PRUDENTIAL INSURANCE GROWTH MANAGEMENT AGREEMENT

b. Willful and Intentional Noncompliance. If the City Council in its reasonable discretion finds that there were willful and intentional violations of this Agreement (including, but not limited to, more than three instances of technical violations in one year, fraud or deceit on the part of Developer or any of its authorized agents, or involving any substantial infringement of the rights of tenants intended to be benefited by the terms of this Agreement), or the failure to pay amounts determined pursuant to subsection a) within the period specified, then, in addition to the dollar value of the violation, the term of this Agreement may be extended for a period of up to one year for each instance of violation as the City Council shall reasonably deem appropriate up to a maximum of three (3) one year extensions. Under no circumstances shall this Agreement be extended beyond eighteen (18) years after the date of completion. If non-compliance is found by the City Council pursuant to this paragraph, Developer shall increase the minimum number of lower income dwelling units to compensate for violation during the next reporting year(s) or until corrected in addition to any fines assessed under this Section. Developer may request arbitration of the City Council's decision in the manner provided by Section 14. c. Recordation. The parties hereby agree and authorize the City to record in the Office of the County Recorder for the County of Alameda any determination which the City Council shall make pursuant to Subsection b). Any determination pursuant to Subsection b) shall constitute a lien upon the Property, but shall be junior and of lower priority than any bona fide security interest or lien on the Property recorded prior to the time of recordation of City Council's determination pursuant to subsection b) . The City Council will promptly release any such lien upon request after payment. 9. Term of Agreement Substantial construction of the Project shall be commenced on or before September 1, 1988. If substantial construction of the Project has not been commenced prior to September 1, 1988, this Agreement shall be terminated, unless an extension to begin construction of the Project has been granted by the City Council. If substantial construction has been commenced prior to September 1, 1988, this Agreement shall remain in full force and effect for a term and period equal to the period of compliance set forth in Section 4 herein, and as said period may be extended pursuant to Section 8 herein. At the end of said term, the City Attorney is authorized to execute on behalf of the City and, upon request by Developer, shall execute a recordable instrument in form substantially similar to the "Notice of Termination of Moderate Income Rental Program" attached hereto as Exhibit "D". 10. Right to Develop Developer shall be permitted to build and occupy units in accordance with the schedule shown in City Resolution No. 87-423. 6