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12 POPE ST - PLANNING
I � � � � � � 1 . a v v - - v a ii - -z-- - _ i + F I - ,_, L.�� ., .. , �� f!� \� ; �/ l�� i t - Y;� ' a •. _ �� � i - � . � � - :.. �._• _ Chi 121 -Pr 12- pcpe s+. _�Gl�M ll-ei ht J SALEM HEIGHTS CHAPTER 121 A APPLICATION FEB 2 2 2013 APPLICATION OF SALEM FIEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP TO THE MASSACHUSETTS DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT FOR .. AUTHORIZATION AND APPROVAL OF A PROJECT UNDER CHAPTER 121A OF THE MASSACHUSETTS GENERAL LAWS, AS AMENDED ActiveUS 103941890v.4 APPLICATION OF SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP TO THE MASSACHUSETTS DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT FOR AUTHORIZATION AND APPROVAL OF A PROJECT UNDER CHAPTER 121A OF THE MASSACHUSETTS GENERAL LAWS, AS AMENDED Table of Contents The Application (1) Description of Applicant. ....................................................................................................I (a) Name and Address of Applicant.............................................................................. l (b) Applicant's Attorney. ..............................................................................................2 (c) Description of Proposed 121 A Entity......................................................................2 (2) Location and Owner of Project Area...................................................................................2 (a) Description of Project Area.. ...................................................................................2 (b) Project Owner..........................................................................................................2 (3) The Project...........................................................................................................................2 (a) Description of the Project........................................................................................2 (b) Improvements.. ........................................................................................................3 (c) Construction Specifications.....................................................................................3 (4) Relationship of Project to the City of Salem Master Plan...................................................3 (5) Description of Blighted. Substandard and/or Decadent Conditions....................................3 (a) Blighted, Substandard and Decadent Conditions. ...................................................3 (b) Impact on Surrounding Neighborhood....................................................................3 (c) Public Safety and Convenience...............................................................................4 (d) Reasons why Project is Necessary and Desirable ...................................................4 (6) Amenities Which Warrant Additional Tax Exemption. ......................................................4 _i_ ActivcUS 103941890v.4 (a) Request for Extension to Exemption Period............................................................4 (7) Development Schedule........................................................................................................4 (8) Cost of Project. ....................................................................................................................4 (9) Financial Information. .........................................................................................................5 (a) General Financial Structure of Project.. ..................................................................5 (b) Method of Financing ...............................................................................................5 (10) Estimated Fiscal Impact on the City of Salem. ...................................................................6 (11) Proposed Section 6A Contract Terms. ................................................................................6 (12) Plan for Relocation of Residents. ........................................................................................6 (13) Environmental Assessment..................................................................................................6 (14) Agreements for Public Improvements.................................................................................6 (15) Local Regulatory Compliance.............................................................................................6 (16) Condominiums (not applicable). .........................................................................................6 (17) Regulatory Agreement.........................................................................................................7 (18) Non-Disposal of M.G.L. c. 121A Interests..........................................................................7 (19) Historic Resources...............................................................................................................7 (20) Public Use and Benefit. .......................................................................................................7 (21) Why Project Needs Chapter 121A Aid................................................................................7 (22) No Discrimination. ..............................................................................................................7 ActivcUS 103941890v.4 • Appendix 1: 121A Organizational Documents Appendix 2: 2003 DHCD Regulatory Agreement Appendix 3: Map Showing Location of Project Area Appendix 4: Legal Description of Project Area Appendix 5: Site Plan Appendix 6: Existing Affordable Housing Restrictions Appendix 7: Building Plans Appendix 8: Financial Summary and Workout Chronology Appendix 9: Draft 6A Contract Appendix 10: Draft Regulatory Agreement • -iii- ActiveUS 103941890v.4 APPLICATION OF SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP TO THE MASSACHUSETTS DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT FOR AUTHORIZATION AND APPROVAL OF A PROJECT UNDER CHAPTER 121A OF THE MASSACHUSETTS GENERAL LAWS, AS AMENDED The undersigned hereby applies to the Massachusetts Department of Housing and Community Development ("DHCD") for authorization and approval of a project, and approval for the project to be undertaken by an urban redevelopment limited partnership under the name SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP (the "Applicant"), with respect to the ownership of certain premises by said Applicant (as described in Section 1(c) hereof) pursuant to Chapter 121A of the Massachusetts General Laws, as amended, and the provisions of 760 CMR 25 (collectively, "Chapter 121 A"). (1) Description of Applicant. (a) Name and Address of Applicant. The name, residence address, business address, occupation and bank reference of the Applicant are: Applicant:icant: SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP • Address: c/o Preservation for Affordable Housing, Inc. 40 Court Street, Suite 700 Boston, Massachusetts 02108 Status: Massachusetts limited partnership Bank Reference: Bank of America, N.A. 100 Federal Street Boston, Massachusetts 02110 All notices and requests in connection with this Application shall be sent by DHCD to: SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP c/o Preservation of Affordable Housing, Inc. 40 Court Street, Suite 700 Boston, Massachusetts 02108 Attention: Amy S. Anthony Telephone: (617) 261-9898 Fax: (617) 261-6661 1 Active US 103941890v.4 (b) Applicant's Attorney, The Applicant's attorney, to whom a copy of all such notices and requests should be sent, is: Katharine E. Bachman, Esquire WilmerHale LLP 60 State Street Boston, Massachusetts 02109 Telephone: (617) 526-6216 Fax: (617) 526-5000 (c) Description of Proposed 121A Entity. The proposed 121A entity for which consent of DHCD is sought is SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP, a Massachusetts limited partnership organized under Chapter 109 of the Massachusetts General Laws, for the purpose of operating and maintaining the affordable housing project known as Salem Heights (the "Project"), presently owned by the Applicant, as described in Section 2 (the "Project Area"). The general partner of the Applicant is POAH Salem Heights, LLC, a Delaware limited liability company, with an address of 40 Court Street, Suite 700, Boston, MA 02108, and the limited partner of the Applicant is the Massachusetts Housing Equity Fund 2002 LLC, a Delaware limited liability company. The member of POAH Salem Heights LLC is POAH Inc. The organizational documents for these entities are attached to this Application as Appendix 1. The Applicant is the successor in interest to the original developer of the Project, who secured the benefit of a Chapter 121 A designation at the time of original development of the Project ("Original 121A Designation"). The Original 121A • Designation will expire at the end of its forty (40) year term on March 26, 2013. The transfer of the Project to the Applicant was approved by DHCD pursuant to a Regulatory Agreement dated July 21, 2003, a copy of which is attached hereto as Appendix 2. (2) Location and Owner of Project Area. (a) Description of Project Area. The Project Area which is the subject of this Application consists of approximately 6.5 acres located at 12 Pope Street in the City of Salem ("City"), which is approximately one (l) mile from the downtown area of the City. A map showing the location of the Project Area within the City, and a map showing the Project Area are attached to this Application as Appendix 3. A metes and bounds description of the Project Area is attached to this Application as Appendix 4. (b) Project Owner. Applicant owns all of the land in the Project Area. (3) The Project. (a) Description of the Project. A site plan showing the Project Area and the approximate locations of structures and facilities included in the Project is attached to this Application as Appendix 5. The Project involves the preservation and maintenance of the existing 283 units of housing, and is subject to affordable housing restrictions held by the City of Salem and Commonwealth of Massachusetts, copies of which are attached as Appendix 6. The Project is comprised of 2 buildings connected by a one-story lobby area, and contains 88 one-bedroom units, 195 two-bedroom units, and community space. Under the City of Salem affordable housing 2 ActiveUS 103941890v.4 restriction, which has a term of 100 years from its execution in 2003, 80% of the units must be occupied by households earning no more than 60% of area median income, and 20% of the units must be occupied by households earning no more than 120% of area median income. The state restriction requires that at least 40% of the units must be occupied by households earning no more than 60% of area median income for a minimum period of 18 years from 2003. (b) Improvements. Attached to this Application as Appendix 7 are the existing building plans. (c) Construction Specifications. The Project conforms to applicable building, public health, environmental, zoning, sanitary and other applicable statutes as they are varied or applied by properly constituted governmental authorities. (4) Relationship of Project to the City of Salem Master Plan. The Project is an important resource for the City, as it provides a substantial number of needed affordable housing units. The Project was originally developed in 1974 under the Section 236 program. The Applicant purchased the Project from the original developer in 2003, following a lawsuit brought by the City of Salem to stop its conversion of this important affordable housing resource into market rate housing. The preservation and maintenance of this affordable housing resource is important to the City and is consistent with it planning goals, both to provide needed affordable housing, and to prevent blight which would impact not only the Project but surrounding areas if the support of a Chapter 121 A designation is not available to provide financial support for Project operations. Since the Project is subject to affordable housing restrictions which limit the income eligibility of tenants and rent they may be charged, it is not possible to increase operating • income to meet the ever increasing cost of proper operations of the Project. (5) Description of Blighted Substandard and/or Decadent Conditions. (a) Blighted. Substandard and Decadent Conditions. As described above, the Project was developed in 1974, having received its original Chapter 121 A Designation due to the need for affordable housing and difficulty of development of the improvements due to substantial ledge on the site. At the time of the City's litigation and acquisition of the Project by the Applicant in 2003, the Project had substantial capital needs resulting from deferred maintenance and unanticipated substantial utility costs due to obsolete energy systems. Using a combination of tax exempt bond financing through the Massachusetts Development Finance Agency, Section 42 low income housing tax credits, deferral of development and management fees, releases of project reserves, a solar energy grant, and rental subsidy provided by the Commonwealth of Massachusetts, the Applicant has worked very hard to upgrade building systems, make energy improvements and upgrade other physical conditions of the Project(including replacement of all windows, and installation of a co-generation plant and solar panels), so as to maintain the Project as an important affordable housing resource in the City, and to avoid the blighted, substandard and decadent conditions which resulted from underfunded capital and operating budgets. The support and certainty provided by Chapter 121 A is needed for the Project to maintain its now- stable condition and to avoid becoming a blighted, substandard and decadent facility. (b) Impact on Surrounding Neighborhood. The Project provides needed affordable housing, and at present positively contributes to the surrounding neighborhood in which it is 3 ActiveUS 103941890v.4 located. The Project has large and attractive grounds, ample parking, a community garden, and extensive landscaping, all of which have benefitted the surrounding neighborhood. This has been possible through the significant resources invested in the Project by the Applicant and funding sources described above, and by the Original 121A Designation which is about to expire. Absent the support of operating costs provided by a new Chapter 121A designation, there is a substantial likelihood that the Project will become blighted due to inadequate resources, which will negatively impact the surrounding neighborhood. (c) Public Safety and Convenience. As described above, the preservation and maintenance of the Project through the support of a new Chapter 121 A designation will preserve the important affordable housing resources provided by the Project, and will enable the Project to be a positive contributor to the surrounding neighborhoods and the City. There are no facts or documents of which the Applicant is aware which would result in a determination by DHCD that the Project is detrimental to the best interests of the public or the City or to the public safety and convenience or inconsistent with the most suitable development of the neighborhood or of the City. (d) Reasons why Project is Necessary and Desirable. The Project is necessary and desirable because, as more particularly described in other portions of this Application, a new Chapter 121A designation will prevent the Project from falling into blighted, substandard and decadent conditions which would negatively impact the surrounding area, and will enable the Applicant to continue to provide decent, safe and sanitary affordable housing. (6) Amenities Which Warrant Additional Tax Exemption. • (a) Request for Extension to Exemption Period. The Applicant is requesting approval for a 25-year extension to the initial 15-year period of exemption from property taxation under Section 10 of Chapter 121 A, based upon the significant and long tern affordable housing restrictions which encumber the Project. (7) Development Schedule. The Project is presently owned by the Applicant, and its Original Chapter 121 A Designation will expire on March 26, 2013. The Applicant seeks to renew the Chapter 121A designation upon such expiration. (8) Cost of Project. A detailed statement of the Project's financial structure and workout chronology is attached to this Application as Appendix 8. The financial structure describes the debt and equity sources brought to the Project by the 2003 refinancing at the time of the Project's acquisition by the Applicant. The workout chronology provides a history of the numerous financial investments brought to the Project by the Applicant since its acquisition by the Applicant in 2003. • 4 Ae iveUS 103941890v.4 . (9) Financial Information. (a) General Financial Structure of Project. As described above, the Project was originally developed under the Section 236 program of the U.S. Department of Housing and Urban Development and received Chapter 121A status as an urban redevelopment project. In 2003, at the time of acquisition, the Applicant refinanced with first mortgage financing from the Massachusetts Housing Partnership Fund Board and tax exempt bond financing issued by Mass Development, state affordable housing mortgage funds through the Capital Improvement and Preservation Fund and Housing Stabilization Fund, low income housing tax credit equity, deferred development and management fees through the Applicant's affiliates, and DHCD project-based Section 8 vouchers for 72 of the units, as set forth in Appendix 8. When the Project was acquired by the Applicant, it was not financially stable. Through dedicated efforts and substantial state support, the Project is just now achieving break even status. Even with substantial debt and equity capital and rental subsidy, it would not be possible to continue to pay for the cost of properly preserving and maintaining the affordable housing resources provided by the Project, given the Project's rent restrictions, without the ability to base payments in lieu of real estate taxes upon actual operating income from tenant rents, which is only possible under Chapter 121 A. (b) Method of Financing (i) Corporate Structure. The Applicant is a limited partnership formed in 2003 under Chapter 109 of the Massachusetts General Laws. The sole general partner of the Applicant is POAH Salem Heights LLC, a Massachusetts limited liability company. The limited partner of • the Applicant is Massachusetts Housing Equity Fund 2002 LLC, a Delaware limited liability company. The Applicant was created for the purpose of operating and maintaining the Project. (ii) Mortgage, Bond and Other Financial Sources. As described in Appendix 8, the Project has been financed through first mortgage financing from the Massachusetts Housing Partnership and private lenders, bond financing issued by Mass Development, affordable housing loans and rental subsidy from the state, energy grants, and deferral of development and management fees by affiliates of the Applicant. (iii) Ownership Interests. No ownership interest in the Applicant has been or will be issued or transferred in payment for services. (iv) Persons with Financial Interest. Those persons who presently have a beneficial interest in the Project, and who are expected to continue to hold a beneficial interest in the Project immediately after its transfer to the Applicant, are: PARTY INTEREST (each party except the Limited Partner has the following address: c/o Preservation for Affordable Housing, Inc. 40 Court Street, Suite 800 Boston, MA 02108) AclrveUS 103941890v.4 Salem Heights Preservation Associates, Limited Applicant 00 Partnership POAH Salem Heights, LLC General Partner of Applicant POAH Inc., an Illinois non-profit corporation Member of General Partner Massachusetts Housing Equity Fund 2002 LLC Limited Partner of (address: 70 Federal Street, 6t Floor, Boston, MA Applicant 02110) (10) Estimated Fiscal Impact on the City of Salem. The Salem Heights site currently contains 283 units of affordable housing and accessory facilities. The continuing vitality of the Project is a benefit to the residents of the City who live there, and to the surrounding community. The Project is currently operated under the Original 121 A Designation; if this application is approved, the Project will be able to continue making a financial contribution to the City through the 121A payments in lieu of taxes contemplated by this application. (11) Proposed Section 6A Contract Terms. The Applicant is seeking tax relief under Chapter 121A for the Project for a term of 40 years. The Applicant will enter into a 6A Contract with the City upon terms to be agreed upon between the Applicant and the City in connection with this Application. The Applicant proposes to pay to the City, during the period in which the Project is subject to Chapter 121 A, the amounts required under Section 10 of Chapter 121 A, based upon an agreed fair cash value of the Project. A draft of the proposed 6A Contract is attached to this Application as Appendix 9. (12) Plan for Relocation of Residents. The Project does not involve the relocation of residents. (13) Local Regulatory Compliance. The Project will comply with all applicable zoning, health and building bylaws or ordinances and any other applicable laws, bylaws, ordinances, rules and regulations applicable to the Project. (14) Condominiums (not applicable). The Project will not contain any condominiums. ActiveUS 103941890v.4 • (15) Regulatory Agreement. Upon approval of this Application, the Applicant shall enter into a Regulatory Agreement with DHCD for the Project. A proposed Regulatory Agreement is attached to this Application as Appendix 10. (16) Statement of Non-Disposal of M.G.L. Chapter 121A Interests. Since the construction and rehabilitation of the Project has been completed, this instrument is not applicable. (17) Public Use and Benefit. The Project constitutes a public use and benefit for the many reasons described in this Application, including the public benefits described in Sections 3 and 5 above. The anticipated impacts from the Project are sufficient to warrant the granting of Chapter 121 A status for several reasons. The Project is dedicated to the preservation and maintenance of a significant affordable housing resource in the City of Salem. Proper maintenance of the Project precludes the creation of blighted, substandard and/or decadent conditions at the Project Area, and positively impacts the surrounding neighborhood. The support to the Project provided by the continuation of the 121A designation complements the substantial public and private resources brought to bear in rectifying the financial difficulties of the Project under its prior ownership. • (18) Why Project Needs Chapter 121A Aid. As described above, the Project needs the certainty of the tax relief provided under Chapter 121 A to support the preservation and maintenance of this affordable housing resource. In addition, the tax benefits sought by the Applicant are critical to the Applicant's proper maintenance of the Project, while complying with the affordable housing restrictions which preserve the Project as a long term resource for households of low and moderate income in the City of Salem. (19) No Discrimination. The Applicant and its contractors and subcontractors shall not discriminate against any employee, applicant for employment, tenant or applicant for tenancy because of race, color, religion, creed, national origin, age, gender, or sexual orientation. [SIGNATURES ON NEXT PAGE] • 7 ActiveUS 103941890v.4 - • [SIGNATURE PAGE TO CHAPTER 121A APPLICATION] Executed this At�,day of G mro 2013. SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP, a Massachusetts limited partnership By: POAH SALEM HEIGHTS, LLC, a Delaware limited liability company, general partner By: POAH Inc., an*. y ' non-proAy, resideTnt tion, member By . A tho • I ActiveUS 103941890v.4 COMMONWEALTH OF MASSACHUSETTS Suffolk ss. On this day of 2013, before me, the undersigned notary public, personally appeared Amy S. Anthony proved to me through satisfactory evidence of identification, which was iso, \ y nowt?sr✓ , to be the person whose name is signed on the preceding or attached document, and acknowledged to me that he signed it voluntarily for its stated purpose, as President of POAH Inc., member of POAH Salem Heights, LLC, general partner of Salem Heights Preservation Associates, Limited Partnership. Notary Public [Seal] PATRICK 4Y. NIEBAUEN g R Notary Public � my commission lth o1 hen Eviusettc �Iy Commiccion Expires July 4,2014- • • ActiveUS 103941890v.4 • Appendix 1 121A Entity Organizational Documents [See attached] • • ActiveUS 103941890v.4 Jjsii h, f AMENDED AND RESTATED CERTIFICATE OF LIMITED PARTNERSHIP OF SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP Pursuant to the provisions of the Massachusetts Uniform Limited Partnership Act,.the undersigned hereby certifies as follows: 1. Name of Limited Partnership. The name of the Limited Partnership is Salem Heights Preservation Associates, Limited Partnership(the"Limited Partnership"). 2. Date of Formation. The Certificate of Limited Partnership(the "Original Certificate")of the Limited Partnership was filed on February 11,2003- 3. Purposes of Limited Partnership. The purposes of the Limited Partnership are to acquire, hold,invest in,and otherwise deal in and with interests in affordable housing projects, engage in any and all activities related thereto and engage in any other business that a partnership may carry on under the laws of Massachusetts and specifically to acquire certain property in Salem,Massachusetts for construction and operation of residential dwelling units and related facilities thereon for the primary benefit of low and moderate income families(the"Project"). 4. General Partner. The General Partner of the Limited Partnership is POAH Salem • Heights,LLC,whose address is c/o Preservation of Affordable Housing,Inc.,40 Court Street, Boston,Massachusetts 02108. 5. Principal Office. The principal office of the Limited Partnership shall be 40 Court Street,Boston,Massachusetts 02108. The mailing address of the Limited Partnership shall be c/o Preservation of Affordable Housing,Inc.,40 Court Street,Boston,Massachusetts 02108, The Limit Partnership's agent for service of process shall be POAH Salem Heights,LLC. 6. Dissolution. The latest date 011 which the Limited Partnership is to dissolve is December 31,2021. 7. Miseellaneous/Nature of Modifications. This Amended and Restated Certificate of Limited Partnership supersedes the Original Certificate and amends the dissolution date and purposes of the Limited Partnership. The undersigned,being the General Partner of the Limited Partnership,has signed and sworn to this Amended and Restated Certificate of Limited Partnership under the penalties of perjury as of this I"day of July,2003. POAH SALEM HEIGHTS,LLC By: Preservatio ofAffoordable//Houusing, Inc. By: l it �Ilf t 2003 Airy S.And ony,President scavr of r co 2�0�r„o Comm r • -130ST1.2608I3.v2 850502 CHECK# LIMITED PARTNERSHIP GENERAL LAWS,CHAPTER 109 MED AUG 2 1 2003 SECRETARY OF THE COMMONWEALTH CORPORATIONS DIVISION • WILLIAM FRANCIS GALVIN SECRETARY OF THE COMMONWEALTH SAID LIMITED PARTNERSHIP FIL r�G HAS BEEN APPROVED FOR FILING, IN THIS OFFICE ON: !^ j/1% 2003 PURSUANT TO MASSACHUSETTS GENERAL LAWS,CHAPTER 109. ///�G /Z IL f , x vi 3 v y 9 r� i . i §X � I a FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF x ;5 FIIiIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP may'! DATED JULY 1, 2003 rve�� f 4 µFb s ,n M` 4 i i r TABLE OF CONTENTS I � ,- PAGE nhs s ] GROUND.... .... . . .... .. ...... ..... ... . . ....... . . . ... I ! CONTINUATION OF THE PARTNERSHIP..... . . . .... .... . .. ... .. . .. . . .... l 1;1 �4 1:01 Continuation .. ..... . ..... . ... ... .. . ... .. . . .. ... . .. .. .. . g p..... ....... . 1 l M 1 02 Name_ rLrralte Office and Pace of Business ...2 jl1 h 1 03 Fihn of Certificate o, Partnership shr 1 1.04 Registered Office, Pi mcrp 0 spa* 7.05 Tenn. 2 s 1.06 Title to Partnership Property .. .. .. . . . . ... . . _....2 j Agent for Service of Process . . ....... . .... . . . . .... . .. . .. IJ 1.07 Ag 2 sa ;'ARTICLE 2 DEFINED TERMS ._............ . ..... .... . ...... ...... _....3 I I � ;PARTICLE 3 - PURPOSES AND POWERS OF THE PARTNERSHIP .... . . .......... ..... .. ..14 SII _r p p . .... ... ... . 14 3.01 Purposes of the Partnership 3.02 Authority of the Partnership. 15 .1 ; ARTICLE 4 -NAMES, ADDRESSES AND CAPITAL CONTRIBUTIONS OF i PARTNERS..... 6 I�I 4.01- General Partner... .... .. ... . . .... ..... ... ... ........................ .. .16 hl 4.02 Withdrawal of Partner; Limited Partner. .. . . ... .. .16 !I, 4.03 Limited Parh�er; Ca rtal Contribution Installments 16 , 11 4.04 Adjustment of Capital Contributions 17 4.05 No Riglit of Withdrawal. .... ..... ...... ... ............ . ....... .. . .... 18 I� .ARTICLE 5 -ADMISSION OF LIMITED PARTNER, REQUIREMENTS, REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE GENERAL PARTNER ............. ............... .. .......... ... .... 19 5.01 Requirements for Admission as Limited Partner ........ __. 19 k' 5.02 Covenants, Representations and Warranties of the General Panner........ 19 5.03 Conditions Precedent to First Installment. .............................. ....... ........22 i, 5.04 Representations and Warranties of the General Partner Prior to j 1L- Delivery of Additional Installments from the Limited Partner....... 24 5.05 Indemnity by General Partner. ........ . .._... . ...... . ........... I V I' I •➢OST 1:260911,12 { YII' a LIABILITIES OF PARTNERS . _.... . _...... .....24 CLE 6 II TI _._........24 6.01 Limited Liability ........ .... ... ...... 5 02 Liability of Genes al Pa tner fol Return of Capital Contubution to Pyr Limited Partner 25 gLiability of .. 03 Limitation oil 6.04 ILiability nstallment;est RemediesPartne for Default7in Malang]Addit Additional 26 z ! !y E ,rkpRTICLE 7 - RIGHTS,POWERS AND DUTIES OF THE GENERAL PARTNER ...---27 Management ement and Control of the Partnership. .. .. ...............27 7.01 g f General Partner Officer or Agent— ... ..... . . 27 7 p2 Authority o bligations of the General Partner - .... . . ... .. .-.. _-_ ....28 7.03 Duties and O 7.04 Restrictions on Authority of the General Partner . ...... 30 f .. .... g Partnership. . . ..... . . 7.05 Actions Requrrmg Consent of Limited Penner 31 7.06 Delegation of Authority . ........ . . . . ..33 7.07 General Partner or Abates Dealing with ParhTershr 33 ✓s ' 4 t4 7.08 Other Activities. 33 7.09 Reimbursement of Expenses. . .. .. . . ... . ... . ....... " 7.10 Loans to the Partnership... .. . .. ... ....34 µ r x 7.11 Contingency Reserves. . 34 7.12 Required Reserves. .......... "i ' 36 7.13 Operating Deficits. ........... . ...... . . . .. . . .... . . .... . . . . . . . .. .......... ...37 7.14 Sale of Project . ...... .. ..... .. ... . . 7.15 Tax Matters Partner . . . . • 37 '. 7.16 General Partner Development Guaranty .. . ...... . ..... . .. ......... . .. 37 r , ' F 8.01 018 Management SND OBLIGATIONS OF THE LIMITED PARTNER. . .. . ........37 J, 8.02 Other Activities. ..... .. . ... .. ... .. ... .. ... 8.03 Removal of Management Agent ..... .. E .. 3 8.04 Removal of Accountant. . 38.... ..... .. ARTICLE 9 - TRANSFER OF, AND RESTRICTIONS ON TRANSFER OF, INTEREST OF THE LIMITED PARTNER ........... .. ... . . . . . .............38 9.01 Purchase for Inveshrrent .......... . . 38 9.02 Restrictions on Transfer of Limited Palinership Interest .................. ....38 9.03 Admission of Substitute Limited Partner. . ................. .... ........39 i. 9.04 Rights of Assignees of Partnership Interests . ....... . .........—.40 9.05 Effect of Banla uptcy, Dissolution, Death, or Incompetence of Limited k•i.; Partner......................................_.................................. ......... ................41 c 'B0STI26081 I.v2 - It j � I pgTICLE 10- CAPITAL ACCOUNTS, DISTRIBUTIONS AND ALLOCATIONS .........41 10.01 General ....... ...... 10.02 Capital Accounts ........... ................................... ............................................ 41 . . :.10.03 Distributions. .......... .... ...... ......... ........ ... ........ .... ... . . .. . 43 I Ijl r mt .110.04 Allocations.:....... ... .. . .... . ... .... . .... ...... .. ..... ........ . . ......... ...... . .43 AgTICLE 1I - CHANGE OF GENERAL PARTNER......... .._... .. . . .... ........47 WC" 11.01 Withdrawal of General Partnerr............ .. ......... . I 11.02 Admission of a Substitute of Additional General Partner... .. ....... 48 11-03 Removal of a General Partner. . .......... .. .. . .. . ..48 ,11.04 Effect of Bankruptcy, Death, Withdrawal, Dissolution, Incompetence ;e w or Removal of a General Partner..... .. ........................................... ....50 11.05 Valuation and Sale of Interest of Former General Partner ............... ..50 ARTICLE 12 -DISSOLUTION AND LIQUIDATION........................ . . .. . . ... ....51 12.01 Dissolution of the Partnership ... .. . . ... ....................... .... . ... . .. .51 fi MV 12.02 Winding Up and Distribution ....... . . . ... .......... ........ ... .... . . .. . 52 ARTICLE 13 - BOOKS AND RECORDS, ACCOUNTING, TAX MATTERS...................52 i NN, ' 13.01 Books and Records . ........ .. .. ... ..... ..... .................. ............ ...... .... .........52 III II` v'34AR 13.02 Custody of Partnership Funds, Bank Accounts ...... . . ... . ..... ...... ...: . ... .53 c �; 1.3.03 Accountants. ......... .. ....... . .. . ....... ... ... ...... .. .. . . ... ... ..... . .... ....53 6�� 13.04 Reports to the Limited Partner. . ........ ..... ... .......... ... .... . ... .. ....53 iglu ` 3 � 3� 13.05 Operating Budget ... ....... . . ..... .... . .. .......................................................5 6I. 13.06 Tax Electrons... .. ...... .... 4=t56 s , 13.07 Fiscal Year..... .. .......... . .... ... .... . . ..57 m'iIIIi ;e }ARTICLE 14- AMENDMENTS.. .. . ................................................ ...... ... ... ....57 AMY I > 14.01 Proposal and Adoption of Amendments Generally . .__ ... ... .57 Y 14.02 Amendments on Admission or Withdrawal of Partners.. .. ... ... .. . . .... .58 I . '. ARTICLE 15 - CONSENTS AND VOTING .................. ........ . ......... ..... ....58 15.01 Method of Giving Consent . . i = ;15.02 Submissions to Limited Parhrer............................... ...58 s� 03 15. - I k lnfornmationalMeetings. .. _. ._..__..... .. . .........�8 li I ya; ARTICLE 16- GENERAL PROVISIONS .. ....... 59ii j 16.01 s 1 Burden and Benefit . ....... . ... ........... . ................ .._......59 r -`J'_6.02 Applicable Law. _................. ........_ ........ .........59 Mill,16:03 Pronouns andPlurals. ......................................... ... .. ......................................59 +�.nc 1.12 �� I I �a z.; Counterparts ... ............... ...... ... .............. .. ...... 59 r 16.04 59 :'.. 16.05 Separability of Provisions ................. ........ .. ... ............ ... ... .... ..... . ` ....... .... ... . ... .. ..... . . .... .. . . ... ...........59 „ t 16.06 Entu c Agreement.... .. ...... 16.07 Arbitration. ... .... .... ... ....... ........ .. ... ........ .. .... .........59 16.08 Equitable Remedies... ......... .. ..... . . . ....... . . ...... . ... ...60 Rs fir r ....60 editors. . . . .. 16.09 C .. . . s of 60 QY 16.10 Publicity........ ..... ..... ........ _.. . . .. k f Ir+ Y. v`FiC Ij? 2 ail p h4 "f L. 1 si , � t � � k y C In 1i t fi- � r r it 0 r fis S� I µ r s t x+ X, r4 W 11 q' Sl'I 260811.12 k b}� ".... FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP * OF , AhEM HEIGHTS PRESERVATION ASSOCIATES, LIMITEll PARTNERSHIP BACKGROUND .� D > fx A POAH Salem Heights, LLC, a Delaware limited liability company, as General z pyt�Or;and Housing hivestments,Inc., a Massachusetts corporation as Initial Limited a .tk mer,formed a limited partnership under the name of Salem Heights Preservation ICI z �� ac}usetts GeL-olited altLaws,as( amended1(the 'lAct'),executed ancagreement of limited PffAs l— ip dated as of February 6,2003 (the "Original Agreement") aiid caused a Certificate P> of+L�m�tedParmership with respect thereto to be executed and filed with the Office of the lg � 9a,,,t y of State of Commonwealth of Massachusetts on February 1 1, 2003; and he parties desire to enter into this First Amended and Restated Agreement of ytt tted Partnership for the pu poses of allowing the withdrawal of the Initial Limited �py ner adm tong Massachusetts Housing Equity Fund 2002 LLC, a Delaware limited Itabity company, as Limited Partner, and setting out more fully the rights, obligations, and eshofthe Partners, all in accordance with the provisions of the Act; gr sr` � sl','i'NOW,THEREFORE, the Partners agree that the Partnership shall be continued and thafth F� � ttivs First Amended and Restated Agreement of Limited Partnership shall be substituted 5aforthe O 'pia] Agreement. ARTICLE I - CONTINUATION OF THE PARTNERSHIP � r ;701 Continuation. +!a c x'• " ' fhe Partners agree to continue the Partnership under the Act pursuant to the t provis'tons'set forth below. m : g a 1 02 Name. + � Thename of the Partnership shall continue to be Salem Heights Preservation r � tiates,.Limted Partnership. , s31r0a _Filing of Certificate of Limited Partnership. 5 }S e General aitner shall, if legally required to do so, promptly file an Amended and w Certificate of Limited Partnership, and any and all amendments thereto in the office a '`-Mitt?ry of State of Convnonwealt of Massachusetts. The General Partner shall do M �'°-*its,and things (including publication or periodic filings of any certificate) that may hereafterbe required for the perfection and continuing maintenance of the d�j.' Y� + ershrP as a limited partnership under the laws of Commonwealth of Massachusetts and .reorder to protect the limited liability of the Limited Partner as a limited partner nwealth of Massachusetts. 1". e'laws of Commo 5 ` 1p4 Office; Principal Office and Place of Business. Registered ' '7 The registered office and the principal office and place of business of the Partnership r t Court Street, Boston, Massachusetts 02108 or at such other location as may be detein?Ined by the General Partner. The General Par-In shall promptly notify the Limited adj er°of any change in the principal office or place of business The Partnership may t itarri such other offices at such other place or places within the state as the Genes al from time to time deem advisable. ff partner may is 1.05 Term. rYx rf, term of the Partnership commenced on the filing of the original Certificate on i�aFebivary 11, 2003, and shall terminate on December 31, 2021, unless the Partnership is } �sooneCdissdived or terminated in accordance with the provisionm s of this Agreeent, ? q provided that such date may be extended (and the Certificate shall be amended accordingly) �z rflr-tlie;GeneraI Partner determines that such extension is in the best interests of the Partnership MN 4l r`becau'se it is necessary to facilitate the disposition of the Project and the Consent of the A4r PuLrmited Partner is obtained. i 1.06 Title to Partnership Property. x All property owned Uy the Partnership, whether real or personal, tangible or ;r intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, ''rltdividually, shall have any ownership of such property or have the right of partition with a ;respect to such property. The Partnership may hold any of its assets in its own name of in the iNname of a nominee, which nominee may be one or more individuals, partnerships, trusts or other entities. u x 1.07 Agent for Service of Process. The Partnership's agent for service of process shall be POAH Salem Heights, LLC, .! with an address of c/o Preservation of Affordable Housing, Inc., 40 Court Street, Boston, 431 J' .Massachusetts 02108. I-r f 2 'aos n:2eoa u.1e ;k ' i Y I '. ARTICL); 2 - D1;IINI✓ll `I';✓I2]VIS s .The following defined terms used in this Agreement shall have the meanings c fled below: }$k �Acco ts" means 'timer, Kennedy & Lehan, LLP of Boston, Massachusetts or ed public accountants as may be selected b e endent certifi Y Y other trill of and p P such trier with the Consent of the Limited Partner. General Par � r rf "Additional Installment' means each of the Second Installment, the Third Installment i . tfandthe Fourth Instalhment of the Limited Partner's Capital Contribution. �F r "Adjuster Amount" has the meaning set forth in Section 4.04(c). ii ,rN usted Value;' means the value of the Partnership assets after they are adjusted c,under Section 10.02(b)(iv) to reflect the difference between their value on the books of the j partnership and their fair market value. " "Admission Date" means the date on which the Limited Partner is admitted to the l „p'a'rtnership as a limited partner. il4 v 'Affiliate" means, as to any named Person or Persons, any other Person (a) who I' 'directly or indirectly controls, is controlled by, or is under common control with such Person, 10 (b'),who owns or controls 10% or more of the outstanding voting securities of such Pei son, j ,(c)of which 10% or more of the voting securities are owned by such Person; (d) who is an 1 officer, director, partner or trustee of such Person, or (e) for which such Person acts in the capacity of officer, director, partner or trustee. " .. " "Atneed Value" means the fair market value of any property (determined without ,regard to liabilities secured by the property or to which the property is subject) contributed to ,.the Partnership, as determined by the contributing Partner and the Partnership. The Agreed Value of any promissory note of which the contributing Partner is the maker shall be equal to the aggregate principal payments when and as actually made on the note, unless the promissory note is readily tradable on an established securities market or the note is disposed of.by the Partnership in a taxable disposition. "A Bement" means this First Amended and Restated Agreement of Limited ! Partnership, as initially executed, or as amended from time to time, as the context may r fequire. tl "Architect" means Mostue and Associates Architects, Inc, of Somerville, Massachusetts, or any successor architect engaged fiom time to time by the Partnership. 3 " } --AOST1:260811.v6 e- i y R �gbnds„means the tax-exempt bonds in the aggregate amount of$18,000,000 to be t byp FA, the Proceeds of which will be used to fund a portion of the Permanent j BEvn 0 erations" means, with respect to any period, that Gross Revenues for reak- e chpedequal or exceed the sum of Debt Service paya X Ule during such period plus Project * '`sean ccrued during such period (such accrual during the period to be based upon a s feofnonnalized annual expenses). If Break-Even Operations are measured with ct to any p eriod prior to the closing of the Permanent Loan, Debt Service shall include � ted Dc I Service on the Permanent Loan. ro" �nr Cay ita means the capital account of any Partner as specified in on 10.02. <,Q'Ca ita]Ca C means the total amount of money contributed in cash or F and agreed to be contributed put scant to this Agreement by all the Partners or the � ecessl holders of the Interests of such ,Partners or Partner, as the case may be. 'Carrying Value" means, in general, the adjusted basis of any Partnership assets as " aetifnned for federal income tax purposes as of the time of determination. The initial �xg Value of contributed property shall be its Agreed Value. The Carrying Value of �t`t e(slup assets inunediately following all adjustment in Capital Accounts under } � on:10:02(b)(iv) shall be their Adjusted Value. When the Carrying Value of Partnership sassets.'differs from the tax basis of such assets, the Canying Value shall be subsequently ,. to reflect depreciation, depletion or amortization in a manner which bears the same iaonship to the Carrying Value as the depreciation, depletion or amortization reflected for .• r #�i�raLtaxpurposes bears to the adjusted tax basis of such assets, except as otherwise } n � d by Treasury Regulations. � x from a Sale or Refinancing" means all cash receipts arising from a Sale or 7r i einancmg less the following (which shall be paid or provided for in the following order of f �Mt4x.� till nr) the amount of cash paid or to be paid in connection with or as an expense of such Sale or Refinancing and, with legal to damage recoveries or insuranee rt� �vi , ..�a a g ' g g ;wry 5� , or condemnation proceeds., cash paid or to be paid for repairs, replacements or st � ti renewals resulting fi otn dansage to ol-partial condenuiation of the Project; the amount necessary for the payment of all debts and obligations of the 3 3 Partnership arising from or otherwise related to the particular Sale or Refinancing and any other debt or obligation of the Partnership then due and n �Y f rte, z Aga + payable, and rXEgg- may) any arrow t set aside by the General Partner for Reserves. 4 r f z CERCLA" has the meaning set forth in Section 5.02(k). Ili n iCertC_ nneas any certificate of limited partnership or any other instrument or of tile to be is or mwnt which is e tri tee publicunder tolfficesswithin tile Commonwealth to perfect of maintain �t ' fling in the app p 1 as a-(tership as a limited partnership under the laws of the Commonwealth, to effect the t� rssrbn,withdrawal, or substitution of any Partner of the Partnership, or to protect the to ted;liability of the Limited Partner as a limited partner under the laws of the nitionwealth. + -"Code" means the Internal Revenue Code of 1986, as amended from time to time, or (tfapplicable) corresponding provisions Of prior or subsequent laws. "Commonwealth" means the Commonwealth of Massachusetts. �1 w,v "Complia�eriod" means the compliance period for the Project as defined in Q� 7 Pi,' a Section 42(i)(1) of the Code. x "Consent of of the Limited Partner" means the prior written consent or approval of the r b � Limited Partner. j F -"Construction Contract" means that certain construction contract between the ( 'Parinership and Knollmeyer Building Corporation of Worcester, Massachusetts, for the � coistruction of the Project. l rL ,Counsel to the Partnership" means Palmer & Dodge LLP having an address of l 1 1 n !r� � Huntington Avenue, Boston, Massachusetts 02199-7613, Attention: Steven L. Paul, ora I' _8ti6cessor law firm appointed by the General Partner. ;. = t i "Credit (s)" or "Tax Credit(s)" means the low-income housing tax credit as set forth in Section 42 of the Code. 1 � "Debt Service" means all payments required to be made in connection with any loan t .to the Partnership,including any Sponsor Loan, excluding payment of amounts which are f required to be paid only to the extent the Partnership has Net Cash Flow or other funds 2vailable therefor and further excluding interest that accrues and is not required to be paid Currently. "Default Rate" means the so-called "prime rate" from time to time as published in the Wall Street Jounial, plus two percentage points. "Deficit Balance" means a deficit balance in a Partner's Capital Account, as determined after talon into account all adjusmorits required hereunder for the taxable year z,,.: ..:• g J q � M ?u question. 5 =80ST126081i J r . Develo meat Fee" means all amounts payable, including interest, to the Sponsor ant to the Development Services Agreement. g f4. , n� +�peveloment Services Agreement" means that certain 'Development Services 4greernent between the Partnership and the Sponsor dated of even date herewith. ..r u; 'DHCD" means the Massachusetts Department of Housing and Community �y '�elopment, or any successor thereto- Ka tt "Distributable Net Cash Flow" means the Net Cash Flow less payments of fees and t �xpet sas of the Partnership that are payable from Net Cash Flow as set forth in Section Tp3(p);to the extent permitted by the Project Documents to be distributed to the Partners of hePartnership. � w r "�Envirotim�Laws' has the meaning set forth in Section 5-02(l). , J , "Bnvironmentai Report" means the Environmental Site Assessment, dated January .`'2003 and the Results of Supplemental Assessment Report dated March 7, 2003 prepared �rx�21 f verb` �Coler& Colantonio for Salem Heights Apartments, 12 Pope Street, Salem, y}� Y,;, assachusetts. 4r W, "Event of Bankruptcy" means with respect to any Person, (i) the entry of a decree or � outer`for relief by a court having jurisdiction in respect of such Person in an involuntary case iia :under the Federal bankruptcy laws, as now or hereafter constituted, or any other applicable q �MTUderal or state bankruptcy, insolvency or similar law, or the appointment of a receiver, ups r+> r„ �Ilgwdator, assignee, custodian, trustee, sequestrator (or other similar official) for such Person ri oryfoi.any substantial part of its property, o- the entry of a decree or order requiring the wording-up or liquidation of such person's affairs, and the continuance of any such decree or or3erunsta ed and in effect fora period of thin 30 consecutive daysor ti the u> aaouanencement by such Person of a voluntary case under the Federal bankruptcy laws, as 9 ' snow cdnstituted or hereafter amended, or any other applicable Federal or state bankruptcy, „t � 14 T_,solbency or similar law, or the consent by such Person to the appointment of or taking 'possession by areceiver,liquidator, assignee, trustee, custodian, sequestrator (or other g', Ural) for such Person or for any substantial part of its property, or the making by �a uchperson of an assignment for the benefit of creditors. 4 € i ' �5�`4 ° "Excess eticit Balance" means a Deficit Balance in a Partner's Capital Account in t ti gym�xPess pf(i) any Restoration Obligation of such Partner, (ii) the Partner's Share of u4tership Minimum Gain and (iii) the Partner's share of Partner Non-Recourse Debt � F �3wMinrmum Gain, after taking into account any reductions required by Treasury rte' gufa4ions ].704-1 U 2 ii d 4-6 for adjustments, allocations and distributions reasonablY x Potted to be made (as of the close of the taxable year in question). M Ulf �M'I'� . 6 s" no ir�6 . I ded Use A cement" means the Extended Low-Income Housing Agreement Xten estictive Covenants between MDFA and the Partnership from time to oration of Rr e ect ' nation° means, with respect to any issue, the earliest to occur of: (i) a Deteun P.;f^anal being issued U an court of competent F er order U Y Y men�or otl g onijudg I ' which decision,judgment, decree, or other order has become final (i.e., all �-.' tGhons.- o7luwo le appeals requested by the parties to the action having been exhausted), or(ii) with ct to m otters that are submitted to arbitration hereunder, a final decision Uy an arbitraor m accordance with the procedures set forth in Section 16.07. r "'Financialnn 11 � eans those estimates of profits, losses and Credits from an �I � �zs`tnent in the Parthnershtp attached hereto as Exhibit G a ,,-,,irstIn�r�t� means the first installment of the Limited Partner's Capital Y i P (gntnbution as set forth in Section 4.03. Fiscal Year"has the meaning set forth in Section 13.07. � ��-'Fourth Installment" means the fourth installment of the Limited Partners Capital i�onh bution as set forth in Section 4.03. General Partner" means POAH Salem Heights, LLC, a Delaware limited liability geonipany,and any successor general partner of the Partnership. r xd� uta "Gross Revenues" means, with respect to any period, all collected income of the t Preleet from normal operations actually received by the Partnership during such period, a ..including rent,previously paid rent attributable to such period, proceeds of any rental rnsubsidy`contract(allocated to the proper month to which they are attributable), parking, t zi—Eddr.'y and miscellaneous income,but excluding pre-paid rent ath ibutable to a 3 +, Tsubsequent period, security deposits, proceeds of a Sale or Refinancing and Capital i Contributions. "Hazardous Materials" has the meaning set forth in Section 5.02(k). Ji 3 Household" means all persons who reside or intend to reside together in an individual resident al rental unit. t r� ncentive Management Fee" means the fee payable to the Sponsor pursuant to that certain Incentive Management Fee Agreement between the Partnership and the Sponsor dated of even date herewith. P "Indemnified Parties" has the meaning set forth in Section 5.05. f 7 aosrrxsosu 1 3 S ' kh , ittal united Partner means the Person who signed the Original Agreement, as kit at;and who is withdrawing from the Partnership pursuant to the terms of this tion ofthe Pioject to be INUaI substantially means accordanceawithttl e�tPlanss and SpeecificatioisL111dertaken by eeship i °QInt�,means the ownership interest of a Partner in the Partnership at any �I�thne,including the right of such Partner to any and all benefits to which such " be entitled as provided in this Agreement, together with the obligations of such er mav, �rto comply with all the provisions of this Agreement. Iifeual Rate ofRehmi" means the measure of retnln provided to the partners of the ;fir fa[tier from the investment in the Partnership as calculated for purposes of the aticfa]Forecasts. Such calculation shall be recorded on a floppy disk maintained at the oftfie Investor Services Agent. a ^investor Services Aeent" means MHIC or any successor investor services agent eeted by the Limited Partner. ,V! r, Lease-UReserve" has the meaning set forth in Section 7.12(c). J tFr�vfi'.`i Lender Reserves" has the meaning set forth in Section 7.12(d). 11`Letters of Credit" means the two direct pay letters of credit to be issued by Fleet I:B�Y Bank and Banknorth, National Association. to support the issuance of the Bonds msd#wo confirmatory letters of credit issued by the Federal Home Loan Bank of Boston. SLimited Partner" means the Massachusetts Housing Equity Fund 2002 LLC, a 7 la�vare limited liability company and any Person who becomes a Substitute Limited saitner m the capacity of such Person as a limited partner of the Partnership. M ' h Liquidators' means the General Partner, or such other Person who may be appointed matcordancc with applicable law, who shall be responsible to take all action related to the mg up and distribution of the assets of the Partnership. v-Income Household" means a Household that has an income that is less than of �t �,o sixty percent(60%) of the median income, as adjusted for family size, for the �11 511 r r MA-NH Primary Metropolitan Statistical Area. n" h, Mana demee] it Asent" means Corcoran Jennison of Boston, Massachusetts, or any r sorrengaged by the General Partner, with the Consent of the Limited Partner, to Big aaw Y ,� Bathe operations of the Project. F`g.�., ` "A w r P YK t q ��anaei�je17t p°iee���t" means the Management Agreement dated of even date mlieeen the Partnership and the Management Agent. n emenCFee means the fee and reimbursements payable to the Management ana usuarit to the terms of the Management Agreement. t; . pais means a minority business enterprise as defined by the City of Boston or the �chusetts State Office of Minority and Women Business Assistance. a . ����< Fp"means Massachusetts Development Finance Agency, a Massachusetts sR- Yyr� } hc,m'stirmentality and body politic and corporate, established under Chapter 23G of the �iItg achusetts Genera] Laws. 4 r r �; MHIC" means Massachusetts Housing Investment Corporation, a Massachusetts t° ytahle'corporation with an address at 70 Federal Street, Boston, Massachusetts 02110, its rr' ""ssors and assigns. k � F art r ; 2v1HP" means the Massachusetts Housing Partnership Fund Board, a Massachusetts �crnshumentaI ty and body politic and corporate, established under Chapter 405 of the ?, sac7usetfs Acts of 1985, as amended by Chapter 102 of the Massachusetts Acts of 1999. oderate-Income Household" means a Household that has an income that is less zK. "-than�oi equal to one hundred twenty percent (120%) of the median income, as adjusted for �� r lysrze'for the Boston, MA-NH Primary Metropolitan Statistical Area. T > Cash Flo v means with respect to any period, the sum of Gross Revenues plus tsproperly withdrawn from the Operating Reserve and amounts released from the easar,Up Reserve in accordance with Section 7.12(c)(iv) and expended during such period, ,aesg{rhe sirs of-(i) Project Expenses, and (ii) Debt Service, Net Cash Flow shall be Btermrnedseparately for each Fiscal Year and shall not be cumulative. � §,Vondefened Development Fee" means the portion of the Development Fee paid G<s �gmthe proceeds of the Third lirstallnnent and the Fourth Installment or at or prior to the paymentby. the Limited Partner of the Fourth Installment. "Non-Recourse Deduct ons" shall mean,in each year, the amount of Partnership ; �gchonstivhich equals the excess, if any, of the net increase in the amount of Partnership � rM�tmumiG'ain during the year over the aggregate anrOnnt ofNon-Recourse Distributions armg such year as detenn sed under applicable Treasury Regulations. Generally,Non- Recourse Deductions consist first of depreciation or cost recovery deductions fi om property M"Mctto anon-recourse liability and thereafter a pro rata portion of the Partnership's other yGcfions 4 5y�i }�l x 9 ,° a,� 126p8n v5 rv+ z r r r r .. £ e ate amount of distributions during a course Dist, means the aggr g' or`Re proceeds of a non recourse liability that are allocable to an increase in Pal tnership ��Gain nined under applicable Treasury Regulations as detem . 4 mit ot ce" means a writing containing informat on required by this Ag cement to he ered or sent rVtWunic d to the Partnership tot aid rtner a eniiglndt Gainey, re�e pt confirmedfied the casemail of postage _ aid=bY hand delivery or by prepaid to file address set forth in Section 1.04, or in the case of any Partner, at the �partn; 110 n Eah_ ice, two days after the date of deposit in the U.S. Mail, one day after fess f hand being ned the h all rnight carrier nd he c _ tdateofdepositwttrovided�lnowever,nthataanyfiwrittten cornmuniicationycontaiiningisuch °'teof"such Notice, p' such Person shall constitute Notice for " at on sent to a Person and actually received by d IT uses of this Ag eetnnent. A copy of any Notice to the Limited Partner shall be sent to a11p° gent and a copy of any Notice to the Sponsor, the General Partner or y to l vestor Services Ag ° "e"PaRnership shall be sent to Counsel to the Partnership. Any Person may change its -tile, a I �addres�for receipt of Notice by giving Notice to tine Partners nip. ry`4' t 54Vx5„kA . {�� 4 O eratit means at any tinea or with respect to any period of time, the {. which Gross Revenues, together with any available cash sa hand a❑ any 7, amouat by ar z, i parrrT tted withdrawal from Reserves, are less than the amount necessary first to pay Debt f sF service and then to pay Project Expenses then due and owing. -1 n rratine Deficit Capital Con ributions° 3. has the meaning set forth in Section 7.1 k sset forth in Section 7.12(a). ;,.. "Operating Reserve" has the meaning a "Oueratin Reserve Minimum" has the meaning set forth in Section 7.12(a). "Partner" nnearis any General Partner or Limited Partner. "Partner Nan-Recourse Debt" has the meaning set forth in Section 1.704-2(U)(4) of the Treasury Regulations. "Partner Non-Recourse Debt Minimunn Gain" means an amount, with t espect to each Partner Non-Recourse Debt, equal to the Partnership Mininnum Gam that would result if'such PartnecNoe-Recoursbility, deter pined in e Debt were treated as a non-recourse lia ;;•'accordance with Section 1.704-2(i)(3) of the Treasury Regulations. "Partnership Mininnim Gain" means the aggregate of gain,if any, that would be n the taxable disposition of each property of the Partnership subject to a non- recognized oil liability for no consideration other than full satisfaction of such liability, detcrmnled using the Carrying Value of Partnership assets and in accordance wide applicable Treasury r Regulations. • 10 -90ST1160811 A F¢ A er's Share of Partnership Minimum Gain" means the amount determined as of taxable year equal to the excess of(i) the sum of the Non-Recourse Deductions gi on=Recourse Distributions allocated or made to such Partner (including sots in interest) up to that time over(ii) the sum of such Partner's (including sor5')aggregate share of net decreases in Partnership Minimum Gain (including art butable to revaluations) as determined under applicable Treasury Regulations. partnership Profit" and "Pin Loss" shall mean the taxable income or loss 'forfederal income tax purposes for any fiscal period, with the adjustments 4, ed . ,m Section 10.02. �f ne=oder" means MHP, as agent for itself and the Letters of Credit issuers. ]per anent Loan" means, collectively, money bon owed from the Permanent Lender t to fhe Permanent Notes and secm ed by the Permanent Mortgage (and the Letters of re]ated secant agreement oi-financin statement and an reimbursement tend any Yg ) Y under ie Letters of Credit or swap agreements. oy npemranent Mortgage" means the instrument pursuant to which a first priority _ interest in the Property is created by the Partnership to secure the payment of interest cr "afon the Permanent Notes and the reimbursement obligations under the Letters of 4I �aPerihanent Notes" means, collectively, the promissory notes of the Partnership in I Arp t'&Permanent Lender totaling 525,269,491. Pemitted Investments" shall mean: `government securities issued by the Treasury Department or other agency of ' v the United States and due within 180 days of the making of the investment; ar "certificates of deposit issued by, deposits in, bankers' acceptances of, and } " :repurchase agreements covering government securities executed by, any bank or savings and loan association doing business in and incorporated under the srsr, laws of the United States of America or any state thereof and having on the m date of such investment combined capital, surplus and undivided profits of at t_ least$100,000,000 (such mininnum not to apply with respect to investments in unts less than the maximum insured by the Federal Deposit Insurance 4 a Corporation) and which carries on the date of such investment one of the three K t highest credit ratings of Moody's Investors Service, Inc. or Standard & Pool's 'Corporation, or certificates of deposit issued by, deposits in, bankers' 11 „ 'acceptances of, and repurchase agreements covering government securities :executed by a wholly-owned subsidiary of any such bank or savings and loan association, in each case due within 180 days after the date of the making of the investment; Lr r6 1 t } .. ., l readily marketable commercial paper of corporations doing business in and } coiporated under the laws of the United States of America or any state on the date of such investment one of the two highest thereof which carry rs Service, Inc., or Standard & Yoor's credit ratings of Moody's Investo s' t _corporation, or Fitch Investor Service, Inc., in each case, due within 365 days the making of the investment; or s tv) such other investments as are permitted with the Consent of the Limited 'r arhler. a rr 'means any individual, parure ship, Corporation, trust or othe entity. sr,,,'.: tan_ s a�pecificat ons" means the plans and specifications for the rehabilitation of as the same may be amended from time to uric. t .a PProved by the Limited Partner, �ppnc," means Preservation of Affordable Housing, Inc., an Illinois not-for- oration. ect" means the residential housing development and related improvements to be and operated on the Property. n a. fro ect Documents" means (i) all documents evidencing and securing the Sponsor mlldpcuments evidencing and securing the Permanent Loan; (iii) the Extended Use ,and all other documents, instruments and agreements issued or required by connection with the Tax Credits; (iv) all documents, instruments and agreements flier'federal, state or local government agency in connection with financial ,pthe.Project- (v) the Construction Contract; (vi) the agreement with the �(v6 the Management Agreement; and (viii) all other documents executed by the a lup(dr made applicable to the Project) and regulating,restricting or otherwise �e Project. PcotectExpenses" means all the costs and expenses of any type incun-ed incident to an operation operation of the Project after the payment ofDebt Service, including utafon, taxes, capital expenditures (to the extent not paid for with proceeds of : agt�rm tted withdrawals from the Replacement Reserve), the cost of operations, �' r * eo?nd repairs, insurance premiums, fees due and payable, contributions to aserges, and The Management Fee, but excluding cost recovery deductions, other arges; fees and debt service required to be paid only to the extent of Net Cash ca hydistributions to Partners. tz � • tMar in" means the sum of(x) the amount of the Nondeferred Development Yoith.in the Financial Forecasts plus (y) the unused amount, if any, of the hard .,3tcontingenciesset forth in the Financial Forecasts plus (z) the net savings, if 7a� . l 12 �u x ` .jq P all other line items of the development budget, all determined as of the due date of the },.v . stallirrent. t Pro er " means the parcel of land located at 12 Pope Street, Salem, Massachusetts, etasmore particularly described on Exhibit B. l uaI fled Basis" with respect to the Project shall have the meaning set forth in Code on 42(c). ���Reoulations" means the Code; the Extended Use Agi cement; the Act; and the rules - Mations promulgated under each of the foregoing, as each of the foregoing may be reg eapublished or amended from me to timebut only to the extent applicable to the �; ershrp or the Project, as the case may be. r '>Replacenrent Reserve" has the meaning set forth in Section 7.12(b). �'geguired Reserves" has the meaning set forth in Section 7.12(e). s" { �f'Reserves" means amounts allocated to reserves maintained for working capital, �;msurance, repairs, replacements, renewals, capital improvements or other costs or s penses incident to the ownership of the Project or operation of the Partnership. t�rtestoration Obligation" means an obligation ansmg from an election filed by a runder Section 10.02(4), in which such Partner elects to restore all or a portion of a rnt Niatce in its Capital Account. � h °Rrght of Refusal and Option Agreement" means the agreement with that title dated `_ nttally even date herewith whereby the Partnership grants POAH, Inc. a right of first Na,,.option to purchase the Project. it"Sale or Refinancing" means any Partnership transaction resulting in the E "ttoh of borrowings or the receipt of finds (other than receipt of Capital inrbuhohs or closing of the Permanent Loan) not in the ordinary course of its business, ' aag`without limitation, sales, mortgage refinancings or borrowings, exchanges or other � rttons of real or personal property, condenuiations, recoveries of damage awards and , ce r ceeds (other than business or rental interruption insurance proceeds) not . �este8 m the repair, replacement or reconstruction of the Project. = e"Second Installment" means the second installment of the Limited Partner's Capital button as set All in Section 4.03. � SoIacial Tax Counsel" means Palmer & Dodge LLP of Boston, Massachusetts of a rlaw$ran appointed by the General Partner. n M,r y�° 13 rdable Housing LLC, a Massachusetts limited -means Preservation of Affo jrs�or""Loan" means, collectively, any and all loans from the Sponsor to the mel idin g but not limited to the loans from the Sponsor of the proceeds of the oan'from MHP, as agent for DHCD and the portion of the Development Fee ant to the Development Services Agreement. if tate'..means Connnonweal th of Massachusetts. bstitute General Parhter" means an assignee of the General Partner's Interest that Partnership as a General Panner pursuant to Section 11.02. ubsti at Limited Partner" means an assignee of any Limited Parhier's Interest that "to the,Partnership as a Limited Partner pursuant to Section 9.03. ,,,Matters Partner" means the General Partner. Y 'dSnstallment" means the third installment of the Limited Partner's Capital on,asset forth in Section 4.03. 3t1`e''"Insurance Policy" means the owner's policy of title insurance to be issued to the MyEhieago Title Insurance Company. easu 'Re ulations" means the regulations promulgated by the United States t,of the Treasury pursuant to and in interpretation of the Code. T ow-Income Household" means a Household that has an income that is less ' .4140 fifty percent (50%) of the median income, as adjusted for family size, for the 4 NH Primary Metropolitan Statistical Area, TlsICLE 3 - PURPOSES AND POWERS OF THE PARTNERSHIP F t . AlPurposes of the Partnership. ?a ebusrness of the Partnership and its purposes are: to own the Project to rehabilitate, maintain and operate within the Project 255 units of gfnroceu ane v,��- •� -..- P y by Low-Income Households, 28 units of housing for occupancy by W ,Income Households, and parking and other facilities ancillary to the housing units hePr`' oleot in furtherance of the charitable purposes ofPOAI-1, Inc.; and a ash 14 s r ' Ion tiyI � I to lease, own, develop, and dispose of or otherwise deal with the ^F 4 tem a manner intended to enable the Project to continue to provide housing and related ce's"fgr Low-Income Households, Very Low-Income Households, market rate € Ids 1 , hi=partnership shallnot engage in any other pinpose or business without the ntoLimited Partner. 02 .Authority 01'the Partnership. 3 { In'ocder to cant' out its purposes, the Partnership is empowered and authorized to do 0. d y�nd ali:lawful acts anthings necessary, appropriate, propel, advisable,incidental to or p enrerif for the furtherance and accomplishment of its purposes, and for the protection benefit of the Partnership. Subject only to the limitations expressly set forth elsewhere � ts'AgrBement, the Partnership is to have all the powers conferred upon it pursuant to the z ,mcludmg but not limited to The power to: :-(a) acquire, construct, operate, maintain, improve,Uuy, own, sell, transfer, assrgn, mortgage, rent, or lease any real estate and any personal prope FTynecessary a E� � 6rtiof the Project; enter into any kind of activity or contract, and perform and carry out 9 canita'cts of any kind necessary to, or in connection with, or incidental to, the ccSm iisliment of the purposes of the Partnership; except with respect to the Permanent Loan,borrow money, issue ._ fences of indebtedness and security instruments in furtherance of any or all of the r ses oEthe Partnership,provided that all such instruments and any evidences of `dress and security instruments and any documents amending, codifying, or replacing a gfthem shall constitute non-recourse liabilities as determined pursuant to § 1.752-1(a)(2) ge' easury Regulations; �(d) maintain and operate the Project, including hiring the Management x ehtand e tering into the Management Agreement or any agreement for the management (e) negotiate for and conclude ageements for the sale, exchange or other # �> srhon sof all or substantially all of the property of the Partnership, or for the refinancing bmortgage loan on the Project; bring or defend actions at law or equity or submit such actions to r ' P , Y (g) make any permissible elections under tax laws applicable to the �ershrp tgrk y� � "AIM 4 15 (lt) employ and dismiss fiom employment any and all employees, agents, ndent contractors, managers, brokers, attorneys and accountants; w,�au purchase, cancel, or otherwise dispose of, the Interest of any Partner to ce;:with the terms of this Agreement; and �) r activities incidental to any of the foregoing. engage in all othe ARTICLE 4 - NAMES, ADDRESSES AND CAPITAL z ¢s, i CONTRIBUTIONS OF PARTNERS �� ,z "�4 01 General Partner. r # , �t�he'name, address and Capital Contribution of the General Partner are set forth on �bttA.:TIle General Partner shall cont ibute to the Partnership the amount of its Capital ❑tb on set forth on Exhibit A. Except as otherwise required in this Agreement {,m�9udmB Section 7.13 below), the General Partner shall not be required to make any ��dt�ional Capital Contribution to the Partnership. �t Withdrawal of Initial Limited Partner. In consideration of the payment of an amount equal to its capital contribution, the gpG alb invited Partner hereby withdraws from the Partnership. All Interests of the Initial a , the Partnership are hereby canceled, such cancellation to be effective as of the first µam 'the'month in which this Agreement is executed by the Partners. a, 403,, Limited Partner; Capital Contribution Installments. } a ename and address of the Limited Partner and the amount of its Capital tubut,on are set forth on Exhibit A. The Limited Parfier shall not be required to make � capttal`contribution in excess of that set forth in Exhibit A. The Limited Partner shall makeuts Capital Contribution, subject to the terms and conditions of this Agreement, in cash �� e�captfal of the Partnership. The Limited Partner shall make its Capital Contribution in �� llments as described below, except that any such installment of Capital Contribution CC 3t<ybe paid by the Limited Partner on any earlier date without penalty. Installment f �q` payments shall be made by the Limited Partner to the Partnership (and credited to the total Contribution of the Limited Partner) as follows: ti 4. �d Llj4� hnstallment { Amount Duc Date ��tnsm tallment $6,468,559 Admission Date t °�t*aMnd Installment $616,923 The later of December 1, 2003 or ten business �vng R' � days following receipt by the Limited Pal r uz l ...'.�,, 5g �✓'�b`ti 16 .., of evidence that each of the following has w+£ - ' occurred. (i) certificates of occupancy have been issued, if required by law, for all units in the Project; (ii) the Architect has certified that a � the Initial Renovation is substantially complete and that all units in the Project are in safe and �< habitable condition. $246,852 Twenty business days following receipt by the y}�ment Limited Partner of evidence that: (i) for three consecutive calendar months the Project has i achieved Break-Even Operations during each bee:: month, and (ii) the rcu anent Loan have closed. 3 $10,000 Twenty business days following receipt by the fiallment Limited Partner of both (i) evidence that the Parhiership has received a Form 8609 f om MDFA with respect to the Credit and (ii) the tax return and annual report for the Partnership for the year in which this Agreement is executed. $7,342,634 o event shall the Limited Partner be required to make an Additional Installment L �n the month set forth in the Financial Forecasts as the projected date for payment f �' ".Tldrtional Installment. 4 ) Adjustment of Capital Contributions. - (a) The Capital Contribution of the Limited Partner recited in Section 4.03 r tieen determined and is based upon the Financial Forecasts. The Financial x sts,rnturn are based upon certain assumptions, including the objective of achieving an gate of eturn of 7.54°/x. � (b) The Capital ConiriUution of the Limited Partner shall be adjusted by the attner in a single adjustment to reflect changes in the Project, if any, from the ons"used in the Financial Forecasts and changes in the performance of Che Pr oject artriarship from that projected in the Financial Forecasts (including changes can gedn the applicable percentage, as defined in Section 42(b) of the Code, from the -apereenta e assumed in the Financial Forecasts) so as to maintain Internal Rate of „ r'ded in Section 4.04(a) above. * ' ' (c) The adjustment, if any is required,referred to in Section 4.04(b) above calculated by the Investor Ser vices Agent within 10 business days after receipt by 17 , F ervr�es Agent of the information and certifications from the General Partne uanffo`;Section 5.04(b), provided that the General Partner has promptly fulfilled �` erequestsUy the Investor Services Agent for additional information necessary to ion of such adjustment. In the event that, as of such date, either the Internal .. based on actual past tax benefits and fuhtre tax benefits reasonably projected T9 8t W (i.i e rAforrnation supplied by the General Partner shall be below the Internal Rate of f' fedrt Section 4.04(x) above, then the Third Installment shall be reduced by an Y P N� j uster Amount") which shall equal the lesser of(x) the amount by which the artt0,r, Capital Contribution would be required to be reduced to yield the Internal : ( provided in Section 4.04(x) above and (y) the Project Margin. If the Adjuster Ids the amount of the Third Installment, then the Fourth Installment shall be ` ythereniaining Adjuster Amount. If the Adjuster Amount exceeds the aggregate �deV he7hr'd and Fourth Installments, the General Partner shall cause the Pai i ershi1) afltstrbtition of Net Cash Flow or Cash from a Sale or Refinancing to the Limited amount of such excess. Promptly after computation of the Adjuster Amount, o ervices Agent shall notify the General Partner and the Limited Partner of the } monist:the amounts of the Third Installment and the Fourth Installment, if any, mlpayable,and, if the Adjuster Amount exceeds the aggregate amount of the Third F3 �trstalbrients, the amount of any distribution due from the Partnership to the as of the due date for the Third Installment, (X) the amount of the ,Basis for the Project, as determined under Section 42(c)(1) of the Code, is greater omit shown in the Financial Forecasts, (Y) the Internal Rate of Return based on tax benefits and future tax benefits anticipated based the Limited Partner's ,olechons (using additional information to be supplied by the General Partner) ` 1 e Intemal Rate of Return provided in Section 4.04(a) above, and (Z) the Limited xs as available cash with which to make additional contributions in excess of the shown above ("Excess Cash"), then the Third Installment shall be increased by an g erlfpward Adjuster Amount"), which shall equal the amount by which the rrtner's'Capital Contribution would be required to be increased to yield the Internal etum,provided in Section 4.04(a) above, provided that such Upward Adjuster Mall not exceed the lesser of(i) 10% of all Capital Contributions measured without gthe Upward Adjuster Amount or (ii) the amount of Excess Cash. r. 051 a'No Right of Withdrawal. I1 rcept asset forth in Section 4.04(c), the Limited Partner shall have no right to v o`to be repaid any potion of its Capital Contribution,nor shall the Limited Partner �r19 t to receive property other than cash as a return of its Capital Contribution, Ponthe"dissolution or termination of the Partnershi and then oil to the manner A+IIn' T Call... - p) y tcallyprovided in this Agreement. M# �z f ett�b ]8 t s � ` I X �S { no approval of any governmental authority or person or any holder of a �tlieProject is necessary in connection with the execution of this Agreement or o ,ofthe Limited Partner to the Partnership or, if any such approval is or shall be �" Elie Baine has been obtained; x cti n, he best ' �rtner is tlueatened, before any court,proceeding governnental bodytor gency]oryedge of the any ybUual which action, suit,proceeding or threat of same is likely to (i) prevent the on"Rahe ?roject in substantial conformity with the requirements of the Project materially adversely affect the Project, the Partnership investment m the e fnancial condition of the Partnership or the General Partner or the General „fl "�arbilrt3�tomeet its obligations render this Agreement, (iii) constitute or result in a a` rbrEach.of any representation, wan arty, covenant or agreement set forth herein, or z s o{her material harm to the Parhrership; the Partnership has obtained all permits required for the . ` aricemeiit of the Initial Renovation and to the extent applicable and feasible at the s Mage of rehabilitation, has obtained all permits required for the operation and use or 4Yy ° >aY.r, `ty"oftheProject; =, -M 1,W) the Project has been or will be rehabilitated and equipped in full erequirementsofallgovernmentalauthoritieshavingjurisdictionoverthe and does and will comply in all material respects with all state and local zoning r, ling codes,health and safety codes, regulations pertaining to ingress and egress, ' cal6"' es .ordinances and regulations applicable to the Project; Mz 1 ,M r'? k (k) to the best of the General Partner's knowledge, after diligent inquiry, , erfly are-not nor, upon completion of the Initial Renovation, will there be, in, on or p c4� Gh rolect (a) except as disclosed in the Environmental Report, any "hazardous t - d,as thaItterm is defined under the Comprehensive Environmental Response, usshon and Liabilit Act of 1980, 42 U.S.C. §9601 et sul, as amended CERCLA" s er hazardous or toxic substance, waste or material or an other substance or k ,J - Y ses a risk to human health or the environment, including, but not limited to, form, lead-based paint, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls or radon, except for ordinary and necessary r�taaos of office supplies, cleaning materials and pest control supplies stored in a safe and �A ercftnd petroleum products contained in motor vehicles or in fuel storage tanks in 4Ufi1 `fie with'Environmental Laws (the "Hazardous Materials"); (b) any underground a e kdksuot in corn liance with Environmental Laws; c an accumulations of debris, � P O Y or]`spent batteries, except for ordinary garbage stored in receptacles for regular e r(d) any other condition which could result in liability for an owner or operator of der .,unany Environmental Laws; ,r s (1) to the best of the General Partner's knowledge, the Project is, or, upon i Rnofthc nitialRenovation, will be in compliance, in all material respects, with all A 6 20 Fy? F I e al, state and local environmental laws, rules, regulations and ordinances, "ot limited to, CERCLA, the Clean Air Act, the Clean Water Act, the Toxic utn. Control Act, the Resource Conservation and Recovery Act, the Safe Drinking and the occupational Health and Safety Act (the 'Environmental Laws"), and the mer has not received notice of any violations of the Environmental Laws. The `gees to take all necessary action within its control to ensure er covenants and a acl4 oject is in compliance, in all material respects, with the Environmental Laws at all that the Project remains fi ee fi 0 the presence of any Hazardous Materials in, on "e`Project or the Property. The General Partner shall promptly deliver a copy of �itmay have received of any violation of the Environmental Laws to the Limited t � . Wl r " (m) the General Partner has no knowledge of, and has received no notices efederal or state laws or municipal ordinances or orders or C, to,' any violations of nts ofany governmental body or authority to whosejurisdiction the Project is fig, (n) there has been no event or circumstance which would entitle a lender or "ariyto declare an event of default, as such an event is defined under any Project went,orthe commencement of any action to foreclose any mortgage on the Property- (o) all financial and tax reports and statements required to be provided der4oShe Limited Partner have been so provided and the General Partner is not tei�ddefault in the observance or performance of any provision of this Agreement to ted or performed Uy the General Partner; 2. (p) the execution of this Agreement, the incurring of the obligations set }us,Agrcement, and the consummation of the transactions contemplated by this ° eat do not violate any applicable law or regulation, do not violate any order or ruling bin in on the General Partner or the Partnership and do not violate any bn of any indenhire, agreement, or other instrument to which the Partnership or the 6eaerPartner is a party or by which their respective properties are bound; (q) all rental charges and security deposits with respect to dwelling units in �eRnectare and will be in compliance with any applicable governmental regulations; (r) all real estate and personal property taxes, special assessments and any taxes applicable to the Project or the property or operations of the Partnership which w 11 be due and payable have been or will be paid in full; ission Limited Section Initial Limited Palrtner shall ti]ithdraw from the`Partnerin sl hip and shance all have lie xuiterest in, or claim against, the Partnership except for the return of its capital but;'On which has been repaid or will be repaid upon the execution of this Agreement; rr �s t ^l 21 W ' 7 A 2 4 (� there has been no material casualty or other damage to the Project or .I A thereof other than casualty or damage which has been disclosed in writing to the artner,and is covered by adequate insurance; Mgr , (ir) neither the General Partner nor the Partnership has received notice of pg or threatened condemnation proceedings with respect to all or any material part h the commitments of the Permanent Lender to make the Permanent ei5n full force and effect; the renovation and operation of the Project in all respects comply and r.s (. .) ' Veto comply with the provisions of the Project Documents and the Regulations ei.to the TaxCredits and throughout the Compliance Per ed, the applicable fraction, 'Ad under Section 42(c)(1) of the Code, will remain not less than 90%; and all fees paid or payable by the Partnership to the General Partner or any x Mite- Partner are reasonable in amount, are for goods or services actually `got to be famished to the Partnership and are similar to fees that would be.payable "slengtli transaction. Vt>ondition5 Precedent to First Installment. .. _ e`obligation of the Limited Partner to pay its First histallment to the Partnership �leetko(a) the receipt of an opinion from Special Tax Counsel in form, scope and easoi it I satisfactory to the Limited Partner with respect to Federal income tax nest ng in the Partnership, including opinions to the effect that the Partnership ry d a� , artnership and the significant tax benefits contemplated by the Financial in-the aggregate, more likely than not be realized and (b) receipt of an opinion Ytatliepartnership in form, scope, and substance reasonably satisfactory to the Po Rtlnerwith respect to the due organization and authority of the General Partner, the ft)le Part rership,the enforceability of this Agreement in accordance with its Fadmi's sion of the Limited Partner as a Partner, the limited liability of the Limited �rf d subhother opinions and docun'ientation as the Limited Partner may reasonably Ece J. Representations and Warranties of the General Partner Prior to ' 'Deli,..,b—very of Additional Installments from the Limited Partner. (a) The Second Installment of the Limited Partner's Capital Contribution by'the Limited Partner to the Partnership as provided in Section 4.03 of this � a rovided that the date the Second Installment is due shall be no earlier than 10 r s,after'the date that the Limited Partner shall have received a certificate from the er in a form designated by the Investor Services Agent stating that all prior the receipt of the Second Installment set forth in Section 4.03 have been met, k F^ d 9 � 22 �F n? t 4 a: eystations in section 5.02 remain true and in effect, and that such certifications all pnaterial respects-3i The Third Installment of the Limited Partner's Capital Contribution � 1)'the Limited Partner to the Partnership as provided in Section 4.03 of this eby v iovided that the date the Third Installment is due shall be no earlier than 20 g�a$er the date that the Limited Partner and the Investor Services Agent shall Y certificate from the General Partner in a form designated by the Investor enf9taroject was placed in service pursuant to the Code, that ti the date the P Ilt�t"ns of the Third Installment set forth in Section 4.03 have been met, that the onsrr Section 5.02 remain true and in effect and that all certifications and other to he Limited Partner m connection with the Third Installment are 9n provided t • 1=material respects; (ii) a statement of the Gross Revenues,Project Expenses and _ ce for @ach month since the Project was placed in service, certified by the General arrentroll for the Project for each month since the Project was placed in service, r,the General Partner; (iv) copies of leases and tenant income verifications for all �eProject; and (v) a cost certification with respect to the development costs of the ared.by the Accountants and certified by the General Partner. The General ' respond promptly to all reasonable requests fiom the Investor Services Agent aI niformation necessary to compute the Adjuster Amount. The Third u §hall be payable no earlier than the date of payment of the Second Installment. The Fourth Installment of the Limited Partner's Capital Contribution ile.bp,the Limited Partner to the Partnership as provided in Section 4.03 of this 1proytded that the date the Fourth Installment is due shall be no earlier than 20 s afte{the date that the Limited Partner and the Investor Services Agent shall Y' eda.cefiificate from the General Partner in a form designated by the Investor ant stating that all prior conditions of the Fourth Installment set forth in -leave been mct that the representat ons in Section 5.02 remain true and in effect, r certifications and other information provided to the Limited Partner in connection it installment are correct in all material respects. The Fourth Installment shall { io,eaelier than the date of payment of the Third Installment. In the eventthat on the due date of an Additional Installment, the s referred to in this Section 5.04 cannot be made by the General Partner, then the YhelLimited Partner to make such payment shall be deferred un l ]0 business �e certifications have been made by the General Partner or until 10 business days " fneral Pan mer certifies that (i) the General Partner's inability to make any ,= E 'g .WwA' r s its from a minor or technical matter, and does not materially adversely affect' -- P3rt er or the Partnership, or(ii) tine circumstances which prevent the General a amu aking t'he applicable ce�tif cation have been cured, or will be cured with the r �£sucb Additional Installment and provided that such use of the proceeds of such �Instdllinent will not materially interfere with the Partnership's ability to complete r the P ' i olect and will not result directly or indirectly in a reduction of any E ewes below levels show n in the Financial Forecasts or required herein. In the ;;, t Y � p Rl a � 23 yJ% . �p,the.due date of the Third Installment, the General Partner has not promptly o albreasonable requests from the Investor Services Agent for additional "� n gYen the obligation of the Limited Partner to mace such payment shall be aIJ1Qbusiness days after such additional information has been supplied by the Unless othenvise expressly set forth in the General Partner's certificate r x `ohnection with a request for Additional Installment, a request by the General a'yment of an Additional Installment shall be deemed a representation and E y"the'General Partner that all conditions listed in Section 4.03 applicable to such j!Installittent]lave been met. 5 Indemnity b}, General Partner. eGenual artner shall indemnify and hold hamrless the Partnership and the actner(the "Indenviified Parties") from and against all claims, actions, causes of "ihty aid expense (including, without limitation, attorneys' fees, court costs and Rapdtesponse costs) incurred or suffered by, of asserted by any person, entity or tat agency against the Indemnified Parties due to breach by the General Partner of erttatior s, warranties or covenants in this Agreement, or due to a violation of the "ent'R a by the Partnership, the General Partner or the Project, or due to the .� fI'lazardous Materials in, on or under the Project. The foregoing indemnification L. recourse obligation of the General Partner and shall (to the full extent permitted by ethe;dissoI tion of the Partnership and the death, dissolution, retirement, icy insolvency, ankruptcy or withdrawal of the General Partner. The inderrunty ` thts'Section 5.05 shall be solely for the benefit of the Limited Partner and is nmde nify the Limited Partner against any direct liability as well as against the _ uncial benefit of its investment in the Partnership. r ' ARTICLE 6 - LIABILITIES OF PARTNERS t Lrntited Liability. eLtin ted Partner shall not be liable for the debts, liabilities, contracts or other u �. softhePartnership. Subject only to exceptions set forth in the Act or in Section f `iY lien"of,the Limited Partner shall be liable only to make its Capital Contribution and equited to lend any funds to the Partnership or, after its Capital Contribution ,qb v been paid to the Partnership, to make any further Capital Contribution. Nothing in f Tg sentence shall negate any obligation which the Limited Partner may have to or.other costs pursuant to Section 6.04. d, }Mtli i k ' 24 k s� a, at 16.02 Liability of General Partner for Return of Capital Contribution to Limited Partner. e General Partner shall have no personal liability to repay the Capital Contribution r of a Limited Partner or, except as provided in Section 10.02(d), to repay to the Partnership yportion of any negative balance in such General Partner's Capital Account. 6.03 Limitation on Liability of General Partner; Indemnification. tltti� The Genera] Partner shall have no liability to the Partnership or to any Partner for any 1r. e A, <,. „lasssuffered by the Partnership (other than a loss that is the subject of a guaranty or ' hgation of the General Partner hereunder) which arises out of any action or inaction of the "RA01i; eneral Partner if the General Partner, in good faith, determined that such course of conduct best terests of the hip e of not 51 ' grass negligence genceror misconduct of tleesGe rele ran Partner or a knowing and nateconstitute al7brleach of 9 yrepresentation, covenant, or warranty contained in this Agreement. The General Partner a `shall be indemnified by the Partnership against any losses,judgments, liabilities, expenses lj :amounts paid in settlement of any claims sustained by it in connection with the sartnership,provided that the same were not the result of gross negligence, fraud or willful # E§66nduct on the part of the General Partner, the willful breach of any representation, )*pvehant,or warranty contained in this Agreement or a breach of fiduciary duty of the � ene'ral Partner. Any indemnity under this Section 6.03 shall be paid from, and only to the , tent of, Partnership assets, and no Partner shall have any personal liability on account thereof The Partnership shall not incur the cost of the portion of any insurance, other than �rpubirc-liability insurance, which insures any party against any liability as to which such party �,r herein prohibited from being indemnified. Notwithstanding the above, the Partnership r S all,not be obligated to iuden-mify and defend the General Partner for matters that are the �� � blect of a guaranty or obligation of the General Partner hereunder or for claims relating to ODt3 O z -, Tial breach of this Agreement, an illegal act, the personal injury of employees of such sr atties`occuiTing in the course of their employment or matters covered by insurance for � � wlubh_the General Partner actually receives insurance proceeds. The General Partner shall �� 3hndem tfy and defend the Partnership and the Limited Partner against and hold the s IIN, n whip and the Limited Partner harmless from any and all claims, liabilities, damages, � `sse 'and expenses (including, but not limited to, investigating and defending any claims andlawsuits and settlement thereof, and legal and accounting costs In connection therewith), hFch nay be rade or imposed upon the Partnership by reason of any gross negligence, aud, illfuI misconduct, material breach of this Agreement, breach of fiduciary duty or "� E r regal act by the General Partner. Notwithstandingthe other provisions hereof,nothin m a t}us Section shall obligate tie Partnership to indenify ohold harmless the General Pal-trier a . e any acts or omissions which constitute violations of any applicable federal or state x;Securitie z�,f slaws. ttrx „ fi v+f o h*_n r ['E� ���TI 260RI I.vG 25 s 1 " Fb�r S,,S � _ �4, Liability of Limited Partner for Default in Malting Additional Q, Installment; Remedies. t 5. (a) If the Limited Partner shall fail to make payment of an Additional .12�. NhU4 ent at khe time such Installment is due in accordance with the terms of this e f.the G eneral Pautrier shall give the Limited Partner Notice of such failure (the ` on'PaYanent ). If the Limited Partner shall fail to make payment of the v' . otrceagfN diriona7Tiistallment within fifteen (15) days after the time the General Partner gives the F t� arhter a Notice of Non-Payment, then the Limited Parhrer shall be in default of its yF igat on',bereundor with respect to its entire Interest and such default may be cured by ent of the Additional Installment with interest on the unpaid amount at the Default Rate the hue such payment was due,plus all costs of collection. No such default may be on¢e the-General Partner has entered into an agreement to sell the :merest of the fir,' yuted Parhier to a third party pursuant to Section 6.04(d)below. hn the event of any default specified in Section 6.04(a), then (i) the g $Parhier shall not receive any cash attributable to its Interest which has not previously ndistt"ibiited to the Limited Partner; and(ii) the Limited Parthar's Interest,including all Is not theretofore distributed and all such profits, losses and tax credits not ere of or all or required to be allocated) on a tax return filed (or to be filed) by the Mtn , ednersh p;shall serve as security for the Limited Panner's obligations to the Partnership rmaybe purchased and sold as provided in this Section 6.04. uKtr 4aA 6 (c) All rights and benefits of the Limited Partner attributable to the Limited aztn s Interest including, without limitation, the right to consent, shall be suspended ru g the period of default of the Limited Partner, which suspension shall commence on the fe of default and shall terminate on the date of the curing of such default (if such curing ' all not then be prohibited under Section 6.04(a)), or upon the admission of a purchaser of Interest pursuant to this Section 6.04 as a Substitute Limited Partner. If such aIs kir "R fl pension is in effect at the end of the Partnership's Fiscal Year, unless and until such spension is no longer in effect, any distributions pursuant to Article 10 hereof attributable �. ` oiheT n ted Partner's Interest, which have not been allocated to the Limited Partner in a 3 +tax return filed by the Partnership, shall be applied first to interest on the defaulted amount at theDefaultRate, and then to the defaulted amount. 4x d In the event of an such default, the General Partner may (i) proceed to O Y puesEIle any and all available legal remedies against the Limited Partner in order to collect the r F 'amountowing from it to the Partnership, and (ii) offer for sale to third parties the Interest of xr 1heLmuted Partner on such commercially reasonable terms as the General Partner, at its sole isi, r 9 disco"teton, deems advisable. If there are profits, losses and/or distributions which are not redto be allocated to the Limited Panner and cannot be allocated or distributed to a r s, Ipttchaser of the Limited Partner's Interest, then such profits, losses and distributions shall be � R allocated or dist ibuted to the General Partner, subject to the General Partner using l^ =M reasonable efforts to obtain a Person to purchase such Interest and to pay therefor such a0apital Contribution that remains unpaid thereon. Any amount received by the Partnership 44� tr, 3 26 '�` ''`y-BOSTI:260811.v6 b I! _' rfttlre Lilnited Partner's Interest (net of the costs and expenses attributable to such 1lbe:credited toward the amount owing froth the Limited Partner to the Partnership emoted Partner shall remain responsible for the payment of any remainder. .Ynvestor as Lender. c �1, the+General Partner acknowledges that a member of the Limited Partner a a# } gee`,ihvestol") may at some time make, acquire, guarantee, own or credit enhance, in " ., ` gin, a loan secured by the Property (a "Mortgage Loan"). `Ihe General Partner urtIraY such a Mortgagee Investor may take actions that the Mortgagee , g`,, acgnowledges (i) �� n its discretion, determines to be advisable in eomrection with such Mortgage Loan Zip r g tn:comrection with the enforcement of such Mortgage Loan); (it) that the fy'e7nvestor will not be acting on behalf of or as agent for the Limited Partner in B„ �uon:with actions it takes with respect to the Mortgage Loan; (iii) that no Mortgagee or owes the Partnership or any Partner any fiduciary duty or other duty or obligation � v��.by virtue of such Mortgagee hrvestor being a member of the Limited Partner and w ,"0—such action will be limited by or constitute a breach of any provision of this . . E r7rent or any other organizational document of the Partnership. The Limited Partner v2tves, on its own behalf and on behalf of the Partnership, any claims against the pt`Y edParhier and the Mortgagee Investor relating to such Mortgage Loan and based in any a n the Mortgagee Investor's status as a member of the Limited Partner. IARTICLE 7 -RIGHTS,POWERS AND DUTIES OF THE GENERAL x PARTNER 'Management and Control of the Partnership. EWA_ Subject to the provisions of Sections 7.04 and 7.05, the General Partner =3_ �� rhaue'the exclusive right to manage the business of the Partnership and is hereby gnledto exercise all powers enumerated in Section 3.02 and, pursuant thereto, to take y Ifa it deems necessary in connection with the purposes and business of the k� � �rsFip"as setforth in Section 3.01. r ->'(b) Except as otherwise provided in the Act or in this Agreement, the dPdrhler shall not participate in or have any control over Partnership business and lmotl ave an authority or right to act for or bind the PartnersUip. Y g Authority of General Partner Officer or Agent. RVI.- . yaction requned or permitted to be taken by a corporate General Partner ,x vadgr.may betaken by such of its proper officers or agents as it shall validly designate } °C �h;'purpose or, if no such designation is in effect,by its president or treasurer. gt NC } x F 3 • F''Ty 7 E > 2W811.v6 f{3 I eK ° � 't. -Duties and Obligations of the General Partner. t (a) The General Partner shall devote to the affairs of the Partnership such be necessary for the proper performn all of its duties heremnder. tray ,. „_ b The General Partner shall take such action as may be necessary or � ( ) , , flyte for the continuation of the Partnership's valid existence under the laws of the t` c opwealth and in order to form or qualify the Partnership under the laws of any rcConm which the Partnersh p is doing business or in which such formation or }� t�c ho is necessary to protect the limited liability of the Limited Partner or in order to k ue.`meffect such formation or qualification. (c) The General Parfier shall have fiduciary responsibility for the ;; ' ng aiid use of all funds and assets of the Partnership, whether or not such funds and r�* areN Its inunediate possession or control. s `(d) The General Partner shall at all times take whatever actions are so that the Partnership will be classified for Federal income tax purposes as a ip'and not as an association taxable as a corporation. While conducting the sssofthg.Partnership, the Genera] Partner will not voluntarily take any action or fail to nyNactron which action or failure will cause (i) the termination of the Partnership for gt ejlcorne tax purposes or (ii) the classification of the Partnership for Federal income poses.as an association taxable as a corporation. N. r (e) The General Partner shall exercise good faith in all activities relating to duct of the business of the Partnership including the development, operation and �k: : . uanceof the Project, and shall take no action with respect to the business and property w ee}#ffiership which is not reasonably related to the achievement of the purposes of the Wa :(f) The General Partner shall cause the Partnership to satisfy all pct e Is,necessary to obtain governmental and other applicable approvals necessary to tcontnued occupancy of all of the rental units in the Project, shall cause the hnitial 'suation;t`obe completed substantially in accordance with the Plans and Specifications ,h3ll;'Ouse the Project to be rehabilitated and operated in full compliance with the ements-.of_all governmental authorities having jurisdiction over the Project. {9 ` Kr. (g) The General Partner shall cause the Partnership to complete the Initial °i D "YOPand tooperate the Project as low-income housing (x) as required by the Project ents acid the Code and regulations promulgated thereunder and (y) as necessary to Yfor and maintain the Credits and other tax benefits projected in the Financial yCyt �ts,and to achieve at least the level of financial performance set forth in the Financial (h) The General Partner shall make all flings and take all actions necessary 1n the:Credits. On i n &71.06 28 i:ak (I) The General Partner shall use such methods of depreciation available �gdewith respect to the Project as may be most beneficial to the Limited Partner. The General Partner shall do what is necessary and appropriate to a rterests of all Partners, including the Limited Partners the Limited Partner, xe to t'wlth the interests of the Partnership and the carrying out of its purposes and shall l ily with the Investor Services Agent so as to enable the Investor Services Agent yts.11 obligations to provide investor services to the Limited Partner. a ' The General Partner shall perform its duties hereunder and manage the k _ (k) �itdttie business affairs of the Partnership in a manner consistent with the chat liable pfPOAH, Inc. and the interest of the Limited Partner. If the Partnership experiences Operating Deficits, the General Partner e`a6ditional Capital Contributions to the Partnership to fund Operating Deficits �totk e terms set forth in Section 7.13. Subject to the exceptions provided for in the Permanent Loan s the General artner shall cause to be included in the loan documents evidencing g any loan to the Partnership prohibitions on (i) any sale, assignment, transfer or ance gf;sueh loan or any interest therein by the lender to a member of the Limited rtq_an affiliate of a member of the Limited Partner and (ii) the inclusion of such apyinterest therein by the lender in a pool of loans to be sold, assigned, transferred or fo-amember of the Limited Partner or to an affiliate of a member of the Limited Ihout the Consent of the Limited Partner. The Limited Partner hereby es,its consent to the inclusion of Fleet Bank and BankNorth in the Permanent as issuers of the Letters of Credit and to Fleet Bank serving as the funding bank for n(n) The General Partner shall make prompt demand under and otherwise guaranty given by the Sponsor to the Partnership, such enforcement to be ii the best interest of the Limited Partner. (o) If the General Pat offer is a "tax exempt controlled entity" as defined in $(h)(6)(F)(iii) of the Code the General Partner shall timely make an election �611IM(h)(6)(F)(ii) of the Code. � =(p) The General Partner shall apply Net Cash Flow to the following �tg-Following order of priority: (i) first, to pay a partnership management fee o aFarh ership Management Fee Agreement dated of even date herewith; (ii) ,,, npaid amounts of the Development Fee; (iii) third, beginning in 2006, to pay ecru119 on the Sponsor Loan; (iv) fourth, to pay the Incentive Management Fee; and t4IDake deposits to the Operating Reserve. t , .`. (q) The General Partner shall cause 10% of the total of so-called soft costs ;hard costs expended in the rehabilitation of the Project to be paid to MBEs, 29 uF r '� G u lr�x " utilized in rehabilitation of the Project to be furnished by minority orkeihours 0/o of annual Project Expenses incurred on account of goods and services to be t�F r : . The General Partner shall cause its officers and or employees who will 1 . , agement of the Project to attend at least annually a Tax Credit training seminar, s'y2ch seminar to be attended prior to the marketing or leasing by the Partnership of t`tn the Project. Notwithstanding the foregoing, the requirements of this subsection I be waived so long as the Management Agent and the officers and or employees who is Q gee management of the Project are experienced in Tax Credit compliance and k and the Project has had no problems in Tax Credit compliance and reporting, as �b]y determined by the Limited Partner. �y (s) The General Partner shall take all necessary action within its control to :. ithatthe Project is in compliance in all material respects with the Environmental Laws .+ ., mes and that the Project remains fi ee from the presence of any Hazardous Materials P�orun&r the Project or the Property and shall promptly deliver a copy of any notice it fiaveieceived of any violation of the Environmental Laws to the Limited Partrne- '. (t) The General Partner shall cause the Partnership to maintain insurance x, r at�least the following minimum standards: (i) con nercial general liability 'cep otecting against liability for personal injury, death and property damage in an tofnot less than $3,000,000 per occurrence, combined single limit with a deductible A:; ffi Ymore than $5,000 per loss, (ii) during the period when rehabilitation is underway, ,ghsk insurance on an all-risk basis in an amount not less than the cost of "'ter •. chon,written on a completed value basis, non-reporting form, (iii) after completion 'ilifation of the Project, property damage insurance on an all-risk basis with a Tle ofnot more than $5,000 and including replacement cost and agreed-amount X is and building laws coverage, and (iv)rental interruption insurance covering at year's rents. (u) Tlie General Partner shall cause the Partnership to perform all of its tons under and to otherwise comply with the terms of the Project Documents. gyp$. f; 704 'Restrictions on Authority of the General Partner. -'eGeneral Partner shall not have the authority to: perform any actin violation of any applicable law or regulation der;pr '+ (b) perform any act in violation of any Project Document, or " (e) do any act required to be approved or ratified in writing by the Limited order the Act without first obtaining such approval unless the right to do so is _ Yprovided for in this Agreement and such right is permitted by the Act, or tiA' 30 cr..}, C (d) borrow from the Partnership or connningle Partnership funds with a her Person or employ, or permit another to employ, Partnership funds or �.,• y manner except for the Uenefit of the Pairtnership; or hV., O except as provided in Article 14, amend this Agreement. Actions Requiring Consent of Limited I'artner. � lista in any grant of authority to the General Pal hrer or any other provision g,Agreement to the contrary,neither the Partnership nor the General Partner shall have ,, homy to do any of the following without having previously received the Consent of �e� mated Partner: r^;ry 4Pr Y:. ax -(a) Engage as accountants for the Partnership any firm other than the 3 Ley o a) iwithhbeing a cod that the Consent of e Limited Partner shall not be lywithheld under thisSection 7.05(a); .; (b) Sell, mortgage, encumber, lease (other than for occupancy by tenants) or otherwise transfer all or any portion of the Project or refinance or nally;amend or modify any mortgage of the Property, other than (1) such mortgage aspie contemplated in the Financial Forecasts, including, without ]imitation, the n �manent Mortgage, (2) a sale pursuant to the Right of Refusal, (3) easements and similar is affecting the Project for purposes necessary or appropriate for the development, nstruction or operation of the Project, or (4) additional affordability restrictions required yvIDFA;in connection with the award of Credits or in connection with the issuance of tax- 'f bonds bonds used to fund a portion of the Permanent Loan, or by the City of Salem in ectioh with obtaining certain approvals under Chapter 121 A of the Massachusetts qti ((�neral Laws; (c) Admit any limited partner to the Partnership other than in substitution a rtheLimitedPartner; (d) Following completion of the Initial Renovation, construct any new IMNtal improvements at the Project except for (i) replacements, remodeling and renovations j the ordinary course of business, including without limitation tenant improvements funded E f " olely from the Replacement Reserve, the Lease-Up Reserve and/or Net Cash Flow and i owp construction to replace losses which is substantially paid for or anticipated to be "c rrr,Teimbursed from insuranceP roceeds; (e) Settle any insurance claim or condemnation action involving a claim in of$100,000 wJ (f) Acquire any real property m addition to the Project, other than a� asements and other minor interests incidental to the purposes of the Partnership; � dy ES inn 31 v3 � �� sr � srtzeoaii.�s v'� S ry�xkr r. � n (g) Confess anyjudgment or settle any legal claim against the Partnership or all amount in excess of$100,000 other than judgments or settlements in amounts covered entirely(excepting deductible sums not in excess of$100,000) by the proceeds of any insurance policy maintained by the Partnership; r ,f 1141 (h) Incur Partnership debt other than indebtedness created under or Raicontemplated U the Pro'ect Documents or the Financial Forecasts, including, without m Y ] la nation, the Permanent Loan, indebtedness incurred in the ordinary course of business not n toexceed $100,000, and indebtedness incurred pursuant to Section 7.10, provided that, t e z_ezcept with respect to the Permanent Loan, without the Consent of the Limited Partner, none i of the foregoing debt shall be Partnership debt for which any Partner, any partner of the "= iniited Par ner (including those listed in Exhibit D attached hereto), or any person related to f , { '� 'apathter(as determined under Section 1.752-4(U) of the Regulations promulgated under Code Section 752) has any economic risk of loss, other than indebtedness expected to be ePafd from Capital Contributions, .4 (i) Materially alter the Partnership's coverage under the terns of insurance spohcies as presently required or as Subsequent]y in effect,provided that the General Partner "'O;all be authorized to increase the Iunits and the coverage in a manner that is customary for 'r a6lisred fro el time to timeients ilar to a ]ehePoject and make any alterations in coverage as may be RAI All"' Take any action in contravention of this Agreement or which would ,change the nature of the Partnership's business or that would make it impossible for the ' y Paritier'ship to carry on its purposes under Section 3.01; "N" r (k) Use any Partnership property for other than a purpose of the j arhtership as set forth in Section 3.01; Perforinany other act requiring the Consent of tl ie Limited Partner s, s 911t to the provisions of this Agreement or of the Act; inr4 (m) Become personally liable on, or guarantee, any mortgage loan; 'Nyam �1+t � rR (n) Voluntarily dissolve the Partnership; ar = (o) Engage, tenninate or replace any Management Agent or enter into, - f3,`terronate or amend any management agreement or management plan; except that the � .partner may make nonmate]ial changes to the management plan included as part of r ?gement Agreement without the Consent ofthe Limited Partner. The Limited et abkhowledges that it has approved the teens of the Management Agreement and has the engagement of the current Management Agent pursuant thereto; (P) Fail to enforce strictly any agreement between the Partnership, on the and the General Partner or any of its Affiliates, on the other hand; a` 4,6 32 r . (q) Enter into or agree to any tax settlement that adversely affects the �� Ltmited Partner; (r) Expend or distribute any portion of the Project Margin except for PaenC of the Development Fee to the extent of the Third and Fourth Installments and yro (II)disirtbation to the Limited Pal fier to the extent required Under Section 4.04(c); or (s) Amend or consent to any amendment of the Plans and Specifications in Y C a way as to materially increase the cost, diminish the quality or lengthen the schedule of s su Cehabiltation of the Project. �j atix`r r 7.06 Delegation of Authority. i The General Partner may delegate all or any of its powers, rights and obligations Tql - r",hereunder, and may appoint, employ, contract or otherwise deal with any Person for the x �Ff the Partnership, which Person mn ay, Under supervisioof the transaction of the business o General Partner,perform any acts or services for the Partnership as the General Partner may approve. Any expenses incurred in connection with such contracts, acts or services shall be expenses of the Partnership. 7.07 General Partner or Affiliates Dealing with Partnership. .. (a) Neither the General Partner nor any Affiliate of the General Partner ,hall act as Management Agent of the Project without the Consent of the Limited Partner and then only on terms and conditions permitted corder the Project Documents. �3a (b) In addition to arrangements elsewhere set forth in this Agreement or heretofore disclosed in writing to the Limited Partner, the General Partner or any of its Affiliates shall have the right to contract or otherwise deal with the Partnership for the sale of goods or services only if(i) compensation paid or promised for such goods or services is reasonable (i.e., at fair market value) and is paid only for goods or services actually furnished to the Partnership, (it) the goods or services to be furnished shall be reasonably necessary to the Partnership, and (iii) tle terms for the furnishing of such goods and services shall be at 'least as favorable to the Partnership as would be obtainable in an arm's-length transaction. Any payment made to the General Partner or any of its Affiliates for such goods or services shall be fully disclosed to the Limited Partner. 7.08 Other Activities. The General Partner's Affiliates (but not the General Partner) may engage in or Possess interests in other businesses or charitable ventures of every kind and description for their own account, including, without limitation, serving as a manager or member of other limited liability companies or general partner or limited partner of other partnerships which own housing projects similar to the Project. Neither the Partnership nor any of the Partners shall have any rights by virtue of this Agreement in or to such other business ventures or to the income or profits derived therefrom. 33 -BOSTI:26081 IA 709 Reimbursement of Expenses. F# The Partnership shall, to the extent consistent with the Financia] Forecasts and the fr; Fri �olect Docwnents, reinnUurse the General Partner and/or the Sponsor for all costs incurred �#'o the'date hereof in connection with the organization of the Partnership and the acquisition, r �oyelopment and operation of the Project, including legal, appraisal, accounting, and other expenses. : . 7.10 Loans to the Partnership. _In the event that additional funds (that is, funds not available under the loan ngements referred to in this Agreement or in the Financial Forecasts) are required by the adjership for any purpose relating to the business of the Partnership or for any of its obligations, expenses, costs, or expenditures, including Operating Deficits not subject to the proxsions of Section 7.13, the Partnership may, subject to the Consent of the Limited 1, £' atnei,borrow such funds as are needed from any Partner or other Person for such per iod of r ±,. �� itweland on such teens as the General Partner and the lender may agree and at the rate of lnferest then prevailing for comparable loans. No loan made under this Section shall be cured by any mortgage or other encumbrance on the property of the Partnership without lhepnor approval of any mortgagee whose loan documents require such approval. Loans & tmede under this Section may be repaid prior to any determination and distribution of Xslnliutable Net Cash Flow and prior to any determination and distribution of Cash from a Saleor Refinancing. 7.11 Contingency Reseves. r :The General Partner shall have the right (but not the duty or obligation) to establish tangency reserves by setting aside therefor available Partnership funds. Such contingency : ieseryes shall be in addition to the Required Reserves, shall be segregated fiom the Required serves and shall be in amounts and for purposes which are reasonable and related to a ,U, gleed or anticipated need of the Project. Any funds set aside in such contingency nes shall not be available for distribution pursuant to Article 10,but such funds may Subsequently be made available for such distribution to the extent that the General Partner les that it is no longer necessary to hold such funds as contingency reserves for the 9perah in of the Partnership business. �s r€ Required Reserves. ism The General Partner shall establish and maintain all reserves set forth in the Financial r� p0easts, including the following: (a) O aerating Reserve. The General Partncr shall establish an operating e(the "Operating Reserve") to be maintained, expended and released according to the ,YrsionsofthisSection7.12(a). j BLVvh 34 An initial deposit of$1,073,736 shall be made simultaneously with the payment by the Limited Partner of the First Installment. Such deposit shall include $140,000 deposited in accordance with Section 3 of the ,{ Development Services Agreement. Thereafter, in any month in which the balance of funds in the Operating , v Reserve is less than the Operating Reserve Minimum, a deposit from 5" Net Cash Flow shall be made to the Operating Reserve of an amount equal to the lesser of(x) one-twelfth of two percent (2%) of projected Project Expenses for the current Fiscal Year or (y) an arnount that when ` added to the sum already in the Operating Reserve yields a balance in the Operating Reserve equal to the Operating Reserve Minimum. (iii) The Operating Reserve may be used from time to time by the General y "r Partner to eliminate Operating Deficits, if any, occurring in the l operation of the Project. The Operating Reserve shall be applied to e Operating Deficits before any sums are required to be contributed by the General Partner under Section 7.13. r I: y r i Fey $` (iv) The "Operating Reserve Minimum" for any Fiscal Year shall equal fifty percent (50%) of Project Expenses paid or payable during the prior Fiscal Year. During the initial Fiscal Year of Project operations, the s "Operating Preserve Minimum" shall equal fifty percent(50%) of projected Project Expenses for such Fiscal Year, as shown in the Financial Forecasts. t r;,', The Limited 'Partner acknowledges that the Permanent Lender shall hold the Operating Reserve. rk $ (b) Replacement Reserve. The General Partner shall establish and maintain a replacement reserve (the "Replacement Reserve") by making installment deposits f asshown in the Financial Forecasts. The Replacement Reserve shall be used by the General Partner only to replace capital items as they come to the end of their useful lives. = r* (c) Lease-Up Reserve. The General Partner shall establish alease-up -reserve(the "Lease-Up Reserve") to be maintained, expended and released according to the provisions of this Section 7.12(c). (i) An initial deposit of-$146,000 shall be made simultaneously with the payment by the Limited Partner of the First Installment. •K a An additional deposit of$204,000 shall be made simultaneous]y with the payment by the Limited Partner of the Second Installment. Mrl (iii) The Partnership shall establish a gradual increase in rents for those �a f current tenants of affordable units in the Project paying less than thirty ecsn,26081 i v6 35 zs; g.: e Percent (30%) of their gross income. The Lease-Up Reserve shall be used from time to time by the General Partner to offset the difference between rental income actually payable from time to time and rental income that would have been payable if all tenants of affordable units were required to pay thirty percent (30%) of their gross income. The General Partner shall provide a detailed annual accounting of the use of the Lease-Up reserve to the Limited Partner. F 't" I • (iv) Any balance in the Lease-Up Reserve remaining after five years from the date hereof, or any earlier date approved by the Limited Partner, a v shall be released to the Partnership. =r + (d) Lender Reserves. The General Partner shall establish and maintain any 3 ` P y fall additional reserves required by the terms of the Permanent Loan, and any other loan eyattnership (the "Lender Reserves"). No portion of the Lender Reserves shall be a �rep�ted toward the Replacement Reserve, the Lease-Up Reserve or the Operating Reserve �r Wout the Consent of the Limited Partner, which consent may be conditioned on the doou of an agreement between the Partnership and the relevant lender in form and .pub�tance satisfactory to the Limited Partner setting forth terms and conditions governing the � levant Lender Reserve acceptable to the Limited Partner. The Limited Partner hereby onsent-s to counting the Lender Reserves required under the terms of the Permanent Loan andocutnents toward the Required Reserves (as defined below) required hereunder. (e) Miscellaneous. Any funds set aside in any of the reserves described in 1�7.12(a), (b) and (e) ("Required Reserves") shall not be available for distribution ��puuant to Article 10, but such funds may subsequently be made available for such i4 bUho'n to the extent that the General Partner determines, with the Consent of the s mvted'Partner and, as to Lender Reserves, with the consent of the relevant lender(s), that Y eyaie 69 longer necessary for the operation of the Project. All Acquired Reserves shall be accounts providing for the signature of both the General Partner and the Investor nlces'Agent for withdrawals and no withdrawal shall be made from Required Reserves t �mtfiout the hnvestor Services Agent's signature. The Investor Services Agent shall not s� told;its approval of withdrawals from Required Reserves, unless the Investor Services agent believes, in its reasonable judgment, that such withdrawals are not for uses permitted riarthsSection 7.12. x �§`r 7.13 Operating Deficits. y � If the Partnership experiences Operating Deficits in excess of funds in the Operating eive,;the General Partner shall make additional Capital Contributions ("Operating Deficit Peal Contributions") to the Partnership to fund such Operating Deficits. Notwithstanding e M, going, the General Partner shall not be required to make Operating Deficit Capital ' c.,Q�utlons to pay principal on the Permanent Loan, or interest in excess of 20% ofthe accruing and payable under the Permanent Loan (as such interest is determined rsection1.752-2(e) of the Treasury Regulations). r r osirb 36 �Y ale ofProject. qhe-:General Partner shall (i) investigate and report to the Limited Partner with respect Ee�jei6ftile Proiect at such time as is in the best interest of the Limited Partner and (ii) der any offer Uy the General Partner or the Limited Partner to purchase or resyndicate �odeFY ,The determination of the Limited Partner's best interest shall give significant rrye trg01 '1 s1 -income ect tothe obligat op of the Genoses of eral Partnehe di Partner's to use diligent ment in efforts l efforts toachieve ershlp 1 e e, rolechous set forth in the Financial Forecasts relating to sale or other disposition of the �p Tax Matters Partner. t. Notwithstanding any other provision of this Article 7, the General Partner is hereby . �gaated'the "Tax Matters Partner," as such tens is defined in Sections 6221 through 6231 de, and shall have full power and authority to carry out the responsibilities of Tax afters Partner as set forth therein. Ir 7 16 General Partner Development Guaranty. The General Partner absolutely, unconditionally and irrevocably guarantees to the Y ecship and the Lintited Partner (w) the completion of the Initial Renovation in a good d otknianlike manner x the payment of all costs of development of the Project in v W > O P Y P J fess ofthose set forth in the Financial Forecasts; (y) the compliance of the Project with all laced m-service requirements of the Code necessary to qualify for the Credits; and (z) the hsf�otrohof all conditions to the closing of the Permanent Loan. �tr "ARTICLE 8 -RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNER e ems, 8 01 Management of the Partnership. The Linured Partner shall not transact any business in the name of the Partnership. Ae �tmit6 3 Partner shall not have the power or authority to bind the Partnership or to sign I c: Y'ag[eement or document in the name of the Partnership. The Limited Partner shall not r part id the management or control of the business of the Partnership or have any power � uthonty with respect to the Partnership except insofar as the consent or approval of the vr ted Panner shall be expressly provided for in this Agreement or the Act. 8:02 Other Activities. 3=� f� r The Limited Partner may engage in or possess interests in other charitable or business [ rtures ofevery kindand description for its own account, including, without limitation, 1� r ig asta member or manager of other limited liability companies or as a general partner t r gmrtedpartner of other partnerships which own, either directly or though interests in r 37 ikg �l1 Mi � t,r x ' t 1 far°companies or partnerships which own,housing projects similar to the Project. Neither attneTship nor any of the Partners shall have any rights by virtue of this Agreement in or n. h ba in ss ventures or to the income or profits derived therefrom. ' g.03 Removal of Management Agent. TheeLimited Partner shall have the right, by notice to the General Partner, to require a e reneial Partner to discharge the Management Agent in accordance with the terms of the eiient Agreement, provided that whenever the Managing Agent shall be an Affiliate n General Partner, such discharge may be required by the Limited Partner if(a) grounds �; 4� xlstor,the removal of the General Partner hereunder, or (b) there are, in the Limited pper'sjudgement, deficiencies in the management of the Project and within 60 days after r tohce_to the General Parhrer of such deficiencies, such deficiencies have not been cured. A sor Management Agent shall be promptly selected by the General Partner and }fitted to the Limited Partner for approval, which approval shall not be unreasonably ya3zi r a r - ��>rhheld. '8.04 Removal of Accountant. Tire Limited Partner shall have the right, by notice to the General Partner, to require (rr thg General Partner to discharge the Accountants. Successor Accountants shall be promptly Cf K „ tselected by the General Partner and submitted to the Limited Partner for approval. r" ARTICLE 9 -TRANSFER OF, AND RESTRICTIONS ON TRANSFER ,rmC .tt t OF, INTEREST OF THE LIMITED PARTNER 9.01 Purchase for Investment. (a) The Limited Partner hereby represents and warrants to the General A Partner and to the Partnership that the acquisition of its Interest is made for investment ,,,loses only and not with a view to the resale or distribution of such hrterest. f (b) The Limited Partner agrees that it will not sell, assign, or otherwise hansfef its Interest or any fraction thereof to any Person who does not similarly represent and U + � a t and similarly agree not to sell, assign, or transfer such Interest or fraction thereof to a{ anyPerson who does not similarly represent and warrant and agree_ Restrictions on Transfer of Limited Partnership Interest. s xs" (a) Except as provided in this Section 9.02 and Section 9.03, the Limited r Pa tnermay not offer, sell, assign, hypothecate, or pledge in whole or in part its Interest or 4 t1 draw from the Partnership without the written consent of the General Partner, which r� eonsent shall be given or denied in the General Partner's reasonable discretion. * s Notwithstanding such consent, recognition of any such transfer shall be subject to receipt of ,SVthPrOhce described in Section 9.04(x). nt i '¢,t� 38 x {i Ty,r , *d u� . Tlie Limited Partner may not offer, sell, transfer, assign, hypothecate or ho1e or in part its Interest unless (i) the General Partner shall have received a hero w story oPinnion of counsel that such proposed disposition (A) maybe effected without Cron' of the Interest under the Securities Act of 1933, as amended, and (B) would not solation of any applicable state securities or Blue Sky" law, and (ii) the General e�shall have consented thereto, which consent may be withheld or granted Uy the et hptmer in its reasonable discretion. The cost of such opinion shall be paid by the r 'ked Partner. (c) The Limited Partner may not sell, transfer or assign in whole or in part �f `erest to a minor or incompetent. ..,, (d) The Limited Partner may not sell,.transfer or assign in whole or in part unless all lenders which have reserved a right of approval in the Project � tuents have given prior written approval thereto according to the teens and conditions R ' epertinent Project Document. (e) Notwithstanding the foregoing, the Limited Partner may pledge its r, stto:one or more lenders providing financing to the Limited Partner for purposes of � Its, a ital Contributions, provided that such lenders give notice as required by 0n9.,04(a)below. Y 03 Admission of Substitute Limited Partner. 4 (a) SuUject to the other provisions of this Article 9, an assignee of the as y of the Limited Partner(which shall be understood to include any purchaser, '` ife�ee :donee, or other recipient of any disposition of such Interest) shall be deemed fed as`a Limited Parhrer of the Partnership only upon the satisfactory completion of the ` y (i) the General Partner shall have consented to such admission, which t _ consent may beg anted or withheld in the reasonable discretion of the sk General Partner and evidenced by the execution by the General Partner F , of an amendment to this Agreement evidencing the admission of such u Person as a Limited Partner; the assignee shall have accepted and agreed to be bound by the terms t; and provisions of this Agreement by executing a counterpart thereof or ? an amendment thereto and such other documents or instruments as the General Partner may require in order to effect the admission of such Person as a Limited Partner; if required by the Act, a Certificate evidencing the admission of such Person as a Limited Partner shall have been filed; fists 5 u i6' 39 { G ap ' . (iv) the assignee shall have delivered a letter containing a representation in the form set forth in Section 9.01(a) and the General Partner shall have r received an opinion in the form set forth in Section 9.02(b); rw (v) f the assignee is a corporation or partnership, the assignee shall have provided the General Partner with evidence satisfactory to Counsel for the Partnership of its authority to become a Limited Partner under the terns and provisions of this Agreement; 31 (vi) the assignor or assignee shall have paid all reasonable legal fees of the a Partnership and the General Partner and filing costs in connection with ep assignee's substitution as Limited partnership; and A. (vii) the assignee shall have complied with all applicable provisrons of the Code and Regulations. Mus, (b) For the purpose of allocating profits, losses and tax credits and ,o�sfinbuting cash received by the Partnership, but far no other purpose, subject to t , a= 4gcttgh 9.04(a), an assignee of the Linuted Partner shall be treated as having become a ' p�rfieron the day of the assignment. For all other purposes, a Substitute Limited Partner be treated as having become, and shall appear in the records of the Partnership as, a �4P<riner upon the completion of the items set forth in Section 9.03(a). fj3 RZ (c) If the General Partner shall decide to consent to the admission of a fi strtute Limited Partner, the General Partner shall cooperate with the Person seeking to become a Substitute Limited Partner by preparing the documentation required by this � Sktion and making all required filings. The Partnership shall take all such action, including �;hefiling for recordation of any Certificate evidencing the admission of any Person as x noted partnership, and the making of any other official filings, as promptly as practicable t� after the satisfaction by the assignee of the interest of the Limited Partner of the conditions in r r thisArtiele 9 to the admission of such Person as the Limited Partner of the Parmership. 5 'f c ' 9.04 Rights of Assignees of Partnership Interests. - ty = (a) Subject to the provisions of Sections 9.01, 9.02, and 9.03, except as poses opraon of law, the {soav r to recognize the ass gn n ntrbyip shall not be obligated for anythe Limited Partner of its Inter estuunless the k ershi receives Notice thereof, including a copy of the instrument pursuant to which tt isuch.assi p ,rrgF g gement is made,no later than 30 days after the end of the Fiscal Year in which such �" x ( A r g ment is intended to be effective. ID, Sa (b) Any Person who is the assignee of all or any portion of the Limited h �IneIs Interest, but does not become a Substitute Limited Partner and desires to make a I � tei assignment of such Interest, shall be subject to all the provisions o this Article 9 to 's the sa �r me extent and in the same manner as the Limited Partner. 40 1.26p81 I.v6 t' { ' s f i� tYr g'05 Effect of Bankruptcy, Dissolution, Death, or Incompetence of Limited Partner. z ;rTli@ bank uptcy or dissolution of the Limited Partner shall not cause the termination lssolution of the Partnership, and the business of the Partnership shall continue. If the putedRartner becomes bankrupt, the trustee or receiver of its assets shall have the rights of s, Bch Lt ?ited Partner for the purpose of settling or managing its assets or property and such ^ the bankrupt Limited Partner possessed to assign all or any part of its hnterest and era' wlth the assignee in satisfying conditions precedent to the admission of the assignee Su�shtute Limited Partner. r .'ARTICLE 10 - CAPITAL ACCOUNTS, DISTRIBUTIONS AND ALLOCATIONS rkt� ? f10,01 General. 1 #ST'his:Article sets forth certain provisions respecting Capita] Accounts of the Partners, h sinbutions to Partners, and allocation of gain and loss to Partners. x >`a' °1002 CapitalAccounts. x (a) Establishment. A separate Capital Account shall be established and tamed for each Partner. In the event of a transfer of an Interest (or portion thereof), the ` sferee shall succeed to the transferor's Capital Account (or corresponding portion egtj The provisions of this Section 10.02 are intended and shall be interpreted to ¢ ly with the Treasury Regulations applicable to capital accounts. (b) Adjustments. Consistent with the provisions of Section 10.02(a), each = er's'GapitaI Account shall be increased by such Partner's Capital Contribution as and '�� made and by such Partner's share of Partnership Profit and shall be decreased by the sa a h aQd the'fair market value of Partnership assets distributed to such Partner and by such r. er'swsI}are of Partnership Loss. In making such adjustments, the following provisions Liabilities of a Partner assumed by the Partnership or to which property contributed to the Partnership are subject shall be deducted and liabilities assumed by a Partner or to which property distributed to a k "y Partner are subject shall be added. (n) Partnership Profit and Partnership Loss shall be determined and allocated in the same manner as income or loss for federal income tax puposes except that(i) in deternnining Partnership Profit and Partnership Loss, items of income and gain exempt from tax shall be added and items which are not deductible and which arc not properly t a chargeable to the capital account under the Code (or are treated as such " r under applicable Treasury Regulations) shall be deducted and 41 41 1146 = ✓zS ki is � y (ii) following any adjustment under Section ]0.02(b)(iv), allocations of n gain or loss on disposition of revalued assets and allocations of depreciation and amortization with respect to such revalued assets shall „ - be determined based on the Adjusted Value of such assets in F, accordance with applicable Treasury Regulations. a> Each Partner's Capital Account shall be reduced by such Partner's share of any downward adjustment in the basis of"Section 38 property" (as 11 Ft defined in the Code) owned by the Partnership. Such adjustment shall s _t zt F be shared in the same proportion as the tax credit giving rise to such reduction is shared raider Section 10.04(b). In the event of any K 4 recapture of any such Section 38 property tax credits, any upward Kt s _ adjustment to basis shall increase each Partner's Capital Account in like manner. (iv) In connection with a contribution or distribution of money or other t property (other than a de minimis amount) in exchange for an Interest, the Genera] Partner may elect in the manner provided under applicable Treasury Regulations to adjust the Capital Accounts of all Partners to reflect the difference between the value of Partnership assets as previously reflected on the books of the Partnership and the fair market value of such assets. Unrealized gain or loss resulting from such revaluation shall be allocated to each Partner's Capital Account in the same manner as if there were a taxable disposition of such revalued sr assets for their fair market value. (v) In the event of a distribution of Partnership assets to a Partner, the ¢tea 1_ General Partner shall first make the adjustment provided for in t Section 10.02(b)(iv) with respect to such property. (vi) Capita] Accounts shall also be adjusted to reflect any additional adjustments provided for in this Agreement or applicable Treasury Regulations. x (c) Liquidation. Upon liquidation of the Partnership (or any Partner's liquidating distributions to the Partners shall be made in accordance with the g osttve. a)ual Account balances of the Partners after taking into account all adjustments to " a � f �l�artners' Capital Accounts for the taxable year during which such liquidation occurs. (d) Restoration Obligation. Effective upon admission, or for any -use, year, any Partner may file with the Partnership an election to be subject to Restoration Obligation. Such Restoration Obligation may be unlimited or may be a . rtted3testoration Obligation". Any such election shall continue in effect for subsequent s ale years: If, following liquidation, after taking into account all adjustments required dee, any Partner has a Deficit Balance in its Capital Account, and such Partner has so x -�N181,1 v6 42 t � F 1 er this Section 10.02(d), then such Partner shall be obligated, in the manner Qder applicable Treasury Regulations, to restore a portion or all of the amount of e( e en ding on the terns of the election) to the Partnership to be paid to moi Io be distributed to Partners with positive Capital Account balances. �4 h a D3 stributions. r Ss a(a) Distributable Net Cash Flow. Distributable Net Cash Flow will be �d annually within 120 days after the close of each Fiscal Year as follows: First,if the General Partner has made Operating Deficit Capital § v Contributions, to the General Partner in an amount up to the aggregate t amount of such Operating Deficit Capital Contributions not theretofore ri � repaid to the General Partner. � p a b (11) Second, the balance, if any, 99.99% to the Limited Partner and 0.01% to the General Partner. Cash from a Sale or Re,finammn Cash from a Sale or Refinancing rlw; N) #7 andn connection with a liquidation of the Partnership or any Partner's interest in the a slop)will be distributed within 30 days of its receipt by the Partnership as follows: �4� r First, to the General Partner and the Limited Partner pro rata in r proportion to and to the extent of their respective positive Capital t Account balances. Second, the balance, if any, 50% to the General Partner and 50% to the Limited Partner. =3333 Oy�4 Allocations. yrs (a) Allocation of Taxable Income and Loss. For purposes of the Code and �arlaw of any state, all items of income, gain, deduction and loss of the Partnership red for federal income tax purposes for any taxable year or period ("Taxable f ts')sl all be allocated as follows: iN y +(i) In General. Except as otherwise provided below or elsewhere under + this Article, items ofincome, gain, loss and deduction for federal income tax proposes (and corresponding provisions of state law) shall be allocated 99.99°/ to the Limited Partner and 0.0 1% to the General Partner, Income and Gain Upon Liquidation. Income and gain arising upon liquidation of the.Partnership shall be allocated in such a manner as to achieve to the extent possible the following distributions in the r�r following order of priority: t u V¢ 43 041r, ' r � ti i l � IYYLF a ' , (x) first, to the Limited Partner an amount that, when combined with all items of income, gain, deduction, credit and loss to be r, =f tr allocated to the Limited Partner under Section 7 0.04(a)(u) and all other amounts to be distributed to the Limited Partner under ;� . Section 10.02(c), would achieve for the Limited Partner the x ; Internal Rate of Return set forth in Section 4.04(a) hereof; (y) second, to the General Partner an amount up to the agg egate a"t 4 n= _ amount of any Operating Deficit Capital Contributions not 3 1 i F, theretofore repaid to the General Panther; and �,' (z) third, the balance 50% to the Limited Partner and 50% to the W1$ General Partner. (iii) Losses From Sale or Refinancing. Losses arising from events which ll result in Cash from a Sale or Refinancing(or would so result if the r proceeds thereof were sufficient in amount) or upon liquidation of the �kk tW' Partnership shall be allocated as follows: xt (x) first, to any Partners having positive Capital Account balances, z „hul�r =;u ' in proportion to and to the extent of such positive balances; and f �M1Wi MW 4x (y) the balance 99.99% to the Linnited Partner and 0.01% to the . General Partner. lloca e ations provided for in this Section 10.04(a) shall be made prior to adjusting Capital M ccounl balances to reflect the distribution of the proceeds from a Sale or Refinancing or s� �gttdation. NOMRi �" (b) Allocation of Tax Credits. All Tax Credits shall be allocated to the >"artners in accordance with the Code and applicable Treasury Regulations. Except to the Y. rent otherwise required under the Code or Regulations, Credits shall-be allocated 99.99% f x the Limited Partner and 0.01% to the General Partner. (c) Special Rules. (i) Allocations Where Partnership Basis Differs From Capital Account Values. In accordance with applicable Treasury Regulations, Taxable Amounts with respect to any property contributed as a Capital Contribution or revalued for purposes of the Partners' Capital Accounts g " under Section I0.02(b)(iv) shall be allocated, for£ederal income tax purposes, so as to take account of any variation between the adjusted tf basis of such assets to the Partnership for federal income tax purposes v T Fs and its value on the books of the Partnership in accordance with the �T1 260811.16 44 I Al principles of Section 704(c) and the Treasury Regulations thereunder. Unless the General Partner and the Limited Partner otherwise agree, >' such allocations shall be made in accordance with the so-called "traditional" method under the Regulations. w ` F (ii) Limitation on Losses. A Partner shall not be allocated items of loss or deduction as of the close of any taxable year to the extent such an allocation would cause or increase an Excess Deficit Balance in its x Capital Account. Any such amounts which are not allocated to a Partner under this Section shall be allocated at the end of the taxable WIN year as provided in applicable Treasury Regulations. If losses or deductions have been reallocated to a Partner or Partners pursuant t hereto, corresponding amounts of income and gain shall be allocated to �e such Partner or Partners to offset such reallocation as quickly as s f � (�� possible. � a� a (in) Qualified hncome Offset- In the event any Partners unexpectedly receive any adjustments, allocations or distributions described in Treasury Regulations 1.704-1(b)(2)(ii)(d)(4)-(6), items of Partnership 4. income and gain shall be specifically allocated to such Partners in an t amount and manner sufficient to eliminate any Excess Deficit Balances in their Capital Accounts created by such adjustments, allocations or �ibhf.k. SY4� distributions as quickly as possible. If income or gain has been ¢ kX allocated to a Partner or Partners pursuant hereto, corresponding §x , amounts of loss or deduction shall be allocated to such Partner or 0" Partners as quickly as possible to offset such allocation to the extent r MR 3 permitted under Section 10.04(c)(ii). eu s u (iv) Minimum Gain Chargeback: If there is a net decrease in Partnership r � i' Minimum Gain for any year, each Partner will be allocated items of Partnership income and gain for such year (and, if necessary, for subsequent years) in accordance with applicable Treasury Regulations n1 in an amount equal to such net decrease multiplied by each Partner's Eh' ° percentage share of Partnership Minimum Gain at the end of the immediately preceding taxable year, such amounts to be determined F}1L�lh G+,1 t gx�ry ,ate with the exceptions and in the manner provided in applicable Treasury Regulations. „ (v) Partner Non-Recourse Debt. Any lass or deduction attributable to Partner Non-Recourse Debt shall not be treated as a Non-Recourse � 1 Deduction under the provisions hereof, but shall be allocated to the Partner which bears the economic risk of loss attributable thereto or as otherwise required by applicable T easury Regulations. If a Partner's KgC share of Partner Non-Recourse Debt Minimum Gain is reduced n any t"�� year, such Partner shall be allocated items of income and gain for such a 45 z;{w,- STI:260811.16 i >� � r s 3 '� Vp ilt3� ,ta sm HInWt y CYE year (and, if necessary for subsequent years) in an amount equal to that sy Partner's share of such net decrease, determined with the exceptions r, and in the manner provided in applicable Treasury Regulations. fy�'t _ Vxs (vi) Non-Recourse Deductions; Non-Recourse Liabilities. Non-Recourse Deductions of the Partnership shall be allocated among the Partners 99.99% to the Limited Partner and 0.01% to the General Partner, � except as otherwise required by applicable Treasury Regulations. Allocation of non-recourse liabilities, to the extent made under f ,r applicable Treasury Regulations in accordance with a Partner's interest Y in profits, shall be allocated among the Partners 99.99% to the Limited Partner and 0.01% to the General Partner, except as otherwise required x�,r ffid Ti�yt by applicable Treasury Regulations. (vii) Treasury Regulations. The allocations provided for in this �k Sectors 10.04 are intended to comply with Treasury Regulations issued under Section 704 and related provisions of the Code and all determinations and adjustments provided fm hereunder shall be made under and in accordance with such Treasury Regulations. (viii) Offsetting Allocations. Certain of the allocations set forth in this Section 10.04 (the "Regulatory Allocations") are intended to comply with the requirements of the Treasury Regulations applicable to partnership allocations. It is the intent of the Partners that, to the extent " possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of �s Partnership income, gain, loss, or deduction pursuant to this Section 10.04. Therefore,notwithstanding any other provision of this M Section 10.04 (other than the Regulatory Allocations), the General Partner shall propose to the Limited Partner, for the Consent of the � 1 Limited Partner, such offsetting special allocations of Partnership income, gain, loss, or deduction in whatever manner it believes appropriate so that, after such offsetting allocations are made, each Partner's Capital Account balance is, to the extent possible, equal to the T t�h kxt, Capital Account balance such Partner would have had if the Regulatory Allocations were not part of this Agreement: and all Partnership items were allocated pursuant to Sections 10.04(a) and b , (d) Mid-Year Admission. For the purpose of allocating Partnership Partnership Losses, and Credits, (i) the Limited Partner shall be deemed to have been Witted as a Limited Partner on the first day of the calendar month in which it executes this x e1,ent,and (ii) Partnership Profits and Partnership Losses attributed to an Interest for 1 an'a full Fiscal Year shall he allocated among the Persons who were the holders of ,Merest during such Fiscal Year in proportion to the number of months during such r � eatthat each such holder was recognized as the owner thereof unless applicable ry a ` tVp , 11 46 16 .Iys: �sions of the Code and Treasury Regulations require a different treatment in which case location shall be made in accordance therewith, as reasonably determined by the y eralpartner. Such allocations among the holders of any such Intel est shall be made rre and to the date, amount or receipt of any distributions which may have been made oi �`Xpect to such Interest. (e) Disallowed Deductions. Notwithstanding the foregoing provisions of 4 x + is Section 10.04, in the event that any fees, interest or other amounts paid or payable to any # "error Affiliate thereof are deducted by the Partnership, and such fees, interest or other a ounts are disallowed as deductions to the Partnership and are recharacterized as ` utions, ther aiship dish e shall be allocated to such Pa mer,prior to the allocations hided for above, an amount of Partnership gross income for the year in which such fees, mnterestorotleramounts are aeated as Partnership distrioutions equal to such fees, interest ' other amounts so treated as distributions. Operating Deficits. If the General Partner makes Operating Deficit �,�.: rtal Contributions pursuant to Section 7.13, then losses or deductions other than apreciation deductions shall be allocated to the General Partner up to the aggregate amount MI-O'0perating Deficit Capital Contributions, prior to the allocation of losses or uetions other than depreciation deductions to the Limited Partner. If the General Partner fiubseguanYly rece ves distributions under Section 10.03(a)(i) on account of such Operating - '-1 °eficitCapital Contributions, then offsetting allocations of income from Partnership ations shall be made to the General Partner, but in no event shall such offsetting �ocat'ions exceed the amount of such distributions. ARTICLE I I - CHANGE OF GENERAL PARTNER �. 11.01 Rlith( rawal of General Partner. (a) No General Partner may withdraw from the Partnership or sell, transfer, r' rgn or hypothecate its Interest as General Partner and no member of the General Partner � � lalltragsfer, assign or hypothecate its interest in the General Partner unless (i) the prior ''�ent'of the Limited Partner is obtained and Consent of the Limited Partner as to the � on to be admitted as a General Partner in its place or to receive all or part of its Interest is obtained, (it) if the withdrawing General Partner is the sole General Partner of the y� nership, a substitute General Partner is admitted simultaneously with the withdrawal, and conditions of Section I1.01(c) and of Section 11.02 have been met. Because the ytq fhe Partnership fi-om an unauthorized withdrawal will be difficult to quantify, the Lrpdrawing General Partner shall be liable to the Partnership for liquidated damages equal _ heamount of the Development Fee in the case of a withdrawal in violation of this 5+, V � the event that. a General Partner withdraws from the Partnership or Ill ,transfers or assigns its entire Interest pursuant to Section 11.01(a), it shall be and shall liable for all obligations and liabilities incmTed by it as a General Partner before such sale, transfer or assignment shall have become effective, but shall be free of any 4 , e 47 sM;.81r.1a an��f- i �r liability incurred on account of the activities of the Partnership from and after Much Withdrawal, sale, transfer or assiSmment shall have become effective. may withdraw from the Partnership pursuant Before a General Partner ' Counsel to the Partnership shall have rendered an opinion that the 1(a) 11.O alo£such General Partner is in conformity with the Act, and that none of the w ill connection with such withdrawal will cause the termination or dissolution o 1" or will cause it to be classified other than as a partnership for Federal income s a'ses. q pZ pdtnission of a Substitute or Additional General Partner. w Apeison shall be admitted as an additional or substitute General Partner of the htp!onI if the following terms and conditions are satisfied: c i�' (a) The admission of such Person shall have received the Consent of the pa fi er, and shall have been consented to in writing by any remaining General andsuch admission does not violate any law, order or agreement by which the ership is bound or to which it is subject; r ` '(b) Such person shall have accepted and agreed in writmg to be bound by e terms and provisions of this Agreement by executing an amendment hereto and such etocurnents or instruments as may be required or appropriate in order to effect the �s�s5onof such Person as a General Partner, and a Certificate evidencing the admission of Bison as a General Partner shall have been filed for recordation and all other actions ¢edby,this Agreement in connection with such admission shall have been perforn ed; (c) If the successor or additional Person is a corporation, it shall have 0 artnership with evidence satisfactory to Counsel to the Partnership of its „ otttyto bccome a General Partner and to be bound by the teens and provisions of this ent;and (d) Counsel to the Partnership shall have rendered an opinion that the ton ofthe successor or additional Person is in conformity with the Act and that none eaeitohs taken in connection with the admission of the successor or additional Person a. '•� ds, the termination or dissolution of the Partnership or will cause it to be classified f � erttan as a parhiership for Federal income tax purposes. nliM, i ,I1 03 Removal of a General Partner.� "'lite Partner shall have the right to remove any General Partner after Notice to 'Mlral Partner specifying the grounds for removal given five (5)business days in ` ance of a proposed removal, in the event any of the following has occurred °r= (i) materia] unanticipated construction cost overruns or Operating Deficits <k�� . ", lasting more than one (1) year, excluding the perP,101 iod prior to projected sit c s 48 i t 6 fA� !Yr +d { ,, rent-up, unless funded by loans or other sources that do not materially and adversely affect the financial performance of the Project; ddy"� a material loan default not cured prior to the earlier of: (x) lapse of the applicable cure period with respect to such loan default, but not later than ninety (90) days after the giving of notice of default by the lender m or (y) if there is no applicable cure period, the giving of notice of as - default by the lender, unless in either case the lender acknowledges satisfactory progress toward curing such default, agrees not to take r further action without prior notice to the Limited Partner, and refrains from action until cure occurs; the conunencement of a foreclosure or exercise of control over the Project by a lender, or the filing of a bankruptcy petition or sunilar e creditor's action by or against the Partnership or the General Partner, except for any such action by a lender or creditor that is dismissed or stayed within sixty (60) days; 3t~n?k fraud, gross negligence or willful misconduct by the General Partner or rm material failure to comply with the General Partner's obligations under a +� this Agreement, including without limitation those obligations relating to rehabilitation and operation of the Project in compliance with the parr Project Documents and as necessary to achieve projected financial x performance; IDF; t 1 +y (v) a failure by the General Partner to remove the Management Agent or l the Accountant for mismanagement or failure to provide accurate and } 4 ' timely reports; material mismanagement of the Project or the Partnership; or any act or omission by the General Partner that substantially reduces tax benefits to, or substantially increases tax liabilities of, the Limited , j Partner. � lotwitlistanding the foregoing provisions to the contrary, if the General Partner bly-believes the grounds for removal are susceptible of cure and if the General R` ry IY 1 desires to attempt to cure the grounds for removal, the General Partner may so notify r muted artner by Notice given prior to the proposed effective date set forth in the p `� hTohce; The General Partner shall have until the twenty-fifth day following the ced effeClive date set forth in the removal Notice to cure the ground for removal and he Li uted Partner with satisfactory evidence of such cure. If such evidence is not ice' ed + pr f the cure is not completed within such period, then the removal shall be at,the to of the twenty-fifth day following the proposed effective date set forth in ,, �?goual Notice, R.� d ' eti16 49 F� ltsy`' Y N` +$ect of Bankruptcy, Death Withdrawal Dissolution v�1.04 )✓ , , Incompetence of Removal of a General Partner. an Event of Bankruptcy occurs with respect to a General Partner or in r f the withdrawal,removal; death, or dissolution of a General Partner or an clude,but not hat irsanity) the Uus less of the Partnership IralltUe olntinuredw th Partnership other r substitute General Partner(s), and such other General Partner(s), by ertyt. . " eattoo`bf this Agn cement, expressly so agree to continue the Uusiness of the Partnership; r ry ded?however, if the withdrawn, removed, bankrupt, deceased, dissolved or incompetent 4` patner is then the sole General Partner, the Partnership shall be dissolved; provided That the Limited Partner may, within ninety (90) days of the withdrawal, removal, aGQt 1ankruptcy, death, dissolution or adjudication of incompetence of the sole General er,'eject to reconstitute the Partnership, effective as of such withdrawal, removal, Event �n}adptcy, death, dissolution or adjudication and continue the business of the Partnership � 13cbalance of the tern specified in Section 1.05 by selecting a Substitute General Upon the occur ence of an Event of Bankruptcy with respect to or the m;dissolution oi adjudication of incompetency of a Person who is a General Partner, )tPersor shall immediately cease to act as a General Partner and any trustee or receiver adI nister its property and assets shall have only the rights to settle and manage s�osition of its Interest in accordance with the provisions of this Agreement; provided, ever•that such cessation or disposition shall not affect the rights, obligations, or rhhes'of the bankrupt, deceased, dissolved or incompetent General Partner which had tUred.prior to the Event of Bankruptcy, death, dissolution or incompetence of such '-,'air, artner or the value, if any, at the time of such Event of Bankruptcy, death, ol'ut'ron'or competence of the Interest of the bankrupt, deceased, dissolved or p6tt, ment Genera] Partner. (c) If, at the time of the withdrawal, Event of Bankruptcy, death, tionor adjudication of incompetence of a General Partner, the bankrupt, deceased, olued or incompetent General Partner was not the sole General Partner of the Partnership, eutatqutg General Partner or General Partners shall inmiediately (i) give Notice to the EmttedFarCner of such Event of Bankruptcy, death, dissolution or adjudication of mpetegce, (ii) make such amendments of this Agreement and execute and file for rdation the termination of the Interest of the bankrupt, deceased, dissolved or ' �petent General Partner, and (iii) file an appropriate amended Certificate. . 11,;05 Valuation and Sale of Interest of Former General Partner. (a) If the business of the Partnership is continued after a General Partner's nPtcy;death, dissolution, or adjudication of incompetence, the Partnership shall chase the former General Partners interest foi a price equal to the fair market value of ?tx erest. Such fair market value shall be determined by two independent appraisers, one d 50 ,.zeoatii:b6 f� by the former General Partner and one by the Limited Partner. If such appraisers are a agree on the value of the former General Partner's Interest, they shall jointly r tfiird independent appraiser. The determination of a majority of such appraisers final and binding. Each party shall pay the costs of its own appraiser and shall y wide the costs of the third appraiser, if necessary. 9t. (b) Promptly after determination of the fair market value of a former 1pflitner's Interest pursuant to Section 1 1.05(x), the Partnership shall pay to such eneraI Partner in cash an amount equal to 20% of such fair market value and shall to such former General Partner a promissory note for the balance payable in fora nsaautive annual installments commencing on the first anniversary of the date of Such rumissory note shall bear interest at the applicable Federal rate as flGte P ned'from tine to time under Section 1274(d) of the Code,payable annually on the atthe principal payment for such year is due and payable. Any such payment shall be bythe amount of any damages and any accrued unpaid liabilities due from the Ge eral Partner. t (c) If the Limited Partner removes a General Partner pursuant to on 11.03 and selects a new General Partner as a successor General Partner to the g ed,Genera] Partner, such successor General Partner shall purchase the Interest of the ve -General Partner at a purchase price equal to the fair market value thereof. Such Fair .� etvalue shall be determined in accordance with the appraisal provisions set forth in oid`1;05(a). paid in accordance with the terms of Such purchase price shall be A'05(b). . ARTICLE 12 -DISSOLUTION AND LIQUIDATION err 201 Dissolution of the Partnership, The Partnership shall be dissolved on the earlier of the expiration of tile, tern of the ershtp, or upon: (a) the withdrawal of a General Partner who is at that time the sole General t rss ,iftheLimited Partner does not elect to reconstitute the Partnership pursuant to 011:04(a); (b) the occurrence of an Event of Bankruptcy with respect to a General the death, adjudication of incompetency, or dissolution of a General Partner who is hmethe sole General Partner, if the Limited Partner does not elect to reconstitute the �7t Ap pursuant to Section 11.04(a); (c) the passage of thirty (30) days after the sale or other disposition of all tially all of the Partnership's assets; m ; •.. ' (d) the election in writing to dissolve by all of the Partners; or 51 Gl_ iV tr (e) any other event causing the dissolution of the Partnership under the Connnonweal th. 'L202 WindIng Upand Distribution. Upon the dissolution of the Partnership pursuant to Section 12.01, the ershlp business shall be wound up and its assets liquidated as provided in this . 0og 12,02, and the net proceeds of such liquidation shall be distributed in accordance rt x �ySection 10.02(c). A _ (b) The Liquidator shall file all certificates and notices of the dissolution of $ r ep ersIn required by law. The Liquidator shat] proceed without any unnecessary delay osellabd otherwise liquidate tue Partnership's property and assets, provided, however, that Liquidator shall determine that an innnediate sale of part or all of the Partnership a r r ,f W -eity would cause undue loss to the Partners, in order to avoid such loss, the Liquidator ay except to the extent prohibited by the Act, defer the liquidation of the Parfiership � roped3 for a reasonable time, except for such liquidation as may be necessary to satisfy the �bts and liabilities of the Partnership to Persons other than the Partners. Upon the complete � qurdation and distribution of the Partnership assets, the Partners shall cease to be Partners ,` QR fthe.Partnership and the Liquidator shall execute, acknowledge and cause to be filed all ny certificates and notices required by law to terminate the Partnership. ? (c) Upon the dissolution of the Partnership pursuant to Section 12.01, the �tccountants shall promptly prepare, and the Liquidator shall furnish to each Partner, a a tatement setting forth the assets and liabilities of the Partnership upon its dissolution. ' ut romptly following the complete liquidation and distribution of the Partnership property and *` t assets,the Accountants shall prepare, and the Liquidator shall furnish to each Partner, a z tement showing the manner in which the Partnership assets were liquidated and f distributed, ARTICLE 13 - BOOKS AND RECORDS, ACCOUNTING, TAX MATTERS rl i x , 13.01 Books and Records. ` The books, records and financial statements of the Partnership shall be maintained Ill r accordance with the accrual method of accounting prepared on an income tax basis. These r and all other records of the Partnership, including a copy of this Agreement and of all x' amendments thereto, copies of the Partnership's Federal, state and local tax returns for the s , longer of the six most recent ycars or the period required by law, information relating to the '� _� rstatus of the Project (including complete tenant files,both current and historic, and a na'intenance file for each dwelling unit in the Project), information with respect to the sale a the General Partner or any Affiliate of the General Partner of goods or services to the Partnership, a list of the names and addresses of all the Partners, and all other information ,required by the Act shall be kept at the principal office of the Partnership and shall be 1available for r examination by any Partner, or its duly authorized representatives, at any and all fV s! 52 �l n 260811.,G f s e ; y�if•:c 1 able times. Any Partner, or its duly authorized representatives, upon paying the costs uphcaI on and mailing, shall be entitled to a copy of the foregoing records. ,* -113.03 Custody of Partnership Funds; Bank Accounts. . - r k " �*� Except to the extent otherwise required by any Project Document, the General Partner rtners (includ ng all ves) in Mfr uiedoaa ouats estaUli ted atone( or mole tFederally linsu d financialdinstitut onstorganized d existing under the laws of the United States or any state thereof(provided that any such nt established at a financial institution with a credit rating for deposits of less than Baal Poor's Co ) y�Mhot exceedethe ranm otlt for which Federal deposit insurance is a nc. (oi equivalent rating by Stanardai able), TheGenleial I r yer.may make (or may designate others to make) deposits of Partnership funds in such u £ r, s 1Pcooun{s and withdrawals of such funds for Partnership costs and expenses. n `t )13.03 Accountants. a"The Accountants shall prepare for execution by the General Partner all tax returns of thePzrtnership, shall audit the books of the Partnership, and shall certify a balance sheet, a k�profitand loss statement and a cash flow statement of the Partnership each year. The Zlauted Partner shall have the right, by notice to the General Partner, to require the General �i� �partper to discharge the Accountants. If the General Partner fails to appoint successor ecountants acceptable to the Limited Partner within 30 days after the giving of such notice, y ..�ited Partner shall have the right to appoint Accountants of its own choosing, the fees M'bfwhich shall be paid for by the Partnership. t _'- 13.04 Repots to the Limited Partner. F (a) Tax Returns. The General Partner shall,not later than March I of `f eveiyyear beginning the first March I after the date of this Agreement, cause to be provided fglhe Limited Partner drafts of all necessary tax information, including a draft Schedule K-1, � ;requ re'dfor filing the annual tax return of the Partnership. The Limited Partner will respond -nth co nments on such drafts within seven (7) days after receipt. The General Partner shall, A �gotlater than March 15 of every year beginning the first March 15 after the date of this 1syk7+greement, cause to be filed and provided to the Limited Partner the annual tax return and cohipleted Schedule K-I of the Partnership,provided that if the Partnership has not received tn` �;krPart:IofFornr 8609 executed by MDFA by March 1 following the first year of the ` oaip]iance Period, the due date for the Pal hrership's tax return for such year shall be ter;= extended in accordance with applicable law. a (b) Annual Reports. The General Partner shall cause to be provided to the s blm ted partner not later than March 15 of every year, beginning tire first March 15 after the o£this A grCement, an annual report of the Partnership, including (i) a repot of the Accountants containing audited financial statements for the prior Fiscal Year, including a Pit ofrt_and loss statement', a balance sheet, a statement of Partner's equity, and a cash flow ?rtatemea together with a certification that the initial and ongoing leasing and verifications of k+ t rl'260BI] 53 A �,r ter' r a ; Igibility are in compliance with the applicable provisions of the Code and the ttons,I(ii) an unaudited comparison of the actual results of the operations of the Ip during the prior Fiscal Year with projections set forth in the Financial Forecasts, port,of the occupancy level of the Project, (iv) a statement indicating if there are any ht g Deficits or anticipated Operating Deficits, and if so, the manner in which it is ated ucI deficits will be funded, (v) a narrative explaining significant deviations ill ons of the Project from projected operations and out]ining and explaining any al dr significant occurrences affecting the Project or the Partnership, (vi) a report on �gof,NI6 Es in the development and operation of the Project, and (vii) any other pon regarding the Partnership and its operations during the prior Fiscal Year deemed e &neral Partner to be material to the Lin Partner or reasonably requested by the Paiuner. The General. Partner shall cause a draft of each annual report to be provided I ted Partner not later than March I and the Limited Partner will respond with gnts on such draft within seven (7) days after receipt. sTn " (c) Quarterly Reports. The General Partner shall cause to be electronically a << tted7inailed to the Limited Partner within thirty (30) days after the end of each quarter cach•1 Iscal Year, Ueginning with the quarter during which this Agreement is executed, erlyreports (in such formats established by MHIC's Asset Management Department) for qa9 er containing the following information: (i) unaudited income and expense brit for the Project, including a comparison with the operating budget and explanations �nignificant deviations of actual operations from budgeted or projected operations; a , audited balance sheet for the Partnership; (iii) unaudited rent roll for the Project 'fent collections, vacancies, physical occupancy and qualified Tax Credit occupancy; }unaudited accounts payable and receivable aging report; (v) statement of the amount of f&ervice and the debt service coverage (defined as the ratio of Gross Revenue less k �tEzpenses to Debt Service); (vi) leasing compliance certifications as described in on 113.04(e)(ii) below; and (vii)project data report setting forth the name of the General zrazlne 'the location of the Project, the number and mix of units, the types of support services l subsidies, if any, the status of construction, the actual or anticipated placed-in- late, the development costs for the Project, the amounts and types of Reserves and erompensation paid to the General Partner and its Affiliates. In addition to the foregoing, xb �Ih rd quarter report shall include an estimate of Tax Credits and tax losses for the current Year. id M , tt �' M �y� (d) Notices. The General Partner shall notify the Limited Partner of the ence of - any of the following within five (5) days after the General 'Partner learns of the ;atottiurence: 1 nim (i) a default by the Partnership under any Project Document, on any mortgage loan or on any other financial obligation of the Pa-ill ership . F1 IC, - _ (ii) a default by the General Partner on any of its financial obligations, (iii) a breach by the Partnership of any provision of Section 42 of the Code; 12f, , ' � `7ne z E � s r � 54 260811.16 W r�F3 F T a suspension or curtailment of any federal, state or local government h rent or Project subsidy; (v) receipt by the Partnership of a notice of any IRS proceeding involving ;,., .. the Partnership; (vi) receipt by the Partnership of an IRS Form 8823; x� . . ;(vii) a draw, call or demand for contribut on on the Genera] Partner's Operating Deficit Capital Contribution obligation under Section 7.13, or on any Operating Reserve, Lender Reserve, performance bond, letter of credit or completion guaranty; ,€1 (viii) a contemplated repayment or guaranty of any non-recourse obligation of the Partnership or a conversion of a non-recourse obligation of the " t Partnership to arecowse obligation; �t YU5 '. : ix material litigation involving the Partnership, the General Partner or the t u Project or receipt by the Partnership of a notice of alleged violation of y laws, building codes or zoning ordinances; or rk (x) a casualty affecting the Project that has an estimated cost of repair greater than $50,000. (xi) receipt by the Partnership of notice of audit findings or other written correspondence from the compliance monitoring agency for the LIHTC program so designated by DIICD (or other future administering agency as the case may be). Certifications. The General Partner shall deliver the following '. eahons to the Limited Partner by the dates indicated: (i) within 90 days after z ehon of construction, a certification by the General Partner (prepared by the a � r " dgia its) of the total development costs of the Project as well as the Partners eligible for Taz Credit pu poses; and (it) within 30 days after initial lease-up of the Project mg leases have been signed for 90% of the units in the Project) and within 30 days each quarter of each Fiscal Year, a certification by the General Partner in a ?slgi it by MHIC that the units in the Project have been]eased in accordance with mre rents of the Project Documents, the provisions of the Regulations applicable to all applicable federal, state and local laws and regulations, which certification mciudespeeific information on the income eligibility of tenants. Construction/Lease-Up Reports. The General Partner shall cause to be to}he Limited Partner within ten (10) days after the end of every month, beginning 'a o mopth of the date of this Agreement and ending with the nnonY]n in which one Percent (100%) of all the units in the Project are occupied, construction/lease-up ) epaiedby the General Partner or its consultant. Until such time that Certificates cf 55 ,,, aitp6 F f � t� G - SY upahcy have been obtained for one hundred percent (100%) of all the units in the Project, Jah iepo�s shall include the following information: (i)the construction schedule including eprojeeted date of completion, (ii) the percentage of completion of the Project, (iii) the y ,, e of the construction budget expended and remaining, (iv) the number of change tal t ders,'their uses, and their individual and cumulative costs, (v) any other information x garding the Partnership, the Project or its construction deemed by the General Pa brier to be s Penal to the Limited Partner or reasonably requested by the Limited Partner. After nuance of the first Certificate of Occupancy for a unit in the Project, such reports shall Pi,ude,tile following information: (i) a sanative description of leasing and marketing - � achvityl (in) the lease-up schedule including the projected date of full occupancy; (iii)the ',U6i of leases signed during the prior month and the total number of occupied units in the olect; (iv) an updated rent roll for the Project; and (v) copies of income verifications with �respect to the tenants who signed leases during the prior month (other than tenants of market- ' a(e ti its). to t& „. (g) Failure to Furnish Reports. If the General Partner fails to furnish melt'-airy report, notice, certification or other document required hereunder, the General � artner shall pay to the Limited Partner damages in the amount of$100 per day £or each day 6fdelay to compensate the Limited Partner for the administrative costs of such delay. Such amount shall be solely on account of the administrative inconvenience to the Limited ' �� artner and shall not be in lieu of any other damage suffered by the Limited Partner as a r ��' esu7t of the General Partner's failure to perform its duties under this Agreement. (h) Report Format. All reports and certifications furnished by the General ' �artner under this Section 13.04 shall be in forms and formats designated by the Investor ervices Agent. The Investor Services Agent may approve other forms and formats of orts and certifications in its sole discretion. 3.05 Ope-atineBudget. aR% The General Partner shall provide to the Limited Partner for review at]east sixty (60) j pays prior to the end of each Fiscal Year an annual budget showing cumulative quarterly AM rprerating incoformeeProject and expensesnand incl radii ngwing nscal Year preve preventive covering maintal enance expenditures and r3 ` Ju rCpl2cemcut plans. Such annual budget shall be subject to the Consent of tine Limited r s n(Pat}i er. It shall be deemed accepted by the Limited Partner unless the General Partner receives written notice to the contrary within thirty (30) days after such budget is provided to Limited Partner. k § 3.06 Tax Elections. rtsx � syn kF In the event of a transfer of all or any part of the Interest of a Partner, the General ti u art er may, in its reasonable discretion, pursuant to Sections 743 and 754 of tine Code, VIM, 'list the basis of the Partnership property. Except insofar as an election pursuant to A��Seghon 754 of the Code has been made with respect to the Interest of any Partner, the +detenir¢nation of Partnership Profits and Partnership Losses shall be made as provided for in a r�' 56 n x �0$r1;260811.v6 M e N l r yr�f �ti,respect to any Partner whose Interest has been affected by an election 74 of the Code, appropriate adjustments shall be made with respect to ". 5: ron`of Partnership Profits and Partnership Losses. Each Partner agrees to with all information necessary to give effect to such election. The eip :mayelect to make any other election permitted under any provision of the .the Consent of the Limited Partner. r fiscal Year. yscall ear of the Partnership shall be the twelve-month period ending ,X ARTICLE 14 - AMENDMENTS r� Proposal and Adoption of Amendments Generally. (a) ,,:-Amendments to this Agreement to reflect the addition or substitution of cr the designation of a successor General Partner, or the withdrawal of a eror achange in the partners of the Limited Partner as set forth in Exhibit D atabe'time and in the manner referred to in Section 14.02. Any other o this Agreement may be proposed: by the General Partner, which shall give Notice to the Limited Partner of(A) the text of such amendment, (B) a statement of the purpose of f such amendment, and (C) an opinion of counsel obtained by the General Partner to the effect that such amendment is permitted by the .Act, will not impair the limited liability of the Limited Partner and will a . A'not adversely affect the classification of the Partnership as a partnership k . for Federal income tax purposes; or (u) by the Limited Partner, which shall submit to the General Partner `(A) the text of such proposed amendment, (B) a statement of the purposes of such amendment and (C) an opinion of counsel acceptable to the General Partner to the effect that such amendment is permitted by the Act, will not impair the limited liability of the Limited Partner, and will not adversely affect the classification of the Partnership as a partnership for Federal incoinetax purposes. ��). •' Except as otherwise provided for with respect to amendments described 2 an amendment to this Agreement shall be adopted if(i) such amendment, nconsented to by the General Partner and (ii) the General Partner shall have onsent of the Limited Partner. he General Partner shall within a reasonable time after the adoption of It is Agreement make any official filings or publications required or 57 s t� "e6t such amendment including any required filing for recordation of any to It CCertificate. }Afiendments on Admission or Withdrawal of Partners. x� if this Agreement shall be amended as a result of substituting g an nerpursuant to Section 9.03, the amendment to this Agreement shall be signed graFPartner,by the Person(s) to be substituted, and by the assigning Limited otwithstanding the foregoing,the consent and signature of the Limited Partner required in connection with an amendment to this Agreement effectuating a tfie Ititerest of the Limited Partner pursuant to Section 6.04. (b) If this Agreement shall be amended to reflect the designation of an or successor General Partner, such amendment shall be, signed by the General d;1y''Such additional or successor General Partner, and by the Limited Partner. (c) If this Agreement shall be amended to reflect the withdrawal of the .. artnerand the business of the Partnership is continued, such amendment shall be thewithdrawing General Partner, the remaining or successor General Partner and `��' r PBrhrer. M IY r ARTICLE 15 - CONSENTS AND VOTING - rQ1''Method of Giving Consent. n:s yconsent or approval required by this Agreement may be given by a written t# vei ,by the applicable Partner(s) and received by the General Partner at or prior to Iefthe'act or thing for which the consent is solicited,provided that such consent au'Vgbeen nullified Uy notice to the General Partner of such nullification by the .Fart er(s) prior to the doing of any act or thing. Submissions to Limited Partner. eGeneta] Partner shall give the Limited Partner Notice of any proposal or other g °' a red Uy any provision of this Agreement to be submitted for consideration and L;° of the Limited Partner. Such Notice shall include any information required by the t'r provision. Snfonnation it Meetings. ear ri ted partner shall have the r ht to -equire, b Notice to the General Parfier, � F v eneral Partner meet for informational purposes with the Limited Partner at the e General Partner. Any such request shall specify in reasonable detail the matters ' rdered or discussed at such meeting. a � s . 58 ARTICLE 16 - GENERAL PROVISIONS r. TM` 16.01 Burden and Benefit. ,The covenants and agreements contained herein sliall Ue binding upon and inure to ' rators, successors and assigns of the respective enefit of the heirs, executors, administ hereto. r 16.02 APP licable Law. - :This Agreement shall be construed and enforced in accordance with the laws of enwealth of Massachusetts. fi5a t, 16.03 Pronouns and Plurals. x , 'All pronouns used herein shall be deemed to refer to the masculine, feminine, neuter, g- gulai or plural as the identity of the Pelson or Persons may require in the context, and the W415Sronouns and verbs shall include the plural, and vice versa, gularform of nouns, p 'r�fiicl everthe context may require. .16.04 Counterparts. n Fx�e �a .:This Agreement may be executed in several counterparts, each of which shall r dl��tanstttute one ag Bement binding on all parties hereto, notwithstanding that all the parties hall not have signed the same counterpart. 16.05 Separability of Provisions. } Each provision of this Agreement shall be considered separable and if for any reason anyprovision which is not essential to the effectuation of the basic purposes of the 'Agreement is determined to be invalid and contrary to any existing or future law, such I,v : . srtnandity shall not in the operation of or affect those provisions of this Agreement that E mate"validun . l P— r , 96.06 Entire Agreement. is ith Ari mended by al part est tUa anintegrat on of, with the la 1)tof t]e pronnsestoag esements,andnd is k erstandings among the parties hereto with respect to the subject matter hereof. r. •.16.07 Arbitration. arbi ration she n pui I n Id inlBoston, Vlass e event osachusetf any �tinaccordance1tiiothlis Ch pter251 ofthelMassachusettsGleneral I Laws,as aended from time to time, and the then commercial arbit anon miles of the m u 'r� ancan Arbitration Association. The award of the arbitrator shall be enforceable by a yqrt df conlpetentjurisdictioil, but such arbitrator shall have no power beyond those given €max n III r 59 i z�oan�e eeyrent of the parties (subject to the provisions of this Agreement) at the time a >:" rifted for arbitration. s,sprI T rµ` gquitable Remedies. f= 'tach Partner shall, in addition to rights provided herein or as may be provided wxler h' law,be entitled to all equitable remedies, including those of specific performance to enforce its rights hereunder.. elunctin n, ? T6'. 6; Creditors. ' Tone of the provisions of this Agreement shall be for the benefit of or enforceable by r ycreditor of any Partner or of the Partnership. k,16'10 Publicity. q � .; 'The'Genera]Partner shall (i) provide at the site of the Project from the " 3ence1nent of construction work until substantial occupancy, a sign satisfactory to the meted partner and in accordance with applicable law identifying the Limited Parbrer as a 40 of"fag for the Project; (ii) make appropriate reference to the Limited Partner as a offending in all publicity relating to the Project during the tem-i of the Partnership; } rouide to the Limited Partner photographs,renderings, slides and any other available }roducible image of the Project and any brochures prepared with respect to the Project or Sponsor and (iv) consult with the Limited Partner regarding any publicity for the Project '!'as-'groundbreakings, marketing events and announcements. S - �x'141P§G' 1 4M1 ��� � 6 t r � ti_ ''�P12bp811.v6 k j �i� 4a < r . Y SS WHEREOF,the parties hereto have executed and delivered this First ded and Restated Agreement of Limited Partnership under seal as of the I" day of July, ea ; , GENERAL PARTNER: - POAI-I SALEM HEIGHTS, LLC '§off By: PRESERVATION OF AFFORDABLE HOUSINGf INC., its sole member 631 t 3 7 Qrn$ S. Anthony,President LIMITED PARTNER: z { MASSACHUSETTS HOUSING EQUITY z# � FUND 2002 LLC By: SAC USETTS HOUSING EQUITY F D, C., its Manager�� }1�2rp s w z By. Chan, Senior Investment P` Officer i �iy3f� L INITIAL LIMITED PARTNER WITHDRAWAL t�µi11�i 5k �r Simultaneously with the admission of the Limited Partner into the Partnership, the l { Y �rt �� ;�„Iwftal-Limited Partner hereby withdraws from the Partnership. E Jful`,yl 4 tl W HOUSING INVESTMENTS, INC. t 1 k w By, t r_ t r' Title: k r %6"! ".'u PZ. `G L ' Y 3 IiMRC. r' M L 61 STI.260R11 "6 H— N T t EXHIBIT A ADDRESSES AND CAPITAL CONTRIBUTIONS OF THE PARTNERS a a PARTNER Capital Contribution $100 Salem Heights, LLC Nrfife eseryation of Affordable Housing, Inc., 40 Court „ nflIvlassachusetts 02108 >s J Z� z PARTNER .° $7,342,534 esusetts Housing Egwty Fund 2002 LLC a ,_ - .ONfassachusetts Housing ri vestment Corporat on t v F ppQdaeral`Street u' gw'bfl,Massachusetts 02110 �e yrs Total Capital Contributions $7,342,634 yy4�YY Y b 1 �S f Y E4` gg p.j+ a �`�� 5 { w§?^3 �r f 62 138ZI 260811.16 t V ta6 x Ea: s Y ' EXHIBIT B LEGAL DESCRIPTION 5 Nf � i X13 s R s ti XdN� ?v CT • �y� j S ^°� y { Tp� i at ; i t 1 fi��� gess tt i 3 S4 t JI {HI1 v6 63 t }f � 4�^ 3f{t +� fJ�lll llU� Ilk. 4r (Legal Description of Property) �it r ' Derain parcel of land situated in the City of Salem, County of Essex, Commonwealth M � Massachusetts; bounded and described as follows: E� t � � �tsa���$e �nng at a point at the intersection of the easterly sideline of Proctor Street and the g r� 4 � g�xarly sideline of Pope Street; kr auk �,Thence running along said southerly sideline of Pope Street N 56° 56' 4S'E, a distance f r >z fri yjoaehnndred twenty-seven and 151100 (127.15) feet to a point; ` r Whence ming and running again along said southerly sideline at Pope Street N 42° 03' a'distancc of thirty-eight and 00/100 (38.00) feet to the TRUE POINT OF BEGINNING. R Thence running along the said southerly sideline of Pope Street by two courses: 03' 45"E, a distance of three hundred and seventeen and 07/100 (317.07) feet; `s`j�iy v LM ° K 18 18' 45" E, a distance of three and 97/100 (3.97) feet to a point; .. Thence turning and running S 64° 30' 00"E, a distance of twelve and 25/100 (12.25) feet h �`thence fuming and running N 52° 06' 18"E, a distance of sixty and 00/100 (60.00) feet NOft nThence Cumin and runnin N 78° 04' 08" E, a distance of thirtyeight and 90/100 5 'r g ,�' g)f,etto a point; �a„ter �afhehce turn ng and running S 43° 25' 58”E, a distance of one hundred four and 851100 4 3b48S)feet to a point; Thence running on a curve to the right having a radius of two hundred eighty five and (285.00) feet an arc distance of one hundred five and 00/100 (105.00) feet to a point; Theocc turning and running S 57°40' 46"W, a distance of twenty six and 50/100 (26.50) h }fir '�apoint; . hence turning and running S 07° 03' 14"E, a distance of two hundred sixty-six and 266.00)feet to a point y; ence turning and running S 06° 35' 14" E, a distance of one hundred fifty-four and a {154.50) feet to a point; �F. a 1, �., ,•^�1'hance fuming and running on S OS° 41' 14"E, a distance of one hundred thirty and feet to a point; y " It�'hence taming and Hanning N 84° 50' 00" W, a distance of five hundred eighty and 1pp4(580:54) feet to a point at land now or formerly of Auger; ce turning and running along said land now or formerly of Auger N 16° 18' 17" E, a ± e of n nety-five and 07/100(95.07) feet to a point; * Whence fuming and running again along said land now or formerly of Auger N 76° 23' 0-6-' stance of one hundred and 00/1.00 (100.00) feet to a point on the easterly sideline of , �„� torStreet; Thence hum ng and running along said easterly sideline of Proctor Street N 150 05' 02" ,yt�, �#instance of eighty-three and 35/100 (8335) feet to a point; Thence tun ng and running S 76° 23' 06" E, a distance of one hundred nine and 50/100 SO)feet to a point; kf Whence tun ng and running N 68° 24' 34" E, a distance of sixteen and 70/100 (16.70) > r' Thence tam ng and running N 53°26' 11" E, a distance of fifty-two and 20/100 (52.20) +LL, Thence.tum ng and running N 27° 51' 01"E, a distance of sixty-four and 50/100 (64.50) a oint; ence fuming and running N 37° 35' 26" W, a distance of forty-two and 40/100 (42.40) ax rU�„_ n Thence turning and running N 55° 24' 34"E, a distance of twenty-seven and 20/100 D}�feef to a point, 1 Thence hum ng and runn ng N 77° 15' 30"E, a distance of eleven and 03/100 (11.03) feet `e t 3lnence fuming and running N 34° 18' 14" W, a distance of ninety-six and 13/100 (96.13) 4he TR UE POINT OF BEGINNING. iRiumg 284,341 sq. ft., more or less. �h } aid'parcel is shown on a plan entitled"Topographic Plan of Land in Salem,Mass., scale i$" March 1972" and Property Lines added October 2, 1972, by New England 3envnce,Inc., Civil Engineers and Land Surveyors. tii ra �r Nt S �4 > XHTBIT C � P . FINANCIAL FORECASTS tS � r r a a x c'�4 i17zuJ ",: �>F Syf�JJ �".Mu z �Ftl s•.- "c s Y 14— -r : ,,�8 a 4- **'� e`2ESn v F{ � Axw yy'"PF9 C � 'rb FFF fir. ' 64 �W81I.v6 T EXHIBIT D MEMBERS OF THE LIMITED PARTNER r - ? Street Bank and Trust Company t sWA ��,t� Safe Deposit and Trust Company �goston National Bank � �g�deral Home Loan Mortgage Corporation Nc , r11 1rvate Bank Trust Company ,Foston P mdGieiis Bank ��tk�fi�p 4S5b as T ,Fastem Bank �fompass Bank for Savings Massachusetts Bank,N.A. anme Mae (_ Banknorth,N.A. "Four Eighty-One Corp. ` a an of Western Massachusetts r Flagship Bank & Trust Company n p mid P v;.�g,,H,x frvr tAn,�.�tljdl+. Umf pWJ� ea Y tl } . 65 F_�mq'iw; x �,ST116081 LvG M g .. CERTIFICATE OF FORMATION OF POAH SALEM HEIGHTS,LLC This Certificate of Formation of POAH Salem Heights,LLC(the"Company"),dated February 2003, is being duly executed and filed by Preservation of Affordable Housing Inc.as an authorized person,to form a limited liability company under the Delaware Limited Liability Company Act(6 Del.C.§18-101,et seq.). FIRST. The name of the Company is: POAH Salem Heights, LLC. SECOND. The address of the registered office of the Company is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,Wilmington, County of New Castle,Delaware 19801. The • Company's registered agent at that address is The Corporation Trust Company. THIRD. The purposes of the Company are to conduct any lawful business or activity as allowed to limited liability companies under the Delaware Limited Liability Company Act, FOURTH. The Company is to have perpetual existence, unless sooner dissolved by agreement of the Members or by operation of law. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation as of the date first written above. Authorized Person Prrvation of Affo able Housing Inc., Member /s/Am S.Anthon Amy S. Anthony,President • State of Delaware Secretary of State Division of Corporations • Delivered 08:00 AM 05/23/2006 FILED 08.00 AM 05/23/2006 STATE OF DELAWARE SRV 060993082 - 3623159 FILE CERTIFICATE OF AMENDMENT 1, Name of Limited Liability Company: POAli Salem Heights, LLC. 2. The Certificate of Fonnation of the limited liability company is hereby amended as follows: Article Second is hereby deleted in its entirety and replaced with the following: "SECOND: The address of the registered office of the Company in Delaware is Registered Agent Solutions, Inc., 32 Loockerman Square, Suite 109, City of Dover, County of Kent, Delaware 19904. The name and address of the registered agent of the limited liability company required to be maintained by Section 18- 104 of the Delaware Limited Liability Company Act are: Registered Agent Solutions, Inc„ 32 Loockerman Square, Suite 109, Dover, Comity of Kent, Delaware 19904." IN WITNESS WHEREOF, the undersigned has executed this Certificate on the 17`h day of May,2006. • Preservation of Affordable Housing, Inc., sole membe manager BY: 0 NAME: Amy S. An Cony, President • OPERATING AGREEMENT OF POAH SALEM HEIGHTS,LLC This Operating Agreement (this "Agreement") is entered into as of February �0, 2003 by and between POAH Salem Heights, LLC (the "Company") and Preservation of Affordable Housing, Inc.,an Illinois nonprofit corporation (the"Corporation"), as the initial Member of the Company. The Company has been formed as a limited liability company under the Delaware -Limited Liability Company Act, G Del-C. B-101, et seq., as amended from time to time (the "Act'),in accordance with the terms and subject to the conditions set froth in this Agreement. NOW, THEREFORE, for good and valuable consideration. the Company and the Corporation, intending legally to be bound,agree as follows: ARTICLE 1 DEFINITIONS The following capitalized terms shall have the meaning specified in this Article I. Other terms defined throughout this Agreement have the meanings respectively ascribed to them. • "Member" means each Person signing this Agreement and any Person who subsequently is admitted as a member of the Company in accordance with the Act. "Penson" means and includes an individual,corporation, partnership, association. limited liability company,trust,estate nr other entity. ARTICLE 2 ORGANIZATION AND OPERATIONS 2.1 Name of the Company. The name of the Company shall be "POAH Sulem Heights, LLC." The Company may do business under that name and under any other name or names upon which a majority of the Members agree. If the Company dues business under a name other than that set forth in its Certificate of Formation,the Company shall file a trade name or doing business certificate or any other documents as required by applicable law. 22 Purpose, The Company is organized to acquire, own, lease, improve, maintain. operate, hold for investment, sell,and otherwise deal in and with real estate and any other assets and to engage in any lawful activity for which a limited liability company may be formed under the laws of Delaware. 2.3 Powers. The Company shall have all of the powers necessary or convenient to the conduct, promotion or attainment of the business, trade, profession, purposes or activities of the Company, including, without limitation, all of the power of an individual, partnership, corporation or other entity under Delaware law. 2.4 Term. The term of the Company began upon the filing of the Certificate of Formation with the Secretary of State of the Slate of Delaware and shall continue until terminated pursuant to the Act. 2.5 Registered Office and Registered Agent in Delaware. The registered office of the Company in the State of Delaware shall be c/o The Corporation Trust Company,Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle, or at any other place within the Stute of Delaware upon which the Members agree. The name and address of the Company's resident agent in the State of Delaware shall be The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,Wilmington, Delaware 19801, County of New Castle, _ 2.6 Principal Office. The Company's principal office shall be at 153 Milk Street, Boston,MA 02109 or at any other place within or without the Commonwealth of Massachusetts upon which the Members agree. 2.7 Management of the Company. The initial Member is authorized to manage the business and affairs of the Company and to take all actions and execute all documents on behalf of the Company. No person dealing with the initial Member need inquire into the validity or propriety of any document or insrniment executed in the name of the Company by it or as to its authority in executing the same. • ARTICLE 3 . CAPITAL CONTRIBUTIONS 3.1 Initial Capital Contributions. The Members shall from time to time make capital contributions to the Company in such amounts as they shall agree. ARTICLE 4 DISTRIBUTIONS 4.1 Distributions. The Members may cause the Company to distribute its assets to the Members in such amounts and at such times as the Members may agree,subject only to the provisions of the Act. ARTICLE 5 LIABILITY AND INDEMNIFICATION 5.1 Limitation of Liability. Members shall not be liable,responsible mael'ntmtable, in damages or otherwise, to other Members or to the Company for any act performed by them with respect to Company matters,except with respect to any matter as to which a Member shall have been adjudicated in any proceeding(i)to have breached a duty of loyalty to the Company . or its Members or(ii)to have engaged in fraud, willful misconduct or gross negligence. No Member shall be obligated personally for any debt,obligation or liability of the Company or of any other Member,whether arising in contract, tort or otherwise,solely by reason of being or acting as a Member of the Company. • 2 5.2 Indemnification. The Company shall indemnify,defend and save harmless each Member for any act performed by the Member with respect to Company matters(including, without limitation,any and all losses,costs,damages,fees,claims,liabilities and expenses) _ incurred by reason of(a)its status as a Member of the Company,(it)any act performed in good faith within the scope of the authority conferred by this Agreement,(iii)any failure or refusal to perform any acts except those required by the terms of this Agreement or(iv)any performance or omission to perform any acts based upon reasonable good faith reliance on the advice of accountants or legal counsel for the Company,except with respect to any matter as to which he or she shall have been adjudicated in any proceeding(i)to have breached a duty of loyalty to the Company or its Members or(ii)to have engaged ir,fraud,willful misconduct or gross negligence. Except as limited by law,expenses incurred by a Member in defending any proceeding,including but not limited to a proceeding by or in the right of the Company,shall be paid by the Company to the Member in advance of final disposition of the proceeding upon receipt of its written undertaking to pay such amount if the Member or Officer is adjudicated to be ineligible for indemnification, which undertaking need not be secured. The provisions of this Section shall not be construed to limit the power of the Company to indemnify its Members,officers,employees or agents to the full extent permitted by law or to enter into specific agreements,commitments or arrangements for indemnification permitted by law. Nothing provided in or omitted from this Section shall have the effect of limiting any right of indemnification existing independently of this Section. 5.3 Insurance. The Company shall have power to purchase and maintain insurance • on behalf of any Member,officer,agent or employee against any liability or cost incurred by such person in any such capacity or arising out of its status as such, whether or not the Company would have power to indemnify against such liability or cost. ARTICLE 6 GENERAL 6.1 Assurances, Each Member shall execute all certificates and other documents and shall do all such filing,recording,publishing and other acts as the Members deem appropriate to comply with the requirements of law for the formation and operation of the Company and to comply with any laws, rules and regulations relating to the acquisition, operation or holding of the property of the Company. 6.2 Complete Agreement. This Agreement constitutes the complete and exclusive statement of the agreement among the Company and the Members. It supersedes all prior written and oral statements, including any prior representation, statement,condition or warranty. Except as expressly provided otherwise herein,this Agreement may not be amended without the written consent of the Members. 6.3 Applicable Law. All questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal law, not the law of conflicts, of the State of Delaware. 3 6.4 Section Titles. The headings herein are inserted as a matter of convenience only and do not define, limit or describe the scope of this Agreement or the intent of the provisions hereof. 6.5 Binding Provisions. This Agreement is binding upon, and inures to the benefit of, the parties hereto and their respective heirs, executors, administrators, personal and legal representatives,successors and permitted assigns. 6.6 Jurisdiction and Venue. Any suit involving any dispute or matter arising under this Agreement may only be brought in the United States District Court for the District of Massachusetts or any court of the Commonwealth of Massachusetts having jurisdiction over the subject matter of the dispute or matter. All Members hereby consent to the exercise of personal Jurisdiction by any such court with respect to any such proceeding. 6.7 Terms. Common nouns and pronouns shall be deemed to refer to the masculine. feminine,neuter.singular and plural,as the identity of the Person may in the context require. 6.8 Separability of Provisions. Each provision of this Agreement shall be considered separable and if, for any reason,any provision or provisions herein are determined to be invalid and contrary to any existing or future law, such invelidiry shall not impair the operntlon of or affect those portions of this Agreement which are valid. 6.9 Counterparts. This Agreement may be executed simultaneously in two or more • counterparts, each of which shall be deemed an original and all of which, when taken together. constitute one and the some document. The signauue of any party to any counterpart shall be deemed a signature to, and may be appended to,any other counterpart. 4 IN WITNESS WHEREOF,this Operating Agreement is executed the C day or February,2003. POAH SALEM HEIGHTS,LLC By: Its Sole Member Preservation of Affordable Housing,Inc. Am Antho y,President INITIAL MEMBER Preservation of Affordable Housing, Inc. t Amy An horsy.President 5 • JO Ij 19 913 0 Tilt Number 6004-291-8 tc nif Officc of T III �&Clrcttlrll of �5tatc -11111 Cr cas ARTICLES OF INCORPORATION OF NEE PROPERTIES, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED IN THE OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE GENERAL NOT FOR PROFIT CORPORATION ACT OF ILLINOIS, IN FORCE JANUPRY 1, A.D. 1987 - • Now Therefore, 1, George H. Ryan, Secretary of State of the State of Illinois, by virtue of the powers vested in me by law, do hereby issue this certificate and attach hereto a copy of the Application of the aforesaid corporation. III It W111101111 111-111MOf, I hereto set my hand and cause to be affixed the Great Seal of the State of Illinois, S Aria at the City of Springfield, this ISTH vday of JULY A.D. 19 gs and of the Independence of the Onited States the two 0 hundred and 23RD 4 SCU6Cdl -V ot std!t�. NFP-102.10 ARTICLES OF INCORPOF. ION 00 Nor (Rev- Jan. 1995) -- — :°f�di e1Vf�Pff�'I� , Payment ent must be made by Cer-,ifired U x, Cishi ,Check,Illinois A�orne, sCha k i , �s "'ling Fi, C P A.s Check cr Money Order,payable tc Sic- relarvcfState.' AJRro"ed DO NOT SEND CASHI TO: GEORGE H. RYAN, Secretary of State Pursuant to the provisions of'The General Not=or Profit Corporation Ac(of 1986,-the undersigned incorpora?or(sh hereby adopt the following Articles of Incorporation. Article 1. The name of the corporation is: N E F P r o D e r t i e s inc . _ Article 2: The name and address of the initial registered agent and registered office are. Reotstered Aaent W i I I h a m E . PaDal First Name Middle Name Last Name Registered Office 547 W . Jackson Boulevard..—Spice 601 Number Street (Do No:Use P.O. Sex) Chicago IL 50661 Cook City Zip Code County Article 3: The first Board of Directors shall be c h r e e in number, their names and residential addresses being as follows: t (Not less than three) Address Director's Names Number Street City State _ Georga_ Latimer 1600 Grand Avenue Sr . ?au 1. Minnesota Hecberc E . Morse 18 Porters Cove Road Hingham Massachusetts David Scartiey 3r,2L Zenith Avenue .,curl; Mi.n n a_a uol is 4ir•nesoca Article 4. The purposes for which the corporation is organized are: see A.ttac":mens EX PE D IT E L Ju ) EI LEV SECRETARY OF NATE UL i r 1998 Is i.nL comm a fin;? ., r e Crjrrla imt. { uo-v'Ir GEORGE H_ RYAN ❑Ys I_�No (C.7e, k orret 5E RETnRY ,c 'TATO is itis co 'C ation 3 .',Cj ce< on ^ c v r Revenue Code of hsSa L-1 Yes t;;C N:, (i"nezk is This a which administers a cornu^,on-interest c>mmuniry as definer!n h subsec!ion (c) of Section 9-102 of the code of Civil Prccedure7 ❑Yes �jiNo Article S Other prcvi<_ions (please use seCarate page): S_< A ... Ariirie. 6. N ES & ADDRESSES OF INCORPORATC The undersigned incorporator(s)hereby declare(s), under penalties of per;ury, that the statements made i, .' the foregoing Articles of incorporation are true. Oated Juts 14 . 1998 SND NAMES POST OFFICE ADDRESS 1_ 1, 55 EC Cion t r.,c Street Ca y'_e 'u' . CraC }:r_ chicsgo , : L 6u603 Name (please print} City/Town State 7J 2. 2, Signature Street Name(please print) City/Town State Zip 3. 3. Signature Street Name(please print) City/Town State Zip 4. 4. Signature Street Name ipiease print) CityrTown State Zip S. 5. Signature Street Name(please print) Cityrrown State Zip (Signatures must be in BLACK INK on anginal document.Carbon copy,xeroxor rubberstamp signatures may only be used on the true copy.) o it a corporation acts as incorporator,the name of the corporation and the stale of incorporation shall be shown and the execution shall be by its President or Vice-President and verified by him, and attested by its Secretary or an Assistant Secretary. • ' e The registered agent cannot be the corporation itself. The registered agent maybe a:�individual,resident in this State,or a domestic or foreign corporation.authorized to act as a registered agent. - The registered office may be, but need not be. the same as its pircipal office. A corporationwhich is to function as a club,as defined in Section,1-3.24 of the'Liquor Control Act°of 1934,must insert n its purpose clause a statement that it will comply with the State and local laws and ordinances relating to alcoholic liquors. FOR INSERTS—USE WHITE PAPER—SIZE 8 1/2 x 11 rn r tL U u 2 n o O LL W Wz O ± n cry m 1 � � m 0 2 [[ U +L N N ro cv <v 0- o- c) w5: 0 W v o C) O z u.. zC� z T V C) q o nz7 CL V Li -2 v m u z OCC Q W S z f j l W u W W = g W 4j t iJ uj {n H UO X W zC cc 4 n n m w I ir�l yL 4tt_Y ! <�It ATTACHMENT TO ARTICLES OF INCORPORATION UNDER THE GENERAL NOT FOR PROFIT CORPORATION ACT FOR NEF PROPERTIES, INC. Article 4. The purposes for which the corporation is organized are: Charitable, including (1) the relief of the poor and distressed or of the underprivileged, (2) the promotion of social welfare by lessening neighborhood tensions, eliminating prejudice and discrimination, or combatting community deterioration and (3) the lessening of the burden of government. Exclusively for such purposes, as permitted under Section 501 (cl(3) of the Internal Revenue Code of 1986, as amended (the "Code"), including, but not limited to, the receipt of funds and the disbursement and donation of said funds to the United States, any state, territory, or any political subdivision thereof, or the District of Columbia, for exclusively public purposes, or to corporations, trusts or community chests, funds or foundations, organized and operated exclusively for religious, • charitable, eleemosynary, scientific, literary or educational purposes, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation. To engage in any and all activities necessary or appropriate and m furtherance of the foregoing. Article 5- Other provisions: The corporation shall have all 'powers that might now or hereafter be lawful for the corporation to exercise under and in pursuance of the General Not For Profit Corporation Act of the State of Illinois, or any act amendatory thereof or supplemental thereto that may now or hereafter he enforced, to effect any all of the purposes for which the corporation is formed, including, without limitation, the power to acquire_ rehabilitate, construct own._ manage, rent, operate, or diose of properties providing decent, safe and affordable housing fnr low-incorne persons and families: to mak egu+t„Y investm_an<s and;or lend ft,inds 'n conjunction with the development of such properties, and to monitor and administer such investments and loans; to attract and manane cooled • �_S�i i e4 Hty • equity investments in such properties and other investments and loans related or conducive thereto, including without limitation, to farm partnerships in which the corporation serves as managing partner and limited liability companies in which the corporation is the managing member; and, in general, in connection with or ancillary to the foregoing, to engage in any other lawful activities whatsoever that are necessary, incident, or convenient to the carrying on of such activities or are intended to promote,directly or indirectly, the interest of the corporation. The net earnings of the corporation shall be exclusively devoted to charitable purposes and shall not inure to the benefit of, or be distributable to, its members,directors, officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth herein. No substantial part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation shall not participate or intervene (including by the publishing or distribution of statements) in any political campaign on behalf of any candidate for public office. Notwithstanding any other provision of these articles in the event the corporation is classified as an organization exempt from federal income tax pursuant to Section 501 (c)(3) of the Internal Revenue Code of 1986, as amended • from time to time (the "Code"), the Corporation shall not carry on any other activities not permitted to be carried on by a corporation exempt from federal income tax under Section 501(cl(3) of the Code. Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of Section 501 (c)(3) of the Code, or shall be distributed to the federal goverrunent, or to a state or local government, for a public purpose. Any such assets not so disposed of shall be disposed of by a court of competent jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such org. Jzat;on or organizations, as said court shall determine, which are organized and operated exclusively for such purposes. }-�N -2 • NFP-110.30 File t: (Rev. Jan 1999) JESSE WHITE Secretary of State This Space For Use By Submit in Duplicate State of Illinois Secretary of State Remit payment in check or none, Date order,payable ;o "Secretary of ARTICLES OF AMENDMENT Srate.' underthe Filing Fee $25.CG i GENERAL NOT FOR PROFIT GO NO SEND CAS?i' CORPORATION ACT Approved Pursuant to the provisions of"The General Not For Profit Corporation Act of 1988," the undersigned corporation hereby adopts these Articles of Amendment to its Articles of Incorporation. r ! ARTICLE ONE The name of the corporation is N r%'-1 ?r"2PC'rT't2S 71- r. (Note >) ARTICLE TWO The following amendment to the;lrtides of Incorporation was adopted on 101 /, a,00 jldcnth&Oay, �`�'i ill time manner indicated below ('x"one box only.) (vear,l ,�m LJ By the affirmative vote of a majority of the directors in office, at a meeting of the board of directors, in accordance with Section 110.15. (Note %) —�� By written consent, signed by al!the directors in office. in compliance voth Sections 110.15 and 108.45 of this Act. (Arote 3) ❑ By the members at a meeting of members entitled to vote by the affirmative vote of • the members having not less than the minimum number of votes necessary to adopt such amendment, as provided by this Act, the articles of incorporation or the :^,ylaws, in accordance wish Section 11020. (N(re v) I `— By written consent signed by members entitled to vote having not less than the minimum number of votes necessary to adopt such amendment, as provided by this Act, the articles of incorporation,or the bylaws, in compliance with Sections 107.10 and 110.20 of this Act. (Note 5) Chnoge of Corporate Name V01 That the Ancic. of lncomo--.ron of the Clm-poratir n be. amended -.a as in -.,t .nvc the name o,tha Corul?raticn Tc Prescrat:nn ofAiiordab;e. Houstn& Inc, and Gnat the Yresiden! or V1,C President and Src e+, of -Assistant Secrer.,r ::rc author.zcd and directeu Io arenar_, execute znd file with the �ecreianof Stat, ca Illinois An=cics of Anicrdmem to rhe Amcies of IncorfxwraLion of Tile Caypoiat on in such fore as reticctc and mak+_s effcctin'e. said cnangc. • (If space is insufficient• attach additional pages size 8 112 x 11) The undersigned corporation has caused these articles to be signed by its du y aumonzed officers. each of vrtLrn affirm,under penalties of perjury, that the facts stated herein arrne. ,t ue, (All signatures must be in BLACK INK.) Dated {{Mon1h $Gny! (Year) _ '(Exact a e N orp,¢rati ) attested by F h l-,/ til!r t ' "ra r'-:y,�— by / / f?c�, /t f ft.Li' Srqn iture of Secretary o'Agarmont, ra erv) i`S mature i Presid it r Vice Pr siden; Y.lali"' 1 c« Gccrnc-1 64 •h a.� 41 ( ype or Print tVaire d Tifle) r _ pe or Print Name an r -rtle) in CG.1Cr+'u� NOTES AND INSTRUCTIONS NOTE 1! State the true exact ;,.,. _rate name as lf appears on the rccprd< f rile 'Oxo of!ho Sticiemrlo' Late. BEFORE any amendments herein reuoned. NOTE 2: Directors may adaJl amendments without member approval ,n{y when the corporation has no members. or no members entitled to vote. NOTE 3: Director approval may be(1)by vote at a directors meeting(either annual or soeclal)or(2)consert.in writing.without a meeting_ NOTE 4. .All amendments net adopted under Sec 170.15 require(i)that the board of dboccrs adopt a r escluiion senine forth tte proposed amendment and (21 that the members approve the amendment. Mernber approval may be(1)by ante at a memuers meeting(either annual or sbac'alr or i7) by consent, in iwsinc„without a meeting, • To oe adopted, the amendment mast receive the affirmative vote or consent of the holders of at least 213 of the outstanding members entitled to vote on the amendment rbot it class vo 3ng apoites then aif- at least a 213 vote within each class is required). The articles of incorpor iron may supersede the 273 vote requirement by specifying any smaller or larger vote requirement not less than a majonty of the outstanding votes of such members entitled to vote and not less ihan a majority within each when class voting applies. (Sec. 110.20) NOTE 5: When a member approval is by written consent, all members must be given notice of the proposed amendment at least 5 days before the consent is signed. If the amendment is adopted,membea who have not signed the consent must be promptly notified of the passage of the amendment.(Sec. !0-1.16 � I I Z iz Z LL U > ro r� 0 2 o 1 U Cn obi _ - 4m ti P C; Z O O Z 8 Z u. W O Q t1 Z) to C L _ a o ; a ¢ ¢ = m r_; m 0 c uJ j < (5 G C7 o I O u Z I _ � I • 4 BY-LAWS OF PRESERVATION OF AFFORDABLE HOUSING, INC. AS AMENDED NOVEMBER 15, 2001 Adopted August 19, 1998 pursuant to the Illinois General Not for Profit Corporation Act of the State of Illinois, as amended, and revised through December 9, 1999 pursuant to the Illinois General Not For Profit Corporation Act of 1986 (the "Act'). ARTICLE I OFFICES • The principal office of Preservation of Affordable Housing, Inc. (the "Corporation') shall be located in the City of Boston, Suffolk County, in The Commonwealth of Massachusetts. The Corporation shall maintain in the State of Illinois a registered office and a registered agent at such office. The Corporation may have other offices within or without The Commonwealth of Massachusetts and the State of Illinois. ARTICLE II MEMBERSHIP The Corporation shall have no members. In accordance with Section 107.03(o ofthe Act, any provision of the Act requiring notice to, the presence of, or the vote, consent or other action by members of the Corporation in connection with such matter shall be satisfied by notice to, the presence of, or the vote, consent or other action of the duly-elected Directors of the Corporation. • Page 1 of 11 • ARTICLE 111 MEETINGS OF THE CORPORATION The regular annual meeting of the Board of Directors of the Corporation shall constitute the annual meeting of the Corporation. ARTICLE IV BOARD OF DIRECTORS Section 1. General Powers. The affairs of the Corporation shall be managed by its Board of Directors. Section 2. Number Election, Tenure and Qualifications. The Board of Directors of the Corporation shall consist of not less than three nor more than eight directors (the number thereof to be determined by the Board of Directors), to be elected at an annual meeting. The terns of office for all Directors appointed to a full term shall be three years. At each annual meeting of the Corporation, the successor of any Director whose term expires at such meeting shall be elected to hold office for a term of three years or until his or her successor is duly elected and qualified. The number of Directors may be increased or decreased within the above-specified • range by resolution of the Board of Directors, provided that no decrease shall have the effect of shortening the term of any incumbent director. Directors may succeed themselves in office. Section 3. Annual Meetings. Each regular annual meeting of the Board of Directors shall be held at such time, on such day, other than a legal holiday, and in such place, as the Board in each such year determines. The Board of Directors may provide by resolution the time and place for the holding of additional regular meetings of the Board without other notice than such resolution. Section 4. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the Executive Director or any two Directors. The person or persons authorized to call special meetings of the Board may designate any place within the United States of America as the place for holding any special meeting of the Board called by them. Section 5. Notice of Special Meeting. Notice of any special meeting of the Board of Directors shall be given at least five days prior thereto by the Corporation. Such notice shall state the purpose for which the meeting is called and shall be accompanied by the principal materials to be discussed or voted on. If mailed, the notice of the meeting shall be deemed delivered when deposited in the United States mail addressed to the director at his or her address as it appears on the record of the Corporation, with postage thereon prepaid. If notice is given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Notice of any special meeting of the Board of Directors may be waived in writing signed by the person or persons entitled to the notice either before or after the time of • Page 2 of 11 the meeting. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Section 6. Quorum. A majority of the Directors then in office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, provided that if fewer than a majority of such directors are present at such meeting, a majority of the Directors present may adjourn the meeting to another time without further notice. Section 7. Manner of Acting. The act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the act of a greater number is required by statute, these by-laws or the articles of incorporation. Section S. Informal Action by Directors. Any action required to be taken at a meeting of the Board of Directors, or any other action that may be taken at a meeting of the Board of Directors, may be taken without the meeting if a consent in writing, setting forth the action so taken, is signed by all of the directors entitled to vote with respect to the subject matter thereof. Section 9. Telephone Participation. Any one or more of the Directors, or any one or more members of any Committee, may participate in a meeting of the Board or a Committee, as applicable, by means of a conference telephone call or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting. • Section 10. Removal. Any Director named in the articles of incorporation or elected or appointed by the Board of Directors may be removed by an affirmative majority vote of two- thirds of the Directors present at a special meeting of the members entitled to vote called for such purpose whenever in theirjudgment and best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 11. Vacancies. If any vacancy occurs in the Board of Directors or any directorship to be filled by reason of an increase in the number of Directors the Board of Directors shall elect a person to fill the unexpired term of such Directorship at a special meeting of the Board of Directors called for that purpose. Section 12. Compensation. Directors shall receive such reasonable compensation for serving on the Board of Directors as the Board of Directors may from time to time provide by resolution, and shall be reimbursed for the reasonable expenses of attendance, if any, for any or each regular or special meeting of the Board. Directors shall also be entitled to receive such reasonable compensation as they may be entitled to receive for serving the Corporation in any other capacity, and to be reimbursed for any other expenses properly incurred on behalf of the Corporation. • Page 3 of 11 • ARTICLE V COMMITTEES Section 1. Committees of Directors. The Board of Directors, by resolution adopted by a majority of the directors in office, may designate one or more committees, each of which shall consist of two or more directors, which committees, to the extent provided in such resolution and not restricted by law, shall have and exercise the authority of the Board of Directors in the management of the Corporation; but the designation of such committees and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any individual director, of any responsibility imposed upon the Board or such director by law. The Chairman of the Board and the President and Executive Director shall each be, ex officio, members of each such committee. Section 2. Other Committees. Other committees not having and exercising the authority of the Board of Directors in the corporation may be designated by a resolution adopted by a majority of the Directors present at a meeting at which quorum is present. Except as otherwise provided in such resolution, members of each such committee shall be members of the Board of Directors, and the Chairman of the Board, or in his or her absence the Director he shall designate to act for him. Any member thereof may be removed by the person or persons authorized to appoint such member whenever in theirjudgment the best interests of the Corporation would be served by such removal. The Chairman of the Board and the President and Executive Director shall each be, ex officio, members of each such committee. • Section 3. Term of Office. Each member of a committee shall continue as such until the next annual meeting of the Board of Directors or until his or her successor is appointed, unless the committee is sooner terminated, or unless such member is removed from such committee, or unless such member ceases to qualify as a member thereof. Section 4. Chairman of Committee. One member of each Committee shall be recommended by the Chairman of the Board to be the chairman of such Committee and shall be so appointed by vote of the Board of Directors at the time of the annual election of Committee members. In the absence of such duly elected chairman, at any properly held meeting of a committee at which the required quorum for such Committee shall be present, the members of such committee may designate any member of such Committee to act as temporary chairman of such meeting. Section 5. Vacancies. Vacancies in the membership of any committee may be filled by appointments made in the same manner as provided in the case of the original appointments. Section 6. Quorum. Unless otherwise provided in the resolution of the Board of Directors designating a committee, a majority of the whole committee shall constitute a quorum, and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of the committee. • Page 4 of 11 • Section 7. Minutes and Rules. Each Committee shall keep minutes of its meetings and report the sante to the Board and may adopt rules for its own governance not inconsistent with these By-Laws or with rules adopted by the Board of Directors. ARTICLE VI OFFICERS Section I. Officers. The officers of the corporation shall be a Chairman of the Board, , a President and Executive Director, an Executive Vice President, a Treasurer, a Secretary, and such Vice Presidents, Assistant Treasurers and Assistant Secretaries, and other officers as may be elected and whose offices may be created by the Board of Directors. Officers whose authority and duties are not prescribed in these By-Laws shall have the authority and perform the duties prescribed, from time to time, by the Board of Directors. Any two or more offices may be held by the same person, except the offices of President and Secretary. Section 2. Election and Term; Term Limits for Chairman. The officers of the Corporation shall be elected by a majority vote of the Board of Directors at its annual meeting. If the election of officers is not held at such meeting, or at any adjournment thereof, such election shall be held as soon thereafter as is convenient. Except for the Chairman of the Board, who shall be chosen from among the Directors, other officers may but not need be Directors. Vacancies may be filled or new offices created and filled at any meeting of the Board of • Directors. Each office shall hold office (i) until the later of the next annual meeting of Directors or the date that his or her successor is duly elected, or (ii) until such officer's death or resignation, or removal from office in the manner hereinafter provided. Election of an officer shall not of itself create contractual rights. Section 3. Resignation and Removal. (a) Any officer may resign at any time by giving written notice to the President or Secretary of the Corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt by the President or Secretary of such notice, and acceptance of the resignation shall not be necessary to make it effective. (b) Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause, whenever in its judgment the best interests of the Corporation would be served thereby. Section 4. Vacancies. A vacancy in any office because ofdeath, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term of such office. Section 5. Chairman of the Board. The Board of Directors shall elect one of its members as Chairman of the Board. The Chairman of the Board shall preside at all meetings of the Board of Directors. • Page 5 of 11 Section 6. President and Executive Director. (a) The President and Executive Director shall be the principal executive officer of the Corporation. Subject to the direction and control of the Board of Directors, the President and Executive Director generally shall supervise and control all of the business and affairs of the corporation. In the absence of the Chairman of the Board, the President and Executive Director shall preside at all meetings of the Board of Directors, but shall not, unless he or she is a Director, have any vote at any such meeting. (b) The President and Executive Director may take any action or sign any document specifically authorized by the Board of Directors. Subject to the limitations and approval levels, if any, as are approved by the Board of Directors or any committee of the board or otherwise set forth in these By-Laws, the President and Executive Director may also, without individual approval by the Board or any of its Committees, execute for the Corporation agreements, loan agreements, contracts, leases, deeds, mortgages, notes, bonds, certificates, instruments or other documents. The President and Executive Director may accomplish such execution either under or without the seal of the corporation and either individually or with the Secretary, any Assistant Secretary, or any other officer so authorized by the Board of Directors, according to the requirements of the form of the instrument or document, except in cases where the signing and execution is expressly delegated by law, by the Board of Directors, or by these By-Laws, to some other officer or agent of the Corporation. The President and Executive Director may vote all securities that the Corporation is entitled to vote except as and to the extent such authority is vested in a different officer or agent of the Corporation by the Board of Directors. (c) The President and Executive Director shall have the power and authority to delegate to the other officers of the Corporation, in a written instrument, the President and Executive Director's power and authority to execute documents on behalf of the Corporation, as such power and authority is described above in this Section. Section 7. Executive Vice President. (a) The Executive Vice President shall assist the President and Executive Director in the discharge of her duties and shall perform such other duties as may be assigned by the President and Executive Director or by the Board of Directors. In the event of the disability, removal, absence, or refusal to act of the President and Executive Director, and to the extent such powers and duties are not assumed by the Chairman of the Board, the Executive Vice President shall possess the powers and shall perform the duties of the President and Executive Director. (b) The Executive Vice President may take any action or sign any document specifically authorized by the Board of Directors. Subject to the limitations and approval levels, if any, as are approved by the Board of Directors or any Committee of the Board or otherwise set forth in these By-Laws, the Executive Vice President may also, without individual approval by the Board or any of its Committees, execute for the corporation agreements, loan agreements, contracts, leases, deeds, mortgages, notes, bonds, certificates, instruments or other documents. • Page 6 of 11 • The Executive Vice President may accomplish such execution either under or without the seal of the Corporation and either individually or with the Secretary, any Assistant Secretary, or any other officer so authorized by the Board of Directors, according to the requirements of the form of the instrument or document, except in cases where the signing and execution is expressly delegated by law, by the Board of directors, or by these By-Laws, to some other officer or agent of the Corporation. Section 8. Vice Presidents. (a) The Vice Presidents shall assist the President and Executive Director, and the Executive Vice President in the discharge of their duties and shall perform such other duties as may be assigned by the President and Executive Director, the Executive Vice President, or by the Board of Directors. (b) The Vice Presidents may take any action or sign any document specifically authorized by the Board of Director. Section 9. Treasurer. (a) The Treasurer, subject to the direction and control of the President and Executive Director, shall be the principal accounting and financial officer of the Corporation and shall : (i) generally supervise the fiscal affairs and operations of the Corporation, (ii) be responsible for the selection and management of all investments of the Corporation's funds, subject to the directions of the President and Executive Director and the Board of Directors and the provisions of Section 5 of Article VII of these By-Laws, (iii) be responsible for the strategic planning of the fiscal affairs and operations of the Corporation, (iv) have charge of and be responsible for the maintenance of adequate books of account for the corporation, (v) have charge of depositing all the Corporation's funds and securities in the name of the Corporation, maintaining the custody of all such funds and securities, and being responsible for the receipt and disbursement thereof, and (vi) maintain books and records sufficient for the preparation of audited financial statements by a certified public accountant, and (vii) perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to the Treasurer by the President and Executive Director or by the Board of Directors. (b) The Treasurer may take any action or sign any document specifically authorized by the Board of Directors. Subject to the limitations and approval levels, if any, as are approved by the Board of Directors or any Committee of the Board or otherwise set forth in these By-Laws, the Treasurer may also, without individual approval by the Board or any of its Committees, execute for the Corporation agreements, loan agreements, contracts, leases, deeds, mortgages, notes, bonds, certificates, instruments or other documents. The Treasurer may accomplish such execution either under or without the seal of the corporation and either individually or with the Secretary, any Assistant Secretary, or any other officer so authorized by the Board of Directors, according to the requirements of the form of the instrument or document, except in cases where the signing and execution is expressly delegated by law, by the Board of Directors, or by these By-Laws, to some other officer or agent of the Corporation. Page 7 of 11 Section 10. Secretary. The Secretary shall: (i) record the minutes of meetings of the Board of Directors and Committees in one or more books provided for that purpose, (ii) see that all notices are duly given in accordance with the provisions of these By-Laws or as required by law, (iii) be custodian of the corporate records and of the seal of the Corporation, (iv) keep a register of the post-office address of each member and each Director, which shall be furnished to the Secretary by each member and Director, (v) sign with the President and Executive Director, or a Vice President, or any other officer thereunto authorized by the Board of Directors any agreements, contracts, leases, deeds, mortgages, notes, bonds, certificates, instruments or other documents that the Board of Directors or the By-Laws have authorized to be executed, according to the requirements of the form of the instrument or document, except when a different mode of execution is expressly prescribed by the Board of Directors or these By-Laws, and (vi) perform ail duties incident to the office of Secretary and such other duties as from time to time may be assigned to the Secretary by the President and Executive Director or by the Board of Directors. Section 11. Assistant Treasurers and Secretaries. The Assistant Treasurers and Assistant Secretaries, in general, shall perform such duties as shall be assigned to them by the Treasurer or the Secretary, respectively, or by the President and Executive Director or the Board of Directors. Section 12. Other Officers and Agents. The Board of Directors may appoint other officers and agents of the Corporation, as it shall deem appropriate. Each officer shall hold office for such term as the Board of Directors shall determine, and each agent shall hold office at the pleasure of the Board. The officers and agents so appointed shall have such authority, • perform such duties and receive such reasonable compensation as the Board of Directors shall determine. To the extent and in the manner provided by the Corporation's Certificate of Incorporation, the President and Executive Director may, subject to the terms of resolutions passed by a majority of the entire board of Directors and subsequent approval by a majority of' the Board of Directors, appoint the officers of the corporation specified in such resolutions. Section 13. Compensation. The compensation of the officers of the Corporation shall be fixed at reasonable levels from time to time by the Board of Directors, and no officer shall be prevented from receiving such compensation by reason of the fact that such officer is also a Director of the Corporation. However, if an officer paid a salary by the corporation is also a Director of the Corporation, such officer shall not receive any annual stipend or attendance fees for Board or Committee membership or attendance. The Corporation shall also, in accordance with its internal procedure, reimburse each officer for his or her expenses reasonably incurred in the ordinary course of executing his or her duties as an officer of the Corporation. ARTICLE VII CONTRACTS, CHECKS, DEPOSITS AND FUNDS Section I. Contracts. The Board of Directors may authorize any officer or officers, agent or agents of the Corporation, in addition to the officers so authorized by these By-Laws, to enter • Page 8 of 11 into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Section 2. Checks, Drafts, Etc. All checks, drafts, or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors. In the absence of such resolution, such checks, drafts, or other orders for payment shall be signed by the President and Executive Director, an Executive Vice President, or a Vice President, and countersigned by the Treasurer or Secretary of the Corporation, except when such instruments are in amounts of $5,000 or less, in which case only the signature of the President and Executive Director, the Executive Vice President, a Vice President or the Treasurer is required. Section 3. Deposits. All funds of the Corporation shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositories as may be selected by the Treasurer or by resolution of the Board of Directors. Section 4. Gifts. The Board of Directors or the President and Executive Director may accept on behalf of the Corporation any contribution, gift, bequest, or devise for the general purposes or for any special purpose of the Corporation. Section 5. Investment of Funds. The Board of Directors may authorize from time to time rules and guidelines governing the deposit, investment or other management of the Corporation's • assets by the President and Executive Director, and Treasurer. ARTICLE VIII BOOKS AND RECORDS The Corporation shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of the Board of Directors, and Committees having any of the authority of the Board of Directors. ARTICLE IX FISCAL YEAR The fiscal year of the Corporation shall begin on the first day of January and end on the last day of December. • Page 9 of 11 ARTICLE X SEAL The corporate seal shall have inscribed thereon the name of the corporation and the words "Corporate Seal" and "Illinois." ARTICLE XI WAIVER OF NOTICE Whenever ay notice is required to be given under the provisions of the Act or under the provisions of the Articles of Incorporation, or these By-Laws, of the Corporation, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE XII AMENDMENTS The power to alter, amend, or repeal these By-Laws or adopt new By-Laws shall be vested in the voting Member. Such action shall be taken at a regular or special meeting for • which written notice of the purpose is duly given. The By-Laws may contain any provisions for the regulation and management of the affairs of the Corporation not consistent with low or the articles of incorporation. ARTICLE XIII INDEMNIFICATION OF DIRECTORS OFFICERS, EMPLOYEES AND AGENTS Section 1. Right to Indemnification. To the extent permitted by law, any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative(including an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee, or agent of the Corporation, shall be indemnified by the corporation against expenses (including attorneys' fees),judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceedings, had no reasonable cause to believe his conduct was unlawful, except that in the discretion of the Board of Directors, indemnification need not be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Corporation unless and only to the extent that the court in which such action or • Page 10 of 11 • suit was brought determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. Section 2. Determination of Right. Any indemnification under the foregoing section of this article (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the Director, officer, employee, or agent is proper in the circumstances because he has met the applicable standard of conduct set forth therein. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion. Anything hereinabove set forth to the contrary notwithstanding, to the extent that a Director, officer, employee, or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suite or proceeding referred to in the foregoing section of this article, or in defense of any claim, issue, or matter therein, he shall in any event be indemnified against expenses (including attorneys' fees) actually and reasonable incurred by him in connection therewith. Section 3. Authority to Advance Expenses. Expenses incurred in defending a civil or criminal action, suit, or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of directors in the specific case upon receipt of an undertaking by or on behalf of the Directors, officers, employee, or agent to repay such amount unless it ultimately be determined that he is entitled to be • indemnified by the Corporation as authorized in this article. Section 4. Provisions Non-Exclusive. The indemnification provided by the article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any agreement, vote of disinterested Directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such person. Section 5. Authority to Insure. The Corporation is authorized to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee, or agent of the Corporation, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this article. Section 6. Invalidity. If any word, phrase, sentence, paragraph, or other provisions of this article is adjudged or decreed to be invalid, void, or voidable, then the remaining portions and provisions of this article and these By-Laws shall continue to remain in full farce and effect. • Page 11 of 11 0 • • • zl • Appendix 2 Existing DHCD Regulatory Agreement [See attached] • • ActiveUS 103941890v.4 • Exhibit D REGULATORY AGREEMENT UNDER CHAPTER 121A§18C Salem Heights Apartments This Regulatory Agreement(this "Aneement")is made as of the�4 day of l—.L QT, 2003,in connection with the transfer and acquisition of the Project, as hereinafter defined, approved pursuant to Sections 11 and 18C of Chapter 121A of the Massachusetts General Laws ("Chapter 121A"),by and between SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP, a Massachusetts Iinmiied partnership (hereinafter referred to as the "Owner"), and the MASSACHUSETTS DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT(the"Department'). WITNESSETH THAT: WHEREAS, the Owner has caused to be filed with the Department and the City of Salem an application dated April_,2003 (the"Application')pursuant to Sections 11 and 18C of Chapter 121A of the Massachusetts General Laws(as amended, "Chapter 121X), for authorization and approval by the Department and the City for the transfer by Salem Heights Apartments Company, a Massachusetts limited partnership(the"_Original Developer"), and the acquisition by the Owner, of the existing Salem Heights Apartments housing development • previously approved by the Department as a project under Chapter 121A located on a 6.5 acre parcel at 12 Pope Street in Salem,Massachusetts, consisting of two high-rise buildings providing 283 housing units, of which approximately[227]units are for low-income elderly and family households, and for the formation of the Owner as an urban redevelopment limited partnership under Chapter 121A(the"Project'); WHEREAS, such transfer,acquisition and formation were approved by the City on -Tw }, 2003, and by the Department on 15 , 2003;and WHEREAS,pursuant to the provisions of Chapter 121A,the Department is requiring the Owner to enter into a Regulatory Agreement with the Department. NOW,THEREFORE, the Owner, for itself and its successors and assigns, agrees by this Agreement with the Department as follows: 1. The Owner initially shall finance its acquisition and renovation of the Project as stated in the i Application. Subject to the provisions of Chapter 121A, any future financing or refinancing by the Owner in connection with the Project may be made without the approval of the Department if provided by the any of the lenders providing financing to,without limitation, the Massachusetts Housing Partnership Fund Board("MIP") or if insured by the U. S. Department of Housing and Urban Development's Federal Housing Administration("FHA"). All other financing shall be made only with the prior written approval of the Department as to the terms thereof and the identity of the financing party or parties,which approval shall not be unreasonably withheld. -2- • Any such financing provided'by MHP and/or insured,in whole or in part,by FHA may be.in an amount up to 100%of the cost of the Project,which is hereby determined] y to be$34,765,000.00. 2. The Owner shall keep the accounts for the Project separate and apart from any other activities conducted by the Owner or its principals and shall not expend income from the Project other than earnings as described in Chapter 12 IA upon or for the benefit of any other of its activities. 3. The Owner shall comply with the provisions contained in§8 of Chapter 121A relative to the inspection of buildings and enforcement of compliance with the financing program and rules and regulations applicable to the Project. 4. (a) Pursuant to §18C of Chapter 121A,for so long as the Project is financed by mortgage financing provided by MHP (the"MHP Financine"),the Owner will not be subject to the limitation on dividends set forth in clause(e)of said §18C,but rather shall be subj ect to MHP's limited dividend requirements: in particular, during the term of the MHP financing,the Owner's dividend is restricted to ten percent(10%)of the"Owner's Equity"in the Project, where the Owner's Equity is the sum of(i)actual cash contributed by the Owner to the Project, including low-income housing tax credit equity but excluding public equity such as HOME, CDB'G or other funds; (ii)developer's fee loaned to the Project;provided that any payment of such''developer's fee from Project cash flow is treated asa dividend distribution; (iii)developer's fee contributed to the Project; and (iv) appraised acquisition value (based on zoning in place at the time of loan commitment)in excess of the acquisition value included in the Project's development budget. (b) During such period as the Proj ect is subject to Chapter 121A and the provisions of Paragraph 4(a) above are not applicable thereto,the partners of the Owner (the"Partnersshall not receive or accept,while this Agreement is in force, as net income from the Project any sum in excess of eight percent(8%)of the amount invested by the Owner(but not others, even if affiliates)in the Project, as described in the Application,in each year in which the Owner owns or has owned the Project, except that,if in any year the Partners have received a sum less than the aforesaid eight percent (80/o),they may so receive in a subsequent year or years,additional sums not exceeding in the aggregate such deficiency without interest over and above the sura of eight percent(8%)of such amount invested by them in the Project. Nothing contained in this paragraph,however, shall be applicable to the distribution of profits from the sale of capital assets or equity interests in the Project or the refinancing of any loan secured in whole or in part by the Project. 5. In consideration of the exemption of the Owner and all its real and personal property from taxation,from betterments and special assessments and from the payment of any tax, excise or assessment to or for the Commonwealth or any of its political subdivisions on account of the Project,the Owner will pay the excises with respect to the Project which a Chapter 121A entity would be bound to pay under the formulae and provisions set forth in Section 10 of Chapter 121A and the"Contract Required by Section 6A of Chapter 121A of the General Laws"dated March 26, 1973 by and between the Original Developer and the City of Salem(the"6A Contract"), which the Owner shall assume in accordance with the Application. 3 • 6. This Agreement shall continue for a term commencing on the date the Owner acquires the Project and shall terminate on the date on which the property tax exemption provided to the Owner under Chapter 121A terminates,being March 26,2013. Neither the Project nor the Owner shall thereafter be subject to the obligations of Chapter 121A nor enjoy the rights and privileges thereunder,nor be subject to the terms, conditions and obligations of this Agreement as provided for in Chapter 121A. 7. If the Owner or any mortgage lender or lenders to the Owner propose, acting either under the provisions of the last paragraph of Section 11, Section 16A,of under any other provision of Chapter 121 A,to transfer the Owner's or such lender(s)' interests in the Project to a different entity,this Agreement shall,upon transfer,be terminated and a new regulatory agreement on substantially the same terns and provisions as contained herein shall be entered into, subject, however,to the options of such mortgage lender(s)under Section 16A of Chapter 121A to hold the Project or severable portion thereof; or to convey or otherwise release its interest in the Project, free'of all restrictions and limitations imposed by Chapter 121A. 8. This Agreement shall be binding upon and the benefits hereunder shall inure to the Owner and its legal representatives, successors in office or interest and assigns. The obligations of the Department hereunder shall be binding upon it successors for the benefit of the Owner and its successors and assigns. 9. Except.as herein expressly provided,the Owner hereby covenants with and agrees with the • Department that it will not voluntarily transfer, assign, convey or sell or in any manner hypothecate its interest in the Project without the express consent and approval of the Department. The written consent of the Department,whenever required by the terms of this Agreement,shall not be unreasonably delayed or withheld. As a condition to any transfer of the Owner's interest in the Project,the Owner will cause the transferee to enter into a new regulatory agreement with the Department on substantially the same terms and conditions as this Agreement, Nothing herein shall prohibit,restrict,nor require approval by the Department of the transfer, assignment, conveyance, sale or other hypothecation of any limited partner interest of, or in, the Owner, or any beneficial interest of, or in,any limited partner interest. 10. Any transferee or any person or entity succeeding to the rights,obligations and interest of the Owner in the Project by operation of law, or insolvency or otherwise shall, at the option of the Department,be deemed to have agreed to be bound by the terns, covenants and conditions of this Agreement. 11. The Owner agrees that it will(a)maintain full and accurate accounts,records and books relative to the Project in such detail as the Department may reasonably prescribe; (b)grant to the employees or representatives of the Department at all times during normal business hours access to the Project and to such of its accounts; records, and books as relate to the Owner's obligations under this Agreement or Chapter 121A upon reasonable prior notice by the Department to the Owner; (c)permit the Department or the City, or any of their approved accountants or auditors, to make reasonable annual audits of the accounts and financial records of the Owner which shall at all times be available in the Commonwealth of Massachusetts; and(d)furnish to the • Department such financial, operating, statistical and other reports,records, statements and -4 documents of the Owner on a uniform and consistent basis as may be periodically or on a onetime basis reasonably required by the Department and copies of contracts entered into by the Owner or other documents in the possession of the Owner as the Department may from time to time reasonably require in connection with the Owner's obligations under this Agreement or Chapter 121A. 12. All notices required or permitted pursuant to this Agreement shall be in writing, signed by a duly authorized officer or representative of the Department or the Owner, as the case may be, and shall be either hand delivered or mailed postage pre-paid,by registered or certified mail,return receipt requested and shall be deemed given when delivered,if by hand, or when deposited with the U.S. Postai Service,if mailed to the principal office of the party to which it is directed, which is as follows unless otherwise designated by written notice to the other party: the Owner: Salem Heights Preservation Associates, Limited Partnership c/o Preservation of Affordable Housing, Inc. 153 Milk Street, Suite 300 Boston,MA 02119 Attn: Amy Anthony with a copy to: Palmer&Dodge LLP 111 Huntington Avenue Boston,Massachusetts 021;99 • Attn: Thomas G. Schnorr,Esquire the Department: Department of Housing and Community Development Division of Municipal Development One Congress Street Boston,Massachusetts 02114 Attn: with a copy to: Department of Housing and Community Development One Congress Street Boston,Massachusetts 02114 Attn: Chief Counsel 13. The Owner shall, at its own cost and expense,keep and maintain the Project or cause it to be kept and maintained, in good repair, order and condition, casualty, condemnation and ordinary wear and tear excepted. 14. All changes, deviations, alterations, or additions in or to the Project shall be subject to review and approval by the Department in accordance with Chapter 121A and the regulations promulgated thereunder,760 CMR 25.00 et seq.,which approval shall not be unreasonably withheld or delayed. • -5- 15. The.Owner shall not effect or execute any covenant, agreement,lease, conveyance or other instrument whereby the property or any improvement thereon is restricted upon the basis of race, religion,-creed, color or national origin or ancestry in the sale, lease or occupancy of the Project. 16. The Owner shall comply with all state and local laws in effect from time to time forbidding discrimination or segregation byreason of race,religion, color or national origin in the sale,lease or occupancy of the Project. 17. The obligations of the Owner under this Agreement,the Application and the approval thereof, are conditioned in all respects upon(a)the closing of the acquisition of the P•roj ect by the Owner from the Original Developer; (b)the issuance of all permissions,variances,permits and licenses which may be required with respect to the occupation, operation,maintenance and management of the Project,whether or not the same were specified in the Application; and(c) upon the Project being exempt from taxation under Section 10 of Chapter 121A. The Owner agrees to use reasonable efforts to secure all such permissions,variances,permits and licenses and to overcome all such delays in securing the same. 18. The liability of the Owner hereunder or its successors or assigns(including,without limitation,mortgagees) shall be limited solely to the interest of the Owner in the Project, and no partners,members,managers,venturers,trustees,beneficiaries, shareholders,officers, directors, employers or agents of the Owner or its constituent member or any of their respective successors and assigns (including,without limitation,mortgagees) or any person or entity directly or • indirectly holding any interest in any of the foregoing, shall have or be subject to any personal liability hereunder. 19. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent,the remainder of this Agreement and the application of such provisions to other persons and circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 20. The respective rights and remedies of the parties hereunder or under the approval granted pursuant to this Application or under any of the agreements entered into in connection therewith or at law shall be cumulative, and the exercise of any one or more of such rights or remedies shall not preclude the exercise, at the same or different times,of any other such rights or remedies. • 6 21. Recognizing that the parties may find it necessary to establish to third parties the then current status of performance hereunder, either party, on the written request of the other made from time to time,will promptly furnish a written statement on the status.of any matter pertaining to such performance. Executed as a sealed instrument as of the day and year first written above. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMEN T, By: \ �/ Name: , 4 e lUe Gtsnl/e Title: �/YecfoK SALEM HEIGHTS PRESERVATION ASSOCIATES,LIMITED PARTNERSHIP By: POAH Salem Heights LLC, YItsGeral Partner By. �y S. ka�nNy Title: drp4 I • 7 s • • • 3 • Appendix 3 Map of Location of Project Area • • Ac(IveUS I03941890v4 12 Pope Street, Salem, MA - Google Maps Page 1 of 1 • Address Pope St GSalem,Salem,MAA 01970 Get Google Maps onyour phone Teat the word"GMAPS"to466453 ti� # All 70br 4 [ k"��94 t Oil x1p� glt�, a �` vwy✓ `sy�,� "�,o* 0 -v. +�� � 4P` r-'r�L1Emiand _„i�tic? S4F ^y '" All 's' °+ 4:}�'` ve,' x'+x6' s "I+a i, %"`psi !ryvL. `•XXk� i .( "' ' r Ih•�� k` � .-. DRQ t. t(P 1-9 Pe v 4 x SRlelexy �`"'�e^�x.�,aa is . p� x .p�` ��. �yi',rr �k - Galia`ws � ell kwy -s. O i ° vi1 f r v 'a-• N.w HrUs ' } r, ,. '`'y� A F._ Ja&Wn r 4N41 car did,r � P g ,: 1„° oa+b +, idnss Guwfa fix y e ,�`-'� ..tt. d>;�� CNIA( Pt Norih� b- /107. y x n 4 aS/`t✓ 1m Ywreedk"al 1 .�N��5 � 'a'n ' ..�� 1 �+ n. ✓s.. d� $_'s �.r� � - p.,fr � Spa dd�ng Fo Pdalfnr q'- # � p boM Shores �H C<mwivig PoPeS�I - (,?/ s 'Y (',�'s� ,1aj�, `Me4¢aCCemet pova Av GvNotl;� ,hwe iv, ;,✓ CherryH �♦ '* // v T A "'' ®2g13 G� IeMa tlata®2013 Goo 1e-1 • littp:Hmaps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=12+Pope+Street,+Sa... 1/9/2013 • • e • a�; • � • 4 I • Appendix 4 Legal Description [See attached] • • AcoveUS 103941890v • EXHIBIT A (Legal Description of Property) A certain parcel of land situated in the City of Salem, County of Essex, Commonwealth of Massachusetts; bounded and described as follows: Beginning at a point at the intersection of the easterly sideline of Proctor Street and the southerly sideline of Pope Street; Thence running along said southerly sideline of Pope Street N 56° 56' 45" E, a distance of one hundred twenty-seven and 15/100 (127.15) feet to a point; Thence turning and running again along said southerly sideline at Pope Street N 42° 03' 45" E, a distance of thirty-eight and 00/100 (38.00) feet to the TRUE POINT OF BEGINNING. Thence running along the said southerly sideline of Pope Street by two courses: N 42° 03' 45"E, a distance of three hundred and seventeen and 07/100 (317.07) feet; N 18° 18' 45"E, a distance of three and 97/100 (3.97) feet to a point; • Thence turning and running S 64° 30' 00" E, a distance of twelve and 25/100(12.25) feet to a point; Thence turning and running N 52° 06' 18"E, a distance of sixty and 00/100 (60.00) feet to a point; Thence turning and running N 78° 04' 08"E, a distance of thirty eight and 90/100 (38.90) feet to a point; Thence turning and running S 43° 25' 58"E, a distance of one hundred four and 85/100 (104.85) feet to a point; Thence running on a curve to the right having a radius of two hundred eighty five and 00/100 (285.00) feet an are distance of one hundred five and 00/100 (105.00) feet to a point; Thence turning and running S 57° 40' 46"W, a distance of twenty six and 50/100 (26.50) feet to a point; Thence turning and running S 07° 03' 14" E, a distance of two hundred sixty-six and 00/100 (266.00) feet to a point; Thence turning and running S 06° 35' 14"E, a distance of one hundred fifty-four and 50/100 (154.50) feet to a point; • • Thence turning and running on S 05° 41' 14" E, a distance of one hundred thirty and 90/100 (130.90) feet to a point; Thence turning and running N 84° 50' 00"W, a distance of five hundred eighty and 54/100 (580.54) feet to a point at land now or formerly of Auger; Thence turning and running along said land now or formerly of Auger N 16° 18' 17" E, a distance of ninety-five and 07/100 (95.07) feet to a point; Thence turning and running again along said land now or formerly of Auger N 76° 23' 06"W, a distance of one hundred and 00/100 (100.00) feet to a point on the easterly sideline of Proctor Street; Thence turning and running along said easterly sideline of Proctor Street N 15° 05' 02" E, a distance of eighty-three and 35/100 (83.35) feet to a point; Thence turning and running S 76° 23' 06" E, a distance of one hundred nine and 50/100 (109.50) feet to a point; Thence turning and running N 68° 24' 34"E, a distance of sixteen and 70/100 (16.70) feet a point; Thence turning and running N 53° 26' 11" E, a distance of fifty-two and 20/100(52.20) • feet to a point; Thence turning and running N 271 51' 01" E, a distance of sixty-four and 50/100 (64.50) feet to a point; Thence turning and running N 37° 35' 26"W, a distance of forty-two and 40/100(42.40) feet to a point; Thence turning and running N 55° 24' 34"E, a distance of twenty-seven and 20/100 (27.20) feet to a point; Thence turning and running N 77° 15' 30"E, a distance of eleven and 03/100 (11.03) feet to a point; Thence turning and running N 34° 18' 14"W, a distance of ninety-six and 13/100 (96.13) feet to the TRUE POINT OF BEGINNING. Containing 284,341 sq. ft., more or less. Said parcel is shown on a plan entitled "Topographic Plan of Land in Salem, Mass., scale 1"=40', dated March 1972" and Property Lines added October 2, 1972, by New England Survey Service, Inc., Civil Engineers and Land Surveyors. • • I • 5 • 5 • I Appendix 5 Site Plan of Project Area [See attached] • ActiveUS 103941890v4 a„ 3g3,.a$ez:, ,- e io.?ia,I • ; € R$ a ' 1 i ; a i iii 3nS i S i 3 ;az i3!€ pi •� a S as ti$I.rE_$g£ �`9�:€$�4�� 13 � - i i x r �-:_ g¢e;.Qe s` s e a.s•3 � s, a ,�` `�� '+• g.*g,;_ � ° ' ' R."i 9]a83 a. _ ' - ;£; x, s a8'2s •� 98F i. s � ,e�a@?�° ' Bss i - ` $: $,^9'F i F � €^£S k $ i �-is•:I5 ie3 °� . 8 y g 8 8 E 3. �a - g. g 8 8 'b. ° g e� '�€�.qni •3 fpp 3; �v sas' gg a: g T • l g ,.. z� � �� � pA g � ' ✓'ps e D Pry �R� Cn Pe e..pm{�Ilf9pn.oeee. zE� m 44N w Sips£ egaee ,z erez S s�Rd r e9 If � t o R ° mfg ✓;i t "j --f ro...:�@s�a� as .• 6 S 9 J ag{ >a .^g r ° s 's N_ _. fib il gez ., A"'J' • r R. Tl /1 (� T ALTA\AGSM - . II• Cameron ,i l' Associates Inc. TITLE INSGFANCE SURVEY 16 LJ 1/ 111 1 11 IAUU ... Associates,1�1 1� JI 1111 SALEM HEIGHTS APARTMErvzs Lnnd So...... Cil r,,—..z 12 POPE STREET SALEM MA L'�V y 681 Washington Street, Norwood Massachusetts 02062 a N 9 • s Appendix 6 • Existing Affordable Housing Restrictions • • ActiveUS 103941890v.4 II ' i ' EM I-IEIGHTS AFFORDABl'LITY PRESERVATION COVENANT Ste' � EM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP, a SpLa husetts limited partnership, with an address c/o Preservation of Affordahlnts witting, Inc-, Goin Street, Suite 650, Boston, Massachusetts 02108 (the "Partnership") g'a = rcovenants, to the CITY OF SALL^'M, a Massachusetts municipal corporation, its tclaN ermitted assigns (the " City"), exclusively for the purpose of preserving housing "'essors and p yy� rpedupancy by low income parsons mrd families,, tile following described Affordability e Vahort Covenant on a certain parcel of land together with the improvements naw or . tier thereon located in Salem, Massachusetts, said parcel being described in Exhibit A ghee hereto ("Premises"). a � WHEREAS, in March of 1973 the City and the Massachusetts Depai menl of ' ` c and t4pn trinity Affairs, the predecessor to the Massachusetts De artment of Housm fl verity evelopincrit ("DHCD"), approved the development on the Premises of the Salem Iejghts Aparhnents Project (the"Protect") as an urban redevelopment project under t3 as'sachusetts General Laws Chapter 121A ("Chapter 121A") and rw i.; WHEREAS, theProject as originally approved under Chapn te�� 121A cosisted of 285 x _ dwelling units in two high-rise buildings - by a one story lobby located at 12 opt ' �St eetin Salem, Massachusetts, and was financed ander the U.S. Department of Housing and s'Jt""ban Development's Section 236 Program (the"Original HUD 236 Financia,") which ( regµlated the Project to ensure that its dwelling amts were affordable for lower income ouseholds; and WHEREAS,the Partnership has requested that the City and DHCD approve flit w y ?artnership's acquisition of tilero Premises and the Project, and in connection with such acquison a payoff the Original HUD 236 Financing and replace it with other financing; and rr � �' WHEREAS, as a condition of the City's approval under Chapter 121 A of the „ :P,artnership's acquisition of the Premises and Project, the City has required the Partnrship eto ragree to preserve the affordability of the Project's dwelling units for an extended 1) od of time ` nder the terms set forth below, T F M u - e NOW, THEREFORE, for consideration paid the parties agree as follows: 1. The purpose of this Affordability Preservation Covenant is to ensure that the premises and Project will be preserved as affordable housing for occupancy by loev and 's 'Moderate-Income families surd persons for the Tei m (as defined below) and othenn�ise nr to'cordance with all of the other llenns and conditions sat Fo h in is Afford'abiliry Prase atom . i „ •Covenant. l 2. The Partnership intends, decla es and covenants, on behalf of itself and its x 'successors and assigns, that the covenants and restrictions set forth in this Affordability s "Tres ervation Covenant regulating and rest ieling the use, occupancy and transfer of the Premises 16 ! f t, yi > L �. l shall be and are covenants running with the Premises, encumbering the Premises Qe rlrd of one hundred 100 ears foIlowin the date on which this AffordabiIit e' io ( ) Y S y Covenanl is recorded with the Essex County South Registry of Deeds (the "Term"), h F.;r � Nupon the Partnership's successors in Lille and all subsequent owners of the Prenuses,(ii) i ogmojely personal covenants of the Partnership, and (iii) shall bind She Partnership and its Rsors and assigns (and the benefits shall inure to the City and to any Past, present or ,r„r Pebtivetenantoftile lremises). P. 3. This Affordability preservation Covenant is intended to be construed as an ip"}(ordability Preservation Covenant as defined in Section 31 of Chaplet 154 of the "sachuse'tts Oerlelal Laws which has the benefit of Section 32 of said Chapter 194, such that a Mas. ` seer"es rictions contained herein shall not be limited in duration by any rule or operation of law. 3 F pa�ership hereby agrees that any and all requirements of tine laws of the Commonwealth of s e, Myssachusetts to he satisfied in order for this Affordability Presevation Covenant to constdute r- Deed restrictions and covenants running with the land shall be deemed to be satisfied in hill and 'at 211e re9un ements of privily of estate are intended to be satisfied, or in the altemalive, thn at a ¢goi(able servitude has been created to insure that this Affordability Preservation Covenant runs x- y ti 111 the land. � ,, , c,'; 4. This Affordability Preservation Covenant shall be recorded on or about the date F hereof with the Essex County South Registry of Deeds. �Vii5. Each and every contract, deed or other instrument hereafter conveying the Premises or the Project or any portion thereof shall expressly Provide that such conveyance is subject to this Affoadabrhty Preservation Covenant,provided, however, that the covenants 'Contained herein shall survive and be effective regardless of whether such contract, deed of othe nst ument hereafter executed conveying the Premises or the Project or portion thereof provides Ihatsuch conveyance is subject to this Affordability Preservation Covenant. 6. As of the date hereof, the Project is being used for approximately 253 dwelline units of housing, approximately eighty percent (80%) of which are occupied by low-income :elderly and family households. The Partnership hereby covenants that each dwelling mut in the :Project shall contain complete facilities for living, sleeping, eating, cooking and sanitation which '-`are to be used on other than a transient basis, and each unit in the Project shall meet the housing equality standards set forth in the regulations of the U. S. Deparhne t of Housing and Urbon Development ("HUD") as 24 C.P.R. §552.109 of any successor thereto. -1 7 (a) At least eighty percent (50%) of the dwelling units in the Project(the "Affordable Units") shall be leased exclusively to Families (as defined below) whose annual incomes are less than sixty percent (60%) of the median income for the Area ("Low-Incorrre 17 Families") based on family size as determined by the HUD. The remaining approximately tWelity peicent (209/0) of the dwellingtire units in e Pro ecu the "Moderate Units" shall be leased 12 exclusively to ,Families whose annual incomes are less than one Hundred twenty percent(120%) Of the median income of the Area ("Moderate-Income Families") based on family size as determined by HUD A `°Farm] is defined as one or more individuals occupying a chvelling unit in the Project and satisfying the standards adopted by I-IUD for the so-called Section 5 grog am trader the United States Housing Act o 1937 and promulgated at 24 C.F.P. Part 512. The"Area"is defined as the City of Salem, Essex County, Massachusetts. A Family's amoral income shall be the anticipated total income from all sources received by the Family head and 2 s'^ i ti$e(everr if temporal i I y absent) and by each additional member of the Famn ily (other (hall 111 cts J ah periodtfolllowing tile cffC age of 18 eci vcrdaleet lof Corti fraatioil of income. Ann List ncomclspCot fiCal Iy acrd excludes certain types types of income as set forth in and shall be determined in orad ce with 24 C.F.R. §813.106 (or any successor regulations). y�card 4 z., Any dwelling unci in the Project occupied by Family who is aLow-Income Family at the so�nneocement of such Family's occupancy of such dwelling unit shall continue to be treated as Affordable Unit occupied by a Low-Income Family even if such Ptundy's amnia] income �ereafter increases, provided that it such Family's annual income subsequently inti cases so as pezceed me hundred forty net (140%) of the median income to' the Area, such Family i :Shall no loiager be considered a Low-Income Family if,any Affordable Unit of cmnpar able or f , smaller size within [lie Project is then being rented to a Family that is not a Lo'v-In one Family. Any dwelling unit in the Project occupied by Family who is a Moderate-Income Family at the commencement of such Family's occupancy of such dwelling unit shall continue to be s Treated as a Moderate Unit occupied by a Moderate-Income Family even if such Family's amnia 'come thereafter increases,provided that if such Family's annual intone subsequently increases so as to exceeds one hundred fifty percent (150%) of the median "'cone for the Area, such Family shall no longer be considered a Moderate-Income Family if any Moderate Unit of size within tlae Project is then being rented to a Family that is not a comparable or smaller Moderate-Incowne Family. (b) The monthly rent charged to Low-Income Family residents of the Affordable-Units shall not exceed an amount equal to thirty percent (30%)of the monthly adjusted income of a Family whose gross income equals sixty-five percent (65%) of the median 'come for the Area, as determined by HUD,with adjustment for the number of bedrooms in the Affordable Unit, as provided by HUD. In determining the maximum monthly rent that may be charged for an Affordable Unit under this clause (b), the Partnership shall subtract front the above amount an allowance for any utilities and services (excluding telephone) to be Paid by the resident. Monthly adjusted income shall equal one-twelfth of adjusted income. Adjusted income shallbe as defined in 24 C.F.R. §813.102 (or any successor regulation) using assumptions provided by HUD. (c) If at any time less than the required number of Affordable Units in the Project are leased,rented or occupied by Low-Income Families, the next available dwelling units shall all be leased, rented or otherwise made available to Low-hicome Families;until the required number of Affordable Units occupied by Low-Income Families is again obtained. (d) The monthly rent charged to Moderate-heome Family residents of the 11 Moderate Units shall not exceed an amount equal to thirty percent(30%) of the monthly adjusted L i income of a Family whose gross income equals one hundred thirty percent(130°/6) of the median income for the Area, as determined by HUD, with a(]jILL Still CIA for the number of bedrooms ill the Moderate Unit, as provided by HUD. Ili determining the maximum monthly rent that may be charged for a Moderate Unit under this clause (d), the Partnership shall sill act Som the above amount an allowance for any utilities and services (excluding telephone) 'to be paid by the resident. Monthly adjusted income shall equal one-twelfth of adjusted income. Adjusted income shall be as defined in 24 CTA §813.102 using assurmPtions provided by I-IUD. 3 SYS 7 i x. The Parhncrship represents, warrants and covenants that the determination of beta Family meets the incomeregmrements set forth in this A Pfordabilmty Presevattell ,t �eaant shay be made by the Par hnership at the time of leasing of a dwelling unit in the Project `jhareafl'er at least annually on the basis of the current income of such Family. The � t a ey}ip shall maintain as part of its Project records copies of all leases of Affordable Units pt ,,�� i cc t and of tenanis �J`dMod ectaand shn i all retainpsoch leases an'd rincome certificatiooslfor aper period o11Sat least six of r zeproJ _g Wtelr{n ninety (90) days atter receipt of a written request from the City, the Partnership °l rd ' rovide to the City a repos t consisting of cetiEcations regarding the annual and monthly T4 ct all P `1 ,ass and t during thdjUsted e most recently concluded each Family occupying ler darn me of Affordable ar. Wlith respect to Families who nit at he Prn1 rived to the Project during such calendar year, the report shall also include certifications P �arding the annual and monthly gross and adjusted incomes ' s .oh Families at tine 4me of "�'eirinitial occupancy al the Project. Any report' shall be in a form reasonably approved by the Id shall contain such supporting documentation as the City shall reasonably require. In City a Gadd hon CO rine foregoing, the Partnership shall keep such additional records and prepare and rsubmit to City such additional reports as the City may deem necessary to ensure compliance with the requirements of this Affordability Preservation Covenant. ' 9. Any use ofthe Premises or activity thereon which is inconsistent with the purpose �ofthis Affordability Preservation Covenant is expressly prohibited. The Partnership hereby grants to the City and its duly authorized representatives the right to enter the Prenises (a) at reasonable times and in a reasonable manner for the purpose of inspecting the Premises to determine compliance with this Affordability Preservation Covenant or any other agreement between the Partnership and the City and (b) after thirty (30) days prior written notice,to take C any reasonable and appropriate action under the circumstances to cure any violation of the resevation Covenant. The notice referred to in clause (U) shall provisions of this Affordability P include a clear description of the course and approximate cost of the proposed cure. 10. The rights hereby granted shall include the right of the City to enforce this Affordability Preservation Covenant by appropriate legal proceedings and to obtain injunctive and other equitable relief against any violations, including without limitation relief requiring restoration of the Premises to its condition prior to any such violation (it being agreed that the City will have no adequate remedy at law), and shall be in addition to, and not in limitation of, any othe rights and remedies available to the City. The Partnership covenants and agrees to reimburse the City all reasonable costs and expenses (including without limitation reasonable counsel fees) incurred in enforcing this Affordability Presevation Covenant or in taking reasonable measures to cure any violation hereof, provided that a violation of this Affordability d Presevation Covenant is aclerowledged by the Partnership or determined by a court of l l jcompetent jurisdiction to have occurred. By its acceptance of this Affordability Preservation Covenant, the City does not undertake any liability or obligation relating to the condition of the Premises or tine Project. if ally provision of this Affordability Preservation Covenant shall to any extent be held invalid, the remainder shall not be affected. Notwithstanding any provision herein to the conhary,DHCD shall have the right to enforce all provisions of this Affordability Preservation Covenant in the place and stead of the City as frilly as if DHCD were named as the City herein. Upon receipt by the Partimeship of a written notice from DHCD requesting to receive notices hereunder, the Parhmership shall 0 4 ersend copies of all notices, reports,requests for approvals and other con espondence by zrship portarmnghereto simultaneously to DHCD. 1('1 Each of the City and DHCD, its agents and designees, shall have the right, fi om tine upon reasonable prior notice,to inspect all of the Partnership's records with respect of the Pio ect for purposes of ensurin conn Bance will' the to ms and Lerrpancy j P P g P ' x(ioos of this Affordability Preservation Covenant. a'r The it is autho zed to record or file any notices or instruments appropriate to c gthe enforceability of this Affordabili Ly Preservation Covenant; and the Partrne ship on oT� elf and its successors and assigns appoints the City its attorney-in-fact to execute, 3 � wledge and delive any such instruments on its behalf. Without limiting the foregoing, the and its successors and assigns agrees to execute any such instruments upon request. befits of this Affordability Prese vation Covenant shall be in gross and snail be assignable eCity. The Partnership and the City intend that the rests ctrons arising heeunder take upon the date hereof, and to the extent' enforceability by any person ever depends upon the vf.Gfgovernmental officials, such approval when given sha]l relate back to the date he col s les'¢'of the date of actual approval or tune date of filing or recording of any instrument �F' egg such approval. v � slg' Notwithstanding anything herein to the contrary,but subject to the next 9g Paragraph hereof, if the holder of record of a first mortgage granted to a state or nal bairk,state or federal savings and loan association, cooperative bank, mortgage r any trust company, insurance company, quasi-public lenders such as Massachusetts lope eirt Finance Agency, Massachusetts Housing Finance Agency, or Massachusetts a ung Partnership Fund, or other institutional lender shall acquire the Premises by reason of ealosnre or similar remedial action under the provisions of such mortgage or upon conveyance IM, "�ePrem ses in lieu of fo-eclosure, and provided that the holder of such mortgage has given theCity and DHCD not less than sixty (60) days' prier written notice of its intention to a lose upon its mortgage or to accept a conveyance of the Premises in lice of foreclosure, then nghis and restrictions herein contained shall not apply to such holder upon such acquisition %,Xrers ses or to any purchaser of the Premises from such holder, and such Prenuses shall, lotto the next two succeeding sentences, thereafter be fi ee from all such rights and The rights and restrictions contained herein shall not lapse if the Premises is nedkh ou h foreclosure or deed in lieu of foreclosure by (a)the Partnership, (b) any person 3Y s ? g k, aduect or indirect fnnancial interest in the Partnership, (c) any pe son related to a person ' tlP, f 't g',q -�cnhed-iu clause (b) by blood, adoption Orman sago, (d) any person wino rs or-1 any time was ¢tess associate of a person described in clause b and c an entity in which an of tl c O, � O � Y Y Y gmnghave a direct o indirect financi l interest (each a"Related Pa Y"). T urthernno e,if the � es are subsequently acquired by a Related Party during the period in which this o�dalnlity Pi -vation Covenant would have remained in effect but for tne proves ons ofthis ion,this Affordability Preservation Covenant shall be revived and shall apply to the ,a0e1"as though it had neve lapsed. r ti X14 This Affordability Presevation Covenant shall be released,if at all, only if(a) sentfnnaneing for the Project includes an affordable housing resh�ction compa able to the " &ofthis Affordability Preservation Covenant, that extends for a tern at least as long as t'he xg" rd,is iu a form acceptable to the City and DI3CD, and (b) the City o the Partnership prior written consent of DHCD. In addition to, and notwithstanding anything to the �� �r �pptained in the preceding sentence, upon the request of the Parhiership, the City may x {tissue a par-tial release of releases o[ this Affordability P escivation Covenant In a form M ate for recording, provided that any partial release shall be based upon such terms and ts as 117ay be reasonably s llisfactory to the City including, without limitation, conditions "0`gthal the Project will provide Affordable Units and Moderate Units consistent with the o a `'r� of Section 7 above. W Any notice, request or other communication which either party hereto may be �M:15. es b s a desire Co give hereunder shall be made in writing and shall be deeme to rave Cd DL a � T 'rtlperly given if hand delivered or ifmailed by United States re,gstered or certified mail, � y �P. eprepaid,return receipt requested, addressed as follows: tr s� * p: If to the Partnership: Salem Heights Preservation Associates, Limited Partnership i I c/o Preservation of Affordable Housing [tic. 40 Court Street, Suite 650 3 Boston, MA 02108 Attention: Patricia Belden ° With a copy to: F Palmer &Dodge LLP > 111 Huntington Avenue at PnldenCial Center Boston,MA 02199 rF st �W, r Attention: Thomas G. Sclmar,Esq. ,arta'' G &4 If to the City: ' City of Salem 5; Salem, IIIA v Attention: If to DHCD: 1._4 �t"� Department of Housing and Connnunity Development j 100 Cambridge Street, 18th Floor nr _ Boston, MA 02202 t e ' Attention: Office of the Chief Counsel " ¢ �asuchother address as the party to he served with notice may have furnished in writing to tale + b ; a F P�y'seeldng or desiring to serve notice as a place for the service ofnotice. A notice sent by 11 r e bstclassrnail shall be deemed given two days aftci mailing; aTnolice delivered by hand shall be �med given upon receipt. 121 Except as expressly provided in Section 14 above, this Affordability Preservation y� yegantmay not be amended, nornnay any obligation lie]CLmdCr be waived or released, without Dbtaming the written consent of the City and of DHCD. 1 b WExecuted under seal as of the 1" day of July, 2003. `' 6 gI SALEM HEIGHTS PRESERVATION ASSOCIATES, r,€ LIMI'T'ED PARTNERSHIP ' zr €•,r� �.� By POAIj Salem I-Ieights, LLC, ' Its general partner } ILTF By Preservation of Affordable Housing, Inc. L It's Sole Member y F % By N2nqe: Any Anthony Its: Presidc''lt zp i' J" I 'r ,< COMMONWEALTH OF MASSACHUSETTS s� Cbc siiffolk, ss. July 17, 2003 ac �r Then personally appeared the above-named Amy S. Anthony,President of Preservation ;ofAffordab le Housing, hrc. the sole memUer ofPOAH Salem HeigUts, LLC the genera] partner 9 of Salem Heights Preservation Associates, Limited Parbrersliip and acknowledged the foregoing Y 1'ry. 4 '< iiistrument to be her fi ee act and deed and the free act and deed of said limited liability company Y as such general partner,before me. Notary Public i My Conmussion Expires: f- /,J —A-1 :i t , s r is N, 7 tart ' s� I`I ACCEPTANCE OF GRANT BY THE CITY �'t'-1 xr:�arxr` The above Affordability 1 reservation Covennt a )s accepl:ed lh,s_ day of_u(-Ls_ M L CITY OF SALEM rk By: Name: 5 lXk� OvtCZ� J r. { Title: Y COMMONWEALTH OF OFMASSACNUSETIS s - a 2003 k§ Then personally appeared the above-named �'• ✓r 'T/ i., and acknowledged �v efarsgoing to he his/her free act and deed and the free act and deed of the City of Salem, re me. �- f 01 �Notary Public :r � % � a #i My Cpminission Expires: w G 119 w3 12( f a } k}e 4h } F C, d'ry, i i Toll ACCEPTANCE OF GRANT BY DI-ICD The above Affordability Preservation Covenant is accepted this day of $e gO,evn�e� DEPARTMENT OF IIOUSING AND COMMUNITY +t DEVELOPMEN' tl; z , By: Name: :1 ( d111'�5 3 F// +� Title: ��,re r ,r F 1?cCfk�� t lex I + COMMONWEALTH OF M.ASSACIIUSETTS 2003 ss. q iw g,� Then personally appeared the above-mined7th+1"1£. and acknowledgedY" V.3&5oregoing to be his/her free act and deed and the free act and deed of the Department of ousing and Conmzunity Development UefQae rne. f�7 « & j`£ Notary Public j,: ,t Ivey Commission Expires: I OT, w mair t ,e xr � Mv Commission l xpira� September 12 2008 4 ` � Y r5 t h ": $u 9 S' K'6 r c"r 9 EXHIBIT A f I Property Description � E7.IiII3IT A i (Legal Description of Property) F - v I A certain parcel of land situated in the City of Salem, County of Essex, Commonwealth t M of Massachusetts; bounded and described as follows: ,. Beginning at a point at the intersection of the easterly sideline of Proctor Street and the southerly sideline of Pope Street; Thence running along said southerly sideline of Pope Sheet N 56° 56' 45" E, a distance of one hundred twenty-seven and 151100 (127.15) feet Co a point; 71 Thence tuning and running again along said southerly sideline at Pope Street N 42° 03' 45" E, a distance of thirty-eight and 00/100 ( 8.00)3feet to the TRUE POINT OF BEGINNING. • Thence running along the said southerly sideline of Pope Street by two courses: N 42° 03' 45"E, a distance of three hundred and seventeen and 07/100 (317.07) feet; N 18' 18' 45"E, a distance of three and 971100 (3.97) feet to a point; Thence turning and running S 64° 30' 00"E, a distance of twelve and 25/100 (12.25) feet to a point; Thence tarring and nunnng N 52° 06' 18"E, a distance of sixty and 00/100 (60.00) feet to a point; Thence turning and naming N 78° 04' 08"E, a distance of thirty eight and 90/100 (3890)feet to apoint; � Thence turning and running S 43° 25' 58"E, a distance of one hundred four and 85/100 (104.85) feet to a point; Thence running on a curve to the right having a radius of two hundred eighty five and 00/100 (285.00) feet an arc distance of one hundred five and 00/100 (105.00) feet to a point; Thence turning and running S 57° 40' 46"W, a distance of twenty six and 50/100 (26.50) g feet to a point; •d 10 9 e a l 9 3 Thence turning and running S 07° 03' 14" E, a distance of two hundred sixty-six and • 00/100 (266.00) feet to a point; Thence turning and running S 06° 35' 14" E, a distance of one hundred fifty-four and 50/100 (154.50) feet to apoint, Thence turning and running on S 05° 41' 14"E, a distance of one hundred thirty and 90/100 (130.90) feet to a point; r Thence taming and running N 84° 50' 00" W, a distance of five hunched eighty and 54/100 (580.54) feet Co apoint at land now or formerly of Auger; j Thence tuning and running along said land now or formerly of Auger N 16° 18' 17" E,a distance of ninety 'five and 07/ t 100 (95.07)feet to a poin t : Thence turning and ruining again along said land now or formerly of Auger N 76°23' 06"W, a distance of one hundred and 00/100 (100.00) feet to a point on the easterly sideline of Proctor Street; - r Thence turning and running along said easterly sideline of Proctor StreetN 15° 05' 02" E,a distance of eighty-three and 35/100 (83.35) feet to a point; ' Thence turning and running S 76° 23' 06"E, a distance of one hundred nine and 50/100 - (109.50)feet to a point; Thence tinning and pinning N 68° 24' 34"E, a distance of sixteen and 70/100 (16.70) feet a point; Thence turning and running N 53° 26' 11" E, a distance of fifty-two and 20/100 (52.20) feet to a point; ' 4 Thence turning and running N 27° 51' 01" E, a distance of sixty-four and 50/100 (64.50) feet to a point; Thence taming and running N 37° 35' 26" W, a distance of forty-two and 40/100 (42.40) '.;feet to a point; Thence turning and running N 55' 24' 34"E. a distance of twenty-seven and 20/100 07.20)feet to a point; !� 4 Thence tuning and humming N 77° 15' 30"E, a distance of eleven and 03/100 (11.03)feet i , a point; kF-- An u, A " Thence taming and running N 34° 18' 14" W, a distance of ninety-six and 13/100=f (96.13) + ' deebto tlne TRUE POINT OF BEGINN'1NG. Containing 284,341 sq. ft.,morc or less. '{ z ZN, , t 3 � r h xill Said parcel is shown on a plan entitled "Topographic Plan of Land in Salem, Mass., scale dated March 1972" and Property Lines added October 2, 1972, by New England r{ � 4 ,fey Service, Inc., Civil Engmeors and Land Surveyors. x4 P�1 F Aq { z F C Yl r'3 x f �r 3 r a. r 14 s tip .5`• '" v3 s' 9 i F ViA I' 5i4= yc ys 12 x � A h Y � � t r_ 'yY c.X t '•. ,4 4 4 c( t ! L xr '%} r a: 1Y )h Iii S 1 tt h i{ �k 3 kr 1 i� f i ybi 0.y 2 { HSS k ! 3 4S fl yJ 3r d AFFORDABLE HOUSING AND r t)i� TAX REGULATORY AGREEMENT Ai&yks v ;r Ws s I r � w „y By and Among MASSACHUSETTS DEVELOPMENT FINANCE AGENCY and vkrtt � MASSACHUSETTS HOUSING PARTNERSHIP FUND BOARD and } IEMHEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP $ and I }� ST ARGO B - aANIC MINNESOTA,NATIONAL ASSOCIATION, as Trustee tom. $25,269,491 Loan Financed In Part By $18,000,000 Massacliusetts Development Finance Agency A" ? Multi-Fancily Housing Revenue Bonds (Salem Heights Apartments) i Series 2003A y -' Dated as of July 1, 2003 r, ESSEX SOUTH REGISTRY DISTRICT JOHN L.O'BRIEN,JR.REGISTRY OF DEEDS t'q F y ' k DATE 2 -1 1 61 aha RECEIVED -Z-O'CLOCK 7,M � ,. ', RK-71;(Avr. Q'U low1 rc F t-.tas x fiyi a ��, f � ,. k t i e — m My a� rs t 4 �r M{ , K S x} �v .�,u L U n' C • k - - _ k Ate _ fits 3'" i FfiC'iz _'{ a 4 / .3f''..1raa�," PI ' .rx + lT�x Y�pfc„ jAlis t AFFORDABLE HOUSING AND TAX REGULATORY AGREEMENT PORDABLE HOUSING AND TAX REGULATORY AGREEMENT -greenent") is made and entered into as of July 1, 2003,by and among .1"SE DEVELOPMENT FINANCE AGENCY (the"Issuer"), a body c o'orate organized and existing under the laws of The Commonwealth of tts`(d e"Commonwealth"), MASSACHLISEI'TS HOUSING FUND BOARD ('MHP"), a body politic and corporate organized and deithe laws of the Commonwealth, WELLS FARGO BANK MINNESOTA; As,SOCIATION (the "Trustee"), a national banking association, and SP SERVATION ASSOCIATES, LIMITED PARTNERSHIP, a hmited partnership (the"Company")- WITNESSETH: Company").WITNESSETH: the Issuer is organized under Chapter 23G, as amended, of the of the Commoniwealthi(the "Act') and is empowered under the Act to enter d is with respect to the financing of projects (as defined in the Act),which trstnal,commercial and other economic development and other public Y 4he Acf and � rt AS"the Issuer has issued $18,000,000 in aggregate principal amount of y,Housing Revenue Bonds (Salem Heights Apartments), Series 2003A for,the pu poses of financing a 283 unit rental housing development (the dated on the property described in Exhibit A hereto intended to qualify as a rde,rat rental project'within the meaning of Sections 142(a)(7) and 142(d) *alfieJenue Code of 1986, as amended; and the Issuer and MHP, a body politic and corporate and a public gf,the Commonwealth created by Section 35 of Chapter 405 of the tzs s L sof 1985, as amended by Sections 34 through 37 of Chapter 102 of the �n Acts of 1990,have entered into a Loan Agreement dated as of July 1, greement"), pursuant to which the Issuer will lend to MHP the proceeds of the Loan".), and MHP will agree, among other things,to make loan payments „ amounts and at times sufficient, among other things,to pay when due the bpand the redemption prem um, if any, and interest on,the Bonds; and h 'Ct AS,MHP and the Company have entered in to a Loan and ent Agreement dated as of July 1,2003 (the "End Loan Agreement"), brch tv1¢g will lend to the Company the proceeds of the Loan, along with mds such that the total amount of funds loaned to the Company is €end"the Company will agree, among other things, to make loan payments to wtLs and at times sufficient, among other things to pay when due the s ....a" 1 f il �k .;- ` a prepayment prerrinun, if any, and interest on, all funds borrowed fi om fan u�rig the Loan; and �r OAS,the Agreement and the End Loan Agreement require the execution a cry df this Regulatory Agreement, p�V;THEREFORE, m consideration of the mutual covenants and undertakings �erem, and intending to be legally bound, the Issuer,MPIl', the Trustee and the }do hereby contract and agree as follows: s) CTION 1. Definitions. In addition to teams defined elsewhere in this cement, unless otherwise expressly provided herein or unless the context tory Agr uues otherwise, the following terms shall have the respective meanings set zeq how for allpurposes of this Regulatory Agreement: Actually Outstanding" shall mean,with respect to the Bonds, those Bonds the dal and' nterest on which has not yet been fully paid, whether or not such bonds are id-be outstanding under the indenture pursuant to which they were issued. 4 ` n Adjusted Family Income" shall mean the adjusted gross income of all persons tde n a single residential rental unit, calculated n the manner prescribed n on'1142(d)(2)(B) of the Code, and determined in accordance with Exhibit B attached `Affordable Units" shall mean those units in the Project set aside for occupancy IOT ver Income Tenants which shall consist of 114 units, representing at least 40% of a t 'in the Project. At least fifty percent (50%) of the Affordable Units shall be two- : , . m units. E'Area"shall mean the Metropolitan Statistical Area in which the Project is as determined from time to time by the United States Department of Housing and Development("HUD"). ,Code"shall mean the Internal Revenue Code of 1986, as amended, and any final, 9rary,or proposed regulations applicable thereto or promulgated therrander. `S,ower-Income Tenants" shall mean and include individuals or families with )1lstedEamily Income which does not exceed sixty percent(60%) of Median Income, ed'for family size, provided that Adjusted Family Income shall be determined in a a• ;x consistent with determinations of lower income families and area median gross � e made under Section 8 of the United States Housing Act of 1937, as amended anid '!a gulatlons promulgated thereunder(the"Section 8 Program"). h7 no event,however, the occupants of a unit be considered to be Lower-Income Tenants if all the ants are foil-time students (as defined in Section 151(c)(4) of the Code), no one of t hJ8 entitled to file a joint federal income tax return. r. s , .Fa e. F . *341{j yS� a x �k jan Income " shall mean the median gross income for'the Area, as omh ne to time by For Far purposes of determining whether Adjusted ualifies a tenant for treatment as a Lower-Income Tenant, the Median $r�qd.. be a1 sted for family size. ".. alifi'ed Pro ect Period" shall mean the period beginning on the first day on p . e[i percent(10%) of the residential units in the Project are first occupied, gon thelatest of(i) the date which is fifteen (15)years after the date on which Percent(50/o) of the residential units in the Project are first occupied; (ii) the wh ch no Bonds are Actually Outstanding; and (iii) the date of which any, rov ded.with respect to the Project under Section 8 of the United States e`t o&1937; as anrendcd,terminates. Notwithstanding the foregoing the Pr9JectPeriod shall, unless terminated sooner in accordance with this {agreement,be for a minimum period of eighteen (18) years from the date of ent� �k `shall mean the Essex County South District Registry of Deeds. k ted Person" shall mean a person whose relationship to such other person is thes6lationship between such persons would result in a disallowance of Section 267 or 707(b) of the Code, or(ii) such persons are members of the ed group of corporations (as defined in Section 1563(a) of the Code, except 5,0 percent" shall be substituted for"at least 80 percent" each place it 1 m) r � r =ION;2;'Rules of Construction. Unless the context clearly requires Dr s of the masculine gender shall be construed to include correlative words e`and neuter genders and vice versa, the words of the singular number shall �to include correlative words of the plural number and vice versa. This �ieement and all the terms and provisions hereof shall be construed to purposes set to herein and to sustain the validity hereof. e�ttles`and head ngs of the sections of this Regulatory Agreement have been z convert ence of reference only and are not to be considered apart hereof and l�tn any Wdymodify or restrict any of the terms or provisions hereof and shall nsidered or given any effect in construing this Regulatory Agreement or any `ereof or in ascertaining intent, if any question of intent shall arise. : s4and phrases used in this Regulatory Agreement and not defined herein e me?ungs assigned to those terms in the Agreement. _ s N`{ F y,} gry� 34 � ry A+� �yF�C 3 ' h K '' of Exhibit C attached hereto, and the Company shall cause such tform . certificate to be duly recorded in the Registry and shall provide a date- ` ed copy of such recorded Certificate to the Issuer and MHP stamp 1 Y unediately thereafter. %f,`r ztJuee each unit m the Project is available for occupancy, such unit will be rented or available for rental to the general public on a continuous basis d mngthe Qualified Project Period and that during such Qualified Project '�y Peno ai) the Company will rent the Affordable Un is to Lower-Income ' Tenants such that, at all times during the respective Qualified Project Period, at least forty percent (40%) of the completed r residential units will be occupied by Lower-Income Tenants (the ordability Requirement") and the Issuer elects to apply the rrequirements of Section 142(d)(1)(B) of the Code to determine the status of the Project as a"qualified residential rental project" within the meaning of Section 142(d) of the Code; The annual rental expense for each Affordable Unit, including the ` revision of heat, electricity and hot water, shall not exceed thirty 3„;percent(30%) of the applicable income limit for the Affordable .. ' Un t, adjusted for household size, assuming that a unit which has one or more separate bedrooms is occupied by 1.5 individuals for y X each separate bedroom. However, the maximum annual rent for : any Affordable Un t shall not fall below the rent level set at the d me the Project is first occupied in accordance with this T2egulatory Agreement. Notwithstanding the foregoing, if antb ;`Affordable Unit has a subsidy commitment through the Section 8 �r h 'h • Program, or any comparable rental assistance program,then the t +maximum rent shall be that permitted by the Section 8 Program, or the comparable program. If, after initial occupancy, the income of a tenant in an Affordable -Unit ncreases, and as a result of such increase, exceeds one P " 'hundred forty percent (140%) of the maximum income permitted fi hereunder for such a tenant, at the expiration of the applicable a lease tem ,the rent restrictions shall no longer apply. Company shall comply with all applicable federal, state and local laws, regulations, rules and ordinances prohibiting x is m nation in the rental of residential property. The Company g ; shall affirmatively market the Affordable Units to minority households. The Company shall advertise the availability of the sAffordable Units in minority newspapers in the area in which the =Project is located and vacancies will be listed with fair housing I P E at T- t i organizations in such vea. The Company shall select tenants for tg* the Project in a fair and impartial manner,based upon objective > = criteria made known to such tenants upon request. Written f, < - applications will be accepted and time stamped upon receipt, so .r that such applications will be considered in the order in which they were received and a waiting list of applicants not accepted as tenants will also be established; �l 0 (iii) the Company shall submit to the Secretary of the United States Department of the Treasury(at such time and in such mannei as the Secretary shall prescribe) an armual certification as to whether v` the Project continues to meet the requirements of Section 142(d) of the Code, and the Company acknowledges that failure to do so will subject the Company to penalties under Section 66520) of the Code; and x (iv) the Company shall prepare and submit to.the Issuer, MFIP and the i s . Trustee on or before the first day of January, April, July and i October of each year during the Qualified Project Period and a.+,rs.xr within 30 days after any change (but only if material to the Company's continuing compliance with this Regulatory Agreement) in occupancy of a residential unit by a Lower-Income Tenant, a Certificate of Continuing Compliance in substantially the form attached hereto as Exhibit D- F, (c) The Company shall lease or enter into residency agreements for the occupancy of residential units in the Project to Lower-Income Tenants Is only pursuant to written leases or residency agreements, and each such lease or residency agreement shall be for a term of at least one year plus sy.. one day(or the remainder of the tenant's life, if less) in compliance with the requirements of the Act and shall contain a clause or addendum in substantially the form of Exhibit E attached hereto. The Company shall, P Y upon initial occupancy and annually thereafter, obtain from each Lower- y Income Tenant an Income Computation and Certification substantially in the form of Exhibit E hereto and shall obtain and maintain on file fiom t f-I each Lower-Income Tenant evidence reasonably sufficient to verify the Lower-Income Tenant's income and assets, including as may be necessary s z`_ k, (i) a copy of such Lower-Income Tenant's most recently filed Federal income tax return, (ii) a verification from the Lower-Income Tenant's s I U' employer, if any, of the Lower-Income Tenant's wages and other fs compensation, and (iii) verification of other sources of income, if any. (d) For purposes of this Regulatory Agreement, each residential unit in the Project leased to or occupied by Lower-Income Tenants shall be treated as continuing to be leased to or occupied by Lower-income Tenants, rr� notwithstanding that the Adjusted Family Income of such Lower-Income �5§ ' i.� y V. Tenants, as of any subsequent determination date, may exceed the M,i—licable limitation;provided however that such residential unit shall no longer be considered leased to or occupied by Lower-Intone Tenants if aj e'Adjusted Family Income of such tenants exceeds 140% of the applicable limitation and after such determination, but before the next +determination, any residential unit of comparable or smaller size in the .Project is occupied by new residents who are not Lower-Income Tenants. In=addit on, each residential unit in the Project which is leased to or ,,-occupied by Lower-Intone Tenants shall continue to be considered leased I ,to'or occupied by Lower-Income Tenants after such residential unit is vacated by such Lower- Income Tenants until such time as such residential it is reoccupied, other than for a temporary period not in Qa :excess of 31 days, at which time a redetermination of whether the =' at nal unit is occupied by Lower-Income Tenants shall be made. ii Y + ��he�Company hereby agrees that the Issuer and MHP shall not be liable ''fon any losses, damages, costs, expenses or claims whatsoever arising m receipt or review by them (or by any person or entity acting on their Y behalf)of any certificates or reports as to compliance with the iequ cements of this Regulatory Agreement. The Company further agrees k'that the Issuer and MHP (or any person or entity acting on their behalf) (j` 'shall not be obligated to review any such report or certificate, or to take action as a result thereof,but without prejudice to the right of the Issuer and MHP to exercise their rights and remedies hereunder if any such report or certificate discloses non-compliance with the requirements h'eteof, or if the Issuer or MHP otherwise discovers such non-compliance. If the Issuer or NIH? becomes aware of non-compliance by the Company i with the requirements hereof, the Issuer or Nfl-IP shall promptly give u r tten notice thereof to the other party, the Company and the Trustee. ON 5. Transfer Restrictions: Covenants to Run_With the Land Duration r. r The Company covenants and agrees that the Company will cause or iequ re as a condition precedent to any conveyance, transfer, assigninent i Cr dsposition of the Project prior to the expiration of the p Qualified Project Period (a "Transfer") that the transferee of that portion :`assume in wr ting, in a form acceptable to the Issuer and MHP, all duties obligations of the Company under this Regulatory Agreement, tnclud ng this Section 5 in the event of a subsequent Transfer before the ezpirafion of the applicable Qualified Project Period. The Company shall deliver such written assumption agreement to the Issuer, MHP and the c:Tnistee before the Transfer. Any conveyance, transfer or assignment by It e,Company of the Project not complying with this Section shall be null, V oid and without effect. Notwithstanding the foregoing, there shall be no s 5 1' it`rttk 'S f 4 or!ilillilloommEmEmomm Kill III tZ `fly:. Ili u �= Transfer without the prior written consent of MHP and the Issuer,which i Mkt ebnsent shall not be unreasonably withheld or delayed. 1, - he Company shall cause this Regulatory Agreement to be recorded with the =try and the covenants contained herein shall nm with the land and shall and its successors and assigns and all subsequent owners of 01had the Compan y 'l W, and of the Project or any interest therein, and the benefits shall 1111117C to I� Rhe,rIssuer and MHP and their successors and assigns, during the Qualified ` ZV project Per od. The restrictions contained herein are intended to be construed �1 ag'an affordable housing restriction as defined in Section 31 of Chapter 184 of 'the Massachusetts General Laws which has the benefit of Section 32 of said t Chapter 184, such that the restrictions contained herein shall not be limited in r'diration Uy any rule or operation of law but rather shall run for the full term =hereof. Unless the covenants contained herein have been released by the e m, Fier Fier and MHP in writing, they shall swvive and be effective for the teen o£ _6 , alas Regulatory Agreement regardless of whether any obligations owed to the a+ _ ,Issuer or MHP or to any assignees of the Issuer or MHP have been fully paid d/orperformed. �r;fhis Regulatory Agreement is senior to the Mortgage and Security Agreement F ;,(the"Mortgage") granted by the Company in favor of MHP of even date and a; .,= .4fecorded herewith with respect to the Project, provided, however,that MHP, at its option,may, at any time,whether or not foreclosure proceedings have ,`,.tier initiated under the Mortgage, unilaterally subordinate this Regulatory y xF s *s��"Agreement to the Mortgage, and the Issuer, Trustee and Company agree to k =''.execute any documents required to so subordinate this Regulatory Agreement. w 'In addition, at any time after(1) the latest of(i)the date which is fifteen(15) "(4ydars after the date on which at least fifty percent (50%) of the residential un is in the Project are first occupied; (ii) the first day on which no Bonds are pActually Outstanding; and (iii)the date on which any assistance provided with respect to the Project under Section 8 of the United States Housing Act of s 1937, as amended,terminates; or(2)upon the occurrence of(A) or(B) of "%'S ection 9 of this Regulatory Agreement,MIIP, at its option,may,whether or not foreclosure proceedings have been initiated under the Mortgage, a 'un laterally discharge this Regulatory Agreement. Furthermore, the Company § ,'understands and agrees that, in the event of foreclosure of the Mortgage and lI ` the exercise by MHP of the Power of Sale therein, the Project will be sold u _ T. subject to the restrictions imposed hereby, unless MIIP exercises its rights to 3discharge or subordinate this Regulatory Agreement prior to such sale. The (; P P irrevocably appoints MHP, or any agent designated by MHP, its 4},true and lawful attomey-in-fact, with full power of substitution, to execute, O'r,acknowledge, and deliver any such docurnents on behalf of the Company MR which the Company fails or refuses to do. � CTION 6. Indemnification of Issuer and Trustee. The Company shall, to the 'Pe tted by law, indemnify and hold harmless the Issuer,MHP and the 10- Lir4 d}their officers, directors, employees and agents, from and against(a) any and h. g m `sin from any cause whatsoever in corechon with this Regulatory Ali _ (b) any and all claims arising from any act or omission of the Company or h t','- ysagehts, servants, employees, or licensees m connection with this Regulatory �; ,,., d(c) all costs,reasonable counsel fees, expenses, and liabilities incurred in oan wiith any such claim or proceeding brought with respect to any thereof. The ty:provided for in this Section shall not limit any other indemnity given carder the Brit of any other document. If any action or proceeding is brought against the or the T ustee, as the case maybe, or any of their respective officers, t officials or employees,with respect to which indemnity maybe sought er=tli e ComP any, upon notice thereof shall assume the investigation and defense ug(" '{ ricluding the employment of counsel acceptable to the Issuer, MHP or the vPd as the case may be, and shall be responsible for the payment of all expenses 'K ;theieto. The indemnified party shall have the right Co employ separate counsel in uc sh actton or proceeding and to participation in the defense thereof, and the s i;q4 z y Shall be required to pay the fees and expenses of such separate counsel. r SECTION 7. Reliance. In performing their duties and obligations hereunder, the and the Trustee may conclusively rely upon statements and certificates of , 2*y or Lower-Income Tenants believed to be genuine and to have been &ed.by the proper person or persons, and upon audits of the books and records of the z any,pertaining to occupancy of the Project. In addition, the Issuer,MHP and the * ee may consult with counsel of their selection, respectively, and the opinion of such unset shall be full and complete authorization and protection in respect of any action AM ared by the Issuer,MHP or the Trustee hereunder in good faith and in ", otmitywith the opinion of such counsel. .0ECTION 8. Access to Development and to Books and Records. The Company Wpon reasonable request,permit the Issuer, MIS and the Trustee to have access to, }a �r, omspect and copy, the Company's books and records with respect to the Project and eve access to the Project during normal business hours. Such rights may be exercised $ 6 arepre,sentative, employee or agent of, or counsel to,the party making the request. 2e' 1SECTION 9. Tenn. The terns and provisions of this Regulatory Agreement fi �n" become effective upon its execution and delivery. Except as otherwise provided in WIN �r, ,- * Scrotion,this Regulatory Agreementshall remain in full force and effect until the end �r eQualified Project Period. It is expressly agreed and understood that certain :F P Y F,tons hereof are intended to survive the payment of the Bonds. The foregoing � �standing this Regulatory Agreement and all restrictions hereunder may terminate ' the written approval of MHP (A) if there is delivered to the Issuer, the Company the Trustee an opinion of nationally recognized bond or tax counsel acceptable to the to the effect that failu e to comply with this Regulatory Agreement will not cause .,f r t on the Bonds to become includable in the gross income of the holders thereof for ( rat income tax purposes, or (B) in the event of an involuntary noncompliance caused Yte s"eizure,requisition, foreclosure, transfer of title by deed in lieu of foreclosure, nation or similar event, or a change in a federal law or an action of a federal .. I t y after the date of issuance of the Bonds that prevents the Issuer from enforcing the this Regulatory Agreement,but only if, within a reasonable period, either the o#. Js ate repaid or amounts received as a consequence of such event are used to provide .� dential rental project that meets the terms of this Regulatory Agreement it a. ler, I ding the foregoing such requirements shall continue to apply to the Project p R s4 611t to a foreclosure, transfer of title by deed in lieu of foreclosure or similar event t at?nY time subsequent to such event, the obligor on the purpose investment(as s r wed in Section 1.145-1(b) of the Treasury Regulations) or a Related Person obtains an ersli p interest in the Project or any part thereof for Federal tax proposes. ; SECTION 10. Enforcement. Upon discovery by of notification to the Issuer,MHP or the Trustee of any default in the peiformance or observance of any covenant, agreement of obligation of the Company set forth in this Regulatory Agreement, the Issuer, NII or the Trustee shall promptly notify the Company in writing ag of the existence and nature of such default. If the Company defaults in the aO Performance or observance of any covenant, agreement or obligation of r Eg� the Company set forth in this Regulatory Agreement, and if such default `+ remains uncured for a period of sixty(60) days after notice thereof shall have been given by the Issuer, MHP or the Trustee to the Company, with aTrustee copy of such notice to the others, then the Issuer,MHP or the Trustee may + declare that the Company is in default hereunder and may take any one or y ° more of the following steps, at its option: by mandamus or other suit, action or proceeding at law or in equity,require the Company to perform its obligations and covenants hereunder, or enjoin any acts or things which maybe uIlawful or m M violation of the fights of the Issuer, HP or the Trustee hereunder; tt,; R i, (ii) have access to and inspect, examine and make copies of all of the n books and records of the Company pertaining to the Project; (iii) take whatever other action at law or in equity may appear necessary or desirable to enforce the obligations, covenants and g agreements of the Company hereunder; or (iv) to recover any monetary damages suffered by the Issuer,MHP, tine Trustee, or the owners from time to time of the Bonds as a r1 consequence of any event of default; provided that in the case of a default that is curable but requires acts to be done or conditions to be remedied which, by their nature, cannot be done or remedied within such 60-day period, and if the Company commences { ' a the same within such 60-day period and thereafter diligently and tt _ t �� + -12_ S �} 'I 'i �t> continuously prosecutes the same to completion the time within which the Company may cure shall be extended for such period as may be s # li' reasonably necessary in the Issuer s or MI or the Trustee's discretion to cme the same with due diligence (but in no event more than 90 days). . w } (b) The Company hereby acknowledges and agrees that money damages will r * „_ not be an adequate remedy at law for a default by the Company arising p(,z ,. from a default hereunder, and therefore the Company agrees that die wtM' remedy of specific performance shall be available to the Issuer or MHP or the Trustee in any such case, but without prejudice to the availability of i monetary damage remedies. j 5 Sy x1 y 1 (c) The Trustee shall have the right, but not the obligation, in accordance with this Section and the provisions of the Trust Agreement, without the mFgz s `_ consent or approval of the Issuer, to exercise any or all of the Issuer's ( ,r rights or remedies hereunder, and the Issuer hereby irrevocably appoints the Trustee attorney-in-fact for the purpose of enforcement of this fi Regulatory Agreement. No delay in enforcing the provisions hereof as to any breach or violation shall impair, damage or waive the ght of any s party entitled to enforce the same or to obtain relief against or recover for �> h the continuation or repetition of such breach or violation or any similar breach or violation thereof at any later time or times. The Company agrees to pay, indemnify and hold the Issuer,MHP and the Trustee fib . r harmless from any and all costs, expenses and fees, including all ,¢k reasonable attorneys' fees and expenses that may be incurred by the Issuer, MHP and the Trustee in enforcing or attempting to enforce this Regulatory a Agreement following any default herein on the part of the Company, whether the same shall be enforced by suit or otherwise, and the reasonable fees and expenses of counsel in connection with any opinion to x M be rendered hereunder. (d) No remedy conferred herein or reserved to the Issuer or MHP or the Trustee is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. IKhl kms' (e) If the Issuer, MHP or the Trusteehas instituted any proceeding to enforce any right or remedy under this Regulatory Agreement and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Issuer, MIS or the Trustee, then and in every such case the Company, the Issuer,MHP and the Trustee shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Issuer, MHP and the Trustee shall continue as though 1 no such proceedings has been instituted. r �ti -13- i4 v-4 a 3 f 1 ilk x V Ill I1: T o`delay or omission of the Issuer, MHP m the Trustee to exercise any dy provided hereunder upon a default (except a delay or pght or reme4 $m ssion pursuant to a written waiver) shall impair any such right or constitute a waiver of any such event of default or acquiescence � 1 remedy or therein. Every right and remedy given by this Section 10 or by law to the }' suer or MPII' or the Trustee maybe exercised from time to time, and as S' be deemed ex pedient b the Issuer or MHP or the Trustee, as d often as may I Y the case may be. e any remedy available to it on account of The Issuer or NHP may exercis :a_ny default, violation in breach by the Company under this Regulatory I`" eement that is not cured to the satisfaction of the Issuer and MHP with t; Agr the applicable cure period hereunder. The Company shall pay all costs :band expenses,including reasonable legal fees (including the time of any "Fin-house counsel of Issuer or MET charged at the same rate as comparable ' outside attorneys), incurred by the Issuer or MHP in enforcing this ,Regulatory Agreement, and, in the event of any action by the Issuer or MHP against the Company,the Issuer and MHP shall be entitled to seek 4a¢attachment against the Company's property including, without ,gimitation, its interest in the Project. The Issuer or MHP may perfect a lien '�'on the Project by recording/filing one or more certificates setting forth the amount of the costs and expenses due and owing in the Registry. A Ftp Irchaser of the Project or any portion of it shall be liable for the payment of any unpaid costs and expenses which were the subject of a recorded filed certificate prior to the purchaser's acquisition of the Project 'I ot,portion thereof. ON11. Governing Law. This Regulatory Agreement shall be governed by of The Commonwealth of Massachusetts except to the extent that laws States of America may prevail. ON 12. Amendments. This Regulatory Agreement shall be amended only Instrument executed by the parties hereto, and only upon receipt of an yrhonally recognized bond or tax counsel acceptable to the Issuer that such neuision will not adversely affect the exclusion from gross income for tax-purposes of interest on the Bonds. ri! I ON 13. Notices. Any notice required to be given hereunder shall be given ror certified mail at the addresses specified below or at such other addresses rfied in writing by the parties hereto: If to the Issuer: :sad Massachusetts Development Finance Agency s*;s 75 Federal Street 1 r Y '•'f� til a- 1 qj f �J Boston, MA 02110 Attention: General Course] "U ffi Massachusetts Housing Parhiership Fund Board r 2 Oliver Street ,f Boston, MA 02109 Attention: General Counsel r l •.W to+heCompany: ' Salem Heights Preservation Associates, Limited Partnership c/o Preservation of Affordable Housing Inc. !� f 40 Court Street, Suite 650 r, fidd` Boston,MA 02108 a copy to: Palmer& Dodge LLP 111 Huntington Avenue at Prudential Center Boston,MA 02199 Attention: Thomas G. Sehnert, Esq. and Steven Paul, Esq, F If to the Trustee: Wells Fargo Bank Minnesota,National Association Corporate Trust Services 213 Court Street, Suite 703 Middletown, CT 06457 ON 14. Severability. If any provision of this Regulatory Agreement shall al or unenforceable, the validity, legality and enforceability of the rtrons shall not in any way be affected or impaired. ON 15. Multiple Counterparts. This Regulatory Agreement may be l v,99ecuted in multiple counterparts, all of which shall constitute one and ent and each of which shall be deemed to be an original. 'r f ON 16, L mitation of Liability. It is understood and agreed by the no covenant of the Issuer or MHP herein shall give rise to a pecuniary eAssuer or MHP or a charge against their general credit or taxing powers. It pod and agreed that no covenant or agreement of any member of the z or any director, officer, agent, employee or representative of the Issuer or �ustee,in his or her individual capacity, and none of such persons shall be � tersonal liability or accountability by reason of the execution hereof, fi 4 *` f t r, .. �€ constitution, statute or rule of]aw or by the enforcement of any e of by -R, Ityor otherwise. Y 1r'han e in Use. The Company understands and acknowledges t rat 7. (2)of the Code provides that if the requirements for a "qualified ntat project" are not met under Section 142(d) of the Code with respect to o'deduction shall allowed for day of the taxable Bonds le1Plroject fails W.begins g jeQu ements and ending on the date the Project meets the requirements. . �r 'r 'nP Requirements The Issuer or MHP may, fiom time to IQN 18 esthe service of a third party monitoring agent for purposes of monitoring the �! performance under this Regulatory Agreement. In such event, such I; agent shall have authority to act m all matters relating to the Company's underth s Rgulatory Agreement. In the event the Issuer or MIIP engages e of a, nonitoring agent, such monitoring agent shall not be held liable for any gn ogulatory Agreement so long as it shall hav r,omirted under thus Ree acted in 3 apd w thout g oss negligence- ACTION 19. Roles of the Issuer and MHP. The Issuer and MHP shall make all g efforts to cooperate in the joint administration of this Regulatory Agreement. -,,,,. acknowledge that MHP shall,dui ng the term of the Loan Agreement,have role in monitoring and enforcing this Regulatory Agreement. At such time %the Issuer or the Trustee determines that it is no longer required to be a party .,. latory Agreement and so notifies the other parties hereto in writing, the vail'eXecute remove such entity as a party to this any documents required to �ry Agreement. w "EFF 14 i' Ems: F yl x -4 b. 1, 4t . h` rib 4t yi J SIuwY Her M i •fF� 16- �h V i'Y aaf 1 -,b:', 4 ri F V"" f r� to �r q` ' "`_ • • F t k � s x � } �a} � ���SFr ��.�� • • • • r ?�eip�"i``%��- tiu mate �mrt�L n n , + it',h Nis£ t i�-nsi�. . • • • - �jj!'a J2 FES ��� fes¢1t' ��[;[�� 4r � ���Y. � • •��� , ���I�t� � � r�. fir ay • • .• �• s',e�''h i y�'Y'- • i • 5 � 1 a�S Y Ai4 S• x Ie k }.(1, fA� .. r5, -ttii • t r �+ • � y to • c J j iy�} I i d \1'k • , ' >�Vk ci n s ,. f hr- • - • • • i ; f s r " "e• rt 3'r�� t ._C3 �i 8c • kT Ott �._+ 5.q4' afe". '•iW . • • �-• - . - •- • '�C�sF: + ata s �i �.v _� • •• • - -• • - •• �• • � . • - • • +s t 9 .Y7. riv k e:. � r e �* q a.' ♦ t t 1 u ` a£y A 711:ffi]I r "t ��Uh� t }alar • "• • • rPz,:�,�4Z�'�,��}fir *�rSiv"gv�, •- • • • •• •• - .• - • -•• • •. Yy� G¢ p 21 r iu tae � ik �� r°*�-�}� 1 � • • • SkL�'. 4'�y�`il 5 F�xJ,"kpy tL�rl�fFlrTii� � � � I I f�*l IA A kT'S 55�a r}" ; t 5 � e e�r�y .i rr ✓ v#a k '0 cx,' aT � � tet: e-I . . • - �°.rt � t it • • x ri ��� �� kyr��.0 e- •�' 1 11 • - • - • 11 I• • ' 1 - • 111 11 �' t' � F k � uta., - I . .• �s- ry Asa ,: ��" ° • i• le • • • •/ // w A ,axt >J n1h.tRT'4 Gc' f �71 x z=u, l i ung and tumring S 06° 35' 14"E, a distance of one hundred fifty-four .I. "154.50) feet to a point; ce turning and running on S 05° 41' 14" E, a distance of one hundred thirty, li �G 130.90) feet to a point; nce firming and running N 84° 50',00" W, a distance of five hundred eighty (5,,80.54) feet to a point at land now or formerly of Anger; r Y ce tun ng and running along said land now or formerly of Auger N 16° 19' '' ``ce of ninety-five and 07/100 (95.07) feet to a point; �'ee taming and running again along said land now or formerly of Auger N ' J'a distance of one hundred and 00/100 (100.00) feet to a point on the deline;of Proctor Street; r' ce;tunung and running along said easterly sideline of Proctor Street N 15° sfance of eighty-three and 35/100 (83.35) feet to a point; `cel rn ng and running S 76°23' 06"E, a distance of one hundred nine and 0)feet to a point; cetuming and running N 68° 24' 34"E, a distance of sixteen and 70/100 r"point; ce hum ng and running N 53' 26' 11"E, a distance of fifty-two and 20/100 o a point; ice honing and runn ng N 27" 51' 01"E, a distance of sixty-four and 50/100 apoint; e turning and mmning N 37° 35' 26" W, a distance of forty-two and 40/100 o a point; tunnn9 and running N 55° 24' 34" E, a distance of twenty-seven and 0)leet to a point; raP g and miming N 77" 15' 30"E, a distance of eleven and 03/100 m ng and Wait ng N 340 18' 14" W, a distance of ninety-six and 13/100 e TRUE POINT OF BEGINNING. g 284,341 sq. ft., more or less. -z�- i �x , m ;c u lr. r " >r'F: 3 s f,.;'t� � X GlLYy 94 C; Y y FF"j:Fel 5 4 4Fr� 4 {kyc xt Fr' FG �r x S 3 yF `p��'1Ak1�"�4 .y 3 za f4p�b43a t s�,.�� l�,1 zs� d +� • a S ax r a i r r 1 �ay ''��f IM1 J S d Ilu 1 _ s rr.'axrla �! yk t a i x- a � • x .5.�t�` �s �x st F� ' • 9 97� �b . +• f �F�N� - a ,a-t, ;'��{�. 3� s�3 eta �51�'.".®a e e • - • •totem al"MOM"• • • -• R to ry rdyS a �I�4,tyY'�L�vt^�'.. . v� T 4�}�(��txttc°L �"iti➢ ,� Y i � t"fl9�n 1 4 rav r „ na �:Y i; f `rfr . fY 1.� X 4t }:prrlZy Y i p ��f) } f� Y 3 ,iii. 1 • v cS t Irl a✓r y ,+ �)s SF: f is�4F"��ih�S�n" t � i4�# Jfi11e t✓`'� f K�� / }6 a • • t��1-� 1����J' i DPW I�.�YS'�-r •• 'rte £,a� ��F��`;�P' �{�,Fs � • • - Fyl� } YzrP: rsXf�ss�s�iP , Ffii� ��gip �"� f��—�f,,�'� -.` — - • — • • • — • I • �'�'i ASF tgYS•�� yF. ,c9�P r� n.;µ I •• 1 • • .• IFRR a � �s G N' 'YY as 1cs , } SG�Vx•yry }y}y ate+ '+}2 $Q 0,4£ la 3 9� rr I�YST �d L" t��F lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident v, insurance and workmen's compensation), capital gains and settlement for personal or property losses; amounts ofstudent financial assistance paid directly to the student �mYN, or the educational institution; special pay to a serviceman head of a family who is away from n home and exposed to hostile fire; foster child or foster adult care payments; income of a live-in aide; amounts under training program fimded by HUD; amounts received by a disabled person that are disregarded for purposes of Supplemental Security Income eligibility because they are set aside t raider a Plan to Attain Self Sufficiency(PASS); }3 ' amounts received by participants in publicly assisted program E' K specifically for or in reimbursement of out-of-pocket expenses tincurred (special equipment, clothing,transportation, child care, etc.) and which are made solely to allow participation in a specific rn, tR,f .amounts specifically excluded by any other federal statute from ,consideration as income for purposes of determining eligibility or r c `benefits under a category of assistance programs that includes a assistance under the United States Housing Act of 1937; xt any resident service stipend [(not to exceed $200 per month)] f 'received by a resident for performing a service for the owner, on a part-time basis, that enhances thetY uali of life in the q 'development; compensation from state or local employment training programs �i rh and tra n ng of a family member as resident management staff; ,repatr ation payments paid by a foreign government pursuant to ms filed under the laws of that govermnent by persons who re ;t persecuted during the Nazi era; x v r earn ngs in excess of[$480] for each full time student 18 years old ' r,older. (excluding the head of household and spouse) and -adoption assistance payments in excess of[$480] per adopted s t; :clnld; ytw ✓.. " T x a amounts received as defened periodic payments of supplemental security income and social security benefits that are received in a d ' lump sum payment; 71 aniounts received as refunds or rebates for property taxes paid on ?_ the dwelling unit; and d f aotmts paid by a state agency to a family with a developmenta mlly ' disabled fancily member living at home to offset the cost of services and equipment needed to keep the developmentally i disabled fancily member at home. :may of the persons described above (or whose income or contributions was nrteml)has any savings,bonds, equity in real property or other form of capital hp is the total value of all such assets owned by all such persons �Firy is the amount of income expected to be derived from such assets 12-month period commencing this date is the amount of such income which is included in item 1 FW,ill all of the persons listed in cohurm 1 above be or have they been full-during five calendar months of this calendar year at an educational nfher than a correspondence school)with regular faculty and students? (check NO [ ] tUI any such person(other than nonresident aliens)married and eligible to file a joint federal income tax return? (check one) NO [ ] /We acknowledge that all of the above information is relevant to the stales under federal income tax law of interest on the Bonds issued to finance the apartment for which application is being made. We consent to the'disclosure of such information to the Issuer of such Bonds, the holders hof such Bonds and any trustee acting on their behalf. it Fps, S .LYf ^ -26- Y qh Y� f I%y i nr t z �z� B® • 1 ,�s i • a--���'1 t �f ' fiiPY � •• • • • • R .� k' 4 p � v' y kh,eL�r � R - :i Sid n f �.T , 1' y9 h v - �+ S �F 'S r -Mel � .....ti4 � }F �tZla, I I "• • • • • ^.y r 144 AIA, i'$.'��+ T-P £ x� �yi 11 I• gi- � �7�g�#rzt{}Tesry YS ig^�f-vim tl - • s 1 I- ,Yr� - g��i Yv�`+�"� 3ri: �`r' z c. ua• - a I I - � t �fi t• Y�''Sf n a .•. �r4t�uu��- �p 1'tFk-P� r cla:o I I• - • -• • "• '_4'S=h�tr`}3 y�' c`t� 13�us�st .a I e� e -• • x 5 2 tx`= t! � v 'n.Mryllt i F "'�3 5y� y„rK1 3(lt n i �A lL � p !y. 4 i;* u 4 9'i 4 fi 1 '` QEF YJJ /JL 5 #i`.'c0 � • 3 i w + l 3 P ail Fv 405 Y "rvL Ar fg,,OM S l-, z ��a a§ .i3 r� y�a EX[IIBIT C 1 x E CERTIFICATE AS TO QUALIFIED PROJECT PERIOD WIIEItEAS, Salem Heights Preservation Associates,Limited Partnership, a lit y �viassachusetts limited partnership (the "Company") is the present owner of the rental m � ens g project (the Pioject') financed in part through the issuance of tax-exempt bonds the:Massachusetts Development Finance Agency(the "Issuer") located on the following described land (the "Land") in the County of Essex and The Commonwealth of +,� "TYlassachusetts, to-wit: [insert legal description.] WHEREAS, the Company, the Massachusetts Housing Partnerslrip Fund Board, �xa'thelssuer and , as trustee, entered into an Affordable Housing and Tax su arRegulatory Agreement dated as of July 1, 2003 (the "Agreement") recorded on k tai � r 2003,in the office of the Registry of Deeds for Essex County,Document 2f1 # No and WHEREAS, the Agreement contains certain covenants and restrictions which run the land and are binding upon the Company, its successors and assigns at all times t �Hanng a Qualified Project Period, as therein defined, unless and until such covenants and restrictions are amended, terminated or deleted as provided in the Agreement; and rt ` WHEREAS, the terms and provisions of the Agreement require the filing of an kms rument to be executed by the Issuer, and the Company in substantially the form of this hficate; NOW THEREFORE,the Company hereby certifies and declares that: ' SECTION 1. was the date of commencement of the Qualified oleot;peried. a SECTION 2. The first date on which fifty percent(50%) or more of the units in reProject were occupied was 2003, and the date which is fifteen(15) i thereafter is 2018. y M Ad r '� a` SECTION 3. The final Maturity Date of the Bonds is �,ta Er ti ' SECTION 4. The date on which any assistance provided with respect to the dTe)ect under Section 8 of the United States Housing Act of 1937, as amended, � k ' t^ at'es, as provided in [describe any HAP contract, if applicable], is unless said Contract is terminated, in which event the earlier date oftermination s� ° -30- za et,vird`> X14 A, f G'; 1 i' n{sai8 assistance shall be established by an amendment to this Certificate executed by and the Company. e Issuer + U :',`SECTION 5. The date of termination of the Qualified Project Period (the latest of e dates set forth in paragraphs 2, 3 or 4 hereof), until this Certificate is amended, is 4 200_. Z Dated under seal this day of . 2003. izAX SALEM HEIGHTS PRESERVATION *y ASSOCIATES, LIMITED PARTNERSHIP r x By: POAH Salem Heights LLC, its general pdiiiicr By: Preservation of Affordable Housing, 1 Inc-, its sole member : By: W 3 Title: . OMMONWEALTH OF MASSACHUSETTS r OiINTY : ss OF x On this,the day of, 200before me,the undersigned tay;;.pub lic personally appeared eared who acknowledged dged elfor herself to be theof Preservation of Affordable �ousMg,Inc., sole member of POAH Salem Heights LLC, the general partner of Salem f eq ' s Preservation Associates,Limited Partnership, and that he or she as such being authorized to do so, executed the foregoing e t ficate as to Qualified Project Period, for the purposes therein contained by signing Stena ne.of said Salem Heights Preservation Associates, Limited Partnership by himself r`herself as such ti IN WITNESS WHEREOF,I hereunto set my hand and official seal. j KSr �4." hJZ fy II x ti Notary Public y My Commission Expires: � �I III; EXHIBT.T D CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE t � 200_ eollowmg information with respect to the Project located in Salem, "Project"), is being provided by Salem Heights Preservation rTed'Partnersl p, a Massachusetts limited partnership (the "Company") to setts Development Finance Agency, the Massachusetts Housing Partnership d as trustee pursuant to that certain goes ng and Tax Regulatory Agreement dated as o`i 3uly 1, 2003 (the t^),with respect to the Project. Capitalized terms, unless defined herein, shall aSeeaung as in the Agreement. number)residential amts are available for occupancy number)residential units are occupied r� eCompany has obtained an "Income Computation and Certification" in the provrded as Exhibit B to the Agreement, from each Tenant named below, come stated therein has been verified as required by the Agreement and each $Certificate is being maintained by the Company in its records with respect to Lkolect.Attached hereto is a copy of the most recent such Certificate for each tenant who signed such a Certificate since 200_,the e� riw ch the last "Certificate of Continuing Program Compliance" was filed e Company. i p 1 entmg the residential units in the Project, the Company has not given feienbe to any particular group or class of persons (except for persons who lrf3 as Lower-Income Tenants), and none of the units listed below as occupied <Xower-Income Tenants have been rented for occupancy entirely by students, onRe. wh ch is entitled to file a joint return for federal income tax purposes. appropriate Income Computation and Certification has been obtained from hLower-Income Tenant upon initial occupancy of a dwelling unit) and none .umts'listed below as occupied by Lower-Income Tenants have been rented ccupar c,y entirely by students, no one of which is entitled to file a j oint return federal hrcome tax purposes. ofthe residential units in the Project have been rented pursuant to written es oY 11 residency ag eements complying with the requirements of Section 4(c) t e Agreement, and the tern of each lease or residency agreement is for a term east eI at to the shorter of the tenant's life and one year plus one day, in pT�nec with the requirements of the,Act. �x 5Rv � 1� it A ., Ar�S 1 vxY kk fS � it;}. • a ay nxn �! k tt�i#'i fid£ , T • ri`:i. • • • • • @����'`}.SsRi�Gb�T}- x r �r all•. Elx1 j� '�- F L f• ,FB 8 1 f"-kk�s�r'Yf�'{te s�jar tr�F� a '• '• • - • • f3�#;t Y�'t"�t3sva5' '. �{e�'� tt-'� a u•' YSaM1'Y Y• 1 f�Sul4 ^Tf} t" ��`��r�,: o 'k'ra-�� Ga • • •- - • _ • • ,131 l ' i Y Mv 9i r� 4 �Fi'A � rS h.KiLv r ��y�:;.pi�'C'�� �„4:. "''nye .• •- �i n a lad .✓ *9�'r `} 'r IT�e F, x �,�'t'mss,✓ � +�i z�°'� .: .. ti a Gi t a A 0 F{era .L ffis t43PY=33 �YI 3 �� =F di Ilia am zi.Et �'�"f" s 4a s�,�4 is� h���i�f r_ • • • • • - 3 w. =-IIBITL ease or Residency Agreement Provisions for ' hued L Y � Project TENANT TO FURNISH INFORMATION ABOUT INCOME. Ir formation to be Furnished. Tenant agrees to provide to Landlord an annual cettificate regarding Tenant's income. The certificate shall be provided each year ai .. d shall he on a form provided by Landlord. Tenant also agrees, at the request of [ (l e Landlord, to provide to Landlord copies of Tenant's federal income tax returns l and any other information or certificates requested by Landlord. Landlord agrees r =to request the income tax returns and information only for the purpose of ;complying with the rules and regulations of the Department of"Treasury or the t tt W :Internal Revenue Service relating to tax-exempt financ ng of qualified residential lental housing proj ects- x�p 'R Lzndiord May Disclose Financial Information. Tenant agrees that the certificates, income tax returns and other information provided by Tenant may be disclosed by 1 t Landlord to the Department of Treasury,the Internal Revenue Service or any t" :other person as maybe required to satisfy Landlord's obligations relatuig to the "-rtax-exempt financing for the [leased] [occupied] premises. i Failure to Provide Information is Default by Tenant. Tenant agrees that any z failure to provide information which Tenant is required to provide under T+Section A above shall be a default by Tenant of its agreements under the [Lease] ;[Residency Agreement]. Tenant also agrees that if any of the certificates, tax eturns, or info mation provided by Tenant are untrue, Tenant shall be in default ,cinder th s [Lease] [Residency Agreement]. In the event of any such default, Y . Landlord shall have the right to exercise any right or remedy described in Section oh s [Lease] [Residency Agreement]- 1 f} �yf t A + ue R 4+�'I�•4 �iJa 3�g�Yy 1. u �k foe 0 3� d°rg\aENTAL\PROJHCTS\POAn.Snlem lke 911 s\Affordoble Housing Ag,.em ,L\Affordable housing and Tax Regulatory t revised 7-2-03.DOC y a.Y;•, r r rr ESSEX SOUTH REGISTRY DISTRICT JOHN L O'BRIEN,JR.REGISTRY OF DEEDS - - CAPITAL IMPROVEMENT AND PRESER.VATIO1Tjy�TJND 7 Z/ �g ('RENTAL) RECEIVED Z- O'CLOCIVZ-V_ AFFORDABLE HOUSING RESTRTCTLQN RG Z at�htsPreservation Associates, Limited Partnership, a Massachusetts limited with an address of 40 Court Street, Suite 650, Boston, Massachusetts 02108 (the �j giants with quitclaim covenants, to the Massachusetts Housing Partnership Fund i exclusively for the purpose of ensuring retention of housing for occupancy s�moTerate income persons and families, the following described Affordable ;Resfci'n on land located at 12 Pope Street, Salem, Massachusetts, said land being ed to Exk ibit A attached, and all improvements located thereon (collectively, the .wi fi Ff u q C Y�r is of this Affordable Housing Restriction, authorized by G.L. c. 184, §§31-33 is law, are as follows: Pumtises. The purpose of this Affordable Housing Restriction is to assure that wtl 1 ba retained as affordable housing for occupancy by low and moderate es fi Scone: The net intends, declares and covenants, on behalf of itself and its assgns, that the covenants and restrictions set forth in this Affordable istnctionregulating and restricting the use, occupancy and transfer of the Property 'dxaie,covenants running with the Property, encumbering the Property and the Okmees successors in title and all subsequent owners of the Property, (ii) „d covenants of the Owner, and (iii) shall bind the Owner and its d assigns an the benefits shall inure to-MHP and to any past,present or M antxo'f the Property). The Owner acknowledges that it has received assistance developing the Property as affordable rental housing,which assistance includes „to Preservation of Affordable Housing, LLC ("POAH, LLC"),which e,been`loaned to Owner and which loan is funded with proceeds of an award to eaCo nmonwealth of Massachusetts acting by and through the Department of Cour it Development("DHCD") under the Capital Improvement and �und�GFeated pursuant to St. 1998, c. 257, budget line item 7004-9980 and tSt 2002,-g. 244, budget line item 7004-7015 (the "Act") with regulations and pted thereunder and promulgated at 760 CMR 18.00 (collectively, the Thi"s Affordable Housing Restriction shall continue in force for its stated of to p for repayment of such loan. uiation Not Limited. This Affordable Housing Restriction is intended to be tdable housing restriction as defined in Section 31 of Chapter 184 of the Genera]•Laws which has the benefit of Section 32 of said Chapter 184, such syu .r? f ?Miayt',G r 1kA`.I Y iso P v, s G E rUr . r c:tons contained herein shall not be limited in duration by any rule or operation e Owner hereby agrees that any and all requirements of the laws of The " ealt{''of Massachusetts to be satisfied in orderfor this Affordable Housing onto cdnstiriite deed rest ctions and covenants naming with the land shall be L4 L .pobe satisfied in fiill and that any requirements of privity of estate are intended to be ° pi�n t1 e alternative, that an equitable servitude has been created to insure that this r9.e�(}o:sill Restriction runs with the land. 4T Tenn of the Restriction. The term of this Affordable Housing Restriction shall earl from the date hereof. se trent Each and every contract, deed or other instrument ?executed conveying the Property or portion thereof shoal expressly provide that s�preyance is subject to this Affordable Housing Restriction,provided, however, that ants;eontamed herein shall survive and be effective regardless of whether such �deed'or other instrument hereafter executed conveying the Property or portion tgvides that suoh conveyance is subject to this Affordable Housing Restriction. ��,Eernritted Use. The Property shall be used for 283 waits ofmulti-family rental he 'Housing Units") of which 227 units (the"CIPF Assisted Units") shall be ---`a steel under the CIPF Program. The CIPF Assisted Units shall include at least 77 aom.units and 150 two-bedroom units. Owner shall not permit the use of any "V- for any purpose other than rental housing. Each Housing Unit shall contain avf Icilities for living, sleeping, eating, cooking and sanitation which are to be used on aRatiahsient basis. Each unit of the Housing Units shall meet the housing quality set Orth in the regulations of the United States Department of Housing and Urban menf("HUD") as 24 C.F.R. §982.401 or any successor thereto, the accessibility tints atPart 8 or any successor thereto(which implement Section 504 of station Act of 1973) and,if applicable, the design and construction requirement of §100.205 or any successor thereto (which implement the Fair Housing Act). The hrr tsted Units shall be dispersed evenly throughout the buildings comprising the Tenant Selection. , 'a O Nondiscmmnahwr. The Owner shall not discriminate on the hosts of e color, sex, age, handicap,marital status, sexual preference, national origin or any sprohibited by law in the lease, use and occupancy of the Housing Units or in - lo`p `with the employment or application for employment of persons for the operation �.. �* aa'ge¢rent of the Housing Units. <, Selection Policies. The Owner shall adopt and submit to MHP for x resident selection policies and criteria acceptable to MI-IP that: Are consistent with the propose of providing housing for Low or riXiY`S . 3 ¢P '4 ;. :Moderate Income Families, as defined below and required herein; and Are reasonably related to CIPF Program eligibility of prospective ,tenants and to the prospective tenants' ability to perforin the obligations the Owner's form lease; and 'If,Giye reasonable consideration to the housing needs of Families (as t ,defined below) that would have preference under Section 6(c)(4)(A) of r a {lie United States Housing Act of 1937 (42 U.S.C. §1437 et seq.); and Ovide for(x) the selection of residents from a written waiting list in ) _ the chronological order of thein application, insofar as practicable and ';(y) the prompt written notification to any rejected a1:pLcant of the �r r grounds for any rejection. ,Affirmative Marketine Plan. The Owner shall also provide MHP with 66g plan acceptable to MHP. The affirmative marketing plan must .. pLcable statutes, regulations and executive orders, with MHP's affirmative emepts grid with MHP's directives reflecting the agreement between MHP k emk j ,reasg of NAACP Boston Chapter v. Kemp. The approved marketing plan resident selection policies and criteria shall be adhered to in every respect. h�}}oymyyyeband Rent Restrictions. t fI' ome Limits. During the term of this Affordable Housing irm'Iricof ffty percent (50%) of the CIPF Assisted Units shall be leased Ires(as defined herein) whose annual incomes are less than or equal to Dd/'),Off"the:median income for the Area ("Low or Moderate Income onfamiI size as determined by the U.S. Department of Housing and v t HITD.. and a minimum of ten percent (10%) of such reserved number �arks A at,is,',five percent (5%) of the total number of CIPF Assisted Units) srvely to;Families whose annual incomes are less than or equal to fifty mtedra i"r come for the Area ("Very Low Income Families") based upon e ,byT1TID, A "Family" is defined as one or more individuals safisfyu g the standards adopted by HUll for the so-called Section 8 mted,States Dousing Act of 1937 and promulgated at 24 C.F.R. Part fined as the Boston, Massachusetts MSA. A Family's annual income r'tota]income from all sources received by the Family head and spouse ent)'and by.each additional member of the Family (other than X18 years); including all net income derived from assets for the 12- g theeffecttvedate of certification of income. Amaral income excludes certain types of income as set forth in, and shall be eenw�th"2,4 C:F:R_ Part 813 (or any successor regulations). fi �1 Y4 sneraTReut Restriction. The monthly rent charged to tenants of CIPF Y rf „ . �* Ee _ tl� shall riot exceed the lesser of: �r The fair market rent for existing housing for comparable units in the (!) MFt Area as established by HUD under regulations promulgated at 24 C.P.R. §888.111 (or successor regulations), less the monthly allowance ,q established by MHP for the utilities and services (excluding telephone) � r ) > to be paid by the tenant; or �rp(11) An amount that does not exceed thirty percent (30%) of the monthly income of a Family whose annual income equals eighty percent(80%) of the median income for the Area, as determined by HUD,with adjustment for the number of bedrooms in the unit, as provided by I k HUD. In determining the maximus: monthly rent that may be charged for a unit under this clause (it), the Owner shall subtract from the above = rs, amount an allowance established by MHP for any utilities and services �} (excluding telephone) to be paid by the resident, provided that so long as any Housing Unit is "rent restricted" for proposes of Section 42 of the Internal Revenue Code of 1956, as amended (the "Internal Revenue e ' Code"), such allowance shall not exceed the utilities allowance a determined for purposes of such Section 42. Monthly income shall h of annual income. equal one-twelft a (c) Rent Restrictions for Very Low Income Units. Furthermore, with T Assisted Units required to be occupied by Very Low Income Families, F3Yd, e 4O , The annual rent charged for such units shall not be greater than 30 percent of the Family's annual adjusted income. The maximum ;monthly rent that may be paid by a Family under this clause shall be r« . determined by (x) multiplying the annual adjusted income of the X Family (determined under 24 C.F.R. §5.611)by 30 percent and i r -dividing by 12 and (y) if applicable, subtracting a monthly allowance It established by Lender for any utilities and services (excluding M 'telephone) to be paid by the Family. If the unit receives federal or state ? project-based rental subsidy and the Very Low Income Family pays as r - a contribution towards rent not more than 30 percent of the Family's �y .adjusted income then the maximum rent (i.e. tenant contribution plus s project-based rental subsidy) is the rent allowable under the federal or s('ate project-based rental subsidy program; or x a ; ?) The annual rent charged for such units shall not be greater than thirty tF percent(30%) of the annual income of a Family whose income equals .ffcy percent(50%) of the median income for the Area, as determined with adjustment for size of the theoretical Family. In =determining the maximum monthly rent that may be charged for a unit s: fid" h� n , r. under this clause, there shall be subtracted from the amount computed under the prior sentence a monthly allowance established by Lender for any utilities and services (excluding telephone) to be paid by the occupants of the unit. If the rent determined by the foregoing method is higher than the maximum rent determined by Subsection 8(b) above, then the maximum rent for units under this Subsection shall equal that P calculated under Subsection 8(b). I44 (d) Next Available Unit Rule. If at any time less than the required number its are]eased,rented or occupied by Very Low Income Families,the next Units shall all be leased,rented or otherwise made available to Very Low ousing i3 hes,tinti1 the required number of Housing Units occupied by Very Low Income flys agd obtained. Subject to the foregoing, if at any time less than the required l iousm Units are leased, rented or occupied by Low Income or Moderate Income se may be, the next available Housing Units shall all be leased,rented or ade available to Low or Moderate Income Families, as the case may be until the mbe"F' Housing Units occupied by Low Income or Moderate Income Families is etl Theforegoing provisions shall be applied so as to maintain a mix of CIPF spts�fhat are comparable in size, features and number of bedrooms to the originally QEF Assisted Units (i.e., a Housing Unit will not be considered an available �'or puiposes of this Subsection 8(d) if classification of such Housing Unit as a Umt would cause the then current mix of CIPF Assisted Units to no longer be .� .. qhe oriis•_ i�gi "toinal mix of CIPF Assisted Units described in Section 6 above). a x'�ncome Certifications. The Owner represents,warrants and covenants that the oftiihether a Family occupying a CIPF Assisted Unit meets the income Isat foith herein shall be made by Owner at the time of leasing of a Housing e tei 't least ammally on the basis of the current income of such Family. In r `Ja Eamil s income, the Owner shall examine the source documents ual n6ome (e.g. wage statements, interest statements,unemployment statements) for the Family. Owner shall maintain as part of its Project records eases of:CIPF Assisted Units in the Project and all initial and annual income byfenai is of the CIPF Assisted Units. Within 60 days after the end of each aofroccupancy of any CIPF Assisted Unit, the Owner shall provide to MHP consisting of certif cations regarding the annual and monthly gross and me of each Family occupying a CIPF Assisted Unit With respect to Families F�Assisted Units in the prior year,the amoral report shall also include e'ardIng-the annual and monthly gross and adjusted incomes of such Families M(iaitial occupancy of a Housing Unit. The annual reports shall be in a form and shall contain such supporting documentation as MHP shall reasonably Khon',to the foregoing, Owner shall keep such additional records and prepare such'additional reports as MHP may deem necessary to ensure �fhcirequirements of this Affordable Housing Restriction and of the Capital dPde'servation Fund. t. r 'ent Ste' Initial monthly rents and allowances for utilities and services p Assisted Units shall be as set forth in Exhibit B attached hereto. Annually, as a annual reports required under Section 9 above, Owner shall submit to M14P a schedule of monthly rents and monthly allowances for utilities and services Por allf s�sfed Units. The rent schedule shall include [lie maximum rents applicable to CIPF nits under Section 8 above. Such schedule shall be subject to the approval of P; �nrrdoprpliance with the requirements of Section 8 above. Rents for CIPF Assisted Yi hell not be increased without MHI"s prior wntten approval of either (x) a specific �jty,2wner for a rent increase or (y) the next annual schedule of rents and allowances. } ing, rent increases shall be subject to the provisions of landing the forego dmglemented without at least 30 days' prior written notice eases and shall not be unpl etld_att affected tenants. °a , Lease Form. The Owner shall not include in any lease for a CIPF Assisted of. the following prov]slons: (a) Agreement by the tenant to be sued, to admit guilt or to a judgment in the Owner in a lawsuit brought in connection with the lease. f ` (b) Agreement by the tenant that the Owner may take;hold, or sell personal roflousehold members without notice to the tenant and a court decision on the rights res. This prohibition, however, does not apply to an agreement by the tenant g disposition of personal property remaining in the unit after the tenant has moved accordance with state it. The Owner may dispose of such personal property in .(c) Agreement by the tenant not to hold the Owner or the Owner's agents oiisible for any action or failure to act,whether intentional or negligent, -(tl) Agreement of the tenant that the Owner may institute a lawsuit without edtenant. ,(8) Agreement by the tenant that the Owner may evict the tenant or 6 nhers without instituting a civil court proceeding in which the tenant has the present a defense, or before a court decision on the rights of the parties. Agreement by the tenant to waive any right to a trial by jury. b :C (g) Agreement by the tenant to waive the tenant's right to appeal, or to challenge in court, a court decision in connection with the lease. Agreement by the tenant to pay attorney's fees or other legal costs even tW 1#'s in a court proceeding by the Owner against the tenant. The tenant, y be obligated to pay costs if the tenant loses. _ es for CIPF Assisted Units shall be on a form reasonably approved by MHP, R�;':" r f P Kq � off v ofterms of not less than one (1)year,unless by mutual agreement between the Owner, and shall require tenants Yo provide information required for the Owner to- aa�' offing requirements hereunder. Owner niay not terminate the tenancy or refiise to e�ase of an occupant of a-CIPF Assisted Unit except (i) for serious or repeated of the terms and conditions of the lease; ii O ] Pfor violations of applicable federal, ton . geal'law; (111) for completion of the tenancy period for transitional housing; or (iv) ther'gVYIpad cause. Any termination or refusal to renew must be preceded by not less than i dq�;:days by Owner's service on the tenant of a written notice specifying the grounds �°cotton: i ransfer Restrictions. Owner shall not sell, transfer, convey,rent(except for r dccupancy agreements made in connection with the Permitted Uses that are Nally in the forapproved by MHP),encumber as security for„ m;c;ng, or m any m any O Y ( ) �gy exchange all or an portion of r the Property,; or n interests in Owner without ,:.F . ress.wtitten permission of MHP. The foregoing prohibition shall not apply to a fiance fo POAH, LLC, pursuant to the terns of a Right of First Refusal of even date Yjriprovided that Owner and POAH, LLC shall have complied with the requirements hon 7e1 of the can Agreement of even date herewith, by and between MHP and ' :Casual . The Owner represents, warrants and agrees that if the Property, or arftheceof, shall be damaged or destroyed, the Owner (subject to the approval of the t* _§)jproviding financing)will use its best efforts to repair and restore the Housing Units fau`tially the same condition as existed prior to the event causing such damage or c�rontoi ;and the Owner represents, warrants and agrees that the Housing Units shall rlcohtinue to operate in accordance with the terms of this Affordable Housing on . 4 ' `=Other Federal Requirements' fiisnection. Any use of the Property or activity avlirch is inconsistent with the purpose of this Affordable Housing Restriction is sly,prohibited. Owner hereby grants to MHP and its duly authorized representatives ttb Biter the Property (a) at reasonable times and in a reasonable manner for the G g gspeeting the Property to determine compliance with this Affordable Housing or any other agreement between Owner and MHP and (b) atter 30 days prior "nofce,to take any reasonable and appropriate action under the circumstances to cure - Iafi'on of the provisions of this Affordable Housing ,Restriction. The notice referred to 4.),shall include a clear description of the course and approximate cost of the ,c'uie: tt 5�� Enforcement. The rights her granted shall include the right of MHP to r4, s �tll s Affordable Housing Restriction by appropriate legal proceedings and to obtain ca d other equitable relief against any violations, including without limitation relief gtestoration of the Property to its condition prior to any such violation (it being hatMHP will have no adequate remedy at law), and shall be in addition to, and not in any other rights and remedies available to MHP. Owner covenants and agrees t` R �$L b iselall reasonable costs and expenses (including without limitation reasonable taing in enforcing ths e�s)eaurredto cure any violation�� fl e suresrdeof,p ovi�ded 1 atsa vitolation�of this Affordable moble m,,, gges ctron is acknowledged by Owner or determined by a court of competent Lpan,[ohave occurred. ,By its acceptance of this Affordable Housing Restriction, oe�s notrurdertake any liability or obligation relating to the condition of the Property. s» ''ruvrsidn of this Affordable I-Iousing Restriction shall to any extent beheld invalid, amdet shall not be affected. Furtherssur�anOeS. MFIP is authorized to record and/or register any notices eats appropriate to assuring the enforceability of this Affordable Housing Iign and the Owner on behalf of itself and its successors and assigns appoints M]1P ti ey u-fact to execute, acknowledge and deliver any such instruments on its behalf. �rimtrng the foregoing, the Owner and its successors and assigns agrees to execute 9fistruments on request. The benefits of this Affordable Housing Restriction shall tss'and shall be assignable by MHP. The Owner and MHP intend that the restrictions ere take effect upon the date hereof, and to the extent enforceability by any ev�r depends upon the approval of governmental officials, such approval when given e back to the date hereof regardless of the date of actual approval or the date of iqg°and/or:registerm of any instrument evidencing such approval. 7Eo eclosure. Notwithstanding anything herein to the contrary,but subject to succeeding paragraph hereof, if the holder of record of a first mortgage granted to a aion al=bank, state or federal savings and loan association, cooperative bank, ;t st company, insurance company or other institutional or governmental a�1# cqu re the Property by reason of foreclosure or similar remedial action under the ofsuch.mortgage or upon conveyance of the Property in lieu of foreclosure, and at the holder of such mortgage has given MHP not less than sixty (60) days prior reerof its intention to foreclose upon its mortgage or to accept a conveyance of the areu oI'foreclosure, then the rights and restrictions herein contained shall not oh holder upon such acquisition of the Property or to any purchaser of the our such.holder, and such Property shall, subject to the next two succeeding theieafter.be free from all such rights and restrictions. The rights and restrictions tem shall not lapse if the Property is acquired through foreclosure or deed in lieu e by�(i),Owner, (ii) any person with a direct or indirect financial interest in 3 : anypeson related to a person described in clause (ii) by blood, adoption or °zany person who is or at any time was a business associate of a person c...... =(ii�, and (v) any entity in which any of the foregoing have a direct or aner'al terest (each a "Related Party"), Furthermore, if the Property is gcgt tied by a Related Party during the period in which this Affordable Housing ou7d liaue remained in effect but for the provisions of this Section, this ousing Restriction shall be revived and shall apply to the Property as though it sed j F W( i. tsue-,. ch holder conducts a foreclosure or other proceeding enforcing its ?IrF� t� } `.4 P }S { � Aa� °u ndersuch mortgage and Che Property is sold for a price in excess of L1re sum of the %ng:iincipal balances of all notes secured by mortgages of the Property plus all dvaflces, accrued interest and all reasonable costs and expenses which the holders erentitled to recover pursuant to the terns of such mortgages, such excess shall be in consideration of the loss of the value and benefit of the rights and restrictions coutamed and released by MHP pursuant to this Section in connection with such i (provided, that in the event that such excess shall be so paid to MI by such s rs�glp shall thereafter indemnify such holder against loss or damage to such holder Mgr&o In any ctaim made by the mortgagor of such mortgage to the extent that such based upon Payment of such excess by such holder to MFTP in accordance herewith, ��that-spch holder shall give the prompt notice of any such claim and shall not object � hon by MHP in any proceeding relating thereto). To the extent the Owner auY interest in any amount which would otherwise be payable to MHP under this ztoalie full extent permissible by law, the Owner hereby assigns its interest in such Co stdholder for payrnent to MHP. `s Notices. Any notice,request or other communication which either party may berequired or may desire to give hereunder shall be made in writing, and shall be ohaueb'een properly given if hand delivered, if sent by recognized overnight ecerpt confirmed, or if mailed by United States registered or certified mail, postage eh m receipt requested, addressed as follows: � f c©caner: m.6ights Preservation Associates Limited Partnership 4Mt11 Street, Suite 300 on,Massachusetts 02109 achizsetts-Housing Partnership Fund Board comer Street: on Massachusetts 02109 s AICD entOf,Housing and Community Development ogrOs Street vlassachusetts 02114 on Qfficc of the Chief Counsel dss.as the part' to be served with notice may have furnished in writing to orc'flesiring to serve notice as a place for the service of notice. A notice sent gysferedmail shall be deemed given three days after mailing; a notice sent y 4 , w _ . �¢✓F R v a� �h �s�Fr4 �- S 4S . • •.• _ • €�>t1'� arse ,?, I rt i$ .a, ■ _ , _ r t ■ a }� — s Y� s 4r-CV' r-' {�Ee ��-3 A • �}�vii..�s yeti� �Ytt� ��'*�t�1 "1 • i r 3.Y �� raOX`g�ryt3e YJ Cr t'} p" a"ui3y "c't§^••'J9a�-3 5�3'�u at{� . i• smx r ' L�' xSP fix'1 , i��. Xv ME- t n�. � sga axe, 0, _ ,( f r ?ET 4,fN {r1 • • 1 • y ��� +�g �i�irf a � . a -•• • • • • • • • a a k 3 16 �M i SA"sh 1E bsgI�lr' x�y � Yrk . i MP; YSL tr#a+t W r 4, EXHIBIT ale(of land situated in Salem, Essex County, Massachusetts being more particularly Tas follows: e parlicularly 4. (>of lofn °dnintning 6.5 Salem, Mass-, Episcopal Housing, plus or mmus, rCorporat on, Scale shown on a 0', Jan. 6, plan . Carter & Towers Eng'r Corp., Swampscott, Mass., which plan is recorded aied by `�Fssex South District Registry of Deeds in Book 5661, Page 599 as Plan No. 18 of 1970. ., also described as follows: remts z:parcel of land situated in the City of Salem, County of Essex, Commonwealth of etts "bounded and described as follows: t^ . oint at the intersection of the easterly sideline N 560 56' 45" E, a distance of one at a.p. e"I seven and 15/100 (127.15) feet to a point; "n and runn ng again along said southerlysideline al pope Street N 42° 03' 45" E, a turtn. g p f thutY eight and 00/100 (38.00) feet to the TRUE POINT OF BEGINNING. ng along e said southerly sideline of Pope Street by two courses: ;4 g `t45 E, a distance of three hundred and seventeen and 07/100 (317.07) feet; a distance of three and 97/100 (3.97) feet to a point; ' 'firming and running S 64° 30' 00" E, a distance of twelve and 25/100 (12.25) feet to a turning and running N 520 06' 18" E, a distance of sixty and 00/100 (60.00) feet to a {'sem H - rrh'taa u %t�umtng and conning N 78° 04' 08" E, a distance of thirty eight and 90/100 (38.90) feet to A tri n and runnin S 430 25' 58" E, a distance of one hundred four and 85/100 (104.85) t; g Ip a ZTa Fninn ng on a curve to the right having a radius of two hundred eighty five and 00/100 Jfee[an distance of one hundred five and 00/100 (105.00) fee[ to a point; 7 Page 1 of 3 4 + 3 C_ r to 4 L tF fi �bi �' S AY JY E�t r . , .� . ,1 I. . 1 • 1 11 A , r 9 1 ;fi 4 # u �ry��'n £ si�� 1 1 1 • • •• r 11 1 f e� �tM��x �x M� q 1 . •• . � "a ' . ` ��Jlr 1 •1 1 �8 f. 10-0 � y r ,• r pp r ysx}�'t��' ie�a�ca 1 1 • • •1 t a . h1Y4j� y;y ���" i 1• • 1 � 1 � m.'t�ar�'"3r��v�'l*'�'� a• 1 • 1 :1 • 11 11 11 11 • r• • • ' • xi _ y yy ��'�ln� #*uY u`-z>'gt`$`�.+.w�. 1 •i' 1 • • 1 11 • 1 • . k 1 f� f 1 1I1 _�t�i� 3 {ryl`n.E rk , 1 • r • • I 1 I 1 i ��} L3 EVI a� x"1#j�Y,y�I,yr Sc7 y�il�Lh�x is Y ( , 1 n I dA f y ��FJ ! tY I tdl�� � • - • 1"1 • 1 • •� • • d -F)�rr '}�'fTr • 1 y! + et IIIFt N F;F.n F t. eer vt t h k t i. T n Y.al I £ Al Y� 3 f Fi' F} t t J 1 I � Sk 3 { aFz . x n s� F f611 g� �- Y 1 ti f Y• f Y 5 a FY'•. 4 LY 4fi � 1� L� 1 ,y�]' 3_atA h 4 I EI oy✓�p, d Y J ,F L1P xp`_ eth .el`2� Fr ait a' U� - �t pf+ +2 � r l h NrFf�'l'J 5 k .k rzt r )z R i f ynF .br .V h� tyy Y N.r `y S 5 Iry � al�t>•.� Gs s��r� x �� z�i file ���F���r 1�l v5.%.ay 1¢k't r 5)tii` �;��'F�•. �q e+{t+r'�yv'•4� t-. x t t�eY''cisa��r'fi,� r F- - b i r }�. +'sa. < .... P..0 S. _• �' ...}Yt <.Yf .r..lst ix __..._._ L • m • Appendix 7 Building Plans [See attached] • ActiveUS 103941890v.4 t i i5 1.1. i 9 _ AL k WI i �L'L r FF � i h • x kms. d �� ^s" �' S *,C � ` t ;4 ��s x 'rfi')s��.� ° 8 • s • Appendix 8 Financial Summary and Workout Chronology [See attached] • ActiveUS 103941890v.4 • Low Income Housing Tax Credits Financial Summary Type of Credit: Acquisition and Rehabilitation Proceeds: $7,342,634 Investor: Massachusetts Housing Equity Fund 2002 LLC First Mortgage Amount: $7,269,491 Issuer: MHP Amount: $18,000,000 Issuer: MDFA; Trustee: WellsFargo; Servicer: MHP Letters of Credit Funder: Fleet (BofA) and BankNorth Amount: $18,272,220 (total) Interest Rate: swap agreements of 4.24% (These letters of credit secure the bonds) Secondary Financing Funder: State through POAH, LLC (Housing Stabilization'Fund and Capital Improvement and Preservation Fund) • Amount: $1,750,000 Funder: Community Economic Development Assistance Corporation Amount: $481,779 Also: deferred development fees, deferred management fees, and project based rental subsidies from State(see Workout Chronology on next page) • -4- ActiveUS 103941890v 4 0 0 0 Salem Heights Workout History Year Action Amount Players Use - To save Energy Costs Funds from:$61,024 $165,000 Salem Heights,POAH, RR/$61,024 Dev Fee advance,S35K Kevspan 2005 Installation ofcogeneration unit Keyspan,TDBank North Rebate,SISk TDBank Noah Gram _ _. Bank _. 'r Cash used to fund payout to CJ Management_ Sept 2006 PHM takes over,agrees mgt fee not to exceed POAH/PHM agree to defer mgt Cee all mgt fees $100,000 per year and paid only out of available cash 2006 'but$100,000 (or3years2007--2009 'POAH/PHM Flow_ Affiliate of GP advances Sl 55,796 to cover $155,796 2006 ',operatingde- flcits _.__- POAH Bank_ _.. _— ._ ___—...._ _. . $190 8n8 'agreemem for 2006&2007 to cover outstanding 2006 MHIC releases dev fee for POAH m contribute MHIC 'payables . .Cancelled as Salem Heights could not maintain LI Forebearance-maintain I I DSC,pay all AT in DSC se no extension into 2009. When did we 2007 j60 days.Agreement for tune 2007-2008. MFT/other lenders switch to maintaining a 1.05 DSC?_ 5750,000 window replacement Cap plan was for S875,000. 2007 HSF funding(One Stop) _ _ _ _ DHCD-HSF. Also note that says loan agreement with MHP? :fund payables&deficits.Award letter I I/O6. $315,865 iClosing 2007.Retrofitted H units&PBV put on the 2007 ';CBH Grant w$63.173 per unit for 5 units DHCD-CBH l5 CBH units. - nc - 3 .. .._ jMHIC advances up to 53RD,000 to be drawn down, To cover operating deficits and DSC required by the 8380,000 2007 �to cover AP MH �Forebearence agreement --_ �_____ . .._ _ Baan . __. ______ 2007 ICF,DAC loan-authorized by DHCD S48I 779 DHCD-CEDAC Regwred by the forebearance agreement _—__. _- _-_ _ _.. AfFlia[e of GP advances$3506 to rover operating g3500 ' 2007 deficits _ 'iMHP/lenders varve DSC covenants-failure to ' 2008 !pay debt only condition ofdefault _ MHP/other lenders M -_ _ - - MHP suspends 560,000 annual RR deposits for ' 560,000 Supported by energy savings from new windows fu1 2009 i 2009MHP __ $40 000 veer ___-_ __ 'Debt resttrr ucture&prFfunding aC RR&reduction; 2010 1o S60K in LOC&bond fees MHP/lenders/MHIC Closed July I,2010 DHCD funding of$L6M to fund cap 2010 1 improvements fund $1600,000 DHCD-CIPF One Stop updated PHM's annual mgt fee reduced to S60K until Fee reducion is approx S90K per year&S45K for 2010 seniordeM Paid down $315,000 PHM 2010 This amount represents value thin 2013 _ ... .._ -. __..make _Baan. 3012 j Energy Grant from TD North $250,000 TO Bank Nonh Addition ofsolar panels to heat maakeup air 'Total $4,672,768 Sub-Total GP(POAI)advancos 5416,148 Baan - .._. .. _ Sub I Dial PHM deferred fee _ _ $315.000 —_ - SubtotalDHCD sponsored loans _ 53,147,644 - -_ Advances from operating reserves 5380,000 Sub Total Grants -.. 5300 000 operations 51 13,976 $4,G72,768 $0 s s • Appendix 9 Draft 6A Contract AGREEMENT BETWEEN THE CITY OF SALEM AND SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP PURSUANT TO CHAPTER 121 A, SECTION 6A OF THE MASSACHUSETTS GENERAL LAWS SALEM HEIGHTS CHAPTER 121A PROJECT This AGREEMENT (the "Agreement') is made as of this day of 2013, by and between SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP, a Massachusetts limited partnership organized under General Laws Chapter 109 and subject to General Laws Chapter 121 A ("Chapter 121 A") as amended to date (the "Partnership"), and the CITY OF SALEM, a municipal corporation of the Commonwealth of Massachusetts (the "City") acting pursuant to General Laws Chapter 121 A, Sections 6A and 10 and every other power and authority. WITNESSETH THAT: WHEREAS, an application dated , 2013 (the "Application") was filed by the Partnership with the Department of Housing and Community Development under the • provisions of Chapter 121 A for an affordable housing project known as Salem Heights, located in the City of Salem, Massachusetts; and WHEREAS, the Project has had the benefit of a Chapter 121A designation which expires on March 26, 2013; and WHEREAS, the Salem Planning Board (the"Planning Board") approved the Application by a vote on 2013, adopting a report and decision (the "Report and Decision"); and WHEREAS, the City Council approved the Report and Decision by a vote on 2013, adopting the Report and Decision; and WHEREAS, the Mayor of the City (the "Mayor") approved the above votes of the Planning Board and the City Council on _, 2013; and WHEREAS, the votes of the Planning Board and the City Council and the approval of the Mayor with respect to the Report and Decision were filed with the City Clerk of the City of Salem (the "City Clerk") on 2013 (the "Approval Date"), and such approval became final and binding pursuant to the provisions of Chapter 121 A; and WHEREAS, the Partnership and the City desire to enter into this Agreement pursuant to Sections 6A and 10 of Chapter 121A for payments in-lieu-of taxes with respect to the Project. • 5 ActiveUS 103941890v.4 • NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: (1) Operation of the Project. The Partnership shall carry out the Project in accordance with, and subject to, the provisions of Chapter 121A and the provisions of the Report and Decision. (2) Term. This Agreement shall remain in effect for a period of forty (40) years after the Effective Date, unless sooner terminated. (3) Excise Tax Payments. The Partnership shall pay to the Commonwealth of Massachusetts, its Department of Revenue or any successor department or agency ("DOR"), with respect to each calendar year, or any portion thereof, that this Agreement is in effect and applicable, the Urban Redevelopment Excise Tax required under Chapter 121 A, Section 10, as amended from time to time (the "Excise Tax"). (4) Determination of Fair Cash Value. During the term specified in Section 2, the City of Salem Assessor's Office shall annually determine and certify to DOR the fair cash value of the Project to be the sum of Eight Million Dollars ($8,000,000.00). (5) Amendments to Chapter 121A or Rules and Regulations The Partnership and the City agree that any amendment, subsequent to the execution.of this Agreement, of Chapter 121A, and the rules, regulations and standards prescribed by the Planning Board, which • otherwise might be applicable to the Project, shall not affect the same. (6) Notices. All notices required pursuant to this Agreement shall be in writing and delivered by hand delivery or mailed postage prepaid, by registered or certified mail, addressed as follow: Partnership: Salem Heights Preservation Associates, Limited Partnership 40 Court Street, Suite 700 Boston, MA 02108 Attn: Amy S. Anthony With a copy to: Katharine E. Bachman, Esquire Wilmer Cutler Pickering Hale and Derr LLP 60 State Street Boston, MA 02109 City: City of Salem Assessor's Office City Hall 93 Washington Street Salem, MA 01970 Attn: Assessor 6 ActiveUS 103941890v.4 • A different address may be designated by each party by giving written notice to the other party. Any such notice shall be deemed given when so delivered by hand or, if so mailed, two (2) days after such notice is deposited with the U.S. Postal Service. (7) Counterparts. This Agreement may be executed in counterparts, each of which when so executed and delivered shall be deemed an original, but such counterparts shall together constitute but one and the same instrument. (8) Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. (9) Governing Law. Notwithstanding anything to the contrary, this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. (t 0) Invalidity. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this. Agreement and the application of such provisions to other persons and circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. [End of text on page] • • 7 ActfveUS 103941890v.4 • Executed as a sealed instrument as of the day and year first above written. SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP, a Massachusetts limited partnership By: POAH SALEM HEIGHTS, LLC, a Delaware limited liability company, general partner By: POAH Inc., an Illinois non-profit corporation, member By: Amy S. Anthony, President CITY OF SALEM • By: Mayor By: Assessor • ActiveUS 103941890v.4 oG 10 • Appendix 10 Draft Regulatory Agreement REGULATORY AGREEMENT Salem Heights Preservation Associates, Limited Partnership Chapter 121A Project This Regulatory Agreement(the "Agreement") is made as of the day of 12013, by and between SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP, a Massachusetts limited partnership organized under General Laws Chapter 109 and subject to General Laws Chapter 121A ("Chapter 121A") as amended to date (the "Partnership"), and the MASSACHUSETTS DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT ("DHCD"), acting hereunder pursuant to Chapter 121A, as amended, of the Massachusetts General Laws (except as otherwise stated herein, this statute, not including Chapter 121 B, is hereinafter referred to as "Chapter 121 A"). Collectively, the Partnership and DHCD are hereinafter referred to as the "Parties." PRELIMINARY STATEMENT The approval of the Partnership's application for the Chapter 121A project described • below (the "Application") was issued by DHCD on , 2013. NOW, THEREFORE, the Partnership agrees, for itself and its successors and assigns, with DHCD as follows: (1) Description of Project. The Project is located on a 6.5 acre parcel at 12 Pope Street in Salem, Massachusetts, and consists of two high-rise buildings providing 283 units of housing for low and moderate income households. The Project was originally approved under the provisions of Chapter 121A, which approval expired on March 26, 2013 ("Prior 121A Approval"). Pursuant to the Application, the Partnership has secured approval of the Project under Chapter 121 A for a new term of forty (40) years. (2) Current Status. The construction of the Project was undertaken upon issuance of the Prior 121 A Approval. The Project has been rehabilitated by the Partnership, which is continuing its ownership and operation as affordable housing as described herein. (3) Financing; Mortgages. The Project has been financed through a first mortgage loan from the Massachusetts Housing Partnership Fund Board and private lenders, tax exempt bond financing issued by Mass Development, state affordable housing funds, grants and deferral of development and management fees as more particularly set forth in Section 9 and Appendix 8 of the Application. Subject to the provisions of Chapter 121A, any and all subsequent debt financing(s) or refinancing(s), whether secured or unsecured, of the Project, in whole or in part, and syndication(s), or resyndication(s) of Partnership interests in the Partnership, shall be subject to the prior approval of DHCD, which approval shall not be unreasonably withheld or delayed. • No mortgages in connection with the Project shall be granted and/or recorded without the prior approval of DHCD, except for any mortgages to secure the financing described herein. (4) Separate Accounts, Expenditure of Proiect Income. The Partnership shall keep its financial accounts for the Project separate and apart from any other activities conducted by the Partnership and shall not expend income derived therefrom other than as described in Chapter 121 A upon or for the benefit of any other of its activities. (5) Return Restrictions. (a) Return Restriction During MHP Loan Term. Pursuant to Section 18C of Chapter 121 A, for so long as the Project is financed by mortgage financing provided by the Massachusetts Housing Partnership Fund Board (the "MHP Financing"), the Owner will not be subject to the limitation on dividends set forth in clause (e) of said Section i 8C, but rather shall be subject to MHP's limited dividend requirements: in particular, during the term of the MHP financing, the Owner's dividend is restricted to ten (10%) percent of the "Owner's Equity" in the Project, where the Owner's Equity is the sum of(i) actual cash contributed by the Owner to the Project, including low-income housing tax credit equity but excluding public equity such as HOME, CDBG or other funds; (ii) developer's fee loaned to the Project, provided that any payment of such developer's fee from the Project cash flow is treated as dividend distribution; (iii) developer's fee contributed to the Project; and (iv) appraised acquisition value(based on zoning in place at the time of loan commitment) in excess of the acquisition value included in the Project's development budget. • (b) Alternate Return Restriction. During such period as the Project is subject to Chapter 121A and the provisions of Section 5(a) above are not applicable thereto, the general partner and limited partners of the Partnership shall not receive or accept as net income from the Project any sum in excess of eight percent (8%) of the amount invested by them in the Project for each calendar year or parts thereof in which they own or have owned an interest in the Project, except that, if in any such year or part thereof, they have so received a sum less than the aforesaid eight percent (8%), they may so receive in a subsequent year or years additional sums not exceeding the aggregate such deficiency ("Permitted Distributions"). (c) Timing of Permitted Distributions. Permitted Distributions shall be made Pursuant to this provision, commencing in May of the calendar year after the date of this Agreement and in the same month during each successive calendar year in which this Agreement is in force and effect, only if by the end of April of each calendar year, the Partnership shall, by notice to DHCD, certify that: (i) the Partnership has paid all amounts due and payable in connection with the approved financing and Sections 10 and 6A of Chapter 121A; (ii) the Partnership is current within 60 business days on other accounts due and payable; (iii) the Partnership has corrected or reserved adequate funds to correct all physical Project deficiencies identified in any notices or inspection reports issued by any federal, state or local governmental body; and (iv) the Partnership has deposited all amounts required by its mortgagees and limited partners to be deposited in the reserve fund for replacements accompanied by a statement evidencing all deposits in such reserve fund. Notwithstanding the foregoing to the contrary, in the event DHCD reasonably determines at any time that the Project has physical deficiencies to • 2 ActiveUS 103941890v.4 • be corrected or remedied, DHCD, by notice to the Partnership, may prohibit any distributions of any kind to the general partner or limited partners until such deficiencies have been corrected or remedied to DHCD's reasonable satisfaction. (d) Additional Matters. In the event in any calendar year or part thereof the general or limited partners of the Partnership receive or accept as net income a sum in excess of the before-mentioned Permitted Distributions, as determined by DHCD, upon receipt of notice from DHCD (which notice must be received by the Partnership within 18 months of the distribution in question to be of any force or effect), the general partner shall repay an equivalent sum plus interest to the Partnership or, at the sole election of DHCD, the Partnership, upon receipt of notice, shall expend an equivalent sum plus interest, as directed by DHCD, for the purposes as set forth in Chapter 121 A, Section 15. Nothing contained in this Section shall be applicable to the distribution of profits from the sale of the capital assets of, or general or limited partner interest in, the Partnership. This Section shall be in force and effect until this Agreement and Chapter 121A are no longer applicable to the Partnership. (6) Use Restriction. The Partnership shall operate the Project in compliance with the tax credit regulatory agreement under the Section 42 low income tax credit program, and in accordance with the other affordable housing restrictions applicable to the Project as described in the Application. Notwithstanding the expiration or earlier termination of the Chapter 121A status of the Project, the provisions of, and the Partnership's covenants and agreement and DHCD's rights under this Section 6 shall survive such expiration or termination and be enforceable by DHCD. • (7) Urban Redevelopment Excise Tax: 6A Payments. In consideration of the exemption of the Partnership and all its real and personal property from taxation and from betterments and special assessments and from the payments of any tax, excise or assessment to or for the Project, it shall pay the excises with respect to the Project which a Chapter 121 A entity would be bound to pay under the formulae and provisions set forth in Section 10 of Chapter 121 A and those payments to the City, as set forth in the Partnership's 6A Contract with the City, any amendments thereto or any new 6A Contract ("6A Contract"). (8) Term of Agreement. This Agreement shall remain in effect for a period of 40 years after the date hereof. After expiration, neither the Project nor the Partnership shall thereafter be subject to the obligations of Chapter 121 A nor enjoy the rights and privileges thereunder, nor be subject to the terms, conditions and obligations of this Agreement as provided for in Chapter 121 A. (9) Project Transfer; Voluntary Transfers of Partnership Interests, Capital Stock and Beneficial lnterests; Involuntary Transfers of Partnership Interests, Condominium or Cooperative Form of Ownership. (a) Project Transfers. If the Partnership and/or the mortgage lender or lenders to the Partnership propose, acting either under the provisions of Chapter 121 A, Section 1 1 (third and last paragraph) or under Chapter 121 A, Section 16A, to sell, convey, exchange, give or otherwise transfer (collectively, "transfer") the Project, in whole or in part, to another Chapter 121 A entity ActiveUS 103941890v.4 or entities, this Agreement shall upon the prior approval of such transfer(s) and the transferee(s) by DHCD and at the option of DHCD, be terminated or amended and a new Regulatory Agreement pursuant to Chapter 121A, Section 18C, shall be entered into between DHCD and such transferee or transferee(s). Notwithstanding any transfer under Chapter 121 A, Section 16A, the Partnership acknowledges and agrees that the Project and the transferee or transferees shall remain subject to the Amendment, this Agreement and Chapter 121 A. (b) Voluntary Transfers of Partnership Interests, Capital Stock and Beneficial Interests. The Partnership and its general and limited partners shall not voluntarily transfer, assign, convey or sell, or in any manner hypothecate any partnership interest in the Project at any time without the prior consent and approval of DHCD, and as a condition to any request to permit a transfer of any such partnership interests it shall cause such proposed transferee or assignee to enter into a written agreement in form and content satisfactory to DHCD, wherein such transferee or assignee agrees to assume and/or be bound by the terms and conditions of this Agreement. Any and all changes of the general and limited partners of the Partnership or their respective partnership interests are subject to DHCD's prior approval. The general partner shall not permit the transfer of any of its capital stock without the prior consent and approval of DHCD. Notwithstanding any provision to the contrary herein, (1) the admission to the Partnership of investor limited partners in exchange for a capital contribution referenced in Sections 1 and 9 of the Application, (2) the admission to the Partnership of a corporation or other entity controlled by the syndicator as a general or limited partner in the Partnership (the "Investor Special Partner") in exchange for a portion of the capital contribution, (3) subsequent transfers of interests in such limited partners or Investor Special Partner, (4) transfers among • limited partners or by a limited partner to an entity related to such limited partner, and (5) any transfer of limited partnership interests that does not exceed in the aggregate 49% of such limited partnership interests shall each constitute a conveyance of an interest in the Project that is permitted without DHCD's consent under this Agreement and Chapter 121 A. (c) Involuntary Transfer of Partnership Interests. Any transferee or person or entity succeeding to the rights and obligations and interest of the general partner of the Partnership in the Project by operation of law, testamentary disposition, intestacy, or otherwise shall be deemed to have consented and agreed to be bound by the terms, covenants and conditions of this Agreement. (d) Condominium or Cooperative Form of Ownership. The Partnership shall take no action to convert the Project or any part thereof to either a condominium or cooperative form of ownership under applicable law, which shall constitute a fundamental change in the Project, without the prior approval of DHCD in accordance with Chapter 121 A. (10) Accounts Records and Books: Access by DHCD Representatives; Financial Reports: Statements, etc. The Partnership agrees that it will: (a) maintain full and accurate accounts, records and books relative to the Project conforming to general accepted accounting principles; (b) grant to the employees or representatives of DHCD and the City at all times during normal business hours access to such of its accounts, records and books as relate to the Partnership's obligations under this Agreement, and Chapter 121A, as now or may be in the future amended; (c) permit DHCD and the City, or their approved accountants or auditors, to make periodic audits I • - 4 - ActiveUS 103941890v.4 • of the Part'nership's accounts and financial records at the Partnership's expense, which shall at all times be available in the Commonwealth of Massachusetts; and (d) furnish to DHCD such financial, operating, statistical and other reports, records, statements and documents on a uniform and consistent basis as may periodically or on a one time basis be required by DHCD and copies of contracts entered into by the Partnership, or other documents in the possession of the Partnership, as DHCD may from time to time require in connection with the Partnership's obligations under this Agreement and Chapter 121 A. (11) Compliance with Applicable Laws, Codes, Ordinances and Regulations. The Partnership shall cause the Project to be in compliance with this Agreement and all zoning, building, health, and fire laws, codes, ordinances and regulations in effect in the City and applicable thereto. (12) Project Maintenance and Management. The Partnership shall, at its own cost and expense, keep, operate and maintain its interest in the Project, or cause it to be kept, operated and maintained in good repair, order and condition at all times during the term of this Agreement. The Partnership may manage the Project itself, or employ an independent contractor to undertake such management. (13) Project Changes, Etc. Any and all material changes, deviations, alterations, or additions proposed to be made to the Project from and after the date of this Agreement shall be subject to prior review and approval by DHCD, which approval shall not be unreasonably withheld or delayed. • (14) Non-Discrimination. The Partnership shall not effect or execute any covenant, agreement, lease, or other instrument whereby the Project or any part thereof is restricted on the basis of race, color, sex, sexual preference, religion, or national origin in the lease or occupancy thereof or employment therein. (15) Notices; Communications. Any notices, reports, statements, requests, approvals, consents, waivers or other communications required or desired to be given or furnished pursuant to this Agreement shall be in writing with copies directed, as indicated below, and shall be hand-delivered or may be made by depositing the same in the United States mail, first class postage prepaid. If such notice is to be to DHCD;the address is: Massachusetts Department of Housing and Community Development 100 Cambridge Street, Suite 300 Boston, MA 02114 Attn: Office of the Chief Counsel If addressed to the Partnership, the general or limited partners, the address is: Salem Heights Preservation Associates, Limited Partnership 40 Court Street, Suite 700 Boston, MA 02108 • 5 ActiveUS 103941890v.4 • Attention: Amy S. Anthony with a copy to: WilmerHale LLP 60 State Street Boston, MA 02109 Attention: Katharine E. Bachman, Esq. Any party may change its respective address by giving written notice to the others in accordance with this Section. (16) Non-Recourse. Notwithstanding any contrary provision hereof, this Agreement shall be made without recourse to the personal assets of the general or limited partners of the Partnership, excepting only their respective interests in the Project. In no event shall any general or limited partner of the Partnership have any personal liability for the payment of any sum of money or the performance of any obligation which may become payable or required by the Partnership hereunder and DHCD agrees to look only to the assets of the Partnership for any such payment or performance. (17) Agreement Binding on Successors and Assigns. The respective provisions of this Agreement shall be binding upon, and shall inure to the benefit of the successors and assigns of the Partnership, the general partner, the limited partners and the public body or bodies succeeding to the interests of DHCD. (18) Enforcement. DHCD may enforce compliance with any of the provisions of this • Agreement or any of its rules and regulations by an action in a court of appropriate jurisdiction. The Partnership shall pay to DHCD all reasonable costs and expenses, including attorneys' fees, which may be incurred by DHCD in proceedings brought to enforce compliance, to the extent DHCD prevails. (19) Table of Contents, Titles to Sections. The Table of Contents and titles of the several Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of the provisions of this Agreement. (20) Execution of Agreement Counterparts, Registration/Recordation. This Agreement shall be executed in such form as will enable registration and/or recordation and may be executed in several counterparts, each of which shall be an original and all of which together shall constitute one and the same agreement. The parties further agree that this Agreement shall be recorded with the Bristol North Registry of Deeds. (21) Severability. If any term or provision of this Agreement, or the application thereof to any person or circumstance, shall to any extent be invalid or unenforceable,the remainder of this Agreement, or the application of such terms to persons or circumstances other than those to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the extent permitted by law. [Remainder ofpage intentionally left blank.] ActiveUS 103941890v.4 • EXECUTED as a sealed instrument as of the day first above written. SALEM HEIGHTS PRESERVATION ASSOCIATES LIMITED PARTNERSHIP, a Massachusetts limited partnership By: POAH SALEM HEIGHTS, LLC, a Delaware limited liability company, general partner By: POAH Inc., an Illinois non-profit corporation, member By: Amy S. Anthony, President COMMONWEALTH OF MASSACHUSETTS, ACTING BY AND THROUGH THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT • By. Name: Title: 1 [Signature Page to Regulatory Agreement] ActivetJS 103941890v.4 • Suffolk, ss. COMMONWEALTH OF MASSACHUSETTS On this day of 2013, before me, the undersigned notary public, personally appeared Amy S. Anthony, proved to me through satisfactory evidence of identification, which was , to be the person whose name is signed on the preceding or attached document, and acknowledged to me that she signed it voluntarily for its stated purpose, as President of POAH Inc., member of POAFI Salem Heights, LLC, general partner of Salem Heights Associates, Limited Partnership. Notary Public My commission expires: COMMONWEALTH OF MASSACHUSETTS County, ss. On this day of 2013, before me, the undersigned notary public, personally appeared , the of The • Commonwealth of Massachusetts acting by and through the Department of Housing and Community Development, proved to me through satisfactory evidence of identification, which was (a current driver's license) (a current U.S. passport) (my personal knowledge of the identity of the principal), to be the person whose name is signed on the preceding or attached document, and acknowledged to me that he/she signed it voluntarily, in such capacity, for its stated purpose. Notary Public My commission expires: [Signature Page to Regulalory Agreement] ActiveUS 103941890v.4 EXHIBIT A Legal Description [See attached] • ActiveUS 103941890v.4 CLA �� Commonwealth of Massachusetts DEPARTMENT OF HOUSING & COMMUNITY DEVELOPMENT Deval L.Patrick,Governor ♦ Aaron Gornstein,Undersecretary ,y The Honorable Kimberley Driscoll July 19, 2013 Mayor City Hall, 93 Washington Street Salem, MA 01970 Salem Heights Preservation Associates, Limited Partnership 40 Court Street, Suite 700 Boston, MA 02108 Attn: Amy S. Anthony RE: Salem Heights Preservation Associates, Limited Partnership—M.G.L. Chapter 121A Dear Mayor Driscoll and Ms. Anthony: The Department of Housing and Community Development (the Department) is in receipt of your application (received on February 22, 2013) for approval of the Chapter 121A status for Salem Heights Preservation Associates, Limited Partnership. The project involves the preservation and maintenance of two existing buildings.comprised of 283 units of housing located at 12 Pope Street, and is approximately one mile from the City's downtown. The project is subject to affordable housing restrictions held by the City (100 year term from 2003) and by the Commonwealth (18 year term from 2003). The Department has received documentation indicating that a joint public hearing was held by the City Council and Planning Board on May 15, 2013. The required local approvals for this project were obtained from the Mayor, City Council and Planning Board. The Planning Board made the following determinations which were accepted by the City Council: 1. The project site is qualified as a blighted open, decadent or substandard area; 2. The project is not in contravention of any zoning, subdivision, health or building ordinance by-law or the rules and regulations of the City; 3. The project is a much needed affordable housing resource and is in compliance with the City's planning goals and objectives; 4. The project is not detrimental to the best interests of the public or city;the best interests of public safety and convenience-, or consistency with the most suitable development of the City; 5. The project constitutes a public use and benefit; and 6. No relocation of residents is required since the ongoing maintenance and capital repairs being undertaken are being performed with the tenants in place. The Department, in accordance with Section 6 of Chapter 121A, as amended, makes the following findings: 100 Cambridge Street, Suite 300 w .mass.gov/dhcd Boston, Massachusetts 02114 Ea 617.573.1100 I. Conditions exist which warrant the implementation of the project; 2. The cost of the project will be practicable; and 3. The preservation and maintenance of the project will not be in contravention of any zoning, subdivision, health or building ordinances or by-laws or rules and regulations of the City, or of any municipal board, in effect in the location of the project or of the standards fixed by the Department under Section 4 of Chapter 121A. The Department is pleased to approve your project and application for Chapter 121A status for the Salem Heights Preservation Associates, Limited Partnership. The 121A Agreement has a term of 40 years. The effective date is March 27, 2013. We look forward to the successful implementation of this project. Sincerely, (A4 Aaron Gornstein Undersecretary cc: Senator Joan B. Lovely Representative John D. Keenan PP ci hnin4J/DAN a � SUP,, 19 2i3 CITY OF SALEM, MASSACHUSETTS DEPT. OF PLArv,ANG s 'OMMUNrry DE+JELOPME.P- Kimberley Driscoll Mayor June 14, 2013 Mr. Aaron Gornstein, Undersecretary Commonwealth of Massachusetts Department of Housing and Community Development 100 Cambridge Street Boston, MA 02114 Re: . Salem Heights Preservation Associates, Limited Partnership M.G.L Chapter 121A Approval Ladies and Gentlemen: Please accept this letter as my certificate of approval as Mayor of the City of Salem for the M.G.L. Chapter 121A approval requested by Salem Heights Preservation Associates, Limited Partnership. My conclusion is based upon the findings of the Salem Planning Board dated May 16, 2013 and an Order of the City Council dated May 23, 2013, following a joint hearing of the Planning Board and City Council on May 15, 2013. Copies of the findings of the Salem Planning Board and Order of the City Council are enclosed for your reference. In accordance with the applicable provisions of M.G.L. Chapter 121 A, the Planning Board and City Council sent copies of the findings and Order by certified mail to all persons who were notified of the hearing. I have also enclosed a copy of the executed local Section 6A tax agreement for the project for your records. Respect' , ley scoll Mayor Cc: Ms. Carol Wolfe, Manager, DHCD Office of Sustainable Communities Christine McClave, Esq., DHCD Deputy General Counsel Salem City Hall-93 Washington Street-Salem, MA 01970-3592 Ph.978-745-9595 Fax 978-7449327 AGREEMENT BETWEEN THE CITY OF SALEM AND SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP PURSUANT TO CHAPTER 121 A, SECTION 6A OF THE MASSACHUSETTS GENERAL LAWS SALEM HEIGHTS CHAPTER 121A PROJECT This AGREEMENT (the"Agreement') is made as of this_day of 2013, by and between SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP, a Massachusetts limited partnership organized under General Laws Chapter 109 and subject to General Laws Chapter 121A("Chapter 121A") as amended to date (the "Partnership"), and the CITY OF SALEM, a municipal corporation of the Commonwealth of Massachusetts (the "City") acting pursuant to General Laws Chapter 121 A, Sections 6A and 10 and every other power and authority. WITNESSETH THAT: WHEREAS, an application dated February 21, 2013 (the "Application") was filed by the Partnership with the Department of Housing and Community Development under the provisions of Chapter 121A for an affordable housing project known as Salem Heights, located in the City of Salem, Massachusetts; and WHEREAS, the Project has had the benefit of a Chapter 121A designation which expired on March 26, 2013; and WHEREAS, the Salem Planning Board (the "Planning Board") approved the Application by a vote on May 16, 2013, adopting a report and decision(the "Report and Decision"); and WHEREAS, the City Council approved the Report and Decision by a vote on May 23, 2013, adopting the Report and Decision; and WHEREAS, the Mayor of the City (the "Mayor") approved the above votes of the Planning Board and the City Council on M 14ti 2$ 2013; and WHEREAS, the votes of the Planning Board and the City Council and the approval of the Mayor with respect to the Report and Decision were filed with the City Clerk of the City of Salem (the "City Clerk") on N{p > 2013 (the "Approval Date"), and such approval became final and binding pursuant o the provisions of Chapter 121 A; and WHEREAS, the Partnership and the City desire to enter into this Agreement pursuant to Sections 6A and 10 of Chapter 121A for payments in-lieu-of taxes with respect to the Project. NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ActiveUS 110591647v.1 (1) Operation of the Project. The Partnership shall carry out the Project in accordance with, and subject to, the provisions of Chapter 121A and the provisions of the Report and Decision. (2) Term. This Agreement shall remain in effect for a period of forty (40) years after the Effective Date, unless sooner terminated. (3) Excise Tax Payments. The Partnership shall pay to the Commonwealth of Massachusetts, its Department of Revenue or any successor department or agency ("DOR"), with respect to each calendar year, or any portion thereof, that this Agreement is in effect and applicable, the Urban Redevelopment Excise Tax required under Chapter 121 A, Section 10, as amended from time to time (the "Excise Tax"). (4) Determination of Fair Cash Value. During the term specified in Section 2, the City of Salem Assessor's Office shall annually determine and certify to DOR the fair cash value of the Project to be the sum of Eight Million Dollars ($8,000,000.00). (5) Amendments to Chapter 121A or Rules and Regulations The Partnership and the City agree that any amendment, subsequent to the execution of this Agreement, of Chapter 121A, and the rules, regulations and standards prescribed by the Planning Board, which otherwise might be applicable to the Project, shall not affect the same. (6) Notices. All notices required pursuant to this Agreement shall be in writing and delivered by hand delivery or mailed postage prepaid, by registered or certified mail, addressed as follow: Partnership: Salem Heights Preservation Associates, Limited Partnership 40 Court Street, Suite 700 Boston, MA 02108 Attn: Amy S. Anthony With a copy to: Katharine E. Bachman, Esquire Wilmer Cutler Pickering Hale and Dorr LLP 60 State Street Boston, MA 02109 City: City of Salem Assessor's Office City Hall 93 Washington Street Salem, MA 01970 Attn: Assessor A different address may be designated by each party by giving written notice to the other party. Any such notice shall be deemed given when so delivered by hand or, if so mailed, two (2) days after such notice is deposited with the U.S. Postal Service. -2- ActiveUS 110591647v.1 (7) Counterparts. This Agreement may be executed in counterparts, each of which when so executed and delivered shall be deemed an original, but such counterparts shall together constitute but one and the same instrument. (8) Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. (9) Governing Law. Notwithstanding anything to the contrary, this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. (10) Invalidity. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons and circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. [End of text on page] -3- ActiveUS 110591647x.1 Executed as a sealed instrument as of the day and year first above written. SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP, a Massachusetts limited partnership By: POAH SALEM HEIGHTS, LLC, a Delaware limited liability company, general partner By: POAH Inc., an Illinois non-profit corporation, member By my S. thony, President CITY OF SALEM c By: Kimberley Dr1 1, Mayor By: eborah Jacks , Assessor ActiveUS 110591647v.1 o CITY OF SALEM q PLANNING BOARD 1013 MAY 9gn MEMORANDUM CITY BLE2FILE gFM MASS Date: May 20, 2013 To: Salem City Council From: Salem Planning Board Re: Summary of Findings and Recommendation for the N1GL Chapter 121A Application of Salem Heights Preservation Associates, Limited Partnership Ori,'JAI 15, 2013 a joint public hearing of the Salem Qty Co-uneil and Salem Planning Board was held to consider the application for approval of a M.G.L. Chapter 121A designation for SALEM HEIGHTS PRESERVATION ASSOCIATES„ LIMITED PARTNERSHIP and for approval of a 25-year extension to the 15-year period of exemption from property taxation under Section 10 of Chapter 121A for the property located at 12 POPE STREET. The Salem Planning Board deliberated and voted on this application on May 16,2013. In consideration of the findings below, the Salem Planning Board voted to approve the Chapter 121A application. All the members present voted in favor, with a 6-0 vote in favor (Mr. Ready (Vice Chair), Mr. Clarke, Ms. Sides, Mr. McCabe,Mr. Anderson, and Mr.Rieder) and none opposed. Pursuant to M.G.L. Ch. 121A § 6, the Salem Planning Board, after careful consideration of the evidence presented at the public hearing,and after thorough review of the application submitted, snakes the following findings: 1. The proposed project area is qualified under the statutory definition of a "blighted open," "decadent" or"substandard"area established in Section 1 of Chapter 1214. The Salem Planning Board has determined that the Salem Heights development was constructed in 1974 to address a blighted, open and substandard area on Pope Street in Salem, on a difficult to develop site with substantial ledge. Over the years,the 283 unit multifamily building on the site has experienced the degradation of aging, inadequate original systems, high energy costs, and heavy use from the families who have lived there over the 40 year period since original construction. Capital needs studies have shown that the building continues to require substantial investment, for basic infrastructure as well as for the rehabilitation of the interior of apartment units on turnover. Due to the inability to raise rents or to increase mortgage proceeds from the property for capital needs as a result of the multiple affordable housing restrictions which encumber the property(including a 100-year restriction held by the Qty of Salem), it is critical to the preservation of this affordable housing resource and the prevention of blight and substandard conditions on the site and in the surrounding neighborhood that the assistance of Chapter 121A be provided to the project. The project has experienced mortgage default and workout status. The owner has diligently pursued all available public and private sources of affordable housing funds to address the blight created by inadequate capitalization, but Chapter 121A status is essential to these efforts to prevent blighted and substandard project conditions. Therefore,the Salem Planning Board finds that all of the above factors qualify the project to meet the statutory purpose and intent of the definition of a"blighted open," "decadent" or"substandard" area. 2. The project is not in contravention of any zoning, subdiaision, health or building ordinance or by-law or the rules and regulations of the City of Salem (the "City"). The project is in conformance with local zoning, subdivision, health or building ordinances, by-law and rules and regulations of the Cry. 120 WASHINGTON STREET, SALEM, MASSACHUSETTS 01970 .TEL: 978.745.9595 FAx: 978.740.0404 ♦ WWW.SAI,ENI.COM Salem Planning Board May20, 2013 Project: 12 Pope Street Page 2 of 2 3. The project does not conflict with the City's master plan, or if there is no master.plan, with, a local or regional plan, as appropriate. The Salem Planning Board finds that the project is in compliance with the planning goals and objectives of the City, as a much needed affordable housing resource for the City,and as an anchor of stability to prevent blight and decay in the surrounding neighborhood. The City has made a major cormnitment to the viability of this multi-family apartment development and the families who live there, through the lawsuit brought to block the conversion of Salem Heights to market rate housing in the late 1990s, and the 100-year affordable housing restriction the City obtained as a result of that lawsuit. The financial stability of the project will be supported with the consistency of the payment formula under Chapter 121A agreement;the City w ll benefit f nanci as well, by sharing through the statutory formula in rental increases permitted by the affordable housing restrictions, and avoiding the need to have annual negotiations, and, potentially, time-consuming and costly annual appeals of real estate tax assessments. 4. The project is not detrimental to: a. the best interests of the public or City; b. the best interests of public safety and convenience;or c. consistency with the most suitable de7xlopment of the City; The Salem Planning Board has determined.that the project will further the best interests of the public and the City by providing much needed, safe and decent affordable housing to families, through the support provided by the predictable amount of taxes payable under Chapter 121A, as well as provid ng a predictable source of tax revenue for the City, and participation in any increase in rental income under the statutory formula of Chapter 121A- 5. The project constitutes a public use and benefit;and The Salem Planning Board determines that the project meets this criteria by supporting a much needed affordable housing development subject to a 100-year restriction held by the City, and will benefit the surrounding neighborhood by enabling the project to address the maintenance and capital needs of the project notwithstanding the limitations on rental income created bythe affordable housing restrictions held bythe City and federal and state governments. 6. No relocation of residents is required since the ongoing maintenance and capital repairs programs being undertaken by the Applicant are being performed with tenants in place. Tim Ready,Acting Chairman Salem Planning Board Cc: Cheryl LaPointe, City Clerk lig VCL6N, SSSS. R i April 11 2013 `tb.r.nu�v* Ordered: That City Council approve the M.G.L. Chapter 121A designation for Salem Heights Preservation Associates, Limited Partnership effective upon the expiration of the current M.G.L. Chapter 121A designation, which expired on March 26, 2013, and approve an initial 15-year period of exemption from property taxation under Section 10 of M.G.L. Chapter 121A and a 25-year extension to such period, based upon the significant and long term affordable housing restrictions that encumber the Project, subject to approval of the Massachusetts Department of Housing and Community Development. Be it further Ordered, that the Mayor be authorized to enter into the M.G.L. Chapter 121 A Agreement on behalf of the City. In City Council April 11, 2013 Moved to schedule a joint public hearing with the Planning Board In City Council May 23, 2013 Adopted as amended Approved by the Mayor on May 28, 2013 ATTEST: CHERY A. LAPOINTE CITY LERK REGULATORY AGREEMENT Salem Heights Preservation Associates, Limited Partnership Chapter 121A Project This Regulatory Agreement(the "Agreement") is made as of the day of 12013,by and between SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP, a Massachusetts limited partnership organized under General Laws Chapter 109 and subject to General Laws Chapter 121A("Chapter 121A") as amended to date (the "Partnership"), and the MASSACHUSETTS DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT ("DHCD"), acting hereunder pursuant to Chapter 121A, as amended, of the Massachusetts General Laws (except as otherwise stated herein, this statute, not including Chapter 121B, is hereinafter referred to as "Chapter 121A"). Collectively, the Partnership and DHCD are hereinafter referred to as the `Parties." PRELIMINARY STATEMENT The approval of the Partnership's application for the Chapter 121A project described below (the"Application") was issued by DHCD on _, 2013. NOW, THEREFORE, the Partnership agrees, for itself and its successors and assigns, with DHCD as follows: (1) Description of Project. The Project is located on a 6.5 acre parcel at 12 Pope Street in Salem, Massachusetts, and consists of two high-rise buildings providing 283 units of housing for low and moderate income households. The Project was originally approved under the provisions of Chapter 121A, which approval expired on March 26, 2013 ("Prior 121A Approval"). Pursuant to the Application, the Partnership has secured approval of the Project under Chapter 121A for a new term of forty (40) years. (2) Current Status. The construction of the Project was undertaken upon issuance of the Prior 121A Approval. The Project has been rehabilitated by the Partnership, which is continuing its ownership and operation as affordable housing as described herein. (3) Financing: Mortgages. The Project has been financed through a first mortgage loan from the Massachusetts Housing Partnership Fund Board and private lenders, tax exempt bond financing issued by Mass Development, state affordable housing funds, grants and deferral of development and management fees as more particularly set forth in Section 9 and Appendix 8 of the Application. Subject to the provisions of Chapter 121A, any and all subsequent debt financing(s) or refinancing(s), whether secured or unsecured, of the Project, in whole or in part, and syndication(s), or resyndication(s) of Partnership interests in the Partnership, shall be subject to the prior approval of DHCD, which approval shall not be unreasonably withheld or delayed. No mortgages in connection with the Project shall be granted and/or recorded without the prior approval of DHCD, except for any mortgages to secure the financing described herein. (4) Separate Accounts Expenditure of Project Income The Partnership shall keep its financial accounts for the Project separate and apart from any other activities conducted by the Partnership and shall not expend income derived therefrom other than as described in Chapter 121A upon or for the benefit of any other of its activities. (5) Return Restrictions. (a) Return Restriction During MHP Loan Term. Pursuant to Section 18C of Chapter 121A, for so long as the Project is financed by mortgage financing provided by the Massachusetts Housing Partnership Fund Board (the "MHP Financing"),the Owner will not be subject to the limitation on dividends set forth in clause (e) of said Section 18C, but rather shall be subject to MHP's limited dividend requirements: in particular, during the term of the MHP financing, the Owner's dividend is restricted to ten (10%)percent of the "Owner's Equity" in the Project, where the Owner's Equity is the sum of(i) actual cash contributed by the Owner to the Project, including low-income housing tax credit equity but excluding public equity such as HOME, CDBG or other funds; (ii) developer's fee loaned to the Project, provided that any payment of such developer's fee from the Project cash flow is treated as dividend distribution; (iii) developer's fee contributed to the Project; and (iv) appraised acquisition value (based on zoning in place at the time of loan commitment) in excess of the acquisition value included in the Project's development budget. (b) Alternate Return Restriction. During such period as the Project is subject to Chapter 121A and the provisions of Section 5(a) above are not applicable thereto, the general partner and limited partners of the Partnership shall not receive or accept as net income from the Project any sum in excess of eight percent (8%) of the amount invested by them in the Project for each calendar year or parts thereof in which they own or have owned an interest in the Project, except that, if in any such year or part thereof, they have so received a sum less than the aforesaid eight percent(8%), they may so receive in a subsequent year or years additional sums not exceeding the aggregate such deficiency ("Permitted Distributions"). (c) Timing of Permitted Distributions. Permitted Distributions shall be made pursuant to this provision, commencing in May of the calendar year after the date of this Agreement and in the same month during each successive calendar year in which this Agreement is in force and effect, only if by the end of April of each calendar year, the Partnership shall, by notice to DHCD, certify that: (i) the Partnership has paid all amounts due and payable in connection with the approved financing and Sections 10 and 6A of Chapter 121A; (ii) the Partnership is current within 60 business days on other accounts due and payable; (iii)the Partnership has corrected or reserved adequate funds to correct all physical Project deficiencies identified in any notices or inspection reports issued by any federal, state or local governmental body; and (iv) the Partnership has deposited all amounts required by its mortgagees and limited partners to be deposited in the reserve fund for replacements accompanied by a statement evidencing all deposits in such reserve fund. Notwithstanding the foregoing to the contrary, in the event DHCD reasonably determines at any time that the Project has physical deficiencies to be corrected or remedied, DHCD, by notice to the Partnership, may prohibit any distributions of any kind to the general partner or limited partners until such deficiencies have been corrected or remedied to DHCD's reasonable satisfaction. (d) Additional Matters. In the event in any calendar year or part thereof the general or limited partners of the Partnership receive or accept as net income a sum in excess of the before- -2 - ActiveUS 110591846v.1 mentioned Permitted Distributions, as determined by DHCD, upon receipt of notice from DHCD (which notice must be received by the Partnership within 18 months of the distribution in question to be of any force or effect), the general partner shall repay an equivalent sum plus interest to the Partnership or, at the sole election of DHCD, the Partnership,upon receipt of notice, shall expend an equivalent sum plus interest, as directed by DHCD, for the purposes as set forth in Chapter 121A, Section 15. Nothing contained in this Section shall be applicable to the distribution of profits from the sale of the capital assets of, or general or limited partner interest in, the Partnership. This Section shall be in force and effect until this Agreement and Chapter 121A are no longer applicable to the Partnership. (6) Use Restriction. The Partnership shall operate the Project in compliance with the tax credit regulatory agreement under the Section 42 low income tax credit program; and in accordance with the other affordable housing restrictions applicable to the Project as described in the Application. Notwithstanding the expiration or earlier termination of the Chapter 121A status of the Project,the provisions of, and the Partnership's covenants and agreement and DHCD's rights under this Section 6 shall survive such expiration or termination and be enforceable by DHCD. (7) Urban Redevelopment Excise Tax: 6A Payments. In consideration of the exemption of the Partnership and all its real and personal property from taxation and from betterments and special assessments and from the payments of any tax, excise or assessment to or for the Project, it shall pay the excises with respect to the Project which a Chapter 121A entity would be bound to pay under the formulae and provisions set forth in Section 10 of Chapter 121A and those payments to the City, as set forth in the Partnership's 6A Contract with the City, any amendments thereto or any new 6A Contract ("6A Contract"). (8) Term of Agreement. This Agreement shall remain in effect for a period of 40 years after the date hereof. After expiration,neither the Project nor the Partnership shall thereafter be subject to the obligations of Chapter 121A nor enjoy the rights and privileges thereunder, nor be subject to the terms, conditions and obligations of this Agreement as provided for in Chapter 121A. (9) Project Transfer Voluntary Transfers of Partnership Interests. Capital Stock and Beneficial Interests: Involuntary Transfers of Partnership Interests. Condominium or Cooperative Form of Ownership. (a) Project Transfers. If the Partnership and/or the mortgage lender or lenders to the Partnership propose, acting either under the provisions of Chapter 121A, Section 11 (third and last paragraph) or under Chapter 121A, Section 16A,to sell, convey, exchange, give or otherwise transfer (collectively, "transfer")the Project, in whole or in part, to another Chapter 121A entity or entities, this Agreement shall upon the prior approval of such transfer(s) and the transferee(s) by DHCD and at the option of DHCD,be terminated or amended and a new Regulatory Agreement pursuant to Chapter 121 A, Section 18C, shall be entered into between DHCD and such transferee or transferee(s). Notwithstanding any transfer under Chapter 121A, Section 16A, the Partnership acknowledges and agrees that the Project and the transferee or transferees shall remain subject to the Amendment, this Agreement and Chapter 121A. ActiveUS 110591846v.1 (b) Voluntary Transfers of Partnership Interests. Capital Stock and Beneficial Interests. The Partnership and its general and limited partners shall not voluntarily transfer, assign, convey or sell, or in any manner hypothecate any partnership interest in the Project at any time without the prior consent and approval of DHCD, and as a condition to any request to permit a transfer of any such partnership interests it shall cause such proposed transferee or assignee to enter into a written agreement in form and content satisfactory to DHCD, wherein such transferee or assignee agrees to assume and/or be bound by the terms and conditions of this Agreement. Any and all changes of the general and limited partners of the Partnership or their respective partnership interests are subject to DHCD's prior approval. The general partner shall not permit the transfer of any of its capital stock without the prior consent and approval of DHCD. Notwithstanding any provision to the contrary herein, (1) the admission to the Partnership of investor limited partners in exchange for a capital contribution referenced in Sections 1 and 9 of the Application, (2)the admission to the Partnership of a corporation or other entity controlled by the syndicator as a general or limited partner in the Partnership (the "Investor Special Partner") in exchange for a portion of the capital contribution, (3) subsequent transfers of interests in such limited partners or Investor Special Partner, (4) transfers among limited partners or by a limited partner to an entity related to such limited partner, and (5) any transfer of limited partnership interests that does not exceed in the aggregate 49% of such limited partnership interests shall each constitute a conveyance of an interest in the Project that is permitted without DHCD's consent under this Agreement and Chapter 121 A. (c) Involuntary Transfer of Partnership Interests. Any transferee or person or entity succeeding to the rights and obligations and interest of the general partner of the Partnership in the Project by operation of law, testamentary disposition, intestacy, or otherwise shall be deemed to have consented and agreed to be bound by the terms, covenants and conditions of this Agreement. (d) Condominium or Cooperative Form of Owmership. The Partnership shall take no action to convert the Project or any part thereof to either a condominium or cooperative form of ownership under applicable law, which shall constitute a fundamental change in the Project, without the prior approval of DHCD in accordance with Chapter 121A. (10) Accounts Records and Books Access by DHCD Representatives: Financial Reports: Statements, etc. The Partnership agrees that it will: (a) maintain full and accurate accounts, records and books relative to the Project conforming to general accepted accounting principles; (b) grant to the employees or representatives of DHCD and the City at all times during normal business hours access to such of its accounts, records and books as relate to the Partnership's obligations under this Agreement, and Chapter 121A, as now or may be in the future amended; (c) permit DHCD and the City, or their approved accountants or auditors, to make periodic audits of the Partnership's accounts and financial records at the Partnership's expense, which shall at all times be available in the Commonwealth of Massachusetts; and (d) furnish to DHCD such financial, operating, statistical and other reports, records, statements and documents on a uniform and consistent basis as may periodically or on a one time basis be required by DHCD and copies of contracts entered into by the Partnership, or other documents in the possession of the Partnership, as DHCD may from time to time require in connection with the Partnership's obligations under this Agreement and Chapter 121A. - 4 - Activ-US 110591846v.] (11) Compliance with Applicable Laws. Codes Ordinances and Regulations. The Partnership shall cause the Project to be in compliance with this Agreement and all zoning, building, health; and fire laws, codes, ordinances and regulations in effect in the City and applicable thereto. (12) Project Maintenance and Management. The Partnership shall, at its own cost and expense, keep, operate and maintain its interest in the Project, or cause it to be kept, operated and maintained in good repair, order and condition at all times during the term of this Agreement. The Partnership may manage the Project itself, or employ an independent contractor to undertake such management. (13) Project Changes. Etc. Any and all material changes, deviations, alterations, or additions proposed to be made to the Project from and after the date of this Agreement shall be subject to prior review and approval by DHCD, which approval shall not be unreasonably withheld or delayed. (14) Non-Discrimination. The Partnership shall not effect or execute any covenant, agreement, lease, or other instrument whereby the Project or any part thereof is restricted on the basis of race, color, sex, sexual preference, religion, or national origin in the lease or occupancy thereof or employment therein. (15) Notices: Communications. Any notices, reports, statements, requests, approvals, consents, waivers or other communications required or desired to be given or furnished pursuant to this Agreement shall be in writing with copies directed, as indicated below, and shall be hand-delivered or may be made by depositing the same in the United States mail, first class postage prepaid. If such notice is to be to DHCD,the address is: Massachusetts Department of Housing and Community Development 100 Cambridge Street, Suite 300 Boston,MA 02114 Attn: Office of the Chief Counsel If addressed to the Partnership, the general or limited partners,the address is: Salem Heights Preservation Associates, Limited Partnership 40 Court Street, Suite 700 Boston, MA 02108 Attention: Amy S. Anthony with a copy to: WilmerHale LLP 60 State Street Boston, MA 02109 Attention: Katharine E. Bachman, Esq. Any party may change its respective address by giving written notice to the others in accordance with this Section. 5 _ ActiveUS 110591846x.1 (16) Non-Recourse. Notwithstanding any contrary provision hereof, this Agreement shall be made without recourse to the personal assets of the general or limited partners of the Partnership, excepting only their respective interests in the Project. In no event shall any general or limited partner of the Partnership have any personal liability for the payment of any sum of money or the performance of any obligation which may become payable or required by the Partnership hereunder and DHCD agrees to look only to the assets of the Partnership for any such payment or performance. (17) Agreement Binding on Successors and Assigns. The respective provisions of this Agreement shall be binding upon, and shall inure to the benefit of the successors and assigns of the Partnership, the general partner, the limited partners and the public body or bodies succeeding to the interests of DHCD. (18) Enforcement. DHCD may enforce compliance with any of the provisions of this Agreement or any of its rules and regulations by an action in a court of appropriate jurisdiction. The Partnership shall pay to DHCD all reasonable costs and expenses, including attorneys' fees, which may be incurred by DHCD in proceedings brought to enforce compliance, to the extent DHCD prevails. (19) Table of Contents. Titles to Sections. The Table of Contents and titles of the several Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of the provisions of this Agreement. (20) Execution of Agreement Counterparts Registration/Recordation. This Agreement shall be executed in such form as will enable registration and/or recordation and may be executed in several counterparts, each of which shall be an original and all of which together shall constitute one and the same agreement. The parties further agree that this Agreement shall be recorded with the Bristol North Registry of Deeds. (21) Severability. If any term or provision of this Agreement, or the application thereof to any person or circumstance, shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such terms to persons or circumstances other than those to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the extent permitted by law. [Remainder ofpage intentionally left blank.] - 6 - ActiveUS 110591846v.1 EXECUTED as a sealed instrument as of the day first above written. SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP, a Massachusetts limited partnership By: POAH SALEM HEIGHTS, LLC, a Delaware limited liability company, general partner By: POAH Inc., an Illinois non-profit corporation, member/ . ' ,�4 ByTiny S. thon ', Presi ent� COMMONWEALTH OF MASSACHUSETTS, ACTING BY AND THROUGH THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT By: ,� Name: C U " 0i Title: [Signature Page to Regulatory Agreement] ActiveUS 110591846v.1 COMMONWEALTH OF MASSACHUSETTS Suffolk, ss. On this - Wday of A,.- ; 2013, before me,the undersigned notary public, personally appeared Amy S. Anthony, proved to me through satisfactory evidence of identification, which was oL�-5,, \ w t ,to be the person whose name is signed on the preceding or attached document, and acknowledged to me that she signed it voluntarily for its stated purpose, as President of POAH Inc., member of POAH Salem Heights, LLC, general partner of Salem Heights Associates, Limited Partnership. _ Notary Public My commission expires: r., PATRICK W. NIEBAUEn Notary Public °omy com lth of Massae it es q V my Commission Expires July 4,2094 COMMONWEALTH OF MASSACHUSETTS County, ss. On thisat day of 2013, before me, the and rsigned tary public, personally appeared A" 3� Y��r,rl the #%The Commonwealth of Massachusetts acting by and through the Department of Housi and Community Development, proved tome through satisfactory evidence of identifies on, which was (a current driver's license) (a current U.S. passport) ( ersonal knowledge of the identity of the principal), to be the person whose name is s' d on the preceding or attached document, and acknowledged to me that he/she signed it vol , in such capacity, for its stated purpose. Notary Pub ' My commission expires: CAROLYN DYMONT Notary Public Commonwealth of Masi -etes My Commission E:°.c- January 19, 2Bi& [Signature Page to Regulatory Agreement] - ActiveUS 110591846x.1 EXHIBIT A Legal Description [See attached] ActiveUS 110591846v.1 -3 5 % 4 ]. (Legal Description of Property) FX pj certain parcel of land situated in the City of Salem, County of Essex, Commonwealth assachusetts; bounded and described as follows: , . Beg nning at a point at the intersection of the easterly sideline of Proctor Street and the �? ely sideline of Pope Street; g N. Y . u;Thence running along said southerly sideline of Pope Street N 560 56' 45" E, a distance nne;tiundred twenty-seven and 15/100 (127.15) feet to a point; y# >�Thence turning and running again along said southerly sideline at Pope Street N 420 03' -ea-distance of thirty-eight and 0 0/10 0 (38.00) feet-to the TRUE POINT OF BEGINNING. s� Thence running along the said southerly sideline of Pope Street by two courses: 03' 45" E, a distance of three hundred and seventeen and 07/100 (317.07) feet; 18' 45" E, a distance of three and 97/100 (3.97) feet to a point; Thence turning and running S 64° 30' 00" E, a distance of twelve and 25/100 (12.25) feet ;<• onnt; �Thonce turning and running N 52° 06' 18" E, a distance of sixty and 00/100 (60.00) feet FT.ence turning and running N 78° 04' 08" E, a distance of thirty eight and 90/100 feet to a point; i Thence turning and running'S 43°25' 58" E, a distance of one hundred four and 85/100 �Ffeet to a point; ¢ThOnce running on a curve to the right having a radius of two hundred eighty five and (2:85.00) feet an arc distance of one hundred five and 00/100 (105.00) feet to a point; rx rw ence turning and running S 57° 40' 46"W, a distance of twenty six and 50/100 (26.50) a poinE henoe turning and rumiing S 07° 03' 14" E, a distance of two hundred sixty-six and 266,.00) feet to a point; e`nce turning and running S 060 35' 14" E, a distance of one hundred fifty-four and �I550) feet to a point; �Y:i g > }T k Iyence turning and running on S 05°41' 14"E, a distance of one hundred thirty and n� �pp130:90) feet to a point; €r � �a t egce turning and running N 840 50' 00" W, a distance of five hundred eighty and s*' �(580:54) feet to a point at land now or formerly of Auger; _ Thence turning and running along said land now or formerly of Auger N 16° 18' 17" E, a - o{ninety-five and 07/100 (95.07) feet to a point; �P y hence turning and running again along said land now or formerly of Auger N 76° 23' I.a �` ad stance of one hundred and 00/100 (100.00) feet to a point on the easterly sideline of Oct; <Thence turning and running along said easterly sideline of Proctor Street N 150 05' 02" stance6f eighty-three and 35/100 (83.35) feet to a point; .; , . .. R enCC turn ng and running S 76° 23' 06" E, a distance of one hundred nine and 50/100 �D);feef to a point; - Thenoe fuming and running N 68° 24' 34" E, a distance of sixteen and 70/100 (16.70) ¢Thenceturning and running N 53° 26' 11" E, a distance of fifty-two and 20/100 (52.20) .tttapnint;. s ence.turning and running N 27° 51' 01" E, a distance of sixty-four and 50/100 (64.50) a` rence:taming and running N 37° 35' 26"W, a distance of forty-two and 40/100 (42.40) apoint fence.turning and running N 55° 24' 34" E, a distance of twenty-seven and 20/100 )feet to a point; Renee turning and running N 77° 15' 30"E, a distance of eleven and 03/100 (11.03) feet ry�hCnee turning and running N 34° 18' 14" W, a distance of ninety-six and 13/100 (96.13) he,TRLTE POINT OF BEGINNING. ': o`ntainia 284,341 sq. ft., more or less. azd'parceI is shown on a plan entitled"Topographic Plan of Land in Salem, Mass., scale dated March 1972" and Property Lines added October 2, 1972, by New England j, Inc., Civil Engineers and Land Surveyors. C� CITY OF SALEM PLANNING BOARD 1013 HAY-20 2q MEMORANDUM CITYFll_e tl c�€RK, SA,Em,MASS. Date: May 20, 2013 To: Salem City Council From: Salem Planning Board Re: Summary of Findings and Recommendation for the MGL Chapter 121A Application of Salem Heights Preservation Associates, Limited Partnership Ou Nlay 15, 2013 a joint public hearing of the Salem City Council and Salem Planning Board was held to consider the application for approval of a M.G.L. Chapter 121A designation for SALEM HEIGHTS PRESERVATION ASSC>QATES, LIMITED PARTNERSHIP and for approval of a 25-year extension to the 15-year period of exemption from property taxation under Section 10 of Chapter 121A for the property located at 12 POPE STREET. The Salem Planning Board deliberated and voted on this application on May 16,2013. In consideration of the findings below, the Salem Planning Board voted to approve the Chapter 121A application. All the members present voted in favor, with a 6.0 vote in favor (Mr. Ready (Vice Chair), Mr. Clarke, Ms. Sides, Mr. McCabe,Mr.Anderson,and Mr.Rieder) and none opposed Pursuant to M.G.L. Ch. 121A S 6, the Salem Planning Board, after careful consideration of the evidence presented at the public hearing, and after thorbugh review of the application submitted,makes the following findings: 1. The proposed project area is qualified under the statutory definition of a "blighted open," "decadent" or"substandard"area established in Section 1 of Chapter 12M. The Salem Planning Board has determined that the Salem Heights development was constructed in 1974 to address a blighted, open and substandard area on Pope Street in Salem, on a difficult to develop site with substantial ledge. Over the years,the 283 unit multifamily building on the site has experienced the degradation of aging, inadequate original systems, high energy costs,and heavy use from the families who have lived there over the 40 year period since original construction. Capital needs studies have shown that the building continues to require substantial investment, for basic infrastructure as well as for the rehabilitation of the igteior of apartment units on turnover. Due to the inability to raise rents or to increase mortgage proceeds from the property for capital needs as a result of the multiple affordable housing restrictions which encumber the property(including a 100-year restriction held by the City of Salem),it is critical to the preservation of this affordable housing resource and the prevention of blight and substandard conditions on the site and in the surrounding neighborhood that the assistance of Chapter 121A be provided to the project. The project has experienced mortgage default and workout status. The owner has diligently pursued all available public and private sources of affordable housing funds to address the blight created by inadequate capitalization, but Chapter 121A status is essential to these efforts to prevent blighted and substandard project conditions. Therefore,the Salem Planning Board finds that all of the above factors qualify the project to meet the statutory purpose and intent of the definition of a"blighted open," "decadent" or"substandard"area. 2. The project is not in contravention of any zoning, subdisision, health or building ordinance or by-law or the rides and regulations of the City of Salem(the "City"). The project is in conformance with local zoning, subdivision, health or building ordinances, by-law and rules and regulations of the City. 1.20 WASHINGTON STREET, SALEM, MASSACHUSETTS Ot970 •TEL: 978.745.9595 FAx: 978.740.0404 ♦ WWW.SALEM.COM Salem Planning Board May 20,2013 Project: 12 Pope Street Page 2 of 2 3. The project does not conflict with the City's master plan, or if there is no master plan, with a local or regional plan,as appropriate. The Salem Planning Board finds that the project is in compliance with the planning goals and objectives of the City,as a much needed affordable housing resource for the City,and as an anchor of stability to prevent blight and decay in the surrounding neighborhood. The Qty has made a major commitment to the viability of this multi-family apartment development and the families who live there, through the lawsuit brought to block the conversion of Salem Heights to market rate housing in the late 1990s, and the 100-year affordable housing restriction the City obtained as a result of that lawsuit. The financial stability of the project will be supported with the consistency of the payment formula under Chapter 121A agreement,the City will benefit financially as well, by sharing through the statutory formula in rental increases permitted by the affordable housing restrictions, and avoiding the need to have annual negotiations, and, potentially, time-consuming and costly annual appeals of real estate tax assessments. 4. The project is not detrimental to: a. the best interests of the public or City; b. the best interests of public safety and conzenience;or c. consistency with the most suitable dezelopment of the City, The Salem Planning Board has determined that the project will further the best interests of the public and the. Qty by providing much needed,safe and decent affordable housing to families, through the support provided by the predictable amount of taxes payable under Chapter 121A,as well as providing a predictable source of tax revenue for the Cry, and participation in any increase in rental income under the statutory formula of Chapter 121A. S. The project constitutes a public use and benefit;and The Salem Planning Board determines that the project meets this criteria by supporting a much needed affordable housing development subject to a 100-year restriction held by the City, and will benefit the surrounding neighborhood byenabling the project to address the maintenance and capital needs of the project notwithstanding the limitations on rental income created bythe affordable housing restrictions held by the City and federal and state governments. G. No relocation of residents is required since the ongoing maintenance and capital repairs programs. being zrndertaken by the Applicant are being performed with tenants in place. Tim Ready,Acting Chairman Salem Planning Board Cc: Cheryl LaPointe,Qty Clerk �a r c� w b� A,ri, „ , 2013 Ordered: That City Council approve the M.G.L. Chapter 121A designation for Salem Heights Preservation Associates, Limited Partnership effective upon the expiration of the current M.G.L. Chapter 121A designation, which expired on March 26, 2013, and approve an initial 15-year period of exemption from property taxation under Section 10 of M.G.L. Chapter 121A and a 25-year extension to such period, based upon the significant and long term affordable housing restrictions that encumber the Project, subject to approval of the Massachusetts Department of Housing and Community Development. Be it further Ordered, that the Mayor be authorized to enter into the M.G.L. Chapter 121A Agreement on behalf of the City. In City Council April ll, 2013 Moved to schedule a joint publichearingwith the Planning Board - - In City Council May .23, 2013 Adopted as amended - Approved by the Mayor on May 28, 2013 ATTEST: CHERYL A. LAPOINTE CITY CLERK A TRUE COPY ATTEST iTy CLERK SALEM, MASS, - E �kUTw" 032113 Ccpr pp p-F"� ";+r.rmlcsAt6 April 11 2013 Ordered: That City Council approve the M.G.L. Chapter 121A designation for Salem Heights Preservation Associates, Limited Partnership effective upon the expiration of the current M.G.L. Chapter 121A designation, which expired on March 26, 2013, and approve an initial 15-year period of exemption from property taxation under Section 10 of M.G.L. Chapter 121A and a 25-year extension to such period, based upon the significant and long term affordable housing restrictions that encumber the Project, subject to approval of the Massachusetts Department of Housing and Community Development. Be it further Ordered, that the Mayor be authorized to enter into the M.G.L. Chapter 121A Agreement on behalf of the City. In City Council April 11, 2013 Moved to schedule a joint public hearing with the Planning Board In City Council May 23, 2013 Adopted as amended Approved by the Mayor on May 28, 2013 ATTEST: CHERYL A. LAPOINTE CITY CLERK CITY OF .SALEM [n City Council, Ordered: N/1ay 23, 2013 That the Salem City council vote, pursuant to the provisions of MGL Chapter 44, Section 53E '/2 to authorize the establishment of the revolving funds for FY 2014 as herein described. Expenditures from said funds shall not exceed the amount of funds received in the respective accounts or as authorized as stated, shall come from any funds received by the respective boards for performing services, shall be used solely for the purpose of implementing the programs delineated and shall be approved by a majority vote of any respective boards in accordance with the recommendation of Her Honor the Mayor. FY 2014 Budget Request Maximum Fund Type of Receipts Authorization Annual Department Fund Name . ft Programs & Purposes Credited for S endin Expenditures Training and special qFirecomm ocal equipment needed to Fees charged to gency respond to hazardous persons spilling or ing materials incidents per CH releasing hazardous Fire Chief and 2433 21E materials Mayor $ 10,000.00 Fee charged to Dominion Power Plant to cover OT costs for R/A Confined Confined space training for Firefighter Confined Fire Chief and Fire S ace Drills 2449 Firefighters. Space Drill training. Ma or $ 48,000.00 To fund capital items for Fees charged for boat R/A Harbormaster and to fund and Float storage at Boat/Float maintenance costs of Winter Island and Harbormaster Harbormaster Storage 2368 equipment. Kernwood Marina and Ma or $ 30,000.00 To support vaccination program and other health promotion activities of the Reimbursements from Health Agent Health Health Clinics 2364 Health De artment vaccination ro rams and Ma or $ 20,000.00 Funding from RFP's for To cover expenses for July services, vendors and Special 4th and Haunted miscellaneous Mayor Events 2361 Ha enin s events. s onsorshi s. Mayor $ 125,000.00 Fee charged for pass to use dog park(pooch Renovations and pass). Twenty-Five Recreation Maintenance of Dog Park dollars annually for Director and Recreation nnn Park 2435 at Leslie's Retreat Park. pass. Mayor $ 10,000.00 ,r?� CITY OF SALEM[ fn City Council, ordered. FY 2014 Budget Request Maximum Fund Type of Receipts Authorization Annual Department Fund Name # Programs & Purposes Credited for S endin Expenditures To be used for the operation and maintenance Parking and launch fees Recreation Park& Rec of Winter Island and charged at McCabe Director and Recreation Public Access 2452 McCabe Marina Marina&Winter Island _Mayor $ 30,000.00 Salem Renovations and Recreation Willows Maintenance of Willows Money generated from Director and Recreation Meters 2459 Park. Willows Meters Mayor $ 35,000.00 To support Salem Award Twenty-Five cent Recreation committee and the Salem surcharge to tickets Director and Recreation Witch House 2499 Witch Trial Memorial beginninq in May 2009 Mayor $ 10,000.00 To increase and replenish store inventory as needed Revenue from sale of Recreation Winter Island and to enhance and inventor at the Winter Director and Recreation Store 2362 maintain WI store. Island Store Mayor $ 30,000.00 Fees received during Planning & Fund operational costs of the off season for Director of Community Salem Ferry the Salem Ferry and use/rent of ferry and Planning and Development Operational 2453 B laney treet Dock Blane St Pier. Mayor $ 20,000.00 r costs of disposal ous items picked $20.00 fee charged for rt of sticker each sticker bought and for when scheduling a Public Service Public Sticker ed pieces picked curbside pick up for item Director and Services Program 2455 s de artment. dis osal. Ma or $ 25,000.00 or City purchase of environmental items such as recycling bins, recycling toters, rain barrels, Fees charged for composeters,water recycling bins, recycling conservation devises, toters, rain barrels, Environmental ercycling calendar and composters, water City Engineer Engineering Fund 2438 educational material. conservation devices. and Ma or $ 30,000.00 JJ � ,�; CITY OF SALEM s v i ,r, yrie (n Citv Cuuncil, Ordered` FY 2014 Budget Request Fund Maximum Annual De artment Fund Name # Pro rams &Pur oses Typ Credited Receipts forS endin Authorization Ex enditures Projects related to City Primarily from: Traffic beautification events Island Sponsorships, including Traffic Island, Special Events Beautification, and special Revenues, Event and events such as Beautification effort City Engineer Engineering Traffic Island 2439 Treemendous s onsors and Ma or $ 25,000.00 Fee charged for testing of backflow devices and Mass DEP required cover the cost of backflow testing program to periodic survey or Water comply with 310 CMR properties potentially City Engineer Engineering Backflow Test 2363 22.22. re uirin a device. and Ma or $ 85,000.00 Payments for rental of School Building building by outside Committee and School Rental 2601 Building Rental/Custodial rou s Mayor $ 200,000.00 Tuition payments for students attending the pre-school program at School Early the Early Childhood Committee and School Childhood 2608 Pre-School Tuition Center Ma or $ 110,000.00 School School School Busin 2614 School Bus ass Purchases of school bus Committee and asses Ma or $ 100,000.00 Tuition payments for students attending the School Night/Summer Summer/Night School night&summer school Committee and FSchooll School 2620 Tuition ro rams Mayor $ 50,000.00 Tuition payments for students from other districts attending School Special Ed Special Ed programs in Committee and Tuition 2627 S ecial Ed Tuition Salem Mayor $ 150,000.00 To pay for parts and materials for automotive Fees charged for parts repairs to vehicles brought and materials for in to the HS Automotive automotive repairs to School SHS Vocational School by vehicles brought in by Committee and Automotive 2645 citizens citizens Mayor $ 50,000.00 In City Council May 23, 2013 Adopted by roll call vote of 10 yeas, 0 nays, 1 absent Approved by the Mayor on May 28, 2013 ATTEST: CHERYL A. LAPOINTE CITY CLERK OJFPI.OF po"� � ;OMMUMI� b April 11 , 2013 Ordered: That City Council approve the M.G.L. Chapter 121A designation for Salem Heights Preservation Associates, Limited Partnership effective upon the expiration of the current M.G.L. Chapter 121A designation, which expired on March 26, 2013, and approve an initial 15-year period of exemption from property taxation under Section 10 of M.G.L. Chapter 121A and a 25-year extension to such period, based upon the significant and long term affordable housing restrictions that encumber the Project, subject to approval of the Massachusetts Department of Housing and Community Development. Be it further Ordered, that the Mayor be authorized to enter into the M.G.L. Chapter 121A Agreement on behalf of the City. In City Council April 11, 2013 Moved to schedule a joint public hearing with the Planning Board In City Council May 23, 2013 Adopted as amended Approved by the Mayor on May 28, 2013 ' s ATTEST: CHERYL A. LAPOINTE CITY CLERK A TRUE COPY ATTEST ITY CLERK SALEM, MASS. C� xv CITY OF SALEM t PLANNING BOARD 1013 NAY 20 MEMORANDUM FILE ZLV CITY CLERK, SALEM, MASS, Date: May 20, 2013 To: Salem City Council From: Salem Planning Board Re: Summary of Findings and Recommendation for the NIGL Chapter 121A Application of Salem Heights Preservation Associates, Limited Partnership Ou'.vLy 15, 2013 a joint public hearing of the Salem City Council and Salem Planning Board was held to consider the application for approval of a M.G.L. Chapter 121A designation for SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP and for approval of a 25-year extension to the 15-year period of exemption from property taxation under Section 10 of Chapter 121A for the property located at 12 POPE STREET. The Salem Planning Board deliberated and voted on this application on May 16,2013. In consideration of the findings below, the Salem Planning Board voted to approve the Chapter 121A application. All the members present voted in favor, with a 6-0 vote in favor (Mr. Ready (Vice Chair), Mr. Clarke, Ms. Sides, Mr. McCabe,Mr.Anderson,and Mr.Rieder) and none opposed. Pursuant to M.G.L. Ch. 121A § 6, the Salem Planning Board, after careful consideration of the evidence presented at the public hearing,and after thorough review of the application submitted,makes the following findings: 1. The proposed project area is qualified under the statutory definition of a "blighted open," "decadent' or"substandard"area established in Section 1 of Chapter 12M. The Salem Planning Board has determined that the Salem Heights development was constructed in 1974 to address a blighted, open and substandard area on Pope Street in Salem, on a difficult to develop site with substantial ledge. Over the years,the 283 unit multifamily budding on the site has experienced the degradation of aging, inadequate original systems, high energy costs, and heavy use from the families who have lived there over the 40 year period since original construction. Capital needs studies have shown that the building continues to require substantial investment, for basic infrastructure as well as for the rehabilitation of the interior of apartment units on turnover. Due to the inability to raise rents or to increase mortgage proceeds from thero e p p rty for capital needs as a result of the multiple affordable housing restrictions which encumber the property(including a 100-year restriction held b the Cat of Salem), it is critical to the reservation of this y Y ) P affordable housing resource and the prevention of blight and substandard conditions on the site and in the surrounding neighborhood that the assistance of Chapter 121A be provided to thePjroect. The Project has experienced mortgage default and workout status. The owner has diligently pursued all available public and private sources of affordable housing funds to address the blight created by inadequate capitalization, but Chapter 121A status is essential to these efforts to prevent blighted and substandard project conditions. Therefore,the Salem Planning Board finds that all of the above factors qualify the project to meet the statutory purpose and intent of the definition of a"blighted open," "decadent" or"substandard" area. 2. The project is not in contrazention of any zoning, subdizasion, health or building ordinance or by-lazy or the rules and regulations of the City of Salem (the "City'). The project is in conformance with local zoning, subdivision, health or building ordinances, by-law and rules and regulations of the City. 120 WASHINGTON STREET, SALEM, MASSACHUSETTS 01970 • TEL: 978.745 9595 FAx: 978.740.0404 ♦ WWW.SALFM.COM Salem Planning Board May 20,2013 Project: 12 Pope Street Page 2 of 2 3. The project does not conflict with the City's master plan, or if there is no master plan, with a local or regional plan, as appropriate. The Salem Planning Board finds that the project is in compliance with the planning goals and objectives of the City, as a much needed affordable housing resource for the Cry, and as an anchor of stability to prevent blight and decay in the surrounding neighborhood. The City has made a major commitment to the viability of this multi-family apartment development and the families who live there, through the lawsuit brought to block the conversion of Salem Heights to market rate housing in the late 1990s, and the 100-year affordable housing restriction the City obtained as a result of that lawsuit. The financial stability of the project will be supported with the consistencyof the payment formula under Chapter 121A agreement;the Citywill benefit financiallyas well, by sharing through the statutory formula in rental increases permitted by the affordable housing restrictions, and avoiding the need to have annual negotiations, and, potentially, time-consuming and costly annual appeals of real estate tax assessments. 4. The project is not detrimental to: a. the best interests of the public or City; b. the best interests of public safety and convenience;or c. consistency with the most suitable development of the City; The Salem Planning Board has determined that the project will further the best interests of the public and the City by providing much needed, safe and decent affordable housing to families, through the support provided by the predictable amount of taxes payable under Chapter 121A, as well as providing a predictable source of tax revenue for the City, and participation in any increase in rental income under the statutory formula of Chapter 121A. 5. The project constitutes a public rise and benefit;and The Salem Planning Board determines that the project meets this criteria by supporting a much needed affordable housing development subject to a 100-year restriction held by the City, and will benefit the surrounding neighborhood by enabling the project to address the maintenance and capital needs of the project notwithstanding the limitations on rental income created bythe affordable housing restrictions held bythe City and federal and state governments. 6. No relocation of residents is required since the ongoing maintenance and capital repairs programs being undertaken by the Applicant are being performed with tenants in place. Tim Ready,Acting Chairman Salem Planning Board Cc: Cheryl LaPointe, City Clerk r e CITY OF SALEM 9 PLANNING BOARD 1813 MAY 2C MEMORANDUM FILE # CITY CLER11, SALEM, Mass. Date: May 20, 2013 To: Salem City Council From: Salem Planning Board Re: Summary of Findings and Recommendation for the MGL Chapter 121A Application of Salem Heights Preservation Associates,Limited Partnership On May 15, 2013 a joint public hearing of the Salem City Council and Salem Planning Board was held to consider the application for approval of a M.G.L. Chapter 121A designation for SALEM HEIGHTS PRESERVATION ASSOCIATES, LIMITED PARTNERSHIP and for approval of a 25-year extension to the 15-year period of exemption from property taxation under Section 10 of Chapter 121A for the property located at 12 POPE STREET. The Salem Planning Board deliberated and voted on this application on May 16,2013. In consideration of the findings below, the Salem Planning Board voted to approve the Chapter 121A application. All the members present voted in favor, with a 6-0 vote in favor (Mr. Ready (Vice Chair), Mr. Clarke, Ms. Sides, Mr. McCabe,Mr.Anderson,and Mr.Rieder) and none opposed. Pursuant to M.G.L. Ch. 121A§ 6, the Salem Planning Board, after careful consideration of the evidence presented at the public hearing,and after thorough review of the application submitted,makes the following findings: 1. The proposed project area is qualified under the statutory definition of a "blighted open," "decadent' or"substandard"area established in Section I of Chapter 12M. The Salem Planning Board has determined that the Salem Heights development was constructed in 1974 to address a blighted, open and substandard area on Pope Street in Salem, on a difficult to develop site with substantial ledge. Over the years,the 283 unit multifamily building on the site has experienced the degradation of aging, inadequate original systems,high energy costs,and heavy use from the families who have lived there over the 40 year period since original construction. Capital needs studies have shown that the building continues to require substantial investment, for basic infrastructure as well as for the rehabilitation of the interior of apartment units on turnover. Due to the inability to raise rents or to increase mortgage proceeds from the property for capital needs as a result of the multiple affordable housing restrictions which encumber the property(including a 100-year restriction held by the City of Salem),it is critical to the preservation of this affordable housing resource and the prevention of blight and substandard conditions on the site and in the surrounding neighborhood that the assistance of Chapter 121A be provided to the project. The project has experienced mortgage default and workout status. The owner has diligently pursued all available public and private sources of affordable housing funds to address the blight created by inadequate capitalization, but Chapter 121A status is essential to these efforts to prevent blighted and substandard project conditions. Therefore,the Salem Planning Board finds that all of the above factors qualify the project to meet the statutory purpose and intent of the definition of a"blighted open," "decadent" or"substandard" area. 2. The project is not in contravention of any zoning, subdiusion, health or building ordinance or by-law or the rules and regulations of the City of Salem (the "City'). The project is in conformance with local zoning, subdivision, health or building ordinances, bylaw and rules and regulations of the City. 120 WASHINGTON STREET, SALEM, MASSACHUSETTS 01970 • TEL: 978.745.9595 FAx: 978.740.0404 • WWW.SALEM.COM Salem Planning Board May 20,2013 Project: 12 Pope Street Page 2 of 2 3. The project does not conflict with the City's master plan, or if there is no master plan, with a local or regional plan,as appropriate. The Salem Planning Board finds that the project is in compliance with the planning goals and objectives of the City, as a much needed affordable housing resource for the City,and as an anchor of stability to prevent blight and decay in the surrounding neighborhood. The Cry has made a major commitment to the viability of this multi-family apartment development and the families who live there,through the lawsuit brought to block the conversion of Salem Heights to market rate housing in the late 1990s, and the 100-year affordable housing restriction the Qty obtained as a result of that lawsuit. The financial stability of the project will be supported with the consistency of the payment formula under Chapter 121A agreement;the City will benefit financially as well, by sharing through the statutory formula in rental increases permitted by the affordable housing restrictions, and avoiding the need to have annual negotiations, and, potentially, time-consuming and costly annual appeals of real estate tax assessments. 4. The project is not detrimental to: a. the best interests of the public or City; b. the best interests of public safety and convenience;or c. consistency with the most suitable development of the City; The Salem Planning Board has determined that the project will further the best interests of the public and the Cty by providing much needed, safe and decent affordable housing to families,through the support provided by the predictable amount of taxes payable under Chapter 121A, as well as providing a predictable source of tax revenue for the Qty, and participation in any increase in rental income under the statutory formula of Chapter 121A. 5. The project constitutes a public use and benefit,and The Salem Planning Board determines that the project meets this criteria by supporting a much needed affordable housing development subject to a 100-year restriction held by the Qty, and will benefit the surrounding neighborhood by enabling the project to address the maintenance and capital needs of the project notwithstanding the limitations on rental income created bythe affordable housing restrictions held bythe Qty and federal and state governments. 6. No relocation of residents is required since the ongoing maintenance and capital repairs programs being undertaken by the Applicant are being performed with tenants in place. Tun Ready,Acting Chairman Salem Planning Board Cc: Cheryl LaPointe,City Clerk