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AFFORDABLE HOUSING AGREEMENT THIS AGREEMENT is made April 6, 2004 between the City of Pleasanton "City and JJS Associates, L.P., a California limited partnership and Vineyard Avenue Associates, LLC, a Delaware limited liability company (collectively "Purchaser RECITALS A. Pursuant to an Indenture dated as of October 1, 1989 (as amended and supplemented) the City issued its Variable Rate Multifamily Mortgage Revenue Demand Bonds (Valley Plaza II Apartments) 1989 Issue A in the amount of $8,160,000 "Bonds to finance a 144 unit apartment building located at 4411 Valley Avenue "Project B. As part of the issuance of the Bonds, City and Purchaser's predecessor in interest entered into a Regulatory Agreement and Declaration of Restrictive Covenants dated as of October 1, 1989 and recorded in the Official Records on October 23, 1989 as Instrument No. 89- 284832 "Regulatory Agreement The Regulatory Agreement provided, in part, that 32 of the 144 apartment units would remain affordable until May 1, 2005, for households at 80% of the area's median income as more further described in the Regulatory Agreement. C. Purchaser intends to acquire the Project, redeem the Bonds in full, and has requested that the City approve the sale of the Project to it. D. City has requested that Purchaser extend the term that the 32 units referenced in Recital B "Affordable Units remain affordable to households of 80% of the area's median income. E. Purchaser is willing to extend the term as provided herein. NOW, THEREFORE, in consideration of the mutual promises expressed herein, the parties agree as follows. 1. City approves the sale of the Project to Purchaser. 2. The Regulatory Agreement referenced in recital B shall terminate May 1, 2005. 3. After the expiration of the Regulatory Agreement, Purchaser shall not increase rents for any tenant that resided in any of the Affordable Units on May 1, 2005 "Rent Restricted Tenant until that Rent Restricted Tenant's lease anniversary date. On the Rent Restricted Tenant's lease anniversary date, the Rent Restricted Tenant's rent may be raised based on the same formula as provided in the Regulatory Agreement (i.e., the percentage increase in the median family income for the San Francisco Oakland Standard Metropolitan Statistical Area). 4. On a Rent Restricted Tenant's next two anniversary dates the Rent Restricted Tenant's rent may be increased by no more than five percent each year. 99005 \48564v2