement benefits under a Welfare Plan, other than liability for continuation of

coverage described in Part 6 of Title I of ERISA.

(u) The Borrower currently maintains insurance coverage with insurance

companies believed by the Borrower to be capable of performing their obligations under

the respective insurance policies issued by such insurance companies to the Borrower (as

determined in its reasonable discretion) and in full compliance this Loan Agreement.

(v) The representations and warranties of the Borrower contained in the other

Borrower Documents, together with the related definitions of terms contained therein, are

hereby incorporated by reference in this Agreement as if each and every such

representation and warranty and definition were set forth herein in its entirety, and the

representations and warranties made by the Borrower in such Sections are hereby made

for the benefit of the Lender. No amendment to or waiver of such representations and

warranties or definitions made pursuant to the relevant Borrower Document or

incorporated by reference shall be effective to amend such representations and warranties

and definitions as incorporated by reference herein without the prior written consent of

the Lender.

(w) The Borrower has not taken any action or omitted to take any action, and

has no actual knowledge of any action taken or omitted to be taken by any other Person,

which action, if taken or omitted, would adversely affect the exclusion of interest on the

Issuer Loan Obligations from gross income for federal income tax purposes or the

exemption of interest on the Issuer Loan Obligations from State personal income taxes.

(x) None of the Loan Documents provide for any payments that would violate

any applicable law regarding permissible maximum rates of interest.

(y) To the knowledge of the Borrower, there is no amendment or proposed

amendment to the Constitution of the State or any State law or any administrative

interpretation of the Constitution of the State or any State law, or any legislation that has

23

passed either house of the legislature of the State, or any judicial decision interpreting

any of the foregoing, the effect of which will materially adversely affect the transactions

contemplated by this Loan Agreement, the security for any of the obligations owed by the

Borrower hereunder, the creation, organization, or existence of the Borrower or the titles

to office of any officers executing this Agreement or any other Borrower Documents or

the Borrower’s ability to repay when due its obligations under this Loan Agreement.

(z) All material taxes, assessments, fees and other governmental charges

(other than those presently payable without penalty or interest) upon the Borrower or

upon any property thereof, which are due and payable, have been paid and no material

claims are being asserted with respect to any past due taxes, assessments, fees or other

governmental charges against the Borrower, except, in each case, as are being contested

in good faith by appropriate proceedings for which adequate reserves are being

maintained in accordance with GAAP,

(aa) The Borrower has no Subsidiaries or Affiliates.

(bb) The Borrower has not entered into any Swap Agreement relating to any

indebtedness, other than those entered into with the Lender in connection with the

transactions contemplated hereby.

ARTICLE III

ISSUANCE OF LOAN; APPLICATION OF PROCEEDS

Section 3.01. Loan To Refinance the Prior Obligations and Finance the

Improvements.

Subject to the terms and conditions set forth herein, the Lender hereby agrees to loan

$10,443,461.66 in the form of the Series A Issuer Loan Obligation, and up to $13,056,538.34 in

the form of the Series B Issuer Loan Obligation, and the Issuer hereby agrees, subject to

limitations herein, to borrow such amount from the Lender and to lend the Loan Proceeds to the

Borrower for the purposes of refinancing the Prior Obligations and financing the Improvements.

The Loans are non-revolving. Any portion of the Loans repaid may not be relent.

(a) The Borrower shall design, acquire, construct, improve and equip the

Improvements with all reasonable dispatch, substantially in accordance with the Plans and

Specifications. The Borrower 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 the

Borrower in good faith and by appropriate proceedings; (b) as the Borrower 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, owing and payable

under the terms of any contract, order, receipt, writing and instruction in connection with the

design, construction and equipping of the Improvements; and (c) as the Borrower deems

reasonably appropriate and in its best interests, enforce the provisions of any contract,

agreement, obligation, bond or other performance security with respect thereto. With the prior

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written consent of the Lender, the Borrower may revise the Plans and Specifications from time to

time, provided that (i) no revision shall be made which would change the purposes of the

Improvements to other than purposes permitted by the Act and (ii) all such revisions shall be

made in accordance with the Project Fund Disbursement Agreement. Upon the completion of

the Improvements, the Borrower shall provide Lender with a Completion Notice.

(b) Upon fulfillment of the conditions precedent set forth in Section 5.01 hereof,

Lender shall disburse the Loan Proceeds of the Series A Issuer Loan Obligation to the Issuer by

applying the proceeds of the Series A Issuer Loan Obligation to the prepayment and

extinguishment of the Prior Obligations.

(c) Subject to the terms and conditions in Sections 4.03 and 5.02 hereof, Lender shall

disburse the Loan Proceeds of the Series B Issuer Loan Obligation to the Issuer from time to

time into the Project Fund pursuant to Draw Requests. The aggregate principal amount of the

Series B Loan outstanding under this Loan 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.

(d) The Issuer’s obligation to repay the Series A Issuer Loan Obligation and the

Borrower’s obligation to repay the Series A Borrower Loan shall commence, and interest shall

begin to accrue, on the Closing Date. The Issuer’s obligation to repay the Series B Issuer Loan

Obligation and the Borrower’s obligation to repay the Series B Borrower Loan shall commence,

and interest shall begin to accrue, on the first date that any of the Loan Proceeds of the Series B

Issuer Loan Obligation are deposited in the Project Fund. 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. The parties hereto acknowledge

that the Loans are noteless loans and this Loan Agreement evidences all amounts due to the

Lender pursuant to the terms hereof.

Section 3.02. Establishment and Application of Project Fund.

(a) The Borrower shall establish and maintain an account at MUFG Union

Bank, N.A. designated as the “Project Fund” and designated as account number

3530014036. The Borrower shall maintain a separate record of the Project Fund on its

books and shall account for all deposits and withdrawals from each Project Fund in

accordance with the Borrower’s accounting procedures. The Lender shall deposit a

portion of the Loan Proceeds from the Series B Loan into the Project Fund to be used and

withdrawn by the Borrower pursuant to a Draw Request to pay Project Costs. No

moneys in the Project Fund shall be used to pay Additional Payments.

(b) Other than the disbursement of Loan Proceeds on the Closing Date, the

Lender’s agreement to disburse funds to the Project Fund shall be subject to the further

conditions precedent set forth in Section 5.02 of this Loan Agreement and that the

Borrower shall have met the conditions and requirements set forth in the Project Fund

Disbursement Agreement with respect to disbursement of funds to the Project Fund.

Upon receipt of a Draw Request to pay for Project Costs from the Borrower and the

25

approval thereof by the Lender, the Lender shall disburse to, or for the account of, the

Borrower, Loan Proceeds to pay Project Costs in accordance with the Draw Request.

Each disbursement from the Project Fund to pay Project Costs shall be in an amount not

to exceed sixty percent (60%) of the amount provided for in each Draw Request. The

remaining forty percent (40%) provided for in each Draw Request for payment of Project

Costs shall be paid by utilization of funds of the Borrower.

(c) The Lender shall have the right to retain, at the Borrower’s expense, an

inspector (the “Lender’s Inspector”) to review and advise the Lender with respect to the

Plans and Specifications, construction, architectural and other design professional

contracts, change orders, governmental permits and approvals, and other matters related

to the design, construction, operation and use of the Improvements, to monitor the

progress of construction and to review on behalf of the Lender all Draw Requests

submitted by the Borrower. The Borrower acknowledges 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 Improvements, and the Lender’s

Inspector may be an employee of the Lender, (ii) the Lender’s Inspector shall in no event

have any power 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 Inspector on behalf of the Lender shall 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 limited in any manner whatsoever

by any opinion expressed or not expressed by the Lender’s Inspector 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 Inspector with another inspector at any time

and without prior notice to or approval by the Borrower. All inspections by or on behalf

of the Lender shall be solely for the benefit of the Lender, and the Borrower shall have no

right to claim any loss or damage against the Lender or the Lender’s Inspector (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 Improvements.

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 Plans and Specifications;

(ii) the percentage of construction of the Improvements completed as

of the date of such Draw Request;

(iii) the hard construction costs actually incurred by the Borrower in

connection with the construction of the Improvements for work in place as part of

the Improvements as of the date of such Draw Request;

26

(iv) the actual sum necessary to complete construction of the

Improvements 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 Improvements in accordance with the

Plans and Specifications.

(d) Upon completion of the Project, the Borrower shall file with the Lender a

Certificate of Completion in the form set forth in Exhibit I hereto. Within 30 days

following completion of the Improvements, the Borrower shall deliver to the Lender a

copy of the certificate of occupancy for the Improvements and a CLTA 101.13

endorsement to the Title Policy.

Section 3.03. Term. The term of this Loan Agreement shall commence on the Closing

Date and shall terminate upon the earliest to occur of any of the following events:

(a) So long as no Event of Default has occurred and is continuing hereunder,

the payment by the Borrower of all Payments and Additional Payments with respect to

the Borrower Loans, any rebate payments and any other payments required to be paid by

the Borrower 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, applicable

Prepayment Fee, 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 and the payment of the entire outstanding principal

amount, accrued interest, applicable Prepayment Fee, any Additional Payments, and the

other amounts due hereunder.

Section 3.04. Costs and Expenses of the Issuer. The Borrower shall pay to the Issuer

the following “Issuer Fees and Expenses”:

(a) All taxes and assessments of any type or character charged to the Issuer

affecting the amount available to the Issuer from payments to be received hereunder or in

any way arising due to the transactions contemplated hereby (including taxes and

assessments assessed or levied by any public agency or governmental authority of

whatsoever character having power to levy taxes or assessments) but excluding any taxes

based upon the capital or income of any other person other than the Borrower; provided,

however, that the Borrower shall have the right to protest any such taxes or assessments

and to require the Issuer, at the Borrower’s expense, to protest and contest any such taxes

or assessments assessed or levied upon them and that the Borrower shall 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, notwithstanding the provisions of Section 8.01;

(b) The reasonable fees and expenses of such accountants, consultants,

attorneys and other experts as may be engaged by the Issuer to prepare audits, financial

27

statements or opinions or provide such other services and advice as are required in

connection with the Loan Documents and the Loan;

(c) The Issuer Issuance Fee, the Issuer Annual Fees and the reasonable fees

and expenses of the Issuer or any agent or attorney selected by the Issuer to act on its

behalf in connection with the Borrower Loans under this Loan Agreement, the Tax

Regulatory Agreement or any other documents contemplated hereby or thereby,

including, without limitation, any and all reasonable expenses incurred in connection

with any inquiry, investigation, litigation or other proceeding which may at any time be

instituted involving this Loan Agreement, the Tax Regulatory Agreement or any other

documents contemplated hereby or thereby, or in connection with the reasonable

supervision or inspection of the Borrower, its properties, assets or operations or otherwise

in connection with the administration of this Loan Agreement, the Tax Regulatory

Agreement, or any other documents contemplated hereby or thereby; and

(d) Such amounts as may be necessary to satisfy the rebate requirements in

accordance with the Tax Regulatory Agreement and to pay the cost of calculation of such

rebate requirements when required by the Code if the Borrower does not do so directly.

To the extent the Borrower does not satisfy any of the exceptions to rebate, any rebate

calculations must be computed by a third party rebate analyst and may not be computed

solely by the Borrower.

The Issuer Fees and Expenses shall be billed to the Borrower by the Issuer from time to

time, together with supporting documents where appropriate for one or more of the above items.

Amounts so billed shall be paid by the Borrower within 30 days after receipt of the bill by the

Borrower. Notwithstanding the foregoing, the Issuer shall not be required to submit a bill to the

Borrower 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 Borrower. The Issuer Issuance Fee shall be paid to the Issuer by the Borrower on the

Closing Date. Thereafter, the Issuer Annual Fee shall be due and payable by the Borrower in

advance on July 1 of each year, commencing with the first such date following the Closing Date.

The Borrower’s obligation to pay the Issuer Issuance Fee and the Issuer Annual Fee shall in no

way limit amounts payable by the Borrower to the Issuer under the Loan Documents, including

the enforcement thereof.

Section 3.05. Limited Obligations of the Issuer. None of the Issuer, its officers, its

employees or any person executing this Loan Agreement on behalf of the Issuer shall be liable

personally on the Issuer Loan Obligations or subject to any personal liability or accountability by

reason of the execution hereof. The Issuer Loan Obligations are a limited obligation of the

Issuer, payable solely from and secured by the pledge of the Payments hereunder. Neither the

Issuer, the members of its Board of Directors, the State of California, 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 Issuer Loan Obligations,

to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their

payment. The Issuer Loan Obligations are not a pledge of the faith and credit of the Issuer, the

State of California 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 power.

28

The Issuer shall not be liable for payment of the principal of, Prepayment Fee, or interest

on the Issuer Loan Obligations or any other costs, expenses, losses, 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 Borrower under this Loan Agreement.

Section 3.06. Invalidity of the Borrower Loans. If at any time the Borrower Loans are

declared to be invalid or unenforceable for any reason, the Borrower Loans will be deemed to be

direct loans from the Lender to the Borrower. All references herein to “Borrower Loans” and

“Issuer Loan Obligations” shall instead refer to the “Loans,” direct loans from the Lender to the

Borrower. In such an event, the Lender and the Borrower acknowledge that the interest

payments with respect to the Loans shall not be excluded from gross income for federal income

tax purposes or State of California income taxation and that the Loans shall bear interest at the

Taxable Equivalent Rate, except as otherwise provided for herein.

ARTICLE IV

REPAYMENT OF THE LOANS

Section 4.01. Interest.

(a) The principal amount of the Loans hereunder outstanding 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, subject to terms set forth herein. The Lender

shall determine the Applicable Loan Rate on each Computation Date, and such rate shall

become effective on the Reset Date next succeeding the Computation Date and interest at

such rate shall accrue each day during such Interest Period, commencing on and

including the first day of such period to and including the last day of such period. The

Applicable Loan Rate shall be rounded upward to the fifth decimal place. Interest

accruing on the aggregate 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 Borrower in arrears on the first Business Day of each month 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 Borrower shall

pay to the Lender, as assignee of the Issuer, future interest payments calculated at the

Taxable Equivalent Rate as such Payments become due. In addition, the Borrower

hereby agrees to pay the Lender on demand therefor (1) an amount equal to the difference

between (A) the amount of interest that would have been paid to Lender hereunder during

the period for which interest on the Loans is included in the gross income of the Lender if

the Loans had borne interest at the Taxable Equivalent Rate, beginning on the Taxable

Date (the “Taxable Period”), and (B) the amount of interest actually paid to the Lender

during the Taxable Period, and (2) an amount equal to any interest, penalties or charges

owed by the Lender as a result of interest of the Loans becoming included in the gross

income of the Lender, together with any and all attorneys’ fees, court costs, or other

out-of-pocket costs incurred by the Lender in connection therewith The Lender

29

acknowledges that payments at the Taxable Equivalent Rate may be amounts that are not

excluded from gross income for federal income tax purposes pursuant to Section 103 of

the Code.

(c) (i) If the amount of interest payable for any period in accordance with

the terms hereof exceeds the amount of interest that would be payable for such

period had interest for such period been calculated at the maximum rate of interest

permitted by applicable law, then interest for such period shall be payable in an

amount calculated at the maximum rate of interest permitted by applicable law.

(ii) Any interest that would have been due and payable for any period

but for the operation of the immediately preceding subclause (i) shall accrue and

be payable as provided in this subclause (ii) and shall, less interest actually paid to

the Lender for such period, constitute the “Excess Interest Amount.” If there is

any accrued and unpaid Excess Interest Amount as of any date, then the principal

amount with respect to which interest is payable shall bear interest at the

maximum rate of interest permitted by applicable law until payment to the Lender

of the entire Excess Interest Amount.

(iii) Notwithstanding the foregoing, on the date on which no principal

amount with respect to the Loans remains unpaid, the Borrower shall pay to the

Lender a fee equal to any accrued and unpaid Excess Interest Amount.

Section 4.02. Payments. The Issuer shall pay the principal of, Prepayment Fee, if any,

and interest on the Issuer Loan Obligations, but only out of Payments made to the Issuer by the

Borrower therefor. The Borrower shall pay to the Lender, as assignee of the Issuer, Payments in

the amounts and at such times as set forth in Section 4.01, Section 4.08 and Section 4.10 hereof.

Section 4.03. Draws. Until October 31, 2017, the Borrower and the Lender, without the

consent of the Issuer, may from time to time, but no more often than once per calendar month,

increase the amount of the Series B Loan outstanding by executing Draw Requests substantially

in the form set forth in Exhibit F hereto in accordance with Sections 5.02 and the Project Fund

Disbursement Agreement. Each Draw Request shall reasonably identify the Project Costs that

will be paid with (or for which the Borrower will be reimbursed by) such Draw Request. Draw

Requests shall be numbered consecutively beginning with “1.” No single Draw Request may

provide for an advance of less than $100,000 (other than the initial and the final Draw Requests,

which may be for a lesser amount). The maximum aggregate amount of the Series B Loan

provided for in all Draw Requests shall not exceed $13,056,538.34. In the event the aggregate

amount of all Draw Requests submitted and approved hereunder on October 31, 2017 is less than

the maximum aggregate amount of the Series B Loan, the Lender may, in its sole discretion,

transfer the undrawn balance of the Series B Loan into the Project Fund for disbursement for

Project Costs in compliance with the terms of the Project Fund Disbursement Agreement. The

proceeds of the Series B Loan deposited into the Project Fund shall be disbursed for Project

Costs no later than the third anniversary of the Closing Date.

Section 4.04. Security for the Loan. As security for the repayment of the Issuer Loan

Obligations, the Issuer hereby assigns to the Lender all of its right, title and interest in this Loan

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Agreement except for Reserved Issuer Rights, including the Issuer’s rights to receive Payments

with respect to the Borrower Loans (and hereby directs the Borrower to make such Payments

directly to, or at the direction of, the Lender), to collect the Payments and any other payments

due to the Issuer hereunder the receipt of which is not part of Reserved Issuer Rights, and to sue

in any court for such Payments or other payments, to exercise all rights hereunder with respect to

the Project, and to withdraw or settle any claims, suits or proceedings pertaining to or arising out

of this Loan Agreement and any other Borrower Loans upon any terms (other than any claims

related to Reserved Issuer Rights). Such assignment by the Issuer to the Lender shall be an

absolute 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 Borrower directly to

the Lender, as the Issuer’s assignee, without the requirement of notice or demand, at the address

provided in Section 12.04 hereof, or such other place as the Lender may from time to time

designate in writing, and shall be credited against the Issuer’s payment obligations under the

related the Issuer Loan Obligations. 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 to be paid by the Borrower hereunder and thereunder. All amounts required to

be paid by the Borrower 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

Borrower for any claim based on this Loan Agreement against any director, officer, employee or

agent of the Issuer alleging personal liability on the part of such person.

To further secure its Obligations and to perform and observe the covenants and

agreements contained herein and in the Borrower Documents, the Borrower hereby pledges to

and grants to the Issuer, and the Issuer hereby assigns to the Lender, a first priority lien 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 Borrower 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 Collateral, including

proceeds thereof.

Section 4.05. Deed of Trust.

(a) The Borrower shall, at its expense, record, or cause the recordation of, the

Deed of Trust and all amendments thereto in the Official Records of the Office of the

County Clerk of San Diego County, California. Within 10 days after request for any

confirmation of any filing required by this Section, the Borrower shall deliver to Lender,

as assignee of the Issuer, the signed documents requested or evidence satisfactory to

Lender to the effect that such filing has been duly accomplished. The Borrower hereby

authorizes Lender to file such financing statements (and all amendments or continuations

thereto) as may be necessary to perfect Lender’s security in a form satisfactory to Lender

and the Borrower shall, at Lender’s written request, provide to Lender, within 60 days of

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the date of delivery of this Loan Agreement, a UCC-1 search certificate with respect to

the Borrower.

(b) The Issuer, the Borrower and Lender agree that the Deed of Trust and

UCC-1 financing statement may be amended or terminated at any time with the prior

written consent of Lender. The consent of the Issuer shall not be required for any such

amendment or termination.

(c) As additional security for the Issuer Loan Obligations, the Issuer has made

a complete assignment to Lender of all of the Issuer’s rights, title interest and obligations

in, to and under the Deed of Trust, pursuant to the Assignment Agreement. The Borrower

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 shall be stated to be due on a day which is not a Business Day, such payment may be

made on the next succeeding Business Day.

Section 4.07. Borrower Payments to Be Unconditional. The obligations of the

Borrower 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 Project, the Facilities or any Improvement to be delivered or installed, any defects,

malfunctions, breakdowns or infirmities in the Facilities or the Improvements or any accident,

condemnation, destruction or unforeseen circumstances. Notwithstanding any dispute between

the Borrower and any of the Issuer, the Lender or any other person, the Borrower shall make all

Payments when due and shall not withhold any Payments pending final resolution of such

dispute, nor shall the Borrower 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 Issuer shall prepay the Series A Issuer Loan Obligation and the Series

B Issuer Loan Obligation solely to the extent that the Borrower shall prepay the Series A

Borrower Loan and the Series B Borrower Loan, respectively, and the Borrower may

prepay the Series A Borrower Loan and the Series B Borrower 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 Borrower Loans (or the portion thereof

being prepaid), any applicable Prepayment Fee, accrued interest to the prepayment date,

and any outstanding and unpaid Additional Payments due under this Loan Agreement;

provided, however, that after any partial prepayment, the remaining outstanding principal

amount of the Borrower Loans shall not be less than $100,000. The Borrower shall

provide the Lender written notice of any such prepayment at least 30 days in advance

thereof, and shall specify if the prepayment applies to the Series A Borrower Loan or the

Series B Borrower Loan. Upon any prepayment in part of the Series A Borrower Loan or

the Series B Borrower Loan, the prepayment shall be applied first to interest accrued

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thereon, the applicable Prepayment Fee, and any outstanding and unpaid Additional

Payments, and next to the principal component of the Series A Borrower Loan or the

Series B Borrower Loan, as applicable, in the inverse order of date due.

(b) The Issuer shall prepay the Series A Issuer Loan Obligation and the Series

B Issuer Loan Obligation solely to the extent that the Borrower shall prepay the Series A

Borrower Loan and the Series B Borrower Loan, respectively, and the Borrower may

prepay the Series A Borrower Loan and the Series B Borrower Loan in whole or in part,

on any date from insurance or condemnation proceeds pursuant to Article IX hereof by

paying some or all of the outstanding principal amount of the Series A Borrower Loan

and the Series B Borrower Loan, accrued interest on the Series A Borrower Loan and the

Series B Borrower Loan to the prepayment date, and any outstanding and unpaid

Additional Payments due under this Loan Agreement.

(c) The Issuer shall prepay the Series A Issuer Loan Obligation and the Series

B Issuer Loan Obligation solely to the extent that the Borrower shall prepay the Series A

Borrower Loan and the Series B Borrower Loan, respectively, and the Borrower shall

prepay the Borrower Loans in full 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 Loan, accrued interest to the prepayment date, and any outstanding and

unpaid Additional Payments due under this Loan Agreement.

(d) The Issuer shall prepay the Issuer Loan Obligations solely to the extent

that the Borrower shall prepay the Borrower Loans in full immediately and the Borrower

shall prepay the Borrower Loans in full immediately upon demand of the Issuer after the

occurrence of a Determination of Taxability by paying the outstanding principal amount

of the Loan, interest at the Taxable Equivalent Rate to the date of prepayment as required

by Section 4.01(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) On the Prepayment Date, the Issuer shall, to the extent funds are received

from the Borrower, prepay the Issuer Loan Obligations in full and the Borrower shall

prepay the Borrower Loans in full, together with all unpaid and accrued interest on the

Borrower 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. Unless the Lender agrees to an extension as set forth below or as

otherwise agreed by the Borrower and the Lender in writing, the Loans shall be prepaid

in full on the related Prepayment Date and any failure to make any such prepayment shall

constitute an Event of Default hereunder. Not later than 90 days prior to the Prepayment

Date, the Borrower may in writing request an extension of the Loans to a date up to and

including November 1, 2047. The Lender shall, not later than 60 days following receipt

of the Borrower’s written request for an extension, provide a written response to the

Borrower indicating whether the Lender has approved such extension. If the Lender

approves the extension, the Market Agent shall determine the Applicable Spread for such

extension period (which shall be consented to by the Borrower and the Lender) such that

the Applicable Loan Rate shall be the interest rate per annum (based upon tax exempt

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obligations comparable, in the judgment of the Market Agent, to the Loans and known to

the Market Agent to have been priced or traded under the prevailing market conditions)

to be the minimum interest rate at which a person will agree to advance the Loans on the

Prepayment Date at a price (without regard to accrued interest) equal to the principal

amount thereof. Concurrently with the determination of the new Applicable Loan Rate

by the Market Agent, the Market Agent shall provide the Borrower and the Lender

amended Exhibits D-1 and D-2. Any failure of Lender to respond to any such request or

if the Borrower and the Lender cannot agree to the Applicable Loan Rate, it shall be

construed as a denial of the request. If the new Applicable Spread is not acceptable to the

Borrower or the Lender, the Borrower shall prepay the Loans on the Prepayment Date.

In connection with the extension of the Prepayment Date of the Loans, the Borrower shall

cause to be delivered to the Issuer a notice of such extension and the new Applicable

Loan Rate and amended Exhibits D-1 and D-2, and to the Issuer and Lender an opinion

of Special 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

Borrower shall enter into an amendment to this Loan Agreement to reflect the terms of

any extension of the Prepayment Date of the Loans pursuant to this Section.

(f) In connection with the determination of the Prepayment Fee, if any,

pursuant to this Section 4.08, in no event shall the Lender be obligated to make any

payment or refund to the Borrower, nor shall the Borrower be entitled to any setoff or

other claim against the Lender, should the return which the Lender could obtain under

this prepayment formula exceed the interest that the Lender would have received if no

prepayment had occurred. The Lender shall provide the Borrower a statement setting

forth the computation of the Prepayment Fee in reasonable detail and such statement shall

be conclusive if reasonably determined. A determination by the Lender as to the

Prepayment Fee amount, if any, shall be conclusive.

Section 4.09. Restrictions on Transfer of Loans. Notwithstanding any other provision

hereof, the Borrower Loans are nontransferable, except in connection with the transfer of the

Issuer Loan Obligations. The Issuer Loan Obligations may be transferred, assigned and

reassigned in whole (but not in part) by the Lender without the consent of the Issuer or the

Borrower, upon 30 days prior written notice to the Borrower, to an Affiliate or a Qualified

Institutional Buyer but only in accordance with the requirements of this Section 4.09. For

purposes of the foregoing sentence, 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 Obligations. In the event of a sale or transfer to an Affiliate, the Lender shall certify to the

Issuer and the Borrower that such transferee is an Affiliate. In the event of a sale, transfer,

assignment or participation by the Lender of the Issuer Loan Obligations 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 Borrower an investor letter

executed by such purchaser, transferee or participant in the form of Exhibit B hereto which shall

contain a certification that the purchaser, transferee or participant 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, Lender will provide to the

Borrower an Assignment Letter, in the form of Exhibit E hereto, when such assignment is to an

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Affiliate, and the Borrower shall acknowledge such assignment. Upon assignment, the Borrower

will reflect in a book entry the assignee designated in the written request of assignment or in a

written certification of an Affiliate delivered to the Issuer and the Borrower pursuant to this

Section, and shall 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 Borrower may from time to

time have against the Lender or the assignee. 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. The Lender or

assignee shall pay all reasonable expenses of the Issuer and the Borrower, including reasonable

fees and expenses of counsel (including those of the California Department of Justice attorneys

when they represent the Issuer), in connection with such transfer and assignment and the

execution of any documents in connection therewith. Any transfers of interest in the Issuer Loan

Obligations shall only be made pursuant to an entry in a registration book by the Borrower

pursuant to this Section, as required by Section 149 of the Code. Upon the Lender’s transfer or

assignment of the Issuer Loan Obligations, the Lender shall have no further obligation and shall

be released from all liability for any act or omission occurring subsequent to the date of such

transfer or assignment.

Notwithstanding anything to the contrary contained in this Section 4.09, the Lender may

at any time pledge or grant a security interest in all or any portion of its rights under the Loans

and this Loan Agreement to secure obligations of the Lender, including any pledge or

assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or

assignment shall release the Lender from any of its obligations hereunder or substitute any such

pledgee or assignee for the Lender as a party hereto.

Section 4.10. Repayment of Principal. The Borrower shall make payments of principal

with respect to the Series A Borrower Loan in accordance with the repayment scheduled attached

hereto as Exhibit D-1. The Borrower shall make payments of interest only with respect to the

Series B Borrower Loan during the Interest-Only Period, and a final payment of interest only on

the first Business Day of the calendar month immediately following the Interest-Only Period.

Payments of principal with respect to the Series B Borrower Loan shall be payable on the dates

and in the amounts set forth on Exhibit D-2 hereto.

Section 4.11. Loan Fee. The Borrower shall pay to the Lender on the Closing Date, a

fee in the amount equal to $58,750.

Section 4.12. Late Charge. If the Borrower fails to make any Payment and such failure

results in the untimely payment of principal and interest on the Loan, or if the Borrower fails to

make any Additional Payment when due, in each case, taking into account any grace period

allowed for such Payment, the Borrower shall pay to the Lender or the Issuer a late charge equal

to 10% of the past due payment.

Section 4.13. Default Rate. If (a) the Borrower shall fail to pay the principal and

accrued interest on the Borrower Loans when the same shall become due under this Loan

Agreement, or (b) an Event of Default shall occur hereunder or under any other Loan

Documents, then the Applicable Loan Rate hereunder shall increase to the Default Rate. All

35

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.

Section 4.14. Increased Costs.

(a) (i) Increased Costs Generally. If any Change in Law shall:

(A) impose, modify or deem applicable any reserve, liquidity

ratio, special deposit, compulsory loan, insurance charge or similar

requirement against assets of, deposits with or for the account of, or

advances, loans or other credit extended or participated in by, the Lender;

(B) subject the Lender to any Tax of any kind whatsoever with

respect to this Loan Agreement, or change the basis of taxation of

payments to the Lender in respect thereof (except for Indemnified Taxes

or Other Taxes covered by Section 4.16 hereof and the imposition of, or

any change in the rate of any Excluded Tax payable by the Lender); or

(C) impose on the Lender any other condition, cost or expense

affecting this Loan Agreement or any other Loan Document;

and the result of any of the foregoing shall be to increase the cost to the Lender related to

extending the Loans or of maintaining its obligation to make the Loans, or to reduce the amount

of any sum received or receivable by the Lender hereunder (whether of principal, interest or any

other amount) then, upon written request of the Lender, the Borrower shall promptly pay to the

Lender such additional amount or amounts as will compensate the Lender for such additional

costs incurred or reduction suffered.

(ii) Capital Requirements. If the Lender determines that any Change

in Law affecting the Lender or the Lender’s parent or holding company, if any,

regarding capital requirements, has or would have the effect of reducing the rate

of return on the Lender’s or the Lender’s parent or holding company holding, if

any, as a consequence of this Loan Agreement, or making or committing to make

the Loans to a level below that which the Lender or the Lender’s parent or

holding company could have achieved but for such Change in Law (taking into

consideration the Lender’s policies and the policies of the Lender’s parent or

holding company with respect to capital adequacy), then from time to time upon

written request of the Lender, the Borrower shall promptly pay to the Lender such

additional amount or amounts as will compensate the Lender or the Lender’s

parent or holding company for any such reduction suffered.

(iii) Certificates for Reimbursement. A certificate of the Lender setting

forth the amount or amounts necessary to compensate the Lender or the Lender’s

parent or holding company, as the case may be, as specified in paragraph (i) or (ii)

of this Section shall be delivered to the Borrower and shall be conclusive absent

manifest error. The Borrower shall pay the Lender or any such Participant, as the

36

case may be, the amount shown as due on any such certificate within thirty (30)

days after receipt thereof.

(iv) Delay in Requests; Survival. Failure or delay on the part of the

Lender to demand compensation pursuant to this Section shall not constitute a

waiver of the Lender’s or any such Participant’s right to demand such

compensation. Without prejudice to the survival of any other agreement of the

Borrower hereunder, the agreements and obligations of the Borrower contained in

this Section shall survive the termination of this Loan Agreement and the payment

in full of the Loans.

Section 4.15. Net of Taxes, Etc.

(a) Any and all payments to the Lender hereunder or with respect to the Loans

shall be made free and clear of and without deduction or withholding for any and all

Indemnified Taxes. If the Borrower shall be required by law to deduct or withhold any

Indemnified Taxes imposed by the United States of America or any political subdivision

thereof from or in respect of any sum payable hereunder or with respect to the Loans,

then (i) the sum payable shall be increased as may be necessary so that after making all

required deductions (including deductions applicable to additional sums payable under

this Section) the Lender receives an amount equal to the sum it would have received had

no such deductions been made, (ii)the Borrower shall make such deductions and (iii)the

Borrower shall timely pay the full amount deducted to the relevant taxation authority or

other authority in accordance with applicable law. If the Borrower shall make any

payment under this Section to or for the benefit of the Lender with respect to Indemnified

Taxes and if the Lender shall claim any credit or deduction for such Indemnified Taxes

against any other taxes payable by the Lender to any taxing jurisdiction in the United

States of America then the Lender shall pay to the Borrower an amount equal to the

amount by which such other taxes are actually reduced; provided, that the aggregate

amount payable by the Lender pursuant to this sentence shall not exceed the aggregate

amount previously paid by the Borrower with respect to such Indemnified Taxes. In

addition, the Borrower agrees to pay any present or future stamp, recording or

documentary taxes and any other excise or property taxes, charges or similar levies that

arise under the laws of the United States of America or any state of the United States

from any payment made hereunder or under the Loans or from the execution or delivery

of this Agreement or the Loans, or otherwise with respect to this Agreement or the Loans

(hereinafter referred to as “Other Taxes”). The Lender shall provide to the Borrower

within a reasonable time a copy of any written notification it receives with respect to

Indemnified Taxes or Other Taxes owing by the Borrower to the Lender hereunder;

provided, that the Lender’s failure to send such notice shall not relieve the Borrower of

its obligation to pay such amounts hereunder.

(b) The Borrower shall, to the fullest extent permitted by law and subject to

the provisions hereof, pay the Lender for the full amount of Indemnified Taxes and Other

Taxes including any Indemnified Taxes or Other Taxes imposed by any jurisdiction on

amounts payable under this Section paid by the Lender or any liability (including

penalties, interest and expenses) arising therefrom or with respect thereto, whether or not

37

such Indemnified Taxes or Other Taxes were correctly or legally asserted; provided, that

the Borrower shall not be obligated to pay the Lender for any penalties, interest or

expenses relating to Indemnified Taxes or Other Taxes arising from the Lender’s gross

negligence or willful misconduct. The Lender agrees to give notice to the Borrower of

the assertion of any claim against the Lender relating to such Indemnified Taxes or Other

Taxes as promptly as is practicable after being notified of such assertion; provided, that

the Lender’s failure to notify the Borrower promptly of such assertion shall not relieve

the Borrower of its obligation under this Section. Payments by the Borrower pursuant to

this Section shall be made within thirty (30) days from the date the Lender makes written

demand therefor, which demand shall be accompanied by a certificate describing in

reasonable detail the basis thereof. The Lender agrees to repay to the Borrower any

refund (including that portion of any interest that was included as part of such refund)

with respect to Indemnified Taxes or Other Taxes paid by the Borrower pursuant to this

Section received by the Lender for Indemnified Taxes or Other Taxes that were paid by

the Borrower pursuant to this Section and to contest, with the cooperation and at the

expense of the Borrower, any such Indemnified Taxes or Other Taxes which the Lender

or the Borrower reasonably believes not to have been properly assessed.

(c) Within thirty (30) days after the date of any payment of Indemnified Taxes

by the Borrower, the Borrower shall furnish to the Lender the original or a certified copy

of a receipt evidencing payment thereof.

(d) Without prejudice to the survival of any other agreement of the Borrower

hereunder, the agreements and obligations of the Borrower contained in this Section shall

survive the termination of this Loan Agreement and the payment in full of the Loans.

ARTICLE V

CONDITIONS PRECEDENT

Section 5.01. Conditions Precedent to Loan Agreement. The Issuer’s agreement to

enter into this Loan Agreement and provide the financing contemplated hereby shall be subject

to the condition precedent that the Issuer shall have received or waived the requirement for the

items listed in Section 5.01(a), (b), (c), (d), (g), (h), (i), (j), (m), (q), (s), (t), (v), (x) and (z), each

in form and substance satisfactory to the Issuer. 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 following,

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 Regulatory Agreement, properly executed on behalf of the

Borrower and the Issuer;

(c) the Assignment Agreement;

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(d) the Deed of Trust, properly executed on behalf of the Borrower and

notarized;

(e) Reserved;

(f) the Contracts and Permits Assignment Agreements;

(g) the Project Fund Disbursement Agreement;

(h) the Construction Contract fully executed by General Contractor and the

Borrower, in form and substance satisfactory to Lender;

(i) the Final Appraisal of the Property evidencing that the loan-to-value ratio,

based on the “as-completed” fair market value of the Property that will secure the

Borrower Loans as set forth in the Final Appraisal, is no greater than 65%;

(j) a certificate of the Borrower, certifying as to (i) the resolutions of the

Board of Directors or Executive Committee, if so authorized by the Board of Directors,

of the Borrower, authorizing the execution, delivery and performance of the Borrower

Documents and any related documents, (ii) the Bylaws of the Borrower, (iii) the

signatures of the officers or agents of the Borrower authorized to execute and deliver the

Borrower Documents and other instruments, agreements and certificates on behalf of the

Borrower, (iv) that there has been no event or circumstance since June 30, 2015, that has

had or could be reasonably expected to have, either individually or in the aggregate, a

Material Adverse Effect, (v) that the representations and warranties contained in Section

2.02 hereof and the other Loan Documents are true and correct in all material respects on

the Closing Date and (vi) no event has occurred and is continuing, or would result from

entry into this Agreement, which would constitute a Default or Event of Default;

(k) copies of the Articles of Incorporation of the Borrower, certified within 30

days of the Closing Date;

(l) a certificate of good standing issued as to the Borrower by the Secretary of

State of the State dated not more than thirty (30) days prior to the Closing Date;

(m) a certificate of good standing or exemption issued as to the Borrower by

the Franchise Tax Board of the State dated not more than thirty (30) days prior to the

Closing Date;

(n) a resolution adopted by the Issuer authorizing the Borrower Loans and the

Issuer Loan Obligations and the transactions contemplated hereunder;

(o) a closing certificate of the Issuer in a form reasonably acceptable to

Special Counsel;

(p) evidence that the financing of the Project has been approved by the

“applicable elected representative” of the TEFRA governmental approver after a public

hearing held upon reasonable notice;

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(q) UCC-1 financing statement(s) as required by the Lender to perfect the

security interests of the Issuer and assignment to the Lender;

(r) current searches of appropriate filing offices showing that (i) no state or

federal tax liens have been filed and remain in effect against the Borrower, (ii) no

financing statements have been filed and remain in effect against the Borrower relating to

the Project except those financing statements filed by the Lender, or financing statements

which will be terminated upon closing of the financing contemplated hereunder, and

(iii) the Lender has duly filed all financing statements necessary to perfect the security

interest created pursuant to this Loan Agreement to the extent such interest can be

perfected by filing a financing statement;

(s) a completed and executed Form 8038 or evidence of filing thereof with the

Secretary of Treasury;

(t) an opinion of counsel to the Borrower, addressed to Kutak Rock LLP, as

Special Counsel, 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 counsel to the Issuer, addressed to the Issuer and the Lender,

in form and substance acceptable to the Lender and the Issuer;

(v) an opinion of Special Counsel addressed to the Issuer and Lender, in form

and substance acceptable to the Issuer and Lender;

(w) evidence of payment of the Issuer’s closing fees and the fees of the

Issuer’s counsel;

(x) evidence of payment to the Lender of the Lender’s costs and expenses in

connection with the execution of the Loan Documents;

(y) 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 to the Issuer;

(z) 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;

(aa) 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 Regulatory Agreement;

(bb) a Docket Search of the Superior Court in the County of San Diego and the

United States District Court for the Southern District of California;

(cc) a commitment from the Title Insurer to issue the Title Policy;

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

Issuer;

(ee) the Lender shall have received a report as to whether or not any portion of

the real property is in a federally designated flood hazard area and, if any improvements

thereon are in a federally designated flood hazard area, evidence of the maintenance of

flood insurance as may be required by applicable law;

(ff) the Lender shall have received a report of an independent firm of

environmental engineers acceptable to the Lender concerning the environmental hazards

and matters with respect to the parcels of real property subject to the Lien of the Deed of

Trust, together with a reliance letter thereon acceptable to the Lender;

(gg) a copy of the Borrower’s Investment Policy as in effect on the Closing

Date; and

(hh) the Lender shall have received (i) the audited financial statements of the

Borrower for Fiscal Year ended June 30, 2015, together with internally prepared financial

statements for each quarter(s) ended since the end of such Fiscal Year and (ii)

information relating to the Capital Campaign Contributions.

Section 5.02. Conditions Precedent to Subsequent Draw Requests. Other than the

initial disbursement of Loan Proceeds on the Closing Date and subject to Section 5.03 hereof,

Lender’s agreement to disburse the Loan Proceeds shall be subject to the further conditions

precedent set forth in the Project Fund Disbursement Agreement and that Lender shall have

received or waived the requirement for all of the following for each Draw Request, each in form

and substance satisfactory to Lender:

(a) a fully executed Draw Request substantially in the form attached hereto as

Exhibit F, with all appropriate supporting documents attached thereto;

(b) an updated Exhibit G to this Loan Agreement, as applicable;

(c) a set of the Plans and Specifications marked “for construction” approved

by the City of San Diego;

(d) the building permit(s) and any other permits, licenses and approvals

(collectively, the “Permits”) that may be required for the commencement of the

construction of the Improvements, in form and substance satisfactory to Lender;

(e) copies of fully executed applications for payments submitted by the

General Contractor, and at Lender's option, from the “Major Subcontractors” (defined for

purposes of this section and elsewhere herein as subcontractors performing work in

excess of $50,000.00), on AIA Document 702 and 703, with all supporting

documentations required thereby;

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(f) the certification by the Borrower that no Event of Default exists, and, to

the best of its knowledge, no event has occurred and no condition exists that, after notice

or lapse of time, or both, would constitute an Event of Default;

(g) payment of Lender Fees, commissions and expenses required by

Section 12.03 hereof;

(h) the Lender shall be satisfied that the opinion of Special Counsel delivered

on the Closing Date remains in effect and covers the requested draw; and

(i) such other information and documents as 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 Loan Proceeds on the

Closing Date, Lender need not make any further disbursements pursuant to a Draw Request or

allow any withdrawal from the Project Fund at any time if:

(a) the Facilities or Improvements 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 Borrower sufficient in Lender’s judgment to pay for

the complete repair or replacement of the Improvements in a timely manner;

(b) the Lender reasonably believes that withholding disbursement in whole or

in part is required by applicable mechanics' lien or stop notice laws (unless the Borrower

has obtained a bond reasonably satisfactory to Lender sufficient to allow Lender to make

such disbursement in accordance with California law);

(c) the Borrower 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 Improvements according to the Plans and Specifications;

(d) the Borrower fails timely to proceed with completion of construction of

the Improvements substantially in accordance with the Plans and Specifications approved

by Lender; or

(e) an Event of Default has occurred under this Loan Agreement, any of the

other Loan Document, any other agreement between the Lender and the Borrower, or the

Borrower is in default under any other agreement regarding the development of the

Facilities or the Improvements, including without limitation, any subdivision agreement,

improvement agreement, or development agreement.

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ARTICLE VI

SECURITY INTEREST

Section 6.01. Change in Name or Corporate Structure of the Borrower; Change in

Location of the Borrower’s Principal Place of Business. The Borrower’s chief executive

office is located at the address set forth in Section 12.04 hereof, and all of the Borrower’s records

relating to its business are kept at such location. The Borrower 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 identification number. Such notice shall 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 Borrower hereby authorizes the Lender to file any

financing statement (and any amendments or continuations to any financing statement) necessary

to perfect the security interest granted in this Loan Agreement under the laws 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

Obligations constitutes a first lien and security interest which immediately attaches to such

Payments, and is effective and binding against the Issuer, the Borrower, 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, filing or further act.

Section 6.03. Assignment of Insurance. As additional security for the payment and

performance of the Borrower’s obligations under this Loan Agreement, the Borrower 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 Borrower with respect to, any and all policies of insurance now or at any time

hereafter covering the Facilities or the Property or any evidence thereof or any business records

or valuable papers pertaining thereto, and Lender may request that the Borrower direct the issuer

of any such policy to pay all such moneys in excess of $100,000 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 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 Facilities or 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) in furtherance of rights pursuant to Article IX hereof, in

the Lender’s name or in the Borrower’s name, execute and deliver proof of claim, receive all

such moneys, endorse checks and other instruments representing payment of such moneys, and

adjust, litigate, compromise or release any claim against the issuer of any such policy or party in

any condemnation proceeding.

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ARTICLE VII

AFFIRMATIVE COVENANTS OF BORROWER

Section 7.01. Maintenance of Facilities.

(a) The Borrower shall, at its own commercially reasonable expense,

maintain, preserve and keep the Facilities in good repair, working order and condition

consistent with its past practice, and shall from time to time make all reasonable repairs

and replacements necessary to keep the Facilities 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 Facilities become worn out, lost,

destroyed, damaged beyond repair or otherwise rendered unfit for use, the Borrower, at

its own 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 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). All such replacement parts and

accessories shall be deemed to be incorporated immediately into and to constitute an

integral portion of the Facilities 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 Facilities or additions to the Facilities.

(b) The Borrower shall observe and comply with all legal requirements

applicable to the ownership, use and operation of the Facilities, including the terms and

conditions set forth in this Loan Agreement, the Deed of Trust and the Tax Regulatory

Agreement. The Borrower shall permit the Lender and its agents, representatives and

employees, upon reasonable prior notice to the Borrower, to inspect the Facilities 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 Facilities. Such

environmental and engineering studies shall be at the Borrower’s commercially

reasonable expense, provided that Lender provides the Borrower with evidence of

Lender’s reasonable belief that there is an environmental or structural condition at the

Facilities that could have a material adverse effect on the Lender’s security under the

Loan Documents.

(c) The Borrower will defend the Facilities against all claims or demands of

all persons (other than the Lender hereunder and other than Permitted Encumbrances)

claiming the Facilities or any interest 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, however, nothing herein shall preclude the Borrower’s right to contest in

good faith by appropriate proceedings any claim of noncompliance or breach.

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Section 7.03. Payment of Taxes and Other Claims. The Borrower 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

limitation, the Facilities) or upon or against the creation, perfection or continuance 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 lien or charge upon any properties of the Borrower; provided, that the Borrower shall

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 Borrower will pay, as

the same respectively come due, all gas, water, steam, electricity, heat, power, telephone, utility

and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the

Property and the Facilities; provided, that the Borrower shall not be required to pay any such

charge whose amount, applicability or validity is being contested in good faith by appropriate

proceedings.

Section 7.04. Insurance; Indemnity.

(a) During the construction of the Improvements or of 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,

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 such Improvements being constructed, and to

remain in effect until all such Improvements being constructed have been completed and

accepted by the Borrower and the Lender (or the Lender’s designee) and a certificate of

occupancy has been issued. Such insurance shall be in an amount equal to $17,781,955

with a deductible not to exceed $889,017.75 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 the Borrower can complete and

occupy the premises without further written consent from the insurer; (iv) not exclude

losses due to explosions, collapses, 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 borrowed to finance construction or renovation, advertising,

promotion, real estate taxes and other assessments, the cost of renegotiating leases,

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, theft, 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 Borrower shall provide or cause to be provided to the Lender

a copy of the builder’s risk insurance policy prior to the commencement of the

construction of the Improvements with an aggregate cost in excess of $250,000.

(b) If requested by the Lender with respect to any time any Improvements

with an aggregate cost in excess of $250,000 are under construction, the Borrower shall

cause each Contractor performing any of such construction work to maintain worker’s

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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.

(c) The Borrower shall, at its own expense, maintain and keep in force

commercial general liability and automobile liability insurance against claims arising in,

on or about the Property, including in, on or about the sidewalks or premises adjacent to

the Property, providing coverage limits not less than $1,000,000 per occurrence and

$2,000,000 in aggregate.

(d) In addition, the Borrower shall, at its own expense, maintain and keep in

force insurance of the types and in amounts customarily carried by institutions similar to

the Borrower, including but not limited to fire and extended all-risk coverage (in an

amount not less than $36,654,929 with a deductible not to exceed $1,000,000, without

deductions for depreciation, and including all fixtures and personal property and

endorsements for any non-conforming uses), flood (if the Borrower’s property is located

in a flood zone), property damage, workers’ compensation, business interruption

covering not less than six (6) months, 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 Borrower may insure the Facilities under a blanket insurance policy or

policies which cover not only the Facilities, but also other properties of the Borrower or,

upon prior written approval of the Lender, may provide self-insurance acceptable to the

Lender.

(e) All of the insurance policies required hereunder shall be issued by

corporate insurers licensed to do business in the State and rated AVII or better by A.M.

Best Company, shall contain a waiver of subrogation endorsement which shall provide

for not less than thirty (30) days’ notice of cancellation, and shall be in form acceptable

to the Lender.

(f) All certificates of insurance and “blanket” insurance policies shall

reference the specific project being covered by name and address and shall name the

Lender as a mortgagee or loss payee (with respect to property insurance) and as an

additional insured (with respect to liability insurance). The insurance shall be evidenced

by the original policy or a true and certified copy of the original policy, or in the case of

liability insurance, by certificates of insurance on Acord form 27 or 28 (for building

contents or property) or Acord form 25 (for liability). Certified copies of the policies of

insurance required to be maintained hereunder shall be delivered to the Lender upon

request. The Borrower 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 least thirty (30) days before the

expiration of existing policies and, in any event, the Borrower shall deliver originals of

such policies or certificates (or other proof of insurance acceptable to Lender) to the

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Lender at least fifteen (15) days before the expiration of existing policies. If the Lender

has not received satisfactory evidence of such renewal or substitute insurance in the time

frame herein specified, the Lender shall have the right, but not the obligation, to purchase

such insurance for the Lender’s interest only. Nothing contained in this Section shall

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 loss shall occur at any time 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 Borrower, 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 reissuance of any policy of insurance maintained by the Borrower, and such

payments shall be accepted by the insurer to prevent same.

(g) The Borrower shall give to the Lender prompt notice of any loss with an

estimated replacement value in excess of $250,000 occurring on or with respect to the

Property. The Borrower shall furnish to the Lender, upon request, certificates of

insurance evidencing such coverage while the Loans are outstanding.

(h) Upon the written request of the Lender at any time, any insurance policy

carried or maintained pursuant to this Section (other than the worker’s compensation

policy) shall be so written or endorsed as to make losses, if any, payable to the Lender

and the Issuer or the Borrower, as their respective interests may appear and naming the

Lender as additional insured for liability. The Net Proceeds of the insurance required in

this Section shall be applied as provided in Article IX hereof. Each 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 cancellation or modification.

(i) As among the Lender, the Issuer and the Borrower, the Borrower assumes

all risks and liabilities from any cause whatsoever, whether or not covered by insurance,

for loss or damage to the Facilities, 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

Borrower or of third parties, and whether such property damage be to the Borrower’s

property or the property of others. Whether or not covered by insurance, the Borrower

hereby assumes responsibility for and agrees to reimburse the Lender and the Issuer for

and will 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 against the Lender or the Issuer or their assignees, agents, employees, officers

and directors that in any way relate to or arise out of this Loan Agreement or the Loan,

the transactions contemplated hereby and thereby and the Facilities or the Property,

including but not limited to, (i) the ownership of the Facilities or the Property, (ii) the

delivery, lease, possession, maintenance, use condition, return or operation of

components of the Facilities or the Property, (iii) the conduct of the Borrower, its

47

officers, employees and agents, (iv) a breach by the Borrower of any of its covenants or

obligations hereunder, and (v) any claim, loss, cost or expense involving alleged damage

to the environment relating to the Facilities or the Property, including, but not limited to

investigation, removal, cleanup and remedial costs. All amounts payable by the

Borrower pursuant to the immediately preceding sentence shall be paid immediately upon

demand of the Issuer or the Lender or their assignees, agents, employees, officers and

directors, as the case may be. This provision shall survive the termination of this Loan

Agreement for any reason.

Section 7.05. Reporting Requirements. The Borrower will deliver, or cause to be

delivered, to the Lender, and to the Issuer if requested by the Issuer, each of the following, which

shall be in form and detail reasonably acceptable to the Lender and the Issuer, as to information

requested by the Issuer:

(a) not later than 150 days after and as of the end of each fiscal year, financial

statements of the Borrower, including therein a balance sheet, income statement,

statement of cash flows and reconciliation of the Borrower’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

Borrower Representative addressed to the Lender stating that such Authorized Borrower

Representative does not have knowledge of the existence of any event or condition

constituting an uncured Default or an Event of Default; provided that Lender

acknowledges and agrees that, as of the Closing Date, West Rhode & Roberts, Certified

Public Accountants, are acceptable as the Borrower’s accountants for purposes of this

section;

(b) contemporaneously with the submittal of the financial statement required

by subsection (a) above, a certificate of the Authorized Borrower Representative

substantially in the form attached hereto as Exhibit H stating all relevant facts in

reasonable detail to evidence, and the computations 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 or bank statements, as applicable;

(c) during the construction of the Improvements, not later than 30 days after

each fiscal quarter and as of such date, commencing December 31, 2015, quarterly

financial statements of the Borrower, including therein a balance sheet and income

statement, prepared in accordance with GAAP consistently applied, internally prepared

by the Borrower, together with a schedule of the Borrower’s cumulative Capital

Campaign Contributions;

(d) following the completion of the Improvements, not later than 60 days after

each June 30 and December 31 and as of such date, commencing December 31, 2017,

semi-annual financial statements of the Borrower, including therein a balance sheet and

income statement, prepared in accordance with GAAP consistently applied, internally

prepared by the Borrower, together with reasonable detail to evidence, and the

computations as to, whether the Borrower is in compliance with the requirements set

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forth in Section 7.16(a) hereof applicable to the period covered by the accompanying

financial statements or bank statements, as applicable;

(e) not later than 30 days after the beginning of each Fiscal Year, a copy of

the annual budget for such Fiscal Year, as adopted by the Board of Directors of the

Borrower;

(f) promptly upon the occurrence and nature of any Reportable Event or

Prohibited Transaction, each as defined in the Employee Retirement Income Security Act

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

ERISA) maintained or contributed to by the Borrower;

(g) promptly upon actual knowledge thereof, notice of any loss or destruction

of or damage to any portion of Facilities in excess of $250,000 or of any material adverse

change in the Facilities;

(h) promptly after the amending thereof, copies of any and all amendments to

the Borrower’s articles of incorporation or bylaws;

(i) promptly upon receipt of notice or actual knowledge thereof by an

Authorized Borrower Representative, notice of the violation by the Borrower of any law,

rule or regulation, the violation of which would have a material adverse effect on the

financial or operating condition of the Borrower;

(j) promptly upon written notice or actual knowledge thereof, any termination

or cancellation of any insurance policy which the Borrower is required to maintain

hereunder, or any uninsured or partially uninsured loss through liability or property

damage, or through fire, theft or any other cause affecting the Borrower’s property in

excess of an aggregate of $250,000;

(k) immediately upon the Borrower’s actual knowledge thereof, notice in

writing of all litigation and of all proceedings before any governmental or regulatory

agency affecting the Borrower which seek a monetary recovery against the Borrower in

excess of $250,000 which is not covered by insurance;

(l) as promptly as practicable (but in any event not later than five Business

Days) after an Authorized Borrower Representative obtains knowledge 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 detailed statement by an Authorized Borrower

Representative of the steps being taken by the Borrower to cure the effect of such Default

or Event of Default;

(m) within 60 days of receipt of a written request from the Issuer, a written

report, as of the end of the Borrower’s prior fiscal year, stating the status of the Project

and the unpaid outstanding balance of the Loan; and

49

(n) 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

Collateral and Capital Campaign Contributions.

Section 7.06. Books and Records; Inspection and Examination. The Borrower will

keep accurate books of record and account for itself separate and apart from those of its

affiliates, including its officers, pertaining to the Project and pertaining to the Borrower’s

business and financial condition and such other matters as the Lender and/or the Issuer 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 or at any time after the occurrence of an Event of Default, will permit any officer,

employee, attorney or accountant for the Lender and/or the Issuer or, at the written request of the

Issuer to the Borrower and only pursuant to a request from the Internal Revenue Service, a

representative of the Internal Revenue Service, to audit, review, make extracts from, or copy any

and all organization and financial books and records of the Borrower and to examine and inspect

the Facilities, the Property and the Collateral, and to discuss the affairs of the Borrower with any

of its officers, employees or agents at all times during ordinary business hours (a) within three

Business Days of a written request by the Lender and/or the Issuer, or (b) at any time after the

occurrence of an Event of Default.

Section 7.07. Performance by the Lender. If the Borrower at any time fails to perform

or observe any of the covenants or agreements contained in the Loan Documents (except for the

Tax Regulatory Agreement), immediately upon the occurrence of such failure, without notice or

lapse of time, but after giving effect to any applicable cure periods or contest rights of the

Borrower 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 Borrower

(or, at the Lender’s option, in the Lender’s name) and may, but need not, take any and all other

actions 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 obligations owed to account debtors or other obligors, the

procurement and maintenance of insurance, the execution of assignments, security agreements

and financing statements, and the endorsement of instruments); and the Borrower shall thereupon

pay to the Lender on demand the amount of all moneys expended and all 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 law; provided, however, that such rate shall not exceed 12% 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 Borrower, with a limited

power 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

Borrower any and all instruments, documents, assignments, security agreements, financing

statements, applications for insurance and other agreements and writings relating to the Property

or the Facilities required to be obtained, executed, delivered or endorsed by the Borrower under

this Loan Agreement.

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Notwithstanding anything herein to the contrary, the Issuer shall have the right to enforce

the Borrower’s covenants, agreements and representations in the Tax Regulatory Agreement

against the Borrower pursuant to the terms thereof.

Section 7.08. Preservation of Existence. The Borrower will preserve and maintain its

existence, its status as a nonprofit religious corporation and an organization described in Section

501(c)(3) of the Code, and all of its permits, 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 Borrower shall hold itself out to the public as a legal entity

separate and distinct from any other entity (including any affiliate thereof). So long as the Issuer

Loan Obligations remain outstanding, the Borrower will be qualified to transact business in the

State and will be engaged in business in the State. The Borrower shall maintain full accreditation

by the Western Association of Schools and Colleges, or its successor, or such replacement

accrediting agency as commonly used by comprehensive independent schools in the State or in

the western region of the United States of America.

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 shall not be liable

to the Borrower 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 documents related

thereto.

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 Borrower Loans and their application as provided herein. No

failure of the Issuer to comply with any term, covenant, or agreement contained herein, or in any

document executed by the Issuer in connection herewith, shall subject the Issuer to liability for

any claim for damages, costs, or other financial or pecuniary charge, except to the extent that the

same can be paid or recovered from Payments made pursuant to the Borrower Loans. Nothing

herein shall preclude a proper party in interest from seeking and obtaining, 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

Issuer pursuant hereto, or the breach thereof. In making the agreements and provisions set forth

in this Loan Agreement, the Issuer has not obligated itself, except with respect to the application

of Payments made pursuant to the Borrower Loans hereunder.

Section 7.11. Expenses. The Borrower covenants and agrees to pay, and to indemnify

the Issuer against all reasonable costs, charges and expenses, including fees and disbursements of

attorneys, accountants, consultants and other experts, incurred by the Issuer in good faith in

connection with the Loans and the Loan Documents. The Borrower covenants and agrees to pay,

and to indemnify Lender against all reasonable costs, charges and expenses, including fees and

disbursements of attorneys, accountants, consultants and other experts, incurred by the Lender in

good faith in connection with the Loans and the Loan Documents.

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Section 7.12. No Personal Liability.

(a) The Issuer shall not be obligated to pay the principal of or interest on the

Issuer Loan Obligations, except from Payments under the Borrower Loans and any other

moneys and assets received by the Issuer for such purpose pursuant to this Loan

Agreement. Neither the faith and credit nor the taxing power of the State or any political

subdivision thereof, nor the faith and credit of the Issuer is pledged to the payment of the

principal or interest on the Issuer Loan Obligations. Neither the Issuer nor its officers,

directors, agents or employees or their successors and assigns shall be liable for any

costs, expenses, losses, 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 Obligations, except only to the extent amounts are received for the payment

thereof from the Borrower under this Loan Agreement.

(b) Borrower hereby acknowledges that the Issuer’s sole source of moneys to

repay the Issuer Loan Obligations will be provided by Payments made by the Borrower

under the Borrower Loans pursuant to this Loan Agreement, and hereby agrees that if the

payments to be made hereunder shall ever prove insufficient to pay all principal and

interest on the Issuer Loan Obligations as the same shall become due (whether by

maturity, redemption, acceleration or otherwise),the Borrower shall pay such amounts as

are required from time to time to prevent any deficiency or default in the payment of such

principal or interest, including, but not limited to, any deficiency caused by acts,

omissions, nonfeasance or malfeasance on the part of the Borrower, 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 Issuer

Rights), other than with respect to any deficiency caused by the willful misconduct of the

Issuer.

(c) No director, member, officer, agent or employee of the Issuer or any

director, officer, agent or employee of the Borrower shall be individually or personally

liable for the payment of any principal (or Prepayment Fee) or interest on the Issuer Loan

Obligations or any other 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, director, officer, agent or

employee from the performance of any official duty provided by law or by this Loan

Agreement.

Section 7.13. Borrower Indemnification of the Issuer. The Borrower covenants and

agrees as follows:

(a) To the fullest extent permitted by law, the Borrower agrees to indemnify,

hold harmless and defend the Issuer, and each of its past, present and future officers,

governing directors, officials, employees, attorneys and agents (collectively, the

“Indemnified Parties”), against any and all losses, damages, claims, actions, liabilities,

costs and expenses of any conceivable nature, kind or character (including, without

limitation, reasonable attorneys’ fees, litigation and court costs, amounts paid in

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settlement and amounts paid to discharge judgments) to which the Indemnified Parties, or

any of them, may become subject under or 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 Issuer Documents or the execution or amendment

hereof or thereof or in connection with transactions contemplated hereby or

thereby;

(ii) any act or omission of the Borrower or any of its agents,

contractors, servants, employees, tenants) or licensees in connection with the

Improvements or the Facilities, the operation of the Improvements or the

Facilities, or the condition, environmental or otherwise, occupancy, use,

possession, conduct or management of work done in or about, or from the

planning, design, acquisition, installation or construction of, the Improvements or

the Facilities or any part thereof;

(iii) any Lien or charge upon payments by the Borrower to the Issuer

hereunder, or any taxes (including, without limitation, all ad valorem taxes and

sales taxes), assessments, impositions and other charges imposed on the Issuer in

respect of any portion of the Improvements or the Facilities;

(iv) any violation of any Environmental Regulations with respect to, or

the release of any Hazardous Materials from, the Improvements or the Facilities

or any part thereof;

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

(vi) any Determination of Taxability of interest on the Issuer Loan

Obligations, or allegations that interest on the Issuer Loan Obligations is taxable

or any regulatory audit or inquiry regarding whether interest in the Issuer Loan

Obligations is taxable;

(vii) any untrue statement or misleading statement or alleged untrue

statement or alleged misleading statement of a material fact contained in any

offering statement or disclosure or continuing disclosure document for the Loans

or any of the documents relating to the Loan, or any omission or alleged omission

from any offering statement or disclosure or continuing disclosure document for

the Loan of any material fact necessary to be stated therein in order to make the

statements made therein, in the light of the circumstances under which they were

made, not misleading;

provided that the foregoing indemnification shall not be available to the extent such damages are

caused by the gross negligence or willful misconduct of such Indemnified Party. In the event

that any action or proceeding is brought against any Indemnified Party with respect to which

indemnity may be sought hereunder, the Borrower, upon written notice from the Indemnified

Party, shall assume the investigation and defense thereof, including the employment of counsel

selected by the Borrower and reasonably approved by the Indemnified Party, and shall assume

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the payment of all expenses related thereto, with full power to litigate, compromise or settle the

same in its sole discretion; provided that the Indemnified Party shall have the right to review and

approve or disapprove any such compromise or settlement. Each Indemnified Party shall have

the right to employ separate counsel in any such action or proceeding and participate in the

investigation and defense thereof, and the Borrower shall pay the reasonable fees and expenses

of such separate counsel; provided, however, that such Indemnified Party may only employ

separate counsel at the expense of the Borrower if in the reasonable judgment of such

Indemnified Party a conflict of interest exists by reason of common representation or if all

parties commonly represented do not reasonably 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 Issuer Loan Obligations. The provisions of this

Section shall survive the termination of this Loan Agreement.

Section 7.14. Borrower Indemnification of the Lender. The Borrower covenants and

agrees as follows:

(a) to indemnify and hold harmless, to the extent permitted by law, the Lender

and its affiliates, their respective incorporators, members, commissioners, directors,

officers, agents and employees (collectively, the “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 Property and/or Facilities, 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 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 Regulatory Agreement)

or restriction relating to the Facilities; (iii) any violation of law, ordinance or regulation

affecting the Facilities or any part thereof or the ownership or occupancy or use thereof;

or (iv) the carrying out of any of the transactions contemplated by this Loan Agreement

and all related documents;

(b) promptly after receipt by an Indemnified Person of notice of the

commencement of any action in respect of which indemnification may be sought under

this Section 7.14, the Indemnified Person shall promptly notify the Borrower in writing,

but the delay to so notify the Borrower will not relieve the Borrower from any liability

which it may have to any 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 against any

Indemnified Person; and

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(c) notwithstanding the previous provisions of this Section 7.14,the Borrower

is not liable for or obligated to indemnify any Indemnified Person harmless against any

loss or damage to property or injury or death to any person or any other loss or liability if

and to the extent such loss, damage, liability, injury or death results from the gross

negligence or willful misconduct of any Indemnified Person seeking such

indemnification.

All indemnifications by the Borrower in this Section 7.14 shall survive (a) the

termination of this Loan Agreement, (b) payment of the indebtedness hereunder, (c) foreclosure

or deed in lieu thereof, or reconveyance or cancellation of the Deed of Trust, (d) sale or other

transfer of the Property by the Borrower, and (e) the exercise of any of the Lender’s other rights

and remedies under the Loan Documents or at law.

Section 7.15. Covenant to Enter into Agreement or Contract to Provide Ongoing

Disclosure. The Borrower and the Lender intend that this Loan Agreement be exempt from the

requirements of Paragraph (b)(5)(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 Borrower hereby covenants and agrees that if this Loan Agreement ceases to be

exempt under the Rule, the Borrower 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.

Section 7.16. Financial Covenants.

(a) Borrower shall maintain unencumbered Net Unrestricted Cash and

Investments in an amount not less than $3,000,000, verified not more frequently than

semi-annually as of each June 30 and December 31, commencing December 31, 2015.

(b) Borrower shall maintain a Debt Service Coverage Ratio of not less than

1.15 to 1.00, measured annually based on the audited financial statements of the

Borrower as of the end of each fiscal year, commencing the fiscal year ended June 30,

2016.

Section 7.17. Deposit Relationship. The Borrower and Lender agree as follows:

(a) So long as the Loans are outstanding and MUFG Union Bank, N.A. or an

Affiliate thereof is the Lender hereunder, the Borrower shall maintain its checking and

other general deposit accounts, as well as the Project Fund, with Lender.

(b) Borrower authorizes Lender to make automatic deductions from the

following deposit account (“Account”) maintained by the Borrower at the Lender’s

offices in order to pay, when and as due, all of the Payments that the Borrower is required

or obligated to make under this Loan Agreement:

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funds in the Account are insufficient to make such Payment in full on the date that such Payment

is due, then the Borrower shall be responsible for all late payment charges and other

consequences of such default by the Borrower under the terms of the Borrower Documents.

(c) Subject to subparagraph (d) below, this authorization shall continue in full

force and effect until the date which is five (5) Business Days after the date on which

Lender actually receives written notice from the Borrower expressly revoking the

authority granted to Lender to charge the Account for Payments in connection with the

Borrower Loans. No such revocation by the Borrower shall in any way release the

Borrower from or otherwise affect the Borrower’s obligations under the Borrower

Documents, including the Borrower’s obligations to continue to make all Payments

required under the terms of this Loan Agreement.

(d) The Lender, so long as MUFG Union Bank, N.A. is the Lender hereunder,

at its option and in its discretion, reserves the right to terminate the arrangement for

automatic deductions from the Account pursuant to this subparagraph (d) at any time

effective upon written notice of such election (a “Termination Notice”) given by Lender

to the Borrower. Without limiting the generality of the immediately preceding sentence,

the Lender may elect to give a Termination Notice to the Borrower if the Borrower 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 Borrower.

(a) The Issuer covenants as follows:

(i) The Issuer shall not take any action, or fail 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 Issuer Loan

Obligations not being excluded from gross income for federal income tax

purposes under Section 103 of the Code. Without limiting the generality of the

foregoing, the Issuer covenants that it will comply with the requirements of the

Tax Agreement applicable to it which is incorporated herein as if fully set forth

herein; provided, however, 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

Regulatory Agreement, the Issuer is relying exclusively on the Borrower to act or

refuse to act in the appropriate manner except to the extent a particular action by

the Issuer is required or prohibited. Any requirement that the Issuer will not

permit or allow an action, or similar requirement, shall pertain solely to the

actions of the Issuer and the Issuer shall have no obligation to prevent, or to

attempt to prevent, any action by the Borrower. This covenant shall survive the

payment in full and prepayment of the Issuer Loan Obligations.

(ii) In the event that at any time the Issuer is of the opinion that for

purposes of this Section it is necessary or helpful to restrict or limit the yield on

the investment of any moneys under this Loan Agreement, the Issuer shall so

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instruct the Borrower in writing accompanied by a supporting opinion of Special

Counsel, and the Borrower shall take such action as may be directed by the Issuer.

(iii) Notwithstanding any provisions of this Section, if the Issuer

provides to the Borrower an opinion of Special 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 Obligations, the Borrower may

conclusively rely on such opinion in complying with the requirements of this

Section and the Tax Regulatory Agreement, and the covenants hereunder shall be

deemed to be modified to that extent.

(b) The Borrower covenants as follows:

(i) The Borrower will not take any action that would cause the interest

on the Issuer Loan Obligations to become includable 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 deliberate action

within the meaning 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 power necessary to ensure that the interest on the Issuer Loan

Obligations does not become includable 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 Borrower covenants that it

shall comply with the requirements of the Tax Regulatory Agreement, which is

incorporated herein as if fully set forth herein. This covenant shall survive the

payment in full and prepayment of the Loans.

(ii) The Issuer 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 Issuer

Loan Obligations. In furtherance of this covenant, the Borrower, on behalf of the

Issuer, hereby covenants (A) initially, on or before September 1, 2020 and on or

before September 1 of every fifth year thereafter, to calculate, or cause to be

calculated, the “rebate amount” in accordance with Section 148(f) and Section

1.148-2 of the Regulations, (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 Borrower further agrees to comply with the provisions and

requirements of the Tax Regulatory Agreement relating to the Issuer’s obligation

to pay the rebate amount as required hereunder and under Section 148 of the

Code.

(iii) Notwithstanding any provisions of this Section, if the Borrower

provides to the Issuer an opinion of Special Counsel to the effect that any

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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 Obligations, the Issuer may conclusively

rely on such opinion in complying with the requirements of this Section and the

Tax Regulatory Agreement, 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 Borrower’s covenants, agreements and representations in the Tax Regulatory Agreement

against the Borrower pursuant to the terms thereof.

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

(a) The Borrower is not an entity (i) whose property or interest in property is

blocked or subject to blocking pursuant to Section 1 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 Borrower is in compliance with the Patriot Act. No proceeds of the

Borrower Loans 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 Borrower 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, which provisions, as well as related

defined terms contained therein, are hereby incorporated by reference herein with the same effect

as if each and every such provision were set forth herein in its entirety all of which shall be

deemed to be made for the benefit of the Lender and shall be enforceable against the Borrower.

To the extent that any such incorporated provision permits the Borrower or any other party to

waive compliance with such provision or requires that a document, opinion or other instrument

or any event or condition be acceptable or satisfactory to the Borrower or any other party, for

purposes of this Loan Agreement, such provision shall be complied with unless it is specifically

waived by the Lender in writing and such document, opinion or other instrument and such event

or condition shall be acceptable or satisfactory only if it is acceptable or satisfactory to the

Lender which shall only be evidenced by the written approval by Lender of the same. No

termination or amendment to such covenants and agreements or defined terms or release of the

Borrower with respect thereto made pursuant to the Loan Documents to which the Borrower is a

party, shall be effective to terminate or amend such covenants and agreements and defined terms

or release the Borrower with respect thereto in each case as incorporated by reference herein

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without the prior written consent of the Lender. Notwithstanding any termination or expiration

of such other Loan Document to which the Lender is a party, the Borrower shall continue to

observe the covenants therein contained for the benefit of the Lender until the termination of this

Loan Agreement and the payment in full of the Loans and all other Obligations. All such

incorporated covenants shall be in addition to the express covenants contained herein and shall

not be limited by the express covenants contained herein nor shall such incorporated covenants

be a limitation on the express covenants contained herein.

Section 7.21. Compliance with ERISA. Except as would not reasonably be expected to

result in a Material Adverse Effect, the Borrower 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 Borrower or a member of its Controlled Group to any tax

or penalty.

Section 7.22. Environmental Laws. The Borrower 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 bring such real property owned, leased, occupied or operated by the

Borrower back into compliance with Environmental Laws and to comply with any cleanup

orders issued by a Governmental Authority having jurisdiction there over. The Borrower shall at

all times use commercially reasonable efforts to render or maintain any real property owned,

leased, occupied or operated by the Borrower safe and fit for its intended uses. The Borrower

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.

ARTICLE VIII

NEGATIVE COVENANTS OF BORROWER

So long as the Borrower Loans shall remain unpaid, the Borrower agrees that:

Section 8.01. Lien. The Borrower shall not, directly or indirectly, create, incur, assume

or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to

the Property, Facilities or any other real or personal property of the Borrower, whether now

owned or hereafter acquired (each, a “Lien” and together, “Liens”), other than the rights of the

Lender or the Issuer as herein provided and the Permitted Encumbrances. The Borrower shall

promptly, at its own expense, take such action as may be necessary duly to discharge or remove

any such unpermitted Lien. The Borrower shall reimburse the Lender for any expenses incurred

by the Lender to discharge or remove any unpermitted Lien.

Section 8.02. Sale of Assets. The Borrower will not sell, lease, assign, transfer or

otherwise dispose of all or substantially all of its assets (other than in the ordinary course of

business or equipment or other personal property which has become inadequate, obsolete, worn

out, unsuitable, unprofitable, undesirable or unnecessary and the disposition thereof will not

impair the operations of the Borrower) or of any of the Property or the Facilities or any interest

59

therein (whether in one transaction or in a series of transactions), without the prior written

consent of the Lender and the delivery to the Issuer and the Lender of an opinion of Special

Counsel to the effect that any such sale, lease, assignment, transfer or other disposition will not

cause the interest on the Issuer Loan Obligations to be included in gross income of the owners

thereof. The Issuer Loan Obligations and the Borrower Loans shall become due and payable

upon the sale, assignment, transfer or other disposition of the Facilities or the Property or any

portion thereof, other than sales, assignments, transfers or other dispositions permitted by the

previous sentence. The Borrower shall provide the Issuer and the Lender with prior written

notice of its intention to sell, lease, assign, transfer or otherwise dispose of the Facilities or 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 Facilities or the Property to an

affiliate of the Borrower (which shall also be subject to the Lender’s prior written consent), such

purchaser, assignee or transferee shall assume in writing the Borrower’s obligations under the

Loan Documents.

Section 8.03. Consolidation and Merger. The Borrower 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) all or substantially all of the assets

of any other person without the prior written consent of the Lender and the Issuer

Section 8.04. Accounting. The Borrower 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 Borrower provides the Lender

restated financial statements in comparative form.

Section 8.05. Transfers. Other than as expressly permitted by this Loan Agreement, the

Borrower will not in any manner transfer any property, other than transfers made in the ordinary

course of business, without prior or present receipt of full and adequate consideration; provided,

that, the restriction contained in this Section shall not prohibit the Borrower from making

transfers in furtherance of its public or charitable purposes that could not reasonably be expected

to have a Material Adverse Effect.

Section 8.06. Other Indebtedness. Other than the Borrower Loans, the Borrower shall

not, without the prior written consent of the Lender, incur any additional indebtedness for

borrowed money or guaranty any indebtedness, secured or unsecured, direct or contingent,

except, so long as no Default or Event of Default has occurred and is continuing under this Loan

Agreement, (a) up to $100,000 in aggregate principal amount of indebtedness outstanding, and

(b) a line of credit and other indebtedness with 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

obligation binding upon the Borrower or any judgment, decree, order or determination applicable

to the Borrower; provided, however, nothing herein shall preclude the Borrower’s right to

contest in good faith by appropriate proceedings any breach, default or event of default;

provided, such contest shall not, and shall not have the potential to, adversely affect the Lender’s

or the Issuer’s interests hereunder or under any of the other Loan Documents.

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Section 8.08. Prohibited Uses. The Borrower shall not use any portion of the proceeds

of the Borrower Loans to finance or refinance any facility, place or building used or to be used

(a) primarily 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 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 Obligations being treated as an obligation not described in

Section 103(a) of the Code.

Section 8.09. Use of Facilities. The Borrower will not install, use, operate or maintain

the Project or the Facilities improperly, carelessly, in violation of any applicable law or in a

manner contrary to that contemplated by this Loan Agreement or the Tax Regulatory Agreement.

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 Borrower shall not enter into any

agreement containing any provision 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 interest on the Issuer Loan Obligations to become includable 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 deliberate action within the meaning of Treas.

Reg. § 1.141-2(d)), and the Borrower will take and will cause its officers, employees and agents

to take all affirmative action’s legally within its power necessary to ensure that the interest on the

Issuer Loan Obligations does not become includable 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 Borrower will not use any part

of the proceeds of the Borrower Loans for the purpose of purchasing or carrying any Margin

Stock and has not incurred any indebtedness to be reduced, retired or purchased by the Borrower

out of such proceeds, and the Borrower does not own and has no intention of acquiring any

Margin Stock.

Section 8.14. Swap Agreements. The Borrower shall not enter into a Swap Agreement

without the prior written consent of the Lender.

Section 8.15. Loan Documents. The Borrower 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 8.16. Formation of Subsidiaries and Affiliates. The Borrower shall not create,

form or acquire any Subsidiary or Affiliate without the prior written consent of the Lender.

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ARTICLE IX

DAMAGE, DESTRUCTION AND CONDEMNATION;

USE OF NET PROCEEDS

Section 9.01. Eminent Domain. If all or any portion of the Property or the Facilities

shall be taken permanently under the power of eminent domain or sold to a government

threatening to exercise the power of eminent domain, the Net Proceeds of any eminent domain

award shall be applied to the prepayment of the Borrower Loans and the Issuer Loan Obligations

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 Special Counsel to the effect that

under then-existing laws that such action would not cause the interest under this Loan Agreement

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) Upon the written request of Lender, the Net Proceeds of any insurance

award resulting from any damage to or destruction of any portion of the Property or the

Facilities 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 deposited with the Lender, who shall determine the application of

such proceeds; provided, however, that the Lender shall release to the Borrower without

further limitations all insurance awards of up to $100,000 received on behalf of the

Borrower in the normal course of business (except to the extent a Default or Event of

Default shall have occurred and be continuing hereunder. The Borrower, except as

provided below, shall cause the proceeds of insurance or eminent domain or

condemnation awards with respect to the Property to be utilized for the repair,

reconstruction, or replacement of the damaged or destroyed portion of the Facilities. The

Lender shall permit withdrawals from time to time of the proceeds received by Lender

upon receiving the written request of the Borrower, stating that the Borrower 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,

and specifying the items for which such moneys were expended or such liabilities were

incurred. Any balance of the proceeds that relate to Property or Facilities not required for

the repair, reconstruction, or replacement thereof shall be applied by the Lender as

provided in Section 4.08(b) hereof.

(b) Alternatively, the Borrower, at its option, and if the proceeds of such

insurance or eminent domain or condemnation awards together with any other moneys

then available are sufficient to prepay the Borrower Loans in full pursuant to Section

4.08(b) 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 the Borrower Loans.

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(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 Borrower of the Property, the Facilities or any portion thereof.

ARTICLE X

ASSIGNMENT, PARTICIPATION, MORTGAGING AND SELLING

Section 10.01. Assignment by the Lender. This Loan Agreement and related the Issuer

Loan Obligations and the right to receive Payments and the Prepayment Fee from the Borrower

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 Borrower; provided, however,

that such assignment or reassignment shall be in accordance with Section 4.09 of this Loan

Agreement. The Issuer and the Borrower agree to execute all documents, including 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 interests granted hereunder on behalf of any assignee,

subassignee or participant described above.

Section 10.02. No Sale, Assignment or Leasing by the Borrower. This Loan

Agreement and the interest of the Borrower in the Facilities and the Property may not be sold,

assumed, assigned or encumbered by the Borrower other than 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 (i) as expressly provided in this Loan Agreement, or (ii)

Permitted Encumbrances, and any such attempted assignment, lease, transfer or sale shall be void

and of no effect and shall, 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. Upon the expiration of any applicable cure period

expressly provided in this Loan Agreement, each of the following shall constitute an “Event of

Default” under this Loan Agreement:

(a) failure by the Borrower to pay to the Lender, as assignee of the Issuer (i)

any Payment when due, or (ii) any Additional Payment or any other amount required to

be paid hereunder or under any of the other Loan Documents within five (5) days of the

due date thereof;

(b) failure by the Borrower to pay any payment required to be paid under any

other material agreement between the Lender or any of its affiliates and the Borrower,

subject to the applicable cure period set forth in such agreement;

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(c) failure by the Borrower to maintain insurance in accordance with Section

7.04 hereof, except for failures that are immaterial and are cured within ten (10) Business

Days after receipt of written notice from the Lender to the Borrower;

(d) (i) failure by the Borrower to observe and perform any covenant set forth

in Section 7.08, 7.16, 8.01, 8.02, 8.03, 8.05, 8.06, 8.07, 8.08, 8.10, 8.11, 8.13, 8.14, 8.15

or 8.16 hereof; or (ii) failure by the Borrower 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 the earlier of (i) the date written notice is given to the Borrower by

the Lender, specifying such failure and requesting that it be remedied or (ii)the Borrower

having actual knowledge of any such failure; provided, however, if such failure is

correctable but cannot be corrected within the applicable period and corrective action is

instituted by the Borrower within the applicable period and diligently pursued until

corrected, then no Event of Default shall be deemed to have occurred unless such cure

has not been completed within sixty (60) days after the earlier date set forth above (or

such longer period as may be permitted by the Lender in writing);

(e) (i) the Borrower shall have entered involuntarily against it an order for

relief under the United States Bankruptcy Code, as amended or (ii) initiation by the

Borrower or by any other Person of a proceeding under any Federal or State bankruptcy

or insolvency law seeking relief under such laws concerning the indebtedness of the

Borrower which proceeding is not dismissed or stayed within sixty (60) days;

(f) the Borrower shall be or become insolvent, or shall note pay, or be unable

to pay, 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 Borrower shall apply for, seek, consent to,

or acquiesce in, 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 forth Borrower or any substantial part of its property without the application or

consent of the Borrower or the Borrower shall institute (by petition, application, answer,

consent or otherwise) any bankruptcy, insolvency, reorganization, arrangement,

readjustment of debt, dissolution, liquidation or similar proceeding relating to it under the

laws of any jurisdiction or fail to file an answer or other pleading denying the material

allegations of any such proceeding filed against it ; or any such proceeding shall be

instituted (by petition, application or otherwise) against the Borrower and remains

undismissed or unstayed for sixty (60) days; or any judgment, writ, warrant of attachment

or execution or similar process shall be issued or levied against a substantial part of the

property of the Borrower; or the Borrower shall take any corporate action in furtherance

of any of the matters described above;

(g) the making of any order or the entry of any decree by a court of competent

jurisdiction enjoining construction of the Improvements or enjoining or prohibiting the

Borrower 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;

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(h) the service upon the Lender, in accordance with the laws of the

jurisdiction in which the Project is located, of a bonded stop notice from the Borrower

and within ten (10) business days after the Lender’s receipt of such notice either (i) the

claim set forth therein is not discharged by the Borrower or (ii) if the amount claimed is

disputed in good faith by the Borrower or the General Contractor, the Borrower fails to

deliver to the Lender a stop notice release bond, in form and substance and issued by a

surety company acceptable to the Lender, insuring the Lender against such claim;

(i) the Borrower (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 Improvements, the Facilities or the Property, other

than Permitted Encumbrances or in accordance with Section 8.02 hereof;

(j) the occurrence of a default or event of default with respect to any

indebtedness or Swap Agreement of the Borrower outstanding in the amount of $100,000

or more under any instrument, agreement or other document evidencing or relating to any

indebtedness, Swap Agreement or other monetary obligation of the Borrower after giving

effect to any grace or cure periods applicable under such instruments, agreements or

documents; provided, however, nothing herein shall preclude the Borrower’s right to

contest in good faith by appropriate proceedings any default or event of default;

(k) the sale of the Borrower to, or merger of the Borrower into, any person, or

the merger of any other person into the Borrower, or acquisition (in 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 Borrower, 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;

(l) the occurrence of a default or event of default under any material lease or

other agreement relating to, affecting or pertaining to the possession or use of any of the

Property, after the expiration of any applicable cure period related thereto;

(m) the occurrence of a default or event of default under any material

agreements or arrangements entered into by the Borrower involving any form of credit

accommodations, after the expiration of any applicable cure period related thereto;

(n) this Loan Agreement or any Loan Document, including any pledge or

collateral security for the Borrower Loans, shall be repudiated by the Borrower or any

material provision in any Loan Document shall become unenforceable or incapable of

performance in accordance with its terms;

(o) any judgment, writ, warrant of attachment or execution or similar process

shall be issued or levied against the Borrower or its assets in excess of $250,000 which is

not covered by insurance or which exceeds any applicable insurance policy by more than

$250,000; provided, however, nothing herein shall preclude the Borrower’s right to

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contest in good faith by appropriate proceedings any such judgment, writ, warrant of

attachment or execution or similar process;

(p) the occurrence of an event of default under the Project Fund Disbursement

Agreement or any other Loan Document;

(q) the occurrence of an event of default under any of the other material

agreement between the Borrower and the Lender after the expiration of any applicable

cure period thereunder;

(r) the Borrower or any member of its Controlled Group shall fail to pay

when due an amount or amounts aggregating not less than $100,000 which it shall have

become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or to the extent

it could reasonably be expected to result in a liability to the Corporation or a member of

its Controlled Group in excess of $100,000, (i) an ERISA Event occurs; (ii) a Plan of the

Borrower or a member of the Controlled Group fails to comply with ERISA or other laws

to the extent applicable thereto; (iii) the Unfunded Vested Liability of the Borrower or a

member of the Controlled Group increases; or (iv) a condition exists or an event or a

transaction occurs with respect to a Plan that results in a liability, fine or penalty;

(s) any lien or security interest granted under the Deed of Trust loses validity

or priority; or

(t) an adverse change shall have occurred with respect to the Borrower’s

financial condition or business which materially impairs the Borrower’s ability to satisfy

its payment obligations under the Loan Documents.

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 following remedial actions insofar

as the same are available to secured parties under the laws of the State from time to time and

which are otherwise accorded to the Lender:

(a) by notice to the Issuer and the Borrower, declare the entire unpaid

principal amount of the Borrower Loans (and the related Issuer Loan Obligations) then

outstanding, all interest accrued and unpaid thereon and all amounts payable under this

Loan Agreement to be forthwith due and payable, whereupon such Borrower Loans (and

the related Issuer Loan 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

Borrower and the Issuer;

(b) the obligation, if any, of the Lender to extend any further credit under any

of the Loan Documents shall immediately cease and terminate;

(c) exercise all rights and remedies legally available to the Lender;

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(d) proceed by appropriate court action to enforce performance by the Issuer

or the Borrower of the applicable covenants of the Loan Documents or to recover for the

breach thereof, including the payment of all amounts due from the Borrower, in which

event the Borrower shall pay or repay to the Lender all costs of such action or court

action including without limitation, reasonable attorneys’ fees;

(e) to enforce its rights, in which event the Borrower shall pay or repay to the

Lender and the Issuer all costs of such action or court action, including, without

limitation, reasonable attorneys’ fees;

(f) take possession of the Property and continue construction of the Project;

and

(g) initiate foreclosure under the Deed of Trust on the Property in any manner

available under law;

All proceeds derived from the exercise of any rights and remedies shall be applied in the

following manner:

FIRST, to pay the Issuer any the Issuer Fees and Expenses;

SECOND, to the United States any rebatable arbitrage due or accrued pursuant to

Section 148(f)(4) of the Code;

THIRD, to pay (a) to the Lender the amount of all 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

FIFTH, to pay the remainder of any such proceeds, purchase moneys or other

amounts paid by a buyer of the Collateral or other person, to the Borrower.

Notwithstanding any other remedy exercised hereunder, the Borrower shall remain

obligated 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 Borrower hereby

waives any rights now or hereafter conferred by statute or otherwise which might require the

Lender to use, sell, lease or otherwise dispose of the Facilities in mitigation of the Lender’s

damages or which might otherwise limit or modify any of the Lender’s rights hereunder.

All rights, powers and remedies of the Lender may be exercised at any time 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, powers or remedies provided by law or equity.

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The Borrower shall pay or repay to the Lender and the Issuer all 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 Borrower 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 Borrower 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 Borrower

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 Facilities or the Property for

such purpose and to take all such action thereon and with respect to the Facilities and the

Property as it may deem necessary or appropriate. If the Lender shall elect to pay any sum due

with reference to the Facilities or the Property, as applicable, the Lender may do so in reliance on

any bill, 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 the Deed of

Trust, 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 Facilities or 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 Borrower shall indemnify,

defend and hold the Lender and the Issuer harmless from and against any and all losses,

liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or

disbursements of any kind or nature whatsoever, including reasonable attorneys’ fees, incurred or

accruing 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 now or hereafter existing at

law or in equity. No delay or omission to exercise any right or power accruing upon any Event

of Default shall impair any such right or power or shall be construed to be a waiver thereof, but

any such right or power may be exercised from time to time and as often as may be deemed

expedient. In order to entitle the Lender to exercise any remedy reserved to it in this Article, it

shall 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.

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

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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

THE FACILITIES, 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

Borrower, are to be borne by the Borrower. Without limiting the foregoing the Lender and the

Issuer shall have no responsibility or liability to the Borrower or any other person with respect to

any of the following: (a) any liability, loss or damage caused or alleged to be caused directly or

indirectly by the Facilities or 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 Facilities or 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

Facilities. If, and so long as, no default exists under this Loan Agreement, the Borrower shall be,

and hereby is, authorized to assert and enforce, at the Borrower’s sole cost and expense, from

time to time, whatever claims and rights the Borrower or the Lender may have against any prior

title holder or possessor of the Facilities. In no event shall the Lender or the Issuer be liable for

any loss or damage in connection with or arising out of this Loan Agreement or the Facilities.

Section 12.02. Limitations of Liability. 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 Issuer (including their respective employees, directors,

officers and agents) be liable for any special, consequential, incidental or punitive damages

including, but not limited to, a loss of profit or revenue, loss of use of the Facilities 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 power, down time costs or claims of the Borrower’s members

for such damages and the Borrower shall indemnify and hold harmless the Lender, its assignees,

if any, and the Issuer (including their respective employees, directors, officers and agents) from

any such damages.

Section 12.03. Additional Payments to the Lender. The Borrower shall pay to the

Lender the following Additional Payments hereunder, in addition to the Payments payable by the

Borrower, in such amounts in each year as shall 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 and refinancing of the

Project, including but not limited to payment of all reasonable fees, costs and expenses and all

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, financial consultants, construction consultants or attorneys, insurance premiums not

otherwise paid hereunder and all 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 the Loan Documents. Such Additional Payments shall be billed to the

Borrower 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

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such amount is then payable by the Lender for such items. Amounts so billed shall be due and

payable by the Borrower within 30 days after receipt of the bill by the Borrower.

Section 12.04. Notices. All notices, certificates, requests, demands and other

communications provided 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

overnight courier of national reputation; or (d) transmitted by telecopy, in each case addressed to

the party to whom notice is being given at its address as set forth below and, if telecopied,

transmitted to that party at its telecopier number set forth below and confirmed by telephone at

the telephone number set forth below or, as to each party, at such other address or telecopier

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 mail if delivered by mail; (iii) the date sent if sent by

overnight courier; or (iv) the date of transmission if delivered by telecopy. If notice to the

Borrower of any intended disposition of the Facilities or any other intended actions is required

by law in a particular instance, such notice shall be deemed commercially reasonable if given (in

the manner specified in this Section) at least 10 calendar days prior to the date of intended

disposition or other action.

If to the Borrower: St. Augustine’s School of San Diego

3266 Nutmeg Street

San Diego, California 92104

Attention: Executive Director of Finance and Facilities

Telephone: (619) 282-2184

Facsimile: (619) 230-4935

If to the Issuer: California Enterprise Development Authority

550 Bercut Drive, Suite G

Sacramento, California 95811

Attention: Chair

Telephone: (916) 448-8252

Facsimile: (916) 448-3811

With a copy to:

Kutak Rock LLP

777 South Figueroa Street, Suite 4550

Los Angeles, California 90017

Attention: Sam S. Balisy

Telephone: (213) 312-4000

Facsimile: (213) 312-4001

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If to the Lender: MUFG Union Bank, N.A.,

4660 La Jolla Village Drive, Suite 400

San Diego, California 92122

Attention: Dan Finster

Telephone: (858) 812-3652

Facsimile: (858) 909-0452

Section 12.05. Binding Effect; Time of the Essence. This Loan Agreement shall inure

to the benefit of and shall be binding upon the Lender, the Issuer, the Borrower 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 jurisdiction, such holding shall 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, however, that the consent of the Issuer shall not be required for

waivers, alternations, modifications, supplements or amendments of or with respect to Section

7.07, 7.14, 7.16, 7.17, 8.01, 8.04, 8.06 or 8.11 of this Loan Agreement; provided further,

however, that prior to the effectiveness of any such waiver, alteration, modification, supplement

or amendment, an opinion of Special 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 amendment or supplement will not cause interest on the

Issuer Loan Obligations 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 shall be an original and all of which shall 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 shall be enforceable in the State of California, and any action arising out

of this Loan Agreement shall be filed and maintained in Sacramento County, California.

Section 12.10. Jury Trial Waiver. TO THE EXTENT PERMITTED BY LAW, THE

LENDER AND 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

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TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED

BETWEEN THE LENDER AND BORROWER. 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 WAVER 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 TO THIS 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 TO A 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, limit or describe the scope or intent of any provisions or

sections of this Loan Agreement.

Section 12.12. Entire Agreement. Except as expressly stated herein, 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

Borrower. Except as expressly stated herein, there are no understandings, agreements,

representations or warranties, express or implied, not specified herein or therein regarding this

Loan Agreement or the Project financed hereunder. Any terms and conditions of any purchase

order or other document submitted by the Borrower in connection with this Loan Agreement

which are in addition to or inconsistent with the terms and conditions of this Loan Agreement

will not be binding on the Lender and will not apply to this Loan Agreement.

Section 12.13. Waiver. The Lender’s or the Issuer’s failure to enforce at any time or for

any period of time any provision of this Loan Agreement shall not be construed to be a waiver of

such provision or of the right of the Lender or the Issuer 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 shall be enforceable by, the Lender and the Issuer, or their successors and assigns.

Section 12.15. Usury. It is the intention 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 shall this Loan Agreement require the payment or

permit the collection of interest or any amount in the nature of interest or fees in excess of the

maximum permitted by applicable law.

72

Section 12.16. Third Party Beneficiary. It is the intention of the parties that any

Lender hereunder be a third 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, acknowledge and deliver, or cause to be

executed, acknowledged 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 Regulatory Agreement

and any rights of such party hereunder or thereunder.

Section 12.18. Dispute Resolution; Provisional Remedies.

(a) Judicial Reference. In the event the jury trial waiver provisions set forth

in Section 12.10 are not permitted for any reason and the Borrower fails to waive jury

trial, Lender and the Borrower hereby agree: (i) each Claim (as defined in Section 12.10

hereof) shall be determined by a consensual general judicial reference (the “Reference”)

pursuant to the provisions of Section 638 et seq. of the California Code of Civil

Procedure, as such statutes may be amended or modified from time to time; (ii) upon a

written request, or upon an appropriate motion by either the Lender or the Borrower, as

applicable, any pending action relating to any Claim and every Claim shall be heard by a

single Referee (as defined below) who shall then try all issues (including any and all

questions of law and questions of fact relating thereto), and issue findings of fact and

conclusions of law and report a statement of decision. The Referee’s statement of

decision will constitute the conclusive determination of the Claim. The Lender and the

Borrower agree that the Referee shall have the power to issue all legal and equitable

relief appropriate under the circumstances before the Referee; (iii) the Lender and the

Borrower shall promptly and diligently cooperate with one another, as applicable, and the

Referee, and shall perform such acts as may be necessary to obtain prompt and

expeditious resolution of all Claims in accordance with the terms of this Section 12.18;

(iv) either the Lender or the Borrower, as applicable, may file the Referee’s findings,

conclusions and statement with the clerk or judge of any appropriate court, file a motion

to confirm the Referee’s report and have judgment entered thereon. If the report is

deemed incomplete by such court, the Referee may be required to complete the report

and resubmit it; (v) the Lender and the Borrower, as applicable, will each have such

rights to assert such objections as are set forth in Section 638 et seq. of the California

Code of Civil Procedure; and (vi) all proceedings shall be closed to the public and

confidential, and all records relating to the Reference shall be permanently sealed when

the order thereon becomes final.

(b) Selection of Referee; Powers. The parties to the Reference proceeding

shall select a single neutral referee (the “Referee”), who shall be a retired judge or justice

of the courts of the State of California, or a federal court judge, in each case, with at least

ten (10) years of judicial experience in civil matters. The Referee shall be appointed in

accordance with Section 638 of the California Code of Civil Procedure (or pursuant to

comparable provisions of federal law if the dispute falls within the exclusive jurisdiction

of the federal courts). If within ten (10) days after the request or motion for the

Reference, the parties to the Reference proceeding cannot agree upon a Referee, then any

73

party to such proceeding may request or move that the Referee be appointed by the

Presiding Judge of the Superior Court of the County of San Diego, or of the U.S. District

Court for the Southern District of California. The Referee shall determine all issues

relating to the applicability, interpretation, legality and enforceability of this Section

12.18(b).

(c) Provisional Remedies, Self Help and Foreclosure. No provision of this

Section 12.18 shall limit the right of either the Lender, the Issuer, or the Borrower, as the

case may be, to (i) exercise such self-help remedies as might otherwise be available under

applicable law, (ii) initiate judicial or non-judicial foreclosure against any personal

property collateral, (iii) exercise any judicial or power of sale rights, or (iv) obtain or

oppose provisional or ancillary remedies, including without limitation injunctive relief,

writs of possession, the appointment of a receiver, and/or additional or supplementary

remedies from a court of competent jurisdiction before, after, or during the pendency of

any Reference. The exercise of, or opposition to, any such remedy does not waive the

right of the Lender or the Borrower to the Reference pursuant to this Section 12.18(c).

(d) Costs and Fees. Promptly following the selection of the Referee, the

parties to such Reference proceeding shall each advance equal portions of the estimated

fees and costs of the Referee. In the statement of decision issued by the Referee, the

Referee shall award costs, including reasonable attorneys’ fees, to the prevailing party, if

any, and may order the Referee’s fees to be paid or shared by the parties to such

Reference proceeding in such manner as the Referee deems just.

Section 12.19. Arm’s Length Transaction. The Borrower acknowledges and agrees

that (i) the advance of the Loans by the Lender pursuant to this Loan Agreement is an arm’s-

length commercial transaction between the Borrower and the Lender, (ii) in connection therewith

and with the financing discussions, undertakings and procedures leading up to the consummation

of such transaction, the Lender is and has been acting solely as a principal and is not acting as the

agent or fiduciary of or in any way advising the Borrower, (iii) the Lender has not assumed an

advisory or fiduciary responsibility in favor of the Borrower with respect to the financing

contemplated hereby or the discussions, undertakings and procedures leading thereto

(irrespective of whether the Lender has provided other services or is currently providing other

services to the Borrower on other matters) and the Lender has no obligation to the Borrower with

respect to the financing contemplated hereby except the obligations expressly set forth in this

Loan Agreement and (iv)the Borrower has consulted its own legal, financial and other advisors

to the extent it has deemed appropriate.

Section 12.20. Patriot Act. The Lender hereby notifies the Borrower that pursuant to

the requirements of the Patriot Act it is required to obtain, verify and record information that

identifies the Borrower, which information includes the name and address of the Borrower and

other information that will allow the Lender to identify the Borrower in accordance with the

Patriot Act. The Borrower hereby agrees that it shall promptly provide such information upon

request by the Lender.

[Remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Master 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:

MUFG UNION BANK, N.A.

By____________________________________

Dan Finster, Vice President

ISSUER:

CALIFORNIA ENTERPRISE

DEVELOPMENT AUTHORITY

By Gurbax Sahota, Chair

Attest:

By

Helen Schaubmayer, Assistant Secretary

BORROWER:

ST. AUGUSTINE’S SCHOOL

OF SAN DIEGO

By____________________________________

Rev. Fr. Kevin Mullins, OSA,

Prior Provincial of the Province of

St. Augustine in California

By____________________________________

Steve Chipp, Executive Director of

Finance and Facilities

[Signature Page to Master Loan Agreement]

A-1

EXHIBIT A

PROPERTY DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF SAN DIEGO, STATE OF

CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Parcel 1 of Parcel Map 16815, in the City of San Diego, County of San Diego, State of California, filed in the Office

of the County Recorder of San Diego County, March 31, 1992, as instrument no. 1992-0183174 of Official Records.

Assessor’s Parcel No. 453-682-05-00

.

B-1

EXHIBIT B

FORM OF INVESTOR LETTER

California Enterprise Development Authority

Sacramento, California

Kutak Rock LLP

Los Angeles, California

St. Augustine’s School of San Diego

San Diego, California

Re: Master Loan Agreement, dated as of October 1, 2015, by and among MUFG

Union Bank, N.A., California Enterprise Development Authority and St.

Augustine’s School of San Diego.

Ladies and Gentlemen:

The undersigned, MUFG Union Bank, N.A., a California corporation (the “Lender”), has

entered into the Master Loan Agreement, dated as of October 1, 2015 (the “Loan Agreement”),

with the California Enterprise Development Authority (the “Issuer”) and St. Augustine’s School

of San Diego, a California nonprofit religious corporation (the “Borrower”). Pursuant to the

Loan Agreement, the Lender is making two loans in the aggregate principal amount of up to

$23,500,000 (the “Issuer Loans”) to the Issuer and the Issuer will simultaneously make two loans

to the Borrower (the “Borrower Loans”), all pursuant to the terms and provisions of the Loan

Agreement. The undersigned hereby represents and warrants to you that:

The undersigned hereby represents and warrants to you that:

1. The Lender has authority to make the Issuer Loans 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 Loans.

2. The Lender is a “Qualified Institutional Buyer” and has sufficient knowledge and

experience in financial and business matters, including purchase and ownership of municipal and

other tax-exempt obligations and is capable of evaluating the merits and risks of its investment

represented by the Issuer Loans, the Borrower Loans and the Loan Agreement. The Lender is

able to bear the economic risk of, and entire loss of, an investment in the Issuer Loans. The

definition of Qualified Institutional Buyer is attached hereto.

3. The Issuer Loans are being provided by the Lender for investment purposes and

not with a view to, or for resale in connection with, any distribution of the Issuer Loans, and the

Lender presently intends to hold the Issuer Loans for its own account and for an indefinite period

of time, and do not intend at this time to dispose of all or any part of the Issuer Loans. The

Lender understands that it may need to bear the risks of this investment for an indefinite time,

since any transfer prior to maturity may not be possible.

B-2

4. The Lender understands that the Loan Agreement is not registered under the 1933

Act; and further understands that the Issuer Loans (a) is not being registered or otherwise

qualified for sale under the “Blue Sky” laws 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) will be delivered in a form which may not be readily marketable. The Lender agrees that it

will comply with any applicable state and federal securities laws then in effect with respect to

any disposition of the Issuer Loans by it and with the Issuer’s resale limitations as set forth in the

Loan Agreement, and further acknowledges that any current exemption from registration of the

Issuer Loans does not affect or diminish such requirements.

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, representations and warranties

contained herein by execution of this letter on behalf of the Lender.

6. The Lender acknowledges that it has either been supplied with or been given

access to information, including financial statements and other financial information, to which a

reasonable Lender would attach significance in making investment decisions, and the Lender has

had the opportunity to ask questions and receive answers from knowledgeable individuals

concerning the Borrower, the Project, the Issuer Loans and the Borrower Loans and the security

therefor so that, as a reasonable investor, the Lender has been able to make a decision to provide

the Issuer Loans. The Lender acknowledges that it has not relied upon the Issuer for any

information in connection with the Lender providing the Issuer Loans or with the Loan

Documents.

7. The Lender acknowledges that the obligations of the Issuer to make loan

payments with respect to the Issuer Loans are special, limited obligations payable solely from the

Payments (as defined in the Loan Agreement) and any other amounts paid to the Issuer from the

Borrower pursuant to the terms of the Loan Agreement and the Issuer shall 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 own inquiry and analysis with respect to the Issuer

Loans, the Borrower Loans and the security therefor, and other material factors affecting the

security and payment of the Issuer Loans and the Borrower Loans. The Lender is aware that the

business of the Borrower involves certain economic variables and risks that could adversely

affect the security for the Issuer Loans and the Borrower Loans.

9. The Lender acknowledges that its right to sell and transfer the Issuer Loans is

subject to compliance with the transfer restrictions set forth in the Loan Agreement, including

the requirement of the delivery to the Issuer and the Borrower of an investor’s letter from the

transferee to substantially the same effect as this Investor Letter, with no revisions except as may

be approved in writing by the Issuer. Failure to deliver such letter to the Issuer and the Borrower

shall cause the purported transfer to be null and void. The Lender agrees to indemnify and hold

harmless the Issuer with respect to any claim asserted against the Issuer that is based upon the

sale, transfer or other disposition of the Issuer Loans in violation of the provisions hereof.

B-3

10. Neither Kutak Rock LLP (“Special Counsel”) nor 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 Borrower or its financial condition, or regarding the ability of the Borrower to pay

the Borrower Loans, or the sufficiency of any security therefore. No written information has

been provided by the Issuer to the Lender with respect to the Borrower Loans. The Lender

acknowledges that, as between the Lender and all of such parties, the Lender has assumed

responsibility for obtaining such information and making such review as the Lender deemed

necessary or desirable in connection with its decision to provide the Issuer Loans.

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

11. The Issuer Loans are being provided in a direct, private placement transaction and

the terms of the Issuer Loans have been established through negotiations between the Lender, the

Borrower and the Issuer in an arm’s-length transaction.

12. The aggregate price, established as described above, for the Issuer Loans, to be

paid by Lender pursuant to the terms of this letter and the Loan Agreement, is an amount equal

to 100% of the aggregate principal amount of the Issuer Loans.

13. As of the date hereof, the price at which the Lender agreed to provide the Issuer

Loans was, the entire principal amount of the Issuer Loans. The Lender acknowledges that such

price will be relied on by Special Counsel as the “issue price” for establishing the yield on the

Issuer Loans, for issuance cost limitations and other federal tax requirements based upon the

issue price of the Issuer Loans.

14. If the Lender transfers, sells or disposes of the Issuer Loans, or any interest in the

Issuer Loans, other than to the Affiliate, either (a) such transfer of any interest in the Issuer

Loans will not occur within 60 days of the date hereof, during which time the Issuer Loans will

be held exclusively for our own account and not subject to contractual arrangement for such

transfer, or (b) such transfer of the Issuer Loans, or interest therein, will be at a price or prices

that, in the aggregate (and taking into account any interest in the Issuer Loans not transferred), is

not in excess of par, unless Special 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

Loans.

We understand that the foregoing information will be relied upon by the Issuer and the

Borrower with respect to certain representations in the Tax Regulatory Agreement dated as of the

date hereof or the Exhibits thereto and by Special Counsel in connection with its opinion as to

the exclusion of the interest on the Issuer Loans from gross income for Federal income tax

purposes under Section 103 of the Internal Revenue Code of 1986, as amended.

Very truly yours,

B-4

Attachment to Investor Letter

Exhibit B–1

Qualified Institutional Buyer Definition

A “qualified institutional buyer” as defined in Rule 144A promulgated under the

Securities Act of 1933, as in effect on the date hereof, consisting of:

1. Any of the following entities, acting for its own account or the accounts of other

qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at

least $100 million in securities of issuers that are not affiliated with the entity:

(A) Any insurance company as defined in Section 2(13) of the Securities Act

of 1933, as amended;

NOTE: A purchase by an insurance company for one or more of its separate accounts, as

defined by Section 2(a)(37) of the Investment Company Act of 1940 (the “Investment

Company Act”), which are neither registered under Section 8 of the Investment Company

Act nor required to be so registered, shall be deemed to be a purchase for the account of

such insurance company.

(B) Any investment company registered under the Investment Company Act

or any business development company as defined in Section 2(a)(48) of that Act;

(C) Any Small Business Investment Company licensed by the U.S. Small

Business Administration under Section 301(c) or (d) of the Small Business Investment

Act of 1958;

(D) Any plan established and maintained by a state, its political subdivisions,

or any agency or instrumentality of a state or its political subdivisions, for the benefit of

its employees;

(E) Any employee benefit plan within the meaning of Title I of the Employee

Retirement Income Security Act of 1974;

(F) Any trust fund whose trustee is a bank or trust company and whose

participants are exclusively plans of the types identified in paragraph 1(D) or (E) of this

section, except trust funds that include as participants individual retirement accounts or

H.R. 10 plans;

(G) Any business development company as defined in Section 202(a)(22) of

the Investment Advisers Act of 1940;

(H) Any organization described in Section 501(c)(3) of the Internal Revenue

Code of 1986, as amended (the “Code”), corporation (other than a bank as defined in

Section 3(a)(2) of the Securities Act of 1933, as amended, or a savings and loan

association or other institution referenced in Section 3(a)(5)(A) of the Securities Act of

B-5

1933, as amended, or a foreign bank or savings and loan association or equivalent

institution), partnership, or Massachusetts or similar business trust; and

(I) Any investment adviser registered under the Investment Advisers Act.

2. Any dealer registered pursuant to Section 15 of the Securities Exchange Act of

1934, acting for its own account or the accounts of other qualified institutional buyers, that in the

aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers

that are not affiliated with the dealer, provided, that securities constituting the whole or a part of

an unsold allotment to or subscription by a dealer as a participant in a public offering shall not be

deemed to be owned by such dealer.

3. Any dealer registered pursuant to Section 15 of the Securities Exchange Act of

1934 acting in a riskless principal transaction on behalf of a qualified institutional buyer.

NOTE: A registered dealer may act as agent, on a non-discretionary basis, in a transaction with a

qualified institutional buyer without itself having to be a qualified institutional buyer.

4. Any investment company registered under the Investment Company Act, acting

for its own account or for the accounts of other qualified institutional buyers, that is part of a

family of investment companies which own in the aggregate at least $100 million in securities of

issuers, other than issuers that are affiliated with the investment company or are part of such

family of investment companies. “Family of investment companies” means any two or more

investment companies registered under the Investment Company Act, except for a unit

investment trust whose assets consist solely of shares of one or more registered investment

companies, that have the same investment adviser (or, in the case of unit investment trusts, the

same depositor), provided that, for purposes of this section:

(A) Each series of a series company (as defined in Rule 18f 2 under the

Investment Company Act: 17 CFR 270.1 8f-2) shall be deemed to be a separate

investment company; and

(B) Investment companies shall be deemed to have the same adviser (or

depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same

parent, or if one investment company’s adviser (or depositor) is a majority-owned

subsidiary of the other investment company’s adviser (or depositor).

5. Any entity, all of the equity owners of which are qualified institutional buyers,

acting for its own account or the accounts of other qualified institutional buyers.

6. Any bank as defined in Section 3(a)(2) of the Securities Act of 1933, as amended,

any savings and loan association or other institution as referenced in Section 3(a)(5)(A) of the

Securities Act of 1933, as amended, or any foreign bank or savings and loan association or

equivalent institution, acting for its own account or the accounts of other qualified institutional

buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in

securities of issuers that are not affiliated with it and that has an audited net worth of at least $25

million as demonstrated in its latest annual financial statements, as of a date not more than 16

months preceding the date of sale under the rule in the case of a U.S. bank or savings and loan

B-6

association, and not more than 18 months preceding such date of sale for a foreign bank or

savings and loan association or equivalent institution.

In determining the aggregate amount of securities owned and invested on a discretionary

basis by an entity, the following instruments and interests shall be excluded: bank deposit notes

and certificates of deposit; loan participations; repurchase agreements; securities owned but

subject to a repurchase agreement; and currency, interest rate and commodity swaps.

The aggregate value of securities owned and invested on a discretionary basis by an

entity shall be the cost of such securities, except where the entity reports its securities holdings in

its financial statements on the basis of their market value, and no current information with

respect to the cost of those securities has been published. In the latter event, the securities may

be valued at market for purposes of this section.

In determining the aggregate amount of securities owned by an entity and invested on a

discretionary basis, securities owned by subsidiaries of the entity that are consolidated with the

entity in its financial statements prepared in accordance with GAAP may be included if the

investments of such subsidiaries are managed under the direction of the entity, except that, unless

the entity is a reporting company under Section 13 or 15(d) of the Securities Exchange Act of

1934, securities owned by such subsidiaries may not be included if the entity itself is a majority-

owned subsidiary that would be included in the consolidated financial statements of another

enterprise.

For purposes of this section, “riskless principal transaction” means a transaction in which

a dealer buys a security from any person and makes a simultaneous offsetting sale of such

security to a qualified institutional buyer, including another dealer acting as riskless principal for

a qualified institutional buyer.

C-1

EXHIBIT C

MATTERS TO BE ADDRESSED IN OPINION OF COUNSEL OF BORROWER

1. The Borrower is a nonprofit religious corporation, validly existing and in good

standing under the laws of the State of California.

2. Borrower has the corporate power and authority to execute and deliver the Loan

Documents and to perform its obligations thereunder. The Borrower has taken all corporate

action necessary to authorize its execution and delivery of the Loan Documents and the

performance of its obligations thereunder. The Borrower has duly executed and delivered the

Loan Documents. The Borrower has all necessary corporate power and authority to conduct the

business now being conducted by it, as contemplated by the Loan Documents.

3. The Loan Documents constitute the valid and binding obligations of the

Borrower, enforceable against the Borrower in accordance with their respective terms. Certain

remedies, waivers and other provisions of the Loan Documents are, or may be, unenforceable, in

whole or in part, under certain laws and judicial decisions; however, subject to the assumptions,

qualifications and limitations expressed in this Letter, and except for the economic consequences

resulting from any delay imposed, or any procedure required, by applicable laws, rules,

regulations, court decisions, the Constitution of the State of California and the Constitution of the

United States of America, such unenforceability will not render the Loan Documents invalid as a

whole or preclude the acceleration of the payment obligations under the Loan Agreement upon a

material breach of a material covenant contained in the Loan Documents.

4. The execution and delivery by the Borrower of the Loan Documents, the

consummation of the transactions contemplated therein and the fulfillment of or compliance with

the terms and conditions thereof, do not and will not (a) conflict with or constitute on the part of

the Borrower a violation or breach of or default (with due notice or the passage of time or both)

under (i) the articles of incorporation or bylaws of the Borrower, (ii) any applicable California or

federal statutory law or administrative rule or regulation known to us; (iii) to the best of our

actual knowledge, any applicable court or administrative decree or order which is directed to or

affects the Borrower; or (iv) any material contract, agreement or instrument to which the

Borrower is a party or by which the Borrower or its respective properties is otherwise subject or

bound; or (b) result in the creation or imposition of any prohibited lien, charge or encumbrance

upon any of the property or assets of the Borrower, which conflict, violation, breach, default,

lien, charge or encumbrance might have consequences that would materially and adversely affect

the consummation of the transactions contemplated by the Loan Documents or the financial

condition or operations of the Borrower.

5. The execution and delivery by the Borrower of the Loan Documents does not

require any consent, approval, authorization or other action by, or filing with, (a) any trustee or

holder of any indebtedness of the Borrower or (b) any governmental authority other than those

consents, approvals, authorizations and other actions by, and filings with, any such trustee,

holder or governmental authority that have been obtained, taken or made.

C-2

6. (a) 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 best of our

actual knowledge, threatened against or affecting the Borrower which, if determined adversely to

the Borrower, would have a material and adverse effect upon the consummation of the

transactions contemplated by or the validity of the Loan Documents, or upon the financial

condition or operations of the Borrower, and (b) the Borrower is not, to the best of our actual

knowledge, in default with respect to any order or decree of any court or any order, regulation or

demand of any federal, state, municipal or other governmental authority, which default might

have consequences that would materially and adversely affect the consummation of the

transactions contemplated by the Loan Documents or the financial condition or operations of the

Borrower.

7. The Borrower is an organization described in Section 501(c)(3) of the United

States Internal Revenue Code of 1986, as amended (the “Code”), and the Borrower is exempt

from federal income taxes under Section 501(a) of the Code, except for unrelated business

income subject to taxation under Section 511 of the Code. We have no current actual knowledge

of any pending proceedings or threatened proceedings before the Internal Revenue Service

(“IRS”) to change such status. As used in this Paragraph 7, the term “pending proceeding”

means a proceeding pending before the IRS that is, to our current actual knowledge, specifically

applicable to the Borrower as a named party. As used in this Paragraph 7, the term “threatened

proceeding “means a written communication actually delivered to the Borrower that overtly

threatens the Borrower with commencement by the sender of a proceeding before the IRS.

Furthermore, we have no current actual knowledge of any information which would indicate that

(1) the Borrower is no longer an organization described in Section 501(c)(3) of the Code, or (2)

the Borrower is in violation of the terms, conditions and limitations set forth in the IRS

determination letter.

8. The Borrower is an organization that the Franchise Tax Board of the State of

California has determined is currently exempt from tax under Section 23701(d) of the California

Revenue and Taxation Code, as amended.

9. Assuming the proceeds of the Loan will be allocated and used as described in the

Tax Agreement, the proceeds of the Loan will not be used by the Borrower in or for any trade or

business the conduct of which is not substantially related to the exercise or performance of the

purposes or functions constituting the basis forth Borrower’s exemption under Section 501(c)(3)

of the Code as determined by applying Section 513(a) of the Code and, therefore, will not be

used by the Borrower in any “unrelated trade or business” within the meaning of Section 513(a).

10. The Deed of Trust is in a form sufficient to create a legal, valid, and perfected lien

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

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 Los Angeles County,

California in accordance with the recording system established pursuant to applicable law. In

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. It is not necessary to re-record, re-register, or re-file the

C-3

Deed of Trust or to record, register, or file any other or additional documents, instruments, or

statements in order to maintain the priority of any liens or security interests to be created in the

Property by the Deed of Trust.

11. The Borrower has created under the Deed of Trust a valid security interest in that

portion of the mortgaged property consisting of personal property and fixtures described in the

Deed of Trust in which the Borrower has rights to the extent a valid security interest can be

created under Division 9 of the California UCC in the same (collectively, the “Personal

Property”). Insofar as perfection can be accomplished by recording a fixture filing in the Official

Records of San Diego County, California or by filing a financing statement with the California

Secretary of State pursuant to the California UCC, recording the Deed of Trust in San Diego

County and filing the California Financing Statements with the California Financing Office

constitutes all action is as necessary to perfect the security interest in the Personal Property

granted pursuant to the Deed of Trust. No other filing or recording is necessary or advisable to

continue the perfection of such security interests.

D-1-1

EXHIBIT D-1

SCHEDULE OF SERIES A LOAN PRINCIPAL PAYMENTS

Payment Date Outstanding

Principal

Principal

Amount Due

11/1/2015 10,443,461.66 20,153.33

12/1/2015 10,423,308.33 20,247.37

1/1/2016 10,403,060.96 20,341.86

2/1/2016 10,382,719.10 20,436.79

3/1/2016 10,362,282.31 20,532.16

4/1/2016 10,341,750.15 20,627.98

5/1/2016 10,321,122.17 20,724.24

6/1/2016 10,300,397.93 20,820.95

7/1/2016 10,279,576.98 20,918.12

8/1/2016 10,258,658.86 21,015.73

9/1/2016 10,237,643.13 21,113.81

10/1/2016 10,216,529.32 21,212.35

11/1/2016 10,195,316.97 21,311.33

12/1/2016 10,174,005.64 21,410.78

1/1/2017 10,152,594.86 21,510.70

2/1/2017 10,131,084.16 21,611.09

3/1/2017 10,109,473.07 21,711.94

4/1/2017 10,087,761.13 21,813.25

5/1/2017 10,065,947.88 21,915.06

6/1/2017 10,044,032.82 22,017.32

7/1/2017 10,022,015.50 22,120.08

8/1/2017 9,999,895.42 22,223.29

9/1/2017 9,977,672.13 22,327.01

10/1/2017 9,955,345.12 22,431.20

11/1/2017 9,932,913.92 22,535.88

12/1/2017 9,910,378.04 15,379.81

1/1/2018 9,894,998.23 15,425.69

2/1/2018 9,879,572.54 15,471.71

3/1/2018 9,864,100.83 15,517.87

4/1/2018 9,848,582.96 15,564.16

5/1/2018 9,833,018.80 15,610.60

6/1/2018 9,817,408.20 15,657.17

7/1/2018 9,801,751.03 15,703.88

8/1/2018 9,786,047.15 15,750.73

9/1/2018 9,770,296.42 15,797.72

10/1/2018 9,754,498.70 15,844.85

D-1-2

11/1/2018 9,738,653.85 15,892.12

12/1/2018 9,722,761.73 15,939.53

1/1/2019 9,706,822.20 15,987.08

2/1/2019 9,690,835.12 16,034.78

3/1/2019 9,674,800.34 16,082.62

4/1/2019 9,658,717.72 16,130.60

5/1/2019 9,642,587.12 16,178.72

6/1/2019 9,626,408.40 16,226.98

7/1/2019 9,610,181.42 16,275.40

8/1/2019 9,593,906.02 16,323.95

9/1/2019 9,577,582.07 16,372.65

10/1/2019 9,561,209.42 16,421.50

11/1/2019 9,544,787.92 16,470.49

12/1/2019 9,528,317.43 16,519.62

1/1/2020 9,511,797.81 16,568.91

2/1/2020 9,495,228.90 16,618.34

3/1/2020 9,478,610.56 16,667.92

4/1/2020 9,461,942.64 16,717.64

5/1/2020 9,445,225.00 16,767.52

6/1/2020 9,428,457.48 16,817.54

7/1/2020 9,411,639.94 16,867.71

8/1/2020 9,394,772.23 16,918.03

9/1/2020 9,377,854.20 16,968.50

10/1/2020 9,360,885.70 17,019.13

11/1/2020 9,343,866.57 17,069.90

12/1/2020 9,326,796.67 17,120.83

1/1/2021 9,309,675.84 17,171.90

2/1/2021 9,292,503.94 17,223.13

3/1/2021 9,275,280.81 17,274.52

4/1/2021 9,258,006.29 17,326.05

5/1/2021 9,240,680.24 17,377.74

6/1/2021 9,223,302.50 17,429.58

7/1/2021 9,205,872.92 17,481.58

8/1/2021 9,188,391.34 17,533.74

9/1/2021 9,170,857.60 17,586.04

10/1/2021 9,153,271.56 17,638.51

11/1/2021 9,135,633.05 17,691.13

12/1/2021 9,117,941.92 17,743.91

1/1/2022 9,100,198.01 17,796.85

2/1/2022 9,082,401.16 17,849.94

3/1/2022 9,064,551.22 17,903.19

D-1-3

4/1/2022 9,046,648.03 17,956.60

5/1/2022 9,028,691.43 18,010.17

6/1/2022 9,010,681.26 18,063.90

7/1/2022 8,992,617.36 18,117.79

8/1/2022 8,974,499.57 18,171.85

9/1/2022 8,956,327.72 18,226.06

10/1/2022 8,938,101.66 18,280.43

11/1/2022 8,919,821.23 18,334.97

12/1/2022 8,901,486.26 18,389.67

1/1/2023 8,883,096.59 18,444.53

2/1/2023 8,864,652.06 18,499.56

3/1/2023 8,846,152.50 18,554.75

4/1/2023 8,827,597.75 18,610.10

5/1/2023 8,808,987.65 18,665.62

6/1/2023 8,790,322.03 18,721.31

7/1/2023 8,771,600.72 18,777.16

8/1/2023 8,752,823.56 18,833.18

9/1/2023 8,733,990.38 18,889.37

10/1/2023 8,715,101.01 18,945.72

11/1/2023 8,696,155.29 19,002.24

12/1/2023 8,677,153.05 19,058.93

1/1/2024 8,658,094.12 19,115.79

2/1/2024 8,638,978.33 19,172.82

3/1/2024 8,619,805.51 19,230.02

4/1/2024 8,600,575.49 19,287.39

5/1/2024 8,581,288.10 19,344.93

6/1/2024 8,561,943.17 19,402.64

7/1/2024 8,542,540.53 19,460.52

8/1/2024 8,523,080.01 19,518.58

9/1/2024 8,503,561.43 19,576.81

10/1/2024 8,483,984.62 19,635.22

11/1/2024 8,464,349.40 19,693.79

12/1/2024 8,444,655.61 19,752.55

1/1/2025 8,424,903.06 19,811.48

2/1/2025 8,405,091.58 19,870.58

3/1/2025 8,385,221.00 19,929.86

4/1/2025 8,365,291.14 19,989.32

5/1/2025 8,345,301.82 20,048.95

6/1/2025 8,325,252.87 20,108.77

7/1/2025 8,305,144.10 20,168.76

8/1/2025 8,284,975.34 20,228.93

D-1-4

9/1/2025 8,264,746.41 20,289.28

10/1/2025 8,244,457.13 20,349.81

11/1/2025 8,224,107.32 20,410.52

12/1/2025 8,203,696.80 20,471.41

1/1/2026 8,183,225.39 20,532.48

2/1/2026 8,162,692.91 20,593.74

3/1/2026 8,142,099.17 20,655.17

4/1/2026 8,121,444.00 20,716.80

5/1/2026 8,100,727.20 20,778.60

6/1/2026 8,079,948.60 20,840.59

7/1/2026 8,059,108.01 20,902.76

8/1/2026 8,038,205.25 20,965.12

9/1/2026 8,017,240.13 21,027.67

10/1/2026 7,996,212.46 21,090.40

11/1/2026 7,975,122.06 21,153.32

12/1/2026 7,953,968.74 21,216.43

1/1/2027 7,932,752.31 21,279.73

2/1/2027 7,911,472.58 21,343.21

3/1/2027 7,890,129.37 21,406.88

4/1/2027 7,868,722.49 21,470.75

5/1/2027 7,847,251.74 21,534.80

6/1/2027 7,825,716.94 21,599.05

7/1/2027 7,804,117.89 21,663.48

8/1/2027 7,782,454.41 21,728.11

9/1/2027 7,760,726.30 21,792.94

10/1/2027 7,738,933.36 21,857.95

11/1/2027 7,717,075.41 21,923.16

12/1/2027 7,695,152.25 21,988.57

1/1/2028 7,673,163.68 22,054.17

2/1/2028 7,651,109.51 22,119.96

3/1/2028 7,628,989.55 22,185.95

4/1/2028 7,606,803.60 22,252.14

5/1/2028 7,584,551.46 22,318.52

6/1/2028 7,562,232.94 22,385.11

7/1/2028 7,539,847.83 22,451.89

8/1/2028 7,517,395.94 22,518.87

9/1/2028 7,494,877.07 22,586.05

10/1/2028 7,472,291.02 22,653.44

11/1/2028 7,449,637.58 22,721.02

12/1/2028 7,426,916.56 22,788.80

1/1/2029 7,404,127.76 22,856.79

D-1-5

2/1/2029 7,381,270.97 22,924.98

3/1/2029 7,358,345.99 22,993.37

4/1/2029 7,335,352.62 23,061.97

5/1/2029 7,312,290.65 23,130.77

6/1/2029 7,289,159.88 23,199.78

7/1/2029 7,265,960.10 23,268.99

8/1/2029 7,242,691.11 23,338.41

9/1/2029 7,219,352.70 23,408.03

10/1/2029 7,195,944.67 23,477.87

11/1/2029 7,172,466.80 23,547.91

12/1/2029 7,148,918.89 23,618.16

1/1/2030 7,125,300.73 23,688.62

2/1/2030 7,101,612.11 23,759.29

3/1/2030 7,077,852.82 23,830.18

4/1/2030 7,054,022.64 23,901.27

5/1/2030 7,030,121.37 23,972.57

6/1/2030 7,006,148.80 24,044.09

7/1/2030 6,982,104.71 24,115.82

8/1/2030 6,957,988.89 24,187.77

9/1/2030 6,933,801.12 24,259.93

10/1/2030 6,909,541.19 24,332.31

11/1/2030 6,885,208.88 24,404.90

12/1/2030 6,860,803.98 24,477.70

1/1/2031 6,836,326.28 24,550.73

2/1/2031 6,811,775.55 24,623.97

3/1/2031 6,787,151.58 24,697.43

4/1/2031 6,762,454.15 24,771.12

5/1/2031 6,737,683.03 24,845.02

6/1/2031 6,712,838.01 24,919.14

7/1/2031 6,687,918.87 24,993.48

8/1/2031 6,662,925.39 25,068.04

9/1/2031 6,637,857.35 25,142.83

10/1/2031 6,612,714.52 25,217.84

11/1/2031 6,587,496.68 25,293.07

12/1/2031 6,562,203.61 25,368.53

1/1/2032 6,536,835.08 25,444.21

2/1/2032 6,511,390.87 25,520.12

3/1/2032 6,485,870.75 25,596.26

4/1/2032 6,460,274.49 25,672.62

5/1/2032 6,434,601.87 25,749.21

6/1/2032 6,408,852.66 25,826.03

D-1-6

7/1/2032 6,383,026.63 25,903.07

8/1/2032 6,357,123.56 25,980.35

9/1/2032 6,331,143.21 26,057.86

10/1/2032 6,305,085.35 26,135.60

11/1/2032 6,278,949.75 26,213.57

12/1/2032 6,252,736.18 26,291.77

1/1/2033 6,226,444.41 26,370.21

2/1/2033 6,200,074.20 26,448.88

3/1/2033 6,173,625.32 26,527.79

4/1/2033 6,147,097.53 26,606.93

5/1/2033 6,120,490.60 26,686.31

6/1/2033 6,093,804.29 26,765.92

7/1/2033 6,067,038.37 26,845.77

8/1/2033 6,040,192.60 26,925.86

9/1/2033 6,013,266.74 27,006.19

10/1/2033 5,986,260.55 27,086.76

11/1/2033 5,959,173.79 27,167.57

12/1/2033 5,932,006.22 27,248.62

1/1/2034 5,904,757.60 27,329.91

2/1/2034 5,877,427.69 27,411.44

3/1/2034 5,850,016.25 27,493.22

4/1/2034 5,822,523.03 27,575.24

5/1/2034 5,794,947.79 27,657.51

6/1/2034 5,767,290.28 27,740.02

7/1/2034 5,739,550.26 27,822.78

8/1/2034 5,711,727.48 27,905.78

9/1/2034 5,683,821.70 27,989.04

10/1/2034 5,655,832.66 28,072.54

11/1/2034 5,627,760.12 28,156.29

12/1/2034 5,599,603.83 28,240.29

1/1/2035 5,571,363.54 28,324.54

2/1/2035 5,543,039.00 28,409.04

3/1/2035 5,514,629.96 28,493.79

4/1/2035 5,486,136.17 28,578.80

5/1/2035 5,457,557.37 28,664.06

6/1/2035 5,428,893.31 28,749.57

7/1/2035 5,400,143.74 28,835.34

8/1/2035 5,371,308.40 28,921.37

9/1/2035 5,342,387.03 29,007.65

10/1/2035 5,313,379.38 29,094.19

11/1/2035 5,284,285.19 29,180.99

D-1-7

12/1/2035 5,255,104.20 29,268.04

1/1/2036 5,225,836.16 29,355.36

2/1/2036 5,196,480.80 29,442.94

3/1/2036 5,167,037.86 29,530.77

4/1/2036 5,137,507.09 29,618.87

5/1/2036 5,107,888.22 29,707.24

6/1/2036 5,078,180.98 29,795.86

7/1/2036 5,048,385.12 29,884.75

8/1/2036 5,018,500.37 29,973.91

9/1/2036 4,988,526.46 30,063.33

10/1/2036 4,958,463.13 30,153.02

11/1/2036 4,928,310.11 30,242.98

12/1/2036 4,898,067.13 30,333.20

1/1/2037 4,867,733.93 30,423.70

2/1/2037 4,837,310.23 30,514.46

3/1/2037 4,806,795.77 30,605.50

4/1/2037 4,776,190.27 30,696.80

5/1/2037 4,745,493.47 30,788.38

6/1/2037 4,714,705.09 30,880.23

7/1/2037 4,683,824.86 30,972.36

8/1/2037 4,652,852.50 31,064.76

9/1/2037 4,621,787.74 31,157.44

10/1/2037 4,590,630.30 31,250.39

11/1/2037 4,559,379.91 31,343.62

12/1/2037 4,528,036.29 31,437.13

1/1/2038 4,496,599.16 31,530.92

2/1/2038 4,465,068.24 31,624.98

3/1/2038 4,433,443.26 31,719.33

4/1/2038 4,401,723.93 31,813.96

5/1/2038 4,369,909.97 31,908.87

6/1/2038 4,338,001.10 32,004.07

7/1/2038 4,305,997.03 32,099.55

8/1/2038 4,273,897.48 32,195.31

9/1/2038 4,241,702.17 32,291.36

10/1/2038 4,209,410.81 32,387.69

11/1/2038 4,177,023.12 32,484.32

12/1/2038 4,144,538.80 32,581.23

1/1/2039 4,111,957.57 32,678.43

2/1/2039 4,079,279.14 32,775.92

3/1/2039 4,046,503.22 32,873.70

4/1/2039 4,013,629.52 32,971.78

D-1-8

5/1/2039 3,980,657.74 33,070.14

6/1/2039 3,947,587.60 33,168.80

7/1/2039 3,914,418.80 33,267.75

8/1/2039 3,881,151.05 33,367.00

9/1/2039 3,847,784.05 33,466.55

10/1/2039 3,814,317.50 33,566.39

11/1/2039 3,780,751.11 33,666.53

12/1/2039 3,747,084.58 33,766.97

1/1/2040 3,713,317.61 33,867.71

2/1/2040 3,679,449.90 33,968.74

3/1/2040 3,645,481.16 34,070.08

4/1/2040 3,611,411.08 34,171.73

5/1/2040 3,577,239.35 34,273.67

6/1/2040 3,542,965.68 34,375.92

7/1/2040 3,508,589.76 34,478.48

8/1/2040 3,474,111.28 34,581.34

9/1/2040 3,439,529.94 34,684.51

10/1/2040 3,404,845.43 34,787.98

11/1/2040 3,370,057.45 34,891.77

12/1/2040 3,335,165.68 34,995.86

1/1/2041 3,300,169.82 35,100.26

2/1/2041 3,265,069.56 35,204.98

3/1/2041 3,229,864.58 35,310.01

4/1/2041 3,194,554.57 35,415.35

5/1/2041 3,159,139.22 35,521.00

6/1/2041 3,123,618.22 35,626.98

7/1/2041 3,087,991.24 35,733.26

8/1/2041 3,052,257.98 35,839.87

9/1/2041 3,016,418.11 35,946.79

10/1/2041 2,980,471.32 36,054.03

11/1/2041 2,944,417.29 36,161.59

12/1/2041 2,908,255.70 36,269.47

1/1/2042 2,871,986.23 36,377.68

2/1/2042 2,835,608.55 36,486.20

3/1/2042 2,799,122.35 36,595.05

4/1/2042 2,762,527.30 36,704.23

5/1/2042 2,725,823.07 36,813.73

6/1/2042 2,689,009.34 36,923.56

7/1/2042 2,652,085.78 37,033.71

8/1/2042 2,615,052.07 37,144.20

9/1/2042 2,577,907.87 37,255.01

D-1-9

10/1/2042 2,540,652.86 37,366.16

11/1/2042 2,503,286.70 37,477.63

12/1/2042 2,465,809.07 37,589.44

1/1/2043 2,428,219.63 37,701.58

2/1/2043 2,390,518.05 37,814.06

3/1/2043 2,352,703.99 37,926.87

4/1/2043 2,314,777.12 38,040.02

5/1/2043 2,276,737.10 38,153.50

6/1/2043 2,238,583.60 38,267.33

7/1/2043 2,200,316.27 38,381.49

8/1/2043 2,161,934.78 38,496.00

9/1/2043 2,123,438.78 38,610.84

10/1/2043 2,084,827.94 38,726.03

11/1/2043 2,046,101.91 38,841.57

12/1/2043 2,007,260.34 38,957.44

1/1/2044 1,968,302.90 39,073.67

2/1/2044 1,929,229.23 39,190.24

3/1/2044 1,890,038.99 39,307.15

4/1/2044 1,850,731.84 39,424.42

5/1/2044 1,811,307.42 39,542.04

6/1/2044 1,771,765.38 39,660.00

7/1/2044 1,732,105.38 39,778.32

8/1/2044 1,692,327.06 39,896.99

9/1/2044 1,652,430.07 40,016.02

10/1/2044 1,612,414.05 40,135.40

11/1/2044 1,572,278.65 40,255.14

12/1/2044 1,532,023.51 40,375.23

1/1/2045 1,491,648.28 40,495.69

2/1/2045 1,451,152.59 40,616.50

3/1/2045 1,410,536.09 40,737.67

4/1/2045 1,369,798.42 40,859.20

5/1/2045 1,328,939.22 40,981.10

6/1/2045 1,287,958.12 41,103.36

7/1/2045 1,246,854.76 41,225.99

8/1/2045 1,205,628.77 41,348.98

9/1/2045 1,164,279.79 41,472.34

10/1/2045 1,122,807.45 41,596.06

11/1/2045 1,081,211.39 41,720.16

12/1/2045 1,039,491.23 41,844.62

1/1/2046 997,646.61 41,969.46

2/1/2046 955,677.15 42,094.67

D-1-10

3/1/2046 913,582.48 42,220.25

4/1/2046 871,362.23 42,346.21

5/1/2046 829,016.02 42,472.54

6/1/2046 786,543.48 42,599.25

7/1/2046 743,944.23 42,726.34

8/1/2046 701,217.89 42,853.80

9/1/2046 658,364.09 42,981.65

10/1/2046 615,382.44 43,109.88

11/1/2046 572,272.56 43,238.49

12/1/2046 529,034.07 43,367.49

1/1/2047 485,666.58 43,496.86

2/1/2047 442,169.72 43,626.63

3/1/2047 398,543.09 43,756.78

4/1/2047 354,786.31 43,887.32

5/1/2047 310,898.99 44,018.25

6/1/2047 266,880.74 44,149.58

7/1/2047 222,731.16 44,281.29

8/1/2047 178,449.87 44,413.39

9/1/2047 134,036.48 44,545.89

10/1/2047 89,490.59 44,678.79

11/1/2047 44,811.80 44,811.80

D-2-1

EXHIBIT D-2

SCHEDULE OF SERIES B LOAN PRINCIPAL PAYMENTS

Payment Date Outstanding

Principal

Principal

Amount Due

12/1/2017 13,056,538.34 20,262.30

1/1/2018 13,036,276.04 20,322.76

2/1/2018 13,015,953.28 20,383.38

3/1/2018 12,995,569.90 20,444.19

4/1/2018 12,975,125.71 20,505.19

5/1/2018 12,954,620.52 20,566.36

6/1/2018 12,934,054.16 20,627.71

7/1/2018 12,913,426.45 20,689.25

8/1/2018 12,892,737.20 20,750.98

9/1/2018 12,871,986.22 20,812.88

10/1/2018 12,851,173.34 20,874.98

11/1/2018 12,830,298.36 20,937.25

12/1/2018 12,809,361.11 20,999.72

1/1/2019 12,788,361.39 21,062.37

2/1/2019 12,767,299.02 21,125.20

3/1/2019 12,746,173.82 21,188.22

4/1/2019 12,724,985.60 21,251.43

5/1/2019 12,703,734.17 21,314.83

6/1/2019 12,682,419.34 21,378.43

7/1/2019 12,661,040.91 21,442.20

8/1/2019 12,639,598.71 21,506.17

9/1/2019 12,618,092.54 21,570.33

10/1/2019 12,596,522.21 21,634.68

11/1/2019 12,574,887.53 21,699.22

12/1/2019 12,553,188.31 21,763.97

1/1/2020 12,531,424.34 21,828.89

2/1/2020 12,509,595.45 21,894.01

3/1/2020 12,487,701.44 21,959.33

4/1/2020 12,465,742.11 22,024.85

5/1/2020 12,443,717.26 22,090.55

6/1/2020 12,421,626.71 22,156.46

7/1/2020 12,399,470.25 22,222.56

8/1/2020 12,377,247.69 22,288.86

9/1/2020 12,354,958.83 22,355.35

10/1/2020 12,332,603.48 22,422.04

D-2-2

11/1/2020 12,310,181.44 22,488.94

12/1/2020 12,287,692.50 22,556.02

1/1/2021 12,265,136.48 22,623.32

2/1/2021 12,242,513.16 22,690.82

3/1/2021 12,219,822.34 22,758.50

4/1/2021 12,197,063.84 22,826.40

5/1/2021 12,174,237.44 22,894.50

6/1/2021 12,151,342.94 22,962.81

7/1/2021 12,128,380.13 23,031.31

8/1/2021 12,105,348.82 23,100.02

9/1/2021 12,082,248.80 23,168.94

10/1/2021 12,059,079.86 23,238.05

11/1/2021 12,035,841.81 23,307.38

12/1/2021 12,012,534.43 23,376.92

1/1/2022 11,989,157.51 23,446.65

2/1/2022 11,965,710.86 23,516.61

3/1/2022 11,942,194.25 23,586.77

4/1/2022 11,918,607.48 23,657.13

5/1/2022 11,894,950.35 23,727.71

6/1/2022 11,871,222.64 23,798.50

7/1/2022 11,847,424.14 23,869.50

8/1/2022 11,823,554.64 23,940.70

9/1/2022 11,799,613.94 24,012.13

10/1/2022 11,775,601.81 24,083.77

11/1/2022 11,751,518.04 24,155.61

12/1/2022 11,727,362.43 24,227.68

1/1/2023 11,703,134.75 24,299.96

2/1/2023 11,678,834.79 24,372.45

3/1/2023 11,654,462.34 24,445.16

4/1/2023 11,630,017.18 24,518.10

5/1/2023 11,605,499.08 24,591.24

6/1/2023 11,580,907.84 24,664.60

7/1/2023 11,556,243.24 24,738.19

8/1/2023 11,531,505.05 24,811.99

9/1/2023 11,506,693.06 24,886.00

10/1/2023 11,481,807.06 24,960.25

11/1/2023 11,456,846.81 25,034.72

12/1/2023 11,431,812.09 25,109.40

1/1/2024 11,406,702.69 25,184.31

2/1/2024 11,381,518.38 25,259.44

3/1/2024 11,356,258.94 25,334.80

D-2-3

4/1/2024 11,330,924.14 25,410.38

5/1/2024 11,305,513.76 25,486.19

6/1/2024 11,280,027.57 25,562.23

7/1/2024 11,254,465.34 25,638.49

8/1/2024 11,228,826.85 25,714.98

9/1/2024 11,203,111.87 25,791.69

10/1/2024 11,177,320.18 25,868.63

11/1/2024 11,151,451.55 25,945.82

12/1/2024 11,125,505.73 26,023.22

1/1/2025 11,099,482.51 26,100.85

2/1/2025 11,073,381.66 26,178.72

3/1/2025 11,047,202.94 26,256.82

4/1/2025 11,020,946.12 26,335.15

5/1/2025 10,994,610.97 26,413.72

6/1/2025 10,968,197.25 26,492.52

7/1/2025 10,941,704.73 26,571.55

8/1/2025 10,915,133.18 26,650.83

9/1/2025 10,888,482.35 26,730.33

10/1/2025 10,861,752.02 26,810.08

11/1/2025 10,834,941.94 26,890.06

12/1/2025 10,808,051.88 26,970.29

1/1/2026 10,781,081.59 27,050.75

2/1/2026 10,754,030.84 27,131.45

3/1/2026 10,726,899.39 27,212.40

4/1/2026 10,699,686.99 27,293.57

5/1/2026 10,672,393.42 27,375.00

6/1/2026 10,645,018.42 27,456.67

7/1/2026 10,617,561.75 27,538.59

8/1/2026 10,590,023.16 27,620.75

9/1/2026 10,562,402.41 27,703.14

10/1/2026 10,534,699.27 27,785.79

11/1/2026 10,506,913.48 27,868.69

12/1/2026 10,479,044.79 27,951.83

1/1/2027 10,451,092.96 28,035.21

2/1/2027 10,423,057.75 28,118.85

3/1/2027 10,394,938.90 28,202.75

4/1/2027 10,366,736.15 28,286.88

5/1/2027 10,338,449.27 28,371.27

6/1/2027 10,310,078.00 28,455.91

7/1/2027 10,281,622.09 28,540.81

8/1/2027 10,253,081.28 28,625.96

D-2-4

9/1/2027 10,224,455.32 28,711.35

10/1/2027 10,195,743.97 28,797.01

11/1/2027 10,166,946.96 28,882.92

12/1/2027 10,138,064.04 28,969.08

1/1/2028 10,109,094.96 29,055.51

2/1/2028 10,080,039.45 29,142.19

3/1/2028 10,050,897.26 29,229.13

4/1/2028 10,021,668.13 29,316.33

5/1/2028 9,992,351.80 29,403.80

6/1/2028 9,962,948.00 29,491.51

7/1/2028 9,933,456.49 29,579.50

8/1/2028 9,903,876.99 29,667.75

9/1/2028 9,874,209.24 29,756.26

10/1/2028 9,844,452.98 29,845.02

11/1/2028 9,814,607.96 29,934.06

12/1/2028 9,784,673.90 30,023.37

1/1/2029 9,754,650.53 30,112.93

2/1/2029 9,724,537.60 30,202.77

3/1/2029 9,694,334.83 30,292.88

4/1/2029 9,664,041.95 30,383.25

5/1/2029 9,633,658.70 30,473.89

6/1/2029 9,603,184.81 30,564.81

7/1/2029 9,572,620.00 30,655.99

8/1/2029 9,541,964.01 30,747.45

9/1/2029 9,511,216.56 30,839.19

10/1/2029 9,480,377.37 30,931.18

11/1/2029 9,449,446.19 31,023.46

12/1/2029 9,418,422.73 31,116.02

1/1/2030 9,387,306.71 31,208.85

2/1/2030 9,356,097.86 31,301.96

3/1/2030 9,324,795.90 31,395.33

4/1/2030 9,293,400.57 31,489.00

5/1/2030 9,261,911.57 31,582.95

6/1/2030 9,230,328.62 31,677.17

7/1/2030 9,198,651.45 31,771.67

8/1/2030 9,166,879.78 31,866.45

9/1/2030 9,135,013.33 31,961.52

10/1/2030 9,103,051.81 32,056.87

11/1/2030 9,070,994.94 32,152.51

12/1/2030 9,038,842.43 32,248.43

1/1/2031 9,006,594.00 32,344.64

D-2-5

2/1/2031 8,974,249.36 32,441.14

3/1/2031 8,941,808.22 32,537.92

4/1/2031 8,909,270.30 32,634.98

5/1/2031 8,876,635.32 32,732.34

6/1/2031 8,843,902.98 32,830.00

7/1/2031 8,811,072.98 32,927.94

8/1/2031 8,778,145.04 33,026.18

9/1/2031 8,745,118.86 33,124.70

10/1/2031 8,711,994.16 33,223.53

11/1/2031 8,678,770.63 33,322.65

12/1/2031 8,645,447.98 33,422.06

1/1/2032 8,612,025.92 33,521.77

2/1/2032 8,578,504.15 33,621.77

3/1/2032 8,544,882.38 33,722.07

4/1/2032 8,511,160.31 33,822.68

5/1/2032 8,477,337.63 33,923.58

6/1/2032 8,443,414.05 34,024.79

7/1/2032 8,409,389.26 34,126.30

8/1/2032 8,375,262.96 34,228.11

9/1/2032 8,341,034.85 34,330.22

10/1/2032 8,306,704.63 34,432.64

11/1/2032 8,272,271.99 34,535.37

12/1/2032 8,237,736.62 34,638.40

1/1/2033 8,203,098.22 34,741.73

2/1/2033 8,168,356.49 34,845.38

3/1/2033 8,133,511.11 34,949.33

4/1/2033 8,098,561.78 35,053.60

5/1/2033 8,063,508.18 35,158.17

6/1/2033 8,028,350.01 35,263.07

7/1/2033 7,993,086.94 35,368.27

8/1/2033 7,957,718.67 35,473.78

9/1/2033 7,922,244.89 35,579.61

10/1/2033 7,886,665.28 35,685.76

11/1/2033 7,850,979.52 35,792.22

12/1/2033 7,815,187.30 35,899.00

1/1/2034 7,779,288.30 36,006.10

2/1/2034 7,743,282.20 36,113.52

3/1/2034 7,707,168.68 36,221.26

4/1/2034 7,670,947.42 36,329.32

5/1/2034 7,634,618.10 36,437.70

6/1/2034 7,598,180.40 36,546.41

D-2-6

7/1/2034 7,561,633.99 36,655.43

8/1/2034 7,524,978.56 36,764.79

9/1/2034 7,488,213.77 36,874.47

10/1/2034 7,451,339.30 36,984.48

11/1/2034 7,414,354.82 37,094.81

12/1/2034 7,377,260.01 37,205.48

1/1/2035 7,340,054.53 37,316.48

2/1/2035 7,302,738.05 37,427.81

3/1/2035 7,265,310.24 37,539.47

4/1/2035 7,227,770.77 37,651.46

5/1/2035 7,190,119.31 37,763.78

6/1/2035 7,152,355.53 37,876.45

7/1/2035 7,114,479.08 37,989.45

8/1/2035 7,076,489.63 38,102.78

9/1/2035 7,038,386.85 38,216.45

10/1/2035 7,000,170.40 38,330.47

11/1/2035 6,961,839.93 38,444.82

12/1/2035 6,923,395.11 38,559.52

1/1/2036 6,884,835.59 38,674.55

2/1/2036 6,846,161.04 38,789.93

3/1/2036 6,807,371.11 38,905.66

4/1/2036 6,768,465.45 39,021.73

5/1/2036 6,729,443.72 39,138.13

6/1/2036 6,690,305.59 39,254.90

7/1/2036 6,651,050.69 39,372.01

8/1/2036 6,611,678.68 39,489.47

9/1/2036 6,572,189.21 39,607.28

10/1/2036 6,532,581.93 39,725.44

11/1/2036 6,492,856.49 39,843.95

12/1/2036 6,453,012.54 39,962.83

1/1/2037 6,413,049.71 40,082.04

2/1/2037 6,372,967.67 40,201.62

3/1/2037 6,332,766.05 40,321.55

4/1/2037 6,292,444.50 40,441.85

5/1/2037 6,252,002.65 40,562.50

6/1/2037 6,211,440.15 40,683.52

7/1/2037 6,170,756.63 40,804.89

8/1/2037 6,129,951.74 40,926.62

9/1/2037 6,089,025.12 41,048.71

10/1/2037 6,047,976.41 41,171.18

11/1/2037 6,006,805.23 41,294.01

D-2-7

12/1/2037 5,965,511.22 41,417.20

1/1/2038 5,924,094.02 41,540.76

2/1/2038 5,882,553.26 41,664.70

3/1/2038 5,840,888.56 41,788.99

4/1/2038 5,799,099.57 41,913.66

5/1/2038 5,757,185.91 42,038.71

6/1/2038 5,715,147.20 42,164.12

7/1/2038 5,672,983.08 42,289.91

8/1/2038 5,630,693.17 42,416.07

9/1/2038 5,588,277.10 42,542.62

10/1/2038 5,545,734.48 42,669.54

11/1/2038 5,503,064.94 42,796.83

12/1/2038 5,460,268.11 42,924.51

1/1/2039 5,417,343.60 43,052.57

2/1/2039 5,374,291.03 43,181.01

3/1/2039 5,331,110.02 43,309.83

4/1/2039 5,287,800.19 43,439.03

5/1/2039 5,244,361.16 43,568.63

6/1/2039 5,200,792.53 43,698.61

7/1/2039 5,157,093.92 43,828.98

8/1/2039 5,113,264.94 43,959.74

9/1/2039 5,069,305.20 44,090.88

10/1/2039 5,025,214.32 44,222.42

11/1/2039 4,980,991.90 44,354.35

12/1/2039 4,936,637.55 44,486.67

1/1/2040 4,892,150.88 44,619.39

2/1/2040 4,847,531.49 44,752.51

3/1/2040 4,802,778.98 44,886.02

4/1/2040 4,757,892.96 45,019.93

5/1/2040 4,712,873.03 45,154.24

6/1/2040 4,667,718.79 45,288.95

7/1/2040 4,622,429.84 45,424.06

8/1/2040 4,577,005.78 45,559.57

9/1/2040 4,531,446.21 45,695.49

10/1/2040 4,485,750.72 45,831.82

11/1/2040 4,439,918.90 45,968.55

12/1/2040 4,393,950.35 46,105.69

1/1/2041 4,347,844.66 46,243.24

2/1/2041 4,301,601.42 46,381.20

3/1/2041 4,255,220.22 46,519.57

4/1/2041 4,208,700.65 46,658.35

D-2-8

5/1/2041 4,162,042.30 46,797.56

6/1/2041 4,115,244.74 46,937.16

7/1/2041 4,068,307.58 47,077.20

8/1/2041 4,021,230.38 47,217.64

9/1/2041 3,974,012.74 47,358.50

10/1/2041 3,926,654.24 47,499.79

11/1/2041 3,879,154.45 47,641.50

12/1/2041 3,831,512.95 47,783.63

1/1/2042 3,783,729.32 47,926.18

2/1/2042 3,735,803.14 48,069.17

3/1/2042 3,687,733.97 48,212.58

4/1/2042 3,639,521.39 48,356.40

5/1/2042 3,591,164.99 48,500.67

6/1/2042 3,542,664.32 48,645.36

7/1/2042 3,494,018.96 48,790.49

8/1/2042 3,445,228.47 48,936.04

9/1/2042 3,396,292.43 49,082.04

10/1/2042 3,347,210.39 49,228.46

11/1/2042 3,297,981.93 49,375.33

12/1/2042 3,248,606.60 49,522.63

1/1/2043 3,199,083.97 49,670.38

2/1/2043 3,149,413.59 49,818.56

3/1/2043 3,099,595.03 49,967.18

4/1/2043 3,049,627.85 50,116.25

5/1/2043 2,999,511.60 50,265.77

6/1/2043 2,949,245.83 50,415.73

7/1/2043 2,898,830.10 50,566.14

8/1/2043 2,848,263.96 50,716.99

9/1/2043 2,797,546.97 50,868.30

10/1/2043 2,746,678.67 51,020.06

11/1/2043 2,695,658.61 51,172.26

12/1/2043 2,644,486.35 51,324.93

1/1/2044 2,593,161.42 51,478.04

2/1/2044 2,541,683.38 51,631.62

3/1/2044 2,490,051.76 51,785.66

4/1/2044 2,438,266.10 51,940.15

5/1/2044 2,386,325.95 52,095.10

6/1/2044 2,334,230.85 52,250.52

7/1/2044 2,281,980.33 52,406.40

8/1/2044 2,229,573.93 52,562.75

9/1/2044 2,177,011.18 52,719.56

D-2-9

10/1/2044 2,124,291.62 52,876.84

11/1/2044 2,071,414.78 53,034.59

12/1/2044 2,018,380.19 53,192.81

1/1/2045 1,965,187.38 53,351.50

2/1/2045 1,911,835.88 53,510.66

3/1/2045 1,858,325.22 53,670.31

4/1/2045 1,804,654.91 53,830.43

5/1/2045 1,750,824.48 53,991.02

6/1/2045 1,696,833.46 54,152.09

7/1/2045 1,642,681.37 54,313.64

8/1/2045 1,588,367.73 54,475.68

9/1/2045 1,533,892.05 54,638.19

10/1/2045 1,479,253.86 54,801.20

11/1/2045 1,424,452.66 54,964.69

12/1/2045 1,369,487.97 55,128.67

1/1/2046 1,314,359.30 55,293.14

2/1/2046 1,259,066.16 55,458.09

3/1/2046 1,203,608.07 55,623.54

4/1/2046 1,147,984.53 55,789.49

5/1/2046 1,092,195.04 55,955.93

6/1/2046 1,036,239.11 56,122.86

7/1/2046 980,116.25 56,290.29

8/1/2046 923,825.96 56,458.23

9/1/2046 867,367.73 56,626.66

10/1/2046 810,741.07 56,795.60

11/1/2046 753,945.47 56,965.04

12/1/2046 696,980.43 57,134.98

1/1/2047 639,845.45 57,305.44

2/1/2047 582,540.01 57,476.40

3/1/2047 525,063.61 57,647.87

4/1/2047 467,415.74 57,819.86

5/1/2047 409,595.88 57,992.35

6/1/2047 351,603.53 58,165.36

7/1/2047 293,438.17 58,338.88

8/1/2047 235,099.29 58,512.94

9/1/2047 176,586.35 58,687.50

10/1/2047 117,898.85 58,862.58

11/1/2047 59,036.27 59,036.27

E-1

EXHIBIT E

ASSIGNMENT LETTER

[Date]

St. Augustine’s School of San Diego

San Diego, California

California Enterprise Development Authority

Sacramento, California

Re: Master Loan Agreement, dated as of October 1, 2015, by and among MUFG

Union Bank, N.A. (the “Lender”), California Enterprise Development Authority

(the “Issuer”) and St. Augustine’s School of San Diego (the “Borrower”)

Ladies and Gentlemen:

The undersigned, a duly authorized representative of the Lender hereby advises you that

pursuant to Section 10.01 of the Master Loan Agreement, dated as of October 1, 2015, by and

among the Lender, the Issuer and the Borrower (the “Loan Agreement”), a 100% participation

interest in the Loan (as defined in the Loan Agreement) made pursuant the Loan Agreement in

the aggregate principal amount of $__,000,000 (the “Loan”) has been assigned on this date by

the Lender to _____________, a wholly-owned subsidiary of the Lender, and an Affiliate (as

defined in the Loan Agreement). The Lender will act as servicer for the Loan.

MUFG UNION BANK, N.A.

By:

[Name, Title]

ACKNOWLEDGED:

ST. AUGUSTINE’S SCHOOL OF SAN DIEGO,

a California nonprofit religious corporation

By

[Name, Title]

CALIFORNIA ENTERPRISE

DEVELOPMENT AUTHORITY

By

Chair

F- 1

EXHIBIT F

FORM OF PROJECT FUND DRAW REQUEST

PROJECT FUND DRAW REQUEST NO. [__] PURSUANT TO

MASTER LOAN AGREEMENT

by and among

MUFG UNION BANK, N.A.,

Lender

and

CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY,

the Issuer

and

ST. AUGUSTINE’S SCHOOL OF SAN DIEGO,

as the Borrower

Dated as of __________, 20__

THIS PROJECT FUND DRAW REQUEST (this “Draw Request”) is made pursuant to

the Section 3.04 of the Loan Agreement identified above (the “Loan Agreement”). Defined

terms used but not otherwise defined herein shall have the meaning set forth in the Loan

Agreement.

Section 1. The Borrower hereby requests a draw from the Series B Loan in the

amount of $_________, all subject to the provisions of the Loan Agreement for the Project

Costs.

Section 2. The undersigned authorized representative, on behalf of the Borrower,

hereby identifies the Project Costs, as set forth in Schedule I hereto, pertaining to this Draw

Request. Attached hereto are invoice(s), contract(s) and, if applicable, evidence of payment

relating to such Project Costs.

Section 3. The Borrower hereby certifies that obligations in amounts stated in this

Draw Request are a proper charge against the Project Fund.

Section 4. The Borrower represents, covenants and warrants that (a) there has not

been any material adverse change in its condition, business, operations, performance, properties

or prospects since the date of the Loan Agreement, (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

F-2

and is continuing or would result from the loan of Loan Proceeds 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.

Section 5. The Borrower hereby certifies that the Loan Proceeds disbursed pursuant

to each prior Draw Request were disbursed in accordance with the terms of each such prior Draw

Request.

Section 6. The Borrower (to its best knowledge at the time of this Draw Request)

hereby certifies that:

(a) all work performed is in substantial accordance with the Plans and

Specifications;

(b) all licenses and permits required by any “Governmental Authority” (as

hereinafter defined) for the Improvements as then completed have been obtained and will

be exhibited to the Lender upon request. “Governmental Authority” shall mean (i) any

governmental municipality or political subdivision thereof, (ii) any governmental or

quasi–governmental agency, authority, board, bureau, commission, department

instrumentality or public body, or (iii) any court, administrative tribunal or public utility;

(c) the Improvements as then completed do not violate, and, if further

completed in accordance with the Plans and Specifications, will not violate, any

applicable law, ordinance, rule or regulation; and

(d) the remaining undisbursed proceeds of the Loan, together with any funds

collected by or otherwise available to the Borrower, are or will be sufficient to pay for the

completion of the Improvements.

Section 7. The Borrower hereby certifies that all conditions precedent to the

disbursement of Loan Proceeds pursuant to the Project Fund Disbursement Agreement have been

satisfied.

Submitted on __________, 20__ by:

BORROWER:

ST. AUGUSTINE’S SCHOOL

OF SAN DIEGO

By [Name, Title]

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Approved as of ________, 20__ by:

LENDER:

MUFG UNION BANK, N.A.

By [Name, Title]

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SCHEDULE I

TO DRAW REQUEST NO. ____

PROJECT COSTS

To Amount Purpose

G-1

EXHIBIT G

AGGREGATE PRINCIPAL AMOUNT OF SERIES B LOAN OUTSTANDING

Date Draw Request

No. __

Amount ($) of Draw

(Request)

Aggregate Amount of

Loan Outstanding

TOTAL

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EXHIBIT H

FORM OF REPORTING CERTIFICATE

TO: MUFG Union Bank, N.A.

RE: Master Loan Agreement, dated as of October 1, 2015, by and among MUFG

Union Bank, N.A., California Enterprise Development Authority and St.

Augustine’s School of San Diego (the “Loan Agreement”)

DATE: [Date]

The undersigned Authorized Borrower Representative hereby certifies as of the date

hereof that [he/she] is the [_____________________] of the Borrower, and that, as such,

[he/she] is authorized to execute and deliver this Certificate to the Lender on the behalf of the

Borrower, and that:

1. Borrower has delivered the year-end reviewed financial statements required by

Section 7.05(a) of the Loan Agreement for the fiscal year ended as of the above date.

2. A review of the activities of the Borrower during such fiscal year has been made

under the supervision of the undersigned with a view to determining whether during such fiscal

year the Borrower performed and observed all its obligations under the Loan Agreement, and

[select one:]

[to the best knowledge of the undersigned, during such fiscal year the Borrower

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 knowledge of the undersigned, the following covenants or conditions have

not been performed or observed and the following 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 knowledge of the undersigned, no Event of Taxability has occurred.

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Defined terms used in this Certificate shall have the meaning set forth in the Loan

Agreement.

ST. AUGUSTINE’S SCHOOL

OF SAN DIEGO

By

Authorized Officer

Schedule A-1

Schedule A

Financial Statement Date: [________, ____] (“Statement Date”)

I. Section 7.16(a) – Net Unrestricted Cash and Investments.

Net Unrestricted Cash and Investments of the

Borrower

$_______________

Minimum Net Unrestricted Cash and Investments Required By Loan Agreement: $3,000,000.

Borrower in compliance with Section 7.16(a)? Yes ____ No _____

II. Section 7.16(b) – Debt Service Coverage Ratio.

A. Operating Profits

$_______________

B. + Depreciation

($______________)

C. + Interest Expense

($______________)

D. A + B + C

$______________

E. Current portion of long term debt

$______________

F. + Interest Expense

$_______________

G. E + F $_______________

L. Debt Service Coverage Ratio (D/G)

$_______________

Minimum Debt Service Coverage Ratio Required By Loan Agreement: 1.15:1.00

Borrower in compliance with Section 7.16(b)? Yes ____ No _____

I-1

EXHIBIT I

FORM OF CERTIFICATE OF COMPLETION

The undersigned duly authorized officer of the St. Augustine’s School of San Diego, a

California nonprofit religious corporation (“Borrower”) hereby certifies with respect to the

Master Loan Agreement, dated as of October 1, 2015 (the “Loan Agreement”), by and among the

Borrower, MUFG Union Bank, N.A. (“Lender”) and the California Enterprise Development

Authority (the “Issuer”), that:

1. The Project (as defined in the Loan Agreement) has been constructed and

equipped in accordance with the Borrower’s plans and specifications and has been completed by

the Borrower.

2. Borrower has obtained, or has arranged to obtain, from one or more reputable

insurance companies qualified to do business in the State (as defined in the Agreement)

insurance with respect to all risks required to be covered thereby pursuant to Section 7.04 of the

Loan Agreement.

3. All of the representations and warranties of the Borrower contained in the Loan

Agreement are true and correct as of the date hereof and no Default or Event of Default has

occurred thereunder. The Borrower has fully and satisfactorily performed all of its covenants and

obligations to date required under the Loan Agreement.

4. Borrower has reviewed the provisions of the Tax Regulatory Agreement (as

defined in the Loan Agreement), and none of the proceeds of the Borrower Loans (as defined in

the Loan Agreement) have been expended in violation of the provisions of the Tax Regulatory

Agreement.

5. Borrower understands that Lender and the Issuer are relying on the certifications

herein in connection with the completion of the Project and the expenditure of the proceeds of

the Borrower Loans.

Dated: _________ __, 20__.

ST. AUGUSTINE’S SCHOOL OF SAN DIEGO By Authorized Officer