BLP PREDEVELOPMENT LOAN AGREEMENT FOR PLEASANTON ASSISTED LIVING

Section 1.2 Use of Funds. Proceeds of the Predevelopment Loan shall be used only for the predevelopment costs of the Development, generally in the amounts and for the cost items set forth in Exhibit B to this Agreement, unless the City approves in writing a different use of the funds. Section 1.3 Documents as Security. Upon termination of this Agreement the Developer shall deposit with the City and assign to the City for the City's use, all documents, reports, surveys, materials, architectural drawings and specifications, and any other information related to the Development paid for by the Developer with proceeds of the Predevelopment Loan (collectively the "Documents"). Section 1.4 Conditions to Fundint. The City shall fund the Predevelopment Loan upon receipt of a written request from the Developer setting forth the use of funds and the amount of funds needed with an attached a copy of the bill or invoice covering the costs incurred. Within thirty (30) days after satisfaction of these conditions, the City shall disburse the Predevelopment Loan (or so much thereof as is required) for cost items and in amounts generally consistent with those shown in Exhibit B. Notwithstanding any other provisions of this Agreement, the City shall have no further obligation to disburse any portion of the Predevelopment Loan to the Developer following: (i) termination of this Agreement; or (ii) notification by the City to the Developer of a Developer Default under the terms of this Agreement; provided, however, that the City shall become obligated again to disburse Predevelopment Loan funds to the Developer pursuant to the terms of this Agreement if the Developer cures the Default within the applicable cure period. Section 1.5 Termination of Agreement. This Agreement may be terminated under the following circumstances: (a) Developer Default. A Default by Developer under Section 3.1. (b) Development Loan. If by one (1) year from the date of execution of this Agreement, or such later date as the City may agree upon in writing, the Developer has not secured funding that will enable construction of the Development (the "Development Financing"), including a Development Loan funded by the City (the "City Development Loan"). (c) Permits. If by one (1) year from the date of execution of this Agreement, or such later date as the City may agree upon in writing, the Developer has attempted and been unable to secure the permits needed to commence construction of the Development. (d) Hazardous Materials. If, during Developer's construction work on the Development, Developer discovers Hazardous Materials, as defined in Section 5.5. of the Ground Lease, on the Property the remediation costs of which the Developer determines will make Development infeasible. Following termination, neither party shall have any rights or obligations under this Agreement, except for the Developer's obligations to deliver and assign the Documents to the 144\105\158870.8 2