07 120312 SA HA WASHINGTON Pl BLA - Attach 3

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the Borrower Loan Documents), a property management fee (however characterized) not to exceed ~.0% of Gross Income, costs of billings and collections, costs of insurance, and costs of audits. Expenses of the Project shall not include any payments, however characterized, on account of any subordinate financing in respect of the Project or other indebtedness, allowance for depreciation, amortization or other non~cash items, gains and losses or prepaid expenses not customarily prepaid. "Extended Outside Conversion Date" shall have the meaning set forth in the Construction Funding Agreement. "Fair Market Value" shall mean the price at which a willing buyer would purchase the investment from a willing seller in a bona. fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of Section 1273 of the Code} and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is an interest in any corruningled investment fund in which the Governmental Lender and related parties do not own more than a ten percent (10%) beneficial interest therein if the return paid by the fund is without regard to the source of investment. "Fiscal Agent" shall mean the Fiscal Agent from time to time under and pursuant to the Funding Loan Agreement. Initially, the Fiscal Agent is Wilmington Trust, National Association. "Fitch" shall mean Fitch, Inc. "Funding Lender" shall mean Citibank, N.A., a national banking association, in its capacity as lender under the Funding Loan. "Funding Loan" means the Funding Loan in the original maximum principal amount of $30,000,000 made by Funding Lender to Governmental Lender under the Funding Loan Agreement, the proceeds of which are used by the Governmental Lender to make the Borrower Loan. "Funding Loan Agreement" means the Funding Loan Agreement, of even date herewith, among the Governmental Lender, the Fiscal Agent and the Funding Lender, as it may from time to time be supplemented, modified or amended by one or more amendments or other instruments supplemental thereto entered into pursuant to the applicable provisions thereof. "Funding Loan Documents" shall have the meaning given to that term in the Funding Loan Agreement. "GAAP" shall mean generally accepted accounting principles as in effect on the date of the application thereof and consistently applied throughout the periods covered by the applicable financial statements. "General Partner" shall mean, collectively, (i) Hearthstone Housing Foundation, a California. nonprofit public benefit corporation, (ii) Washington Place Management, LLC, a California limited liability company, and/or (iii) any other Person that the partners of the Borrower, with the prior written C:1UsersltadlDesktoplSanta Ana HA Washington Place 9 BLA.doc DRAFT 11/28/12 8:41AM