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Imp. Proj. #614 Add'l.
1�- ,1�0 A Curtis Jacobsen 4401 Xylon Ave. No. New Hope, MN 55428 us; &Ipislgpeopife (�le helj�i themselves the matter and I appreciate your prompt response once you became aware of the request. I am enclosing a letter of legal opinion regarding the matter. I presume that you would like to have this for the City file. Should you have any questions or concerns, please do not hesitate to contact me directly at 612-455-5132 or at Llesifie.seaberg@221-inc.orfl. PROM F IDE IN LIVING, INC. Lesli g Ass e Manager =11 AUULTAIAL6010 L � N DO U IS T+V E N N U M Laura L. Krenz (612) 371-3529 "taar*IA UO2MAM 37077IRIENOMM TRIMEWWW"Mm 4200 IDS Center 80 South Eighth Street Endil 0. wi W for the City of Minneapolis the City of New Hope 1001 Washington Avenue North 4401 Xylon Avenue North Minneapolis'MN 55401 New Hope, NIN 55428-4898 Attn: Executive Director Attn: Executive Director We are counsel to PPL Bass Lake Court Limited Partnership ("Partnership"). We hereby notify you that the limited partner ownership interest in the Partnership will be assigned from National Equity Fund 1997 Series 11 Limited Partnership to PPL Bass Lake Court LLC. Section 10.2 of that certain Regulatory and Operating Agreement, dated February 3, 1999, among the addressees and the Partnership (the "Agreement") requires your prior written consent for an assignment of the Agreement by the Partnership. In this case, the Agreement is not being assigned and no consent is required. amommum Laura L. Krenz LLK/jag cc: Barbara McCormick Leslie Scaberg Debra Beltran THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS And THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE for MIXED -FINANCE DEVELOPMENT {PPL -Sass Lake Court/New Hope, Minnesota} Closing: February 3,1999 Participants MPHA Minneapolis Public Housing Authority in and for the City of Minneapolis MPHA's Counsel James S. Holmes, Holmes & Associates, Ltd. HUD United States Department of Housing and Urban Development HUD's Counsel Steve Gronewold, Esq. City City of New Hope, Minnesota EDA Economic Development Authority in and for the City of New Hope, Minnesota City & EDA Steve Sondrall Counsel Owner PPL -Bass Lake Court Limited Partnership Owner's Robert J. Silverman Counsel Dorsey & Whitney LLP Owner's Lisa Kugler Consultant Managing Project for Pride in Living, Inc. Agent Fund Family Housing Fund MHFA Minnesota Housing Finance Agency Title Old Republic National Title Insurance Company DAMNN12RO17MOMCLOSOLST.DOC l 1. Amendment No. 101 to Mixed Finance Development Grant Project Amendment to Consolidated Annual Contributions Contract executed by MPHA and HUD 2. Amendment No. 102 to Mixed Finance Development Grant Project Amendment to Consolidated Annual Contributions Contract executed by MPHA and HUD 3. Amendment No. 107 Development Project Grant Amendment to Consolidated Annual Contributions Contract Number C-953 originally dated March 10, 1971, executed by MPHA and HUD 4. Resolutions and General Certification of MPHA General Certificate of Local Authority Resolutions regarding Cooperation Agreement Resolution regarding execution of documents 5. Resolution of City regarding Cooperation Agreement 6. Resolutions of EDA regarding execution of documents 7. Resolutions of Owner Certificate of Good Standing Limited Partnership Agreement S. Cooperation Agreement between MPHA and City 9. Declaration of Restrictive Covenants executed by the Owner Exhibit A Legal Description 10. Initial Agreement between MPHA and EDA Exhibit A Waiting List Certification Amendment No. 1 to the Initial Agreement between MPHA and EDA 11. Housing Development Agreement among MPHA, EDA and Owner Exhibit A Legal Description Exhibit B Declaration of Restrictive Covenants Exhibit C Certificate of Completion Exhibit D Title Insurance Commitment 12. Regulatory and Operating Agreement among MPHA, EDA and Owner Exhibit A Development Site '- " .A " Dispute Resolution Procedures Exhibit C Development Operating Subsidy Cap Worksheet Exhibit D Management Agreement D:%M 125\017\DOCS\CLOSGLST.bOC 2 13. Management Agreement between Owner and Managing Agent with Consent of MHFA, MPHA and EDA Exhibit A Management Plan Exhibit B MHFA Regulatory and Operating Agreement Exhibit C Lease Form Exhibit D Marketing Agreement Exhibit E Affirmative Fair Housing Marketing Plan Amended and Restated Addendum to Management Agreement between Owner and Managing Agent with Consent of MHFA, MPHA and EDA 14. Title Policy 15. Guarantee of Completion from Owner to MPHA and EDA 16. Opinion of MPHN's Counsel Proposal (without Exhibits attached) 17. Opinion of Owner's Counsel Schedule 1 A. MPHR Documents B. Other Documents 18. Master Subordination Agreement and Estoppel Certificate among Owner, MPHA, MHFA, EDA, Fund, County and Lenders j Exhibit A Legal Description Exhibit B MHFA NCTC Loan Documents Exhibit C MHFA ARIF Loan Documents Exhibit D Fund Documents Exhibit E County Loan Documents Exhibit F EDA Loan Documents Exhibit G Declaration of Land Use Restrictive Covenants for Low -Income Housing Credits Exhibit H Declaration of Restrictive Covenants (HUD) 19. Master Disbursement Agreement among Owner, MPHA, MHFA, EDA, Fund, County and Title Exhibit A Legal Description Exhibit B Escrow and Disbursement Agreement Exhibit C MHFA NCTC Disbursement Agreement 20. Pledge Agreement between Owner and MHFA and Approval of MPHA and HUD 21. Subsidy Layering Review 22. HUD Approval of Proposal 23. Letter of approval for release of HUD funds D:NM04N12510171DOCSICL0SGLST.D0C 3 PARTICIPANTS Bass Lake Court/New Hope, Minnesota UAIu fNUMOI700MMIDISTRHMOG IDecember 4, 1998 NAME AND ADDRESS WORK FAX E-MAIL HA Cora McCorvey 612-342-1439 612-371-0421 Dorothy Jacobs* 612-342-1215 612-342-1407 djacobs@mplspha.org Minneapolis Public Housing Authority 612-342-1400 1001 Washington Avenue North Minneapolis, MN 55401 MPHA's James S. Holmes* 612-249-2900 612-249-0777 jholmes@hohnesltd.com Counsel Mary Jaworsky, Paralegal 612-249-2006 mjaworskyQholmesltd.com Holmes & Associates, Ltd. Two Carlson Parkway, Suite 155 Minneapolis, MN 55447 HUD- Steve Gronewold* 612-370-3000 612-370-3003 stephen j. gronewold(Qhud.g v Minnesota Debbie Kravik* x2210 Office General Counsel 612-370-3204 612-370-3090 d_eborah kravik@hud.gov US Department of HUD x2225 220 South 2nd Street Minneapolis, MN 55401 HUD- Luci Blackburn* 202-708-0614 202-401-2370 Washington, Department of HUD x4190 D.C. 451 Seventh Street Southwest Room 4142 Washington, D.C. 20410 EDA & City Daniel Donahue* 612-531-5100 612-531-5136 Executive Director New Hope EDA Kirk McDonald Director of Community Development 4401 Xylon Avenue North New Hope, MN 55428-4898 EDA's Counsel Steve Sondrall* 612424-8811 612-493-5193 sas@slms.com 8525 Edinbrook Crossing Brooklyn Park, MN 55443 Owner & PPL -Bass Lake Court Limited 612-874-8511 612-874-6444 General Partner Partnership c/o Steve Cramer* Project for Pride in Living, Inc. 2516 Chicago Avenue South Minneapolis, MN 55404 Owner's Robert J. Silverman* 612-340-2742 612-340-7800 Counsel Dorsey & Whitney LLP Pillsbury Center South 220 South Sixth Street, 22nd Floor Minneapolis, Minnesota 55402 Owner's Lisa Kugler* 612-827-2189 612-824-8672 lisakugiet@aol.com Consultant Project Management 4737 Garfield Avenue South Minneapolis, MN 55409 Managing Agent Shari Pleiss 612-874-3302 612-872-8995 Project for Pride in Living, Inc. 1925 Chicago Avenue South Minneapolis, MN 55404 UAIu fNUMOI700MMIDISTRHMOG IDecember 4, 1998 MHFA Jim Dinerstein* 651-296-2293 651-296-8139 jitn.dinerstein@state.mn.u9 Julie Tarlizzo , 651-296-9822 651-296-9545 -� Minnesota Housing Finance Agency 651-296-9793 400 Sibley Street; Suite 300 St. Paul, MN 55101 Jew Tom Fulton 612-375-9644 612-375-9648 Family Housing Fund Midwest Plaza West 801 Nicollet Mall, Suite 840 Minneapols, MN 55402 FT -Ws Counsel Becky Rom 612-336-3204 612-336-3885 Faegre & Benson 2200 Norwest Center 90 South Seventh Street Minneapolis, MN 55402 County Hennepin County Hennepin Housing Consortium A-2400 Government Center Minneapolis, MN 55487 County's Jay L. Arneson Counsel Hennepin County Attorney's Office A-2000 Government Center Minneapolis, MN 55487 Limited Partner Uire Clark 312-360-0400 312-360-0131 Chicago Office -in house Counsel Diedre Schmidt Mary Ann (Mngmt Only) 651-649-1123 National Equity Fund 1997 Limited Partnership Hamlin Park Plaza 570 Asbury Street, Suite 101 St. Paul, MN 55104 DAMNN125W171D0CS\bUDISTR$.D0C 7 December 4, 1998 Development Project Grant Amendment to Consolidated Annual Contributions Contract Development Project Grant Number: MN46P00206096A 2. Amendment to Annual Contributions Contract Number C-953 dated 03110/71 (the Contract). 3, The Contract is amended to provide a grant assistance for the Development Grant Project. This amendment is a part of the Contract. 4. The following provisions shall be applicable to the Development Grant Project: a. Date of Development Grant Reservation: b. Development Method and Housing Type Conventional New Construction c. Number of Units 146 d. Maximum Total Development Cost (Development Grant Authority) $4,288,386.00 5. The development of this Grant Project shall be carried out in accordance with all HUD regulations and other requirements applicable to the public housing development program. The PHA agrees to comply with these regulations and requirements, B. The development work to be carried out is described in a PHA Proposal, a statement of the basic elements of the Development Grant Project. The PHA Proposal must be adopted by the PHA and approved by HUD, and may be revised from time to time by agreement between HUD and the PHA. The PHA agrees to carry out the development activities in accordance with the approved PHA Proposal. 7. The Maximum Total Development Cost of the Development Grant Project is stated in Section 4.d. of this amendment. The PHA shall complete the development of the Grant Project at the lowest possible development cost within the approved Development Cost Budget and in no event in excess of the stated Maximum Total Development Cost for the Grant Project. 8. Subject to the provisions of Part II of this Contract, and in order to assist the development of the Grant Project, HUD agrees to disburse to the PHA. from time to time as needed, up to the amount of the Maximum Grant Commitment. The Maximum Grant Commitment shall be equalto the Maximum Total Development Coattorthe Grant Project, as stated in Section 4.d. or the approved Actual Development Cost of the Grant Project. (SEAL) Attest: U -S. Department of Housing and Urban Development Amendment No. 101 9, After inclusion in an audit and HUD approval of the Actual Development Cost Certificate (in accordance with Section 405 of Part II of the Contract), a copy of the Actual Development Cost Certificate shall be attached to this amendment and shall be deemed to further amend the Contract, where necessary, to reduce the amount of grant authority for the Development Grant Project to an amount equal to the approved Actual Development Cost. In no case shall the approved Actual Development Cost Certificate amount exceed the New Maximum Total Development Cost stated in Section 4.d. of this amendment, 10, The PHA shall continue to operatethe Development Grant Project as lower income housing in compliance with this Contract, the Act and all HUD regulations and requirements for a period of forty years beginning on the Date of Full Availability of the Development Grant Project: provided, however, thatthe provisions of Section 308[81 and (C) of the Contract shall remain in effect for so long as HUD determines there is any outstanding indebtedness of the PHA to HUD which arose in connection with any project or projects under the Contract and which is not eligible for forgiveness, and provided further that, for a period of ten years following the last payment of operating subsidy to the PHA, no disposition of the Grant Project shall occur unless approved by HUD. 11 . If the PHA does not comply with any of its obligations under this amendment, HUD may direct the PHA to terminate all further development activities. In such case, the PHA shall only incur additional casts with HUD approval. 12, The PHA shall execute and file for record a Declaration of Trust as provided under Section 420(8► of the Contract to protect the rights and interests of HUD throughout the forty -year period during which the PHA is obligated to operate the Development Grant Project in accordance with the Contracts, the Act and HUD regulations and requirements. 13. These units are funded pursuant to the terms of the Consent Decree dated April 20, 1995, in settlement of Hallman at al. v_. Cisnaras at al., U.S.D.C. (Minn Dist., 4th Div.) Civ. No. 4-92-712, Project units are to be used solely in accordance with the terms and conditions of the Consent Decree. The parties have caused this amendment to be effective as of the date of execution on behalf of the United States, as stated below. OLIS PUBLIC HOUSING, AUTHORITY IN I - /r ' -- (- l� - Cora McCorvey, Executive Director Date 9/22/98 UNITED STATES OF AMERICA SECRETARY OF HOUSING AND URBAN DEVELOPMENT By Z'L-a e!� J(1 for Daniel H. Larson, Director Office of Public Housing Minnesota State Office Date 9/25/98 HUD -53010-D (6/89) Development Project Grant Amendment to Consolidated Annual Contributions Contract U.S. Department of Housing and Urban Development _ ^_A Amendment No. 102 _ 1 . Development Project Grant Number: MN46P00207395A 2. Amendment to Annual Contributions Contract Number C-953 dated 03)10171 (the Contract). 3. The Contract is amended to provide a grant assistance for the Development Grant Project. This amendment is a part of the Contract. 4. The following provisions shall be applicable to the Development Grant Project: a. Date of Development Grant Reservation: 03/28/95 b. Development Method and Housing Type Conventional - New Construction c. Number of Units 12 d, Maximum Total Development Cost (Development Grant Authority) $1.386,480.00 6. The development of this Grant Project shall be carried out in accordance with all HUD regulations and other requirements applicable to the public housing development program. The PHA agrees to comply with these regulations and requirements. 6. The development work to be carried out is described in a PHA Proposal, a statement of the basic elements of the Development Grant Project. The PHA Proposal must be adopted by the PHA and approved by HUD, and may be revised from time to time by agreement between HUD and the PHA. The PHA agrees to carry out the development activities in accordance with the approved PHA Proposal. 7, The Maximum Total Development Cost at the Development Grant Project is stated in Section 4.d. of this amendment. The PHA shall complete the development of the Grant Project atthe lowest possible development cost within the approved Development Cost Budget and in no event in excess of the stated Maximum Total Development Cost for the Grant Project, 8. Subject to the provisions of Part 11 of this Contract, and in order to assist the development of the Grant Project, HUD agrees to disburse to the PHA, from time to time as needed, up to the amount of the Maximum Grant Commitment. The )Maximum Grant Commitment shall be equal to the Maximum Total Development Cost for the Grant Project, as stated in Section 4,d, or the approved Actual Development Cost of the Grant Project. (SEAL) Attest: 9. After inclusion in an audit and HUD approval of the Actual Development Cost Certificate lin accordance with Section 406 of Part II of the Contract), a copy of the Actual Development Cost Certificate shall be attached to this amendment and shall be deemed to further amend the Contract, where necessary, to reduce the amount of grant authority for the Development Grant Project to an amount equal to the approved Actual Development Cast. In no case shall the approved Actual Development Cost Certificate amount exceed the New Maximum Total Development Cost stated in Section 4.d. of this amendment. 10. The PHA shall continue to operate the Development Grant Project as lower income housing in compliance with this Contract, the Act and all HUD regulations and requirements for a period of forty years beginning on the Date of Full Availability of the Development Grant Project; provided, however, that the provisions of Section 308181 and lC) of the Contract shall remain in effect for so long as HUD determines there is any outstanding indebtedness of the PHA to HUD which arose in connection with any project or projects under the Contract and which is not eligible for forgiveness, and provided further that, for a period of ten years following the last payment of operating subsidy to the PHA, no disposition of the Grant Project shall occur unless approved by HUD. 11. If the PHA does not comply with any of its obligations under this amendment, HUD may direct the PHA to terminate all further development activities. In such case, the PHA shall only incur additional costs with HUD approval. 12, The PHA shall execute and file for record a Declaration of Trust as provided under Section 420(B) of the Contract to protect the rights and interests of HUD throughout the forty -year period during which the PHA is obligated to operate the Development Grant Project in accordance with the Contracts, the Act and HUD regulations and requirements. 13. These units are funded pursuant to the terms of the Consent Decree dated April 20, 1995, in settlement of Hallman at al. v_. Cisneros et al., U.S.D.C. (Minn Dist., 4th Div.) Civ. No, 492 712. Project units are to be used solely in accordance with the terms and conditions of the Consent Decree. The parties have caused this amendment to be effective as of the date of execution on behalf of the United States, as stated below. MINIFAPOLIS PUBLIC HOUSING AUTHORITY IN ANDIFOR THE CITY OF MINNEAPOLIS Executive Director, Corad Date 9/22/98 UNITED STATES OF AMERICA SECRETARY OF HOUSING AND URBAN DEVELOPMENT y By Z&Z' for Daniel H. Larson, Director Office of Public Housing Minnesota State Office Date 9L 96 --- HUD-53010-D (6/89) MIXED -FINANCE AMENDMENT TO CONSOLIDATED ANNUAL CONTRIBUTIONS CONTRACT Section 1. This Mixed -Finance ACC Amendment covers the project identified below (herein referred to as "the Project") (A) Development Grant Project Number: MN46P00207395A, to be known as Bass Lake Court; or (B) Modernization Grant Project Number (for modernization funds approved for use for development purposes, hereafter referred to as "public housing development funds"): Not Applicable ; or (C) HOPE VI Grant Agreement No. Not Applicable Section 2. This Mixed -Finance ACC Amendment is Amendment No. 107 to Consolidated Annual Contributions Contract (ACC) Number: C-953, dated March 10, 1971. Section 3. The ACC is amended to provide grant assistance for the Project identified in Section 1 and/or to add the public housing units to the ACC. This Mixed -Finance Amendment is part of the ACC and incorporates Exhibits A -G, which are attached hereto. Section 4. The following provisions are applicable to the Project: (A) Date of Project grant reservation: March 28, 1995 (B) Number of public housing units to be developed: 12 (C) Housing Type: Conventional -New Construction. (D)(1) For Projects to be developed using development grant funds, or modernization funds approved for conversion to development purposes, the Maximum Total Development Cost (Development Grant Authority) of the Project is: $1,386,480. The difference between the Maximum Total Development Cost of $1,386,480 and the total amount of the Developer's grant of $1,356,480 is the amount of the PHA's administrative expenses as reflected in the Development Cost Budget attached as Exhibit F - HUD issuance date: November 25, 1996 (D)(2) For Projects to be developed using HOPE VI grant funds, the approved Total Development Cost of the Project is: Not Applicable (E) The public [designated units — in the mixed -finance housing units will be (check one): ]; [undesignated units x ] development. N (F) The public housing units are (check one): [eligible ]; ] [ineligible ] to receive operating subsidy under section 9 of the United States Housing Act of 1937 ("the Act"). If some or all of the units are eligible to receive operating assistance, specify the number of eligible units (including the number of bedrooms per unit) that will be eligible to receive such assistance: 6 three bedroom and 6 four bedroom . (G) The public housing units shall be ineligible to receive modernization assistance unless the housing authority executes a project -specific ACC modernization amendment in connection with the units. (H) The definitions set forth in 24 CFR part 941, subpart F, are applicable to this Mixed -Finance ACC Amendment_ Section 5 - PHA Certifications and Assurances. (A) By executing this Mixed -Finance ACG Amendment, the public housing agency (the "PHA") certifies to HUD that: (1) it has the legal authority under State, local, or tribal (if applicable) law to develop public housing units through the establishment or selection of an owner entity, and to enter into all agreements and provide all assurances required under 24 CFR part 941, the HUD -approved proposal, and this Mixed - Finance ACC Amendment. The PHA also warrants that it has the legal authority under State, local, and tribal (if applicable) law to enter into any proposed partnership and to fulfill its obligations as a partner thereunder, and that it has obtained all necessary approvals for this purpose; (2)(i) it will ensure that the Project is developed in - accordance with the mixed -finance proposal submitted by the PHA and approved by HUD, this Mixed -Finance ACC Amendment (including all exhibits), the ACC (except that any requirement set forth in the ACC is superseded by a modified requirement set forth in this Mixed -Finance ACC Amendment), and all statutes, executive orders and regulations applicable to the development of mixed -finance public housing units, as such requirements now exist or as they may be enacted, promulgated, or amended from time to time. (ii) If the public housing units are to be developed using HUD issuance date: November 25, 1996 3 HOPE VI funds, the PHA agrees that, in addition to the requirements set forth in subparagraph (i), it also will comply with any applicable requirements set forth in the HOPE VI grant agreement, the approved Revitalization Plan, and any statutes, executive orders and regulations applicable to the HOPE VI program, as such requirements now exist or as they may be enacted, promulgated, or amended from time to time. (3) it will ensure that the requirements for admission to, continued occupancy of, management, and modernization of the public housing units are in accordance with all requirements applicable to public housing, as set forth in the ACC (except that any requirement set forth in the ACC shall be superseded by a modified requirement set forth in this Mixed -Finance ACC Amendment), and all statutes, executive orders and regulations applicable to public housing, as such requirements now exist or as they may be enacted, promulgated, or amended from time to time. (4) there is no action, proceeding, or investigation now pending, nor any basis therefor, known or believed to exist by the PHA, which: (i) questions the validity of this Mixed -Finance ACC Amendment, or any action taken, or to be taken, under it, or; (ii) is likely to result in any materially adverse change in the authorities, properties, liabilities, or condition (financial or otherwise) of the PHA or the proposal, or of any participating party, that would materially or substantially impair the PHA's or such participating party's ability to perform any of the obligations imposed upon it under the proposal and this Mixed - Finance ACC Amendment. (5) it has obtained all Federal, State, and local government approvals and reviews required by law, or reasonably required by HUD, to be obtained by the PHA to develop and implement the proposal, and all participating parties have obtained all such approvals and reviews required to be obtained by the participating parties to develop and implement the proposal. (6) it will immediately notify HUD of any material change in any representations, statements, certifications or other matters contained in the PHA's proposal, this Mixed -Finance ACC Amendment, and/or the HOPE VI Revitalization Plan (if applicable). (7) it will use its best efforts to assure the performance of all PHA, owner entity, and participating party(ies) obligations under this Mixed -Finance ACC Amendment in accordance HUD issuance date: November 25, 1996 4 with the timeframes established in the development schedule attached hereto as Exhibit D. (8)(i) The PHA hereby acknowledges that HUD has approved its mixed -finance proposal in reliance upon the FHA's representations that the PHA, the partner(s), the owner entity(ies), and other participating parties will: (a) carry out the activities ascribed to them in accordance with the proposal and approved implementing documents (as summarized in Exhibit B hereto); (b) complete those activities in accordance with the schedule set forth in Exhibit D, including the development of a certain number of public housing units (including the specified number of bedrooms per unit); (c) have, or will have when necessary to implement their activities in accordance with the proposal, the financial capacity to assure carrying out the activities to their completion; (d) invest or cause to be invested in the activities described in the proposal a specific amount of funds in addition to the public housing development funds (or the HOPE VI funds, if applicable), in accordance with Exhibit F. HUD has also relied upon the PHA's, the owner entity's, and the partner's representations that they and other participating parties, prior to the use of the public housing development funds (or HOPE VI funds, if applicable) for the proposal, will enter into legally binding agreements, as approved by HUD, evidencing the commitments of all parties necessary for completion of the proposal, in compliance with the requirements of this Mixed - Finance ACC Amendment; and (ii) the representations, statements, certifications and other matters contained in the proposal were, to the best of the PHA's information and belief, true and complete in all material respects as of the dates of submission of the proposal to HUD (including the dates of any separate submissions for a specific phase), and upon the execution of this Mixed -Finance ACC - Amendment and will continue to be true and complete in all material respects as of the date of any amendment to this Mixed - Finance ACC Amendment, except as modified by such amendment (and any corollary modification to the proposal that the PHA deems necessary) . (9) This Mixed -Finance ACC Amendment has been executed and delivered by the PHA in such a manner and form as to comply with HUD issuance date: November 25, 1996 5 all applicable laws so as to make this Mixed -Finance ACC Amendment the valid and legally binding act and agreement of the PHA. (10) it will use, or ensure the use of, program income during the grant period, in accordance with 24 CFR § 85.25, only for eligible program costs or other low-income housing purposes. The PHA agrees that after the end of the award period, any gross income received by the PHA or a subgrantee that was directly generated.by a grant -supported activity (or earned only as the result of funding providing under Section 3 of this Mixed -Finance ACC Amendment), including, without limitation, principal and interest on loans made with grant funds, will be utilized solely for eligible program costs or other low-income housing purposes. This covenant will survive any termination of the grant and, at HUD's direction, may be incorporated into any documentation related to the closeout of the grant. (S) The PHA warrants that it will include, or cause to be included: (1) in all its agreements or contracts with the partner, the owner entity, and/or other participating parties receiving public housing development funds an acknowledgement that a transfer of public housing development funds by the PHA. to the partner, the owner entity, or other participating party will not be (and shall not be deemed to be) an assignment of public housing development funds, and the partner, owner entity, or other participating party will not succeed to any rights or benefits of the PHA under the ACC or this amendment, or attain any privileges, authorities, interests, or rights in or under the ACC or this amendment. (2) in all its agreements or contracts with the partner, the owner entity, or other participating parties, and in all contracts with any party involving the use of public housing development funds, a provision that nothing contained in the ACC or this amendment, nor in any agreement or contract between the parties, nor any act of HUD, the PHA, or any of the parties, will be deemed or construed to create any relationship of third -party beneficiary, principal and agent, limited or general partnership, joint venture, or any association or relationship involving HUD. Section 6 -_ Evidentiary „Materials. (A) Content. The PHA shall submit to HUD for review and approval the evidentiaries specified in Exhibit E to this Mixed - Finance ACC Amendment. Such evidentiaries must be submitted in the form of legally binding and enforceable commitments of the HUD issuance date: November 25, 1996 rl parties to the proposal to undertake and complete specified activities connected with the proposal, as set forth below: (1) Evidence of Contracts. Evidence of contractual commitments submitted to HUD must include all documents evidencing the contractual commitments, with an opinion of counsel attached (see paragraph (B)(2) of this section regarding the proper form for opinions of counsel). (2) Evidence of Loans Closings, Bond Sales. (i) Evidence of a loan must be submitted in the form of copies of fully executed notes, deeds, bonds, indentures, loan agreements, and other documents, which must contain sufficient evidence (satisfactory to HUD) to enable HUD to determine: that the loan has been closed and the funds are irrevocably committed and immediately available to the borrower; the principal amount of the loan; its purposes (interim or permanent); and the authorized use of loan funds; the identity of the security for the loan; the term of the loan; the interest rate (and/or any other form of participation) under the loan; the repayment provisions; the default provisions; the identity of all parties to the loan; with an opinion of the owner entity's (and/or any other borrower's) counsel addressed to HUD in accordance with the requirements of paragraph (13)(2) of this section. (ii) If bonds or limited partnership interests are sold to finance the proposal, the evidence must include a copy of the offering statement or syndication prospectus for the sale of the bonds or limited partnership interests and a statement from the trustee or depository of the proceeds certifying that the bonds or limited partnership interests have been sold and the amount of the proceeds that are available immediately for the implementation of the proposal, and must have an opinion of the owner entity's (and/or any other borrower's) counsel addressed to HUD in accordance with paragraph (B)(2) of this section. In the event that any portion of the proceeds of the sale of the bonds or limited partnership interests are to be made available over an extended period, or for any other reason are not immediately available in accordance with the proposal, evidence of "bridge financing" loan(s) in such amount (secured by pledges from the limited partners or in another manner which does not encumber the Project), or other evidence satisfactory to HUD, must be submitted as part of the evidentiary materials, in accordance with paragraph (1) of this section. Notwithstanding the foregoing, the requirement for bridge loan financing will be waived to the extent that such proceeds are necessary only to cover the payment of developer fees (provided that the receipt of HUD issuance date: November 25, 1996 7 such proceeds are timed to coincide with deferred payments to the developer for its fees). (3) Evidence of Other Financing and Funding Sources (including other Federal State and Local Commitments (i) Whenever evidence -is required in the form of a statement and opinion of counsel (or other party designated by HUD) that a participating party has irrevocably committed a specific amount of financing to carry out the commitment of that participating party under the proposal,. such evidence must be in the form of an opinion of counsel or such other party designated by HUD, made in accordance with paragraph (3)(2) of this section. (ii) The opinion of counsel (or other party designated by HUD) must certify that: such party has examined the availability of the participating party's financing, or other funding source; state the amount and the source of such financing or other funding committed by the participating party to the proposal; and state that such financing or other funding has been irrevocably committed by the participating party for use in the proposal and such commitment is in the amount required under the terms of the proposal. (4) Evidence of Title. Evidence of fee simple or leasehold title to real property must be in the form of an original ALTA (or other form acceptable to HUD) policy of owner's or mortgagee's title insurance, which must identify the real property and the ownership interests of the PHA, owner entity, and other participating parties (as appropriate) as the owners or lessees of record of such property. The title policy must also reflect that any instruments securing any private or public financing, including any loan of public housing development funds (or HOPE VI funds, if applicable) have been recorded against the title, and that deed restrictions or covenants running with the land relating to the restrictions and requirements applicable to public housing units under this Mixed - Finance ACC Amendment have been recorded in full to assure that the restrictions and requirements will remain in effect for the period required by law and under this Mixed --Finance ACC Amendment and will survive all other interests (B) Form of Evidentiaries. (1) Submissions. All documentary evidence submitted to HUD must be in the form of either duplicate original(s) of the fully executed document(s), or photographic copies of the fully executed original of the document(s), unless otherwise specified, HUD issuance date: November 25, 1996 Est with a certification attached that the document is a true and complete copy of the original_ (2) ©pinions of counsel. (i) Counsel must opine to the following for each document submitted as evidentiary material under Exhibit E to this Mixed - Finance ACC Amendment: (a) An examination of the authority of all parties to the documents and all persons executing the documents on behalf of the parties has been made and that the parties and said persons were authorized to enter into and execute the documents; and (b) Each document constitutes a valid and legally enforceable agreement or contract under the laws of the PHA's State and the commitments and/or agreements evidenced thereby can be carried out in accordance with their terms under State and local law, and conform to the provisions of the proposal approved by HUD and the requirements of this Mixed -Finance ACC Amendment, and that there is nothing in such document that conflicts with, or is inconsistent with, the requirements of this Mixed --Finance ACC Amendment. (ii) each opinion of counsel must be in writing and include the separate opinions of the PHA's counsel and the owner entity's counsel, unless otherwise specified. (iii) counsel may rely upon the certification of other persons, or the written statements or opinions of other counsel, provided that a copy of each such certification, statement, or opinion must be attached to the opinion of that counsel. (iv) if counsel predicates an opinion upon "information and belief," then in all such cases the counsel'.s opinion must contain, or have attached thereto, a statement or description of all of the information upon which the belief of counsel is predicated. (C) Amendment of Apipro„v_ed Evidentiaries. After HUD has approved an evidentiary submitted in accordance with this Mixed - Finance ACC Amendment, the evidentiary may not be amended in any material respect without the prior written approval of HUD. (D) Implementation in Phases. If Exhibit D contemplates implementation of the proposal in phases, all of the evidentiary material for each phase must be delivered to HUD, in accordance with the provisions of this Mixed -Finance ACC Amendment, no later than the date specified in Exhibit D. HUD issuance date: November 25, 1996 E Section 7 - Draw Down of Funds. (A) The PHA shall ensure that grant funds are expended only in accordance with the requirements set forth in this Mixed - Finance ACC Amendment and the approved budget set forth in Exhibit F to this Mixed -Finance ACC Amendment. (B) In the event that tunds in addition to those set forth in the budget(s) at Exhibit F are received from any source in connection with the Project, such excess funds may only be used, as approved by HUD in writing, for: (1) cost overruns; (2) additional betterments; or (3) other purposes for the benefit of the residents and/or the development. (C) Notwithstanding any contrary requirement set forth in 24 CFR §85.21, the PHA shall request all draw downs of grant funds under the Line of Credit Control System - Voice Response System (LOCOS-VRS), unless and until another payment system is designated by HUD. The PHA shall comply with all rules, guidelines and notices established for the public housing development program under the LOCOS-VRS system, or any substitute system, in connection with the draw down of public housing development funds (or HOPE VI funds, if applicable). If HUD designates an alternative payment system, it shall be based on 24 CFR §85.21(g) - (D) HUD may withhold payments under this Mixed -Finance ACC Amendment in accordance with 24 CFR §85.21(8). (E) After HUD provides the PHA with written notification that the evidentiaries have been reviewed and approved, the PHA may request a draw down of grant funds pursuant to the approved budget in Exhibit F. (F) The PHA may utilize grant funds, in accordance with the budget under Exhibit F, for publication costs of reports or other media relating to Project accomplishments or results, which are allowable costs pursuant to OMB Circular A-87, Schedule B, paragraph 23). (G) No grant funds may be drawn down under this Mixed Finance ACC Amendment during any period in which the PHA has failed to file with HUD any overdue financial report(s). Section 8 - Default. Each of the following events constitutes a default under this Mixed -Finance ACC Amendment: HUD issuance date: November 25, 1996 10 (A) The draw down of public housing development funds (or HOPE VI funds, if applicable) under the proposal in amounts greater than authorized, or in amounts greater than allowed by the pro rata drawdown requirements in Exhibit G of this Mixed - Finance ACC Amendment; (B) Breach of any approved performance schedule; or (C) Breach of any terms, covenants, agreements, provisions, or warranties of: (1) the PHA, as set forth in this Mixed -Finance ACC Amendment; (2) the PHA, as set forth in any agreement submitted to HUD as part of the evidentiary materials and entered into between the PHA and the owner entity, partner, or other participating party relating to the proposal which, in the opinion of HUD, adversely affects the performance obligations of the PHA, the owner entity, or other participating parties, as set forth in this Mixed - Finance ACC Amendment; and (3) the owner entity, partner, or other participating party, made in any agreement submitted to HUD as part of the evidentiary materials which, in the opinion of HUD, adversely affects the performance obligations of the PHA, the owner entity, partner, or other participating party as set forth in this Mixed -Finance ACC Amendment. Section 9 - Consent Decree. These public housing units are funded pursuant to the terms of the Consent Decree dated April 20, 1995, in settlement of Hollman et al. v_. Cisneros et al., U.S.D.C. (Minn. Dist., 4th Div.) Civ. No. 4-92-712. Project units are to be used solely in accordance with the terms and conditions of the Consent Decree. HUD issuance date: November 25, 1996 11 In consideration of the foregoing covenants, the parties have caused this amendment to be executed and effective as of the date of execution on behalf of the United States, as stated below. MINNEAPOLIS PUBLIC HOUSING AUTHORITY SEAL IN AND FOR THE CITY OF MINNEAPOLIS Rich d Br stad, Chairman M C( Cora McCorvey, Exec Director Date AekagP 3' /999 UNITED STATES OF AMERICA Secretary of Housing and Urban Development By Daniel H. Larson, Director Office of Public Housing Minnesota State Office Date HUD issuance date: November 25, 1996 12 EXHIBIT A [Exhibit A must include an identification of each participating party involved in the implementation of the full proposal, with an address and a contact person for each such party. If the proposal is being implemented in phases, list in Exhibit A-1 (through the applicable number of phases) the participating parties for each of the respective phases. If the identities of all participating parties are not known at the time this Mixed - Finance ACC Amendment is executed, this Mixed -Finance ACC Amendment shall be further amended to include the name, address and contact person for each such participating party.] Minneapolis Public Housing Authority in and for the City of Minneapolis (PHA) 1001 Washington Avenue North Minneapolis, MN 55401 Dorothy Jacobs 612-342-1215 PPL --Bass Lake Court Limited Partnership (Owner Entity) and Project for Pride in Living, Inc. (General Partner) 2516 Chicago Avenue South Minneapolis, MN 55404 Steve Cramer 612-874-8511 Minnesota Housing Finance Agency (MHFA) 400 Sibley Street, Suite 300 St. Paul, MN 55101 Jim Dinerstein 651-296-2293 Family Housing Fund of Minneapolis and St. Paul (FHF) Midwest Plaza West 801 Nicollet Mall, Suite 840 Minneapolis, MN 55402 Tom Fulton 612-375-9644 Economic Development Authority in and for the City of New Hope (EDA) and City of New Hope 4401 Xylon Avenue North New Hope, MN 55428-4898 Daniel Donahue 612-531-5100 HUD issuance date: November 25, 1996 13 Project for Pride in Living, Inc. (Managing Agent) 2515 Chicago Avenue South Minneapolis, MN 55404 Jeff Helmeke 612-874-3301 Hennepin County Hennepin County Consortium A-2400 Government Center Minneapolis, MN 55487 National Equity Fund 1997 Limited Partnership (Equity Investor) Hamline Park Plaza 570 Asbury Street, Suite 101 St. Paul, MN 55104 Diedre Schmidt HUD issuance date: November 25, 1996 14 EXHIBIT B (Exhibit B must include a description of the overall activities to be carried out under the proposal, in addition to the activities ascribed to, and the financing to be provided by, each participating party. If the proposal is to be implemented in phases, also describe the activities and financing by phase in Exhibits B-1 through the applicable number of phases. This Exhibit must be amended if all of the foregoing information (for any phase subsequent to the first phase) is unavailable at the time this Mixed -Finance ACC Amendment is executed.) Overall Description Project Eiements means the construction of twenty (20) new three-bedroom townhomes on two parcels of land and rehabilitate 14 four-bedroom units in seven buildings located at 7302 - 7316 Bass Lake Road in the City of New Hope, Minnesota. Six (6) three-bedroom units and six (6) 4 -bedroom units will be operated as public housing "floating" among the units in the project. Project Site means the parcels described as follows: Parcel 1: The South 56 feet of the North 101 feet of the East 62.59 feet of the West 226.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property HXM issuance date: November 25, 1996 15 Parcel 2: The South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East 'Line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 3: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 teet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot,32; thence North to the point of beginning. Abstract Property - HUD issuance date: November 25, 1996 16 Parcel 4: That South 69.37 feet of the North 114.37 feet of the East -56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said.Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property Parcel 5: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property - HUD issuance date: November 25, 1996 Parcel 6: The East 56 feet of the West 282 of the North 174.87 feet of the part of the West Half of Lot 32, 226, Hennepin County, Minnesota, .17 feet of the South 60-50 feet following described tract: That Auditor's Subdivision Number described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 7: The East 62.58 feet of the West 1.63.58 feet of the South 56 feet of the North 101 feet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 23, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly from the South line of said Northeast Quarter of the Southwest Quarter as measured along said West line and its Southerly extension, to a point on the East line of Murray Lane 3rd Addition 444.66 feet Northerly from its intersection with said South line. Being registered land as is evidenced by Certificate of Title No. 820577. Parcel 8: The South 145.2 feet of the West 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin Countv, Minnesota Abstract Property. HUD issuance date: November 25, 1996 Parcel 9: The South 80 feet of the East 166.76 feet of Lot 32, Auditor's Subdivision No. 226, Minnesota, according to the recorded plat Hennepin County, Minnesota - Abstract Property. Parcel 10: 18 of the West 296.76 feet Hennepin County, thereof, and situate in The North 100 feet of that part of the West Half of Lot 32, lying South of the North 6 acres thereof, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property, Parcel 11: That part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 23, described as beginning at the intersection of the South line of said Northeast Quarter of the Southwest Quarter with the Southerly extension of the West line of Murray Lane 4th Addition; thence Northerly along said Southerly extension and along said West line a distance of 444.49 feet; thence Westerly in a straight line to a point on the East line of Murray Lane 3rd Addition distant 444.66 feet Northerly from its intersection with said South line; thence Southerly along said East line to the North line of the South 178.2 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line to a line drawn parallel with and 100 feet East from said East line of Murray Lane 3rd Addition; thence Southerly along said parallel line to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said South line to a line drawn parallel with and 196.76 feet West from said West line of Murray Lane 4th Addition; thence Northerly parallel with said West line to the North line of the South 113 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line of the South 313 feet to a line drawn parallel with and 30 feet West from said West line of Murray Lane 4th Addition; thence Southerly parallel with said West line and its Southerly extension to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said South line to the point of beginning. Except those portions of the above-described property described as follows: HUD issuance date: November 25, 1996 19 The East 56 feet of the West 101 feet of the South 182.37 feet of the North 227.37 feet; The East 62.59 feet of the West 226.17 feet of the South 56 feet of the North 101 feet; The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet; The East 56 feet of the West 282.17 feet of the South 182.37 feet of the North 227.37 feet, according to the United States Government Survey thereof and situate in Hennepin County, Minnesota. Being registered land as is evidenced by Certificate of Title No. 820576. fl The Housing Authority Activities shall consist of the following: Of the $1,386,480 grant received from HUD as identified in Section 4.(D)(1) of this ACC, the PHA shall make a grant to PPL - Bass Lake Court Limited Partnership of not more than $1,356,480 of development funds which shall be used in accordance with the Housing Development Agreement, Regulatory and Operating Agreement, Management Agreement, and other evidentiary materials as listed in Exhibit E of this Mixed -Finance ACC Amendment. 0 The "Non Recipient Activities" shall consist of the following: I Owner shall: (a) complete the project elements on the Project Site at a total cost of not more than $6,026,778 in accordance with Exhibit D to this ACC Amendment using not less than $200,000 of owner equity (provided by a grant from Metropolitan Council), not more than $1,712,096 of Limited Partner equity, not more than $2,758,202 of other public money, and not more than $1,356,480 of public housing development funds; (b) borrow from the MHFA as a first mortgage not more than $348,202 for financing the Project; HUD issuance date: November 25, 1996 20 (c) borrow from the MHFA Affordable Rental Investment Fund Program not more than $130,000 for financing the Project; (d) borrow from the Hennepin County HOME funds not more than $680,000 for financing the Project; (e) borrow from EDA local funds of not more than $1,400,000 for financing the Project; (f) borrow from the FHF not more than $200,000 for financing the Project; (g) invest not more than $1,356,480 of PHA development funds in the Project; (h) invest not more than $1,712,096 of Limited Partner equity in the project; (i) invest not less than $200,000 in Owner equity as provided by a grant from Metropolitan Council; (j) unconditionally and irrevocably guarantee the completion of the Project in accordance with the schedule set forth in Exhibit D to this ACC Amendment. Ii MHFA shall lend to Owner Entity not more than $348,202 for financing the Project III MHFA Affordable Rental Investment Fund Program shall lend to Owner Entity not more than $130,000 for financing the Project. IV FHF shall lend to Owner Entity not more than $200,000 for financing the Project W Hennepin County HOME funds shall lend to Owner Entity not more than $680,000 for financing the Project. HUD issuance date: November 25, 1996 22 VI EDA shall lend to Owner Entity not more than $1,400,000 of local funds for financing the Project VII Upon completion, owner entity will operate the project through its managing agent in accordance with the Regulatory and Operating Agreement and Management Agreement by renting six (6) three-bedroom units and six (6) four-bedroom units to public housing eligible low-income families selected from the MPHR/EDA waiting lists. The units will not be physically identified, but will "float" throughout the units in the project. To assist -the Owner Entity in this endeavor, PHA will provide operating subsidy in accordance with the terms of the Regulatory and Operating Agreement. The units will be operated as public housing units for the term indicated by the Regulatory and Operating Agreement and Declaration of Restrictive Covenants, HUD issuance date: November 25, 1996 22 EXHIBIT C I. Proposed number of public housing units 12 . II. Breakdown of public housing units by bedroom count: 6 three-bedroom units and 6 four-bedroom units which will not be physically identified, but will "float" throughout the units in the project. HUD issuance date: November 25, 1996 23 EXHIBIT D DEVELOPMENT SCHEDULE I. The evidentiary materials described in Exhibit E of this Mixed -Finance ACC Amendment must be submitted to HUD by the PHA no later than on or before the date of closing. II. Upon HUD's notification to the PHA of its approval of the evidentiary materials required to be submitted under paragraph (I) of this exhibit, the PHA shall be authorized to draw down public housing development funds (or HOPE VI funds, if applicable) for the implementation of the proposal, or the applicable phase of the proposal, in accordance with all applicable requirements, including Section 7 of this Mixed - Finance ACC Amendment. III. The activities described in the PHA's proposal at Exhibit B of this Mixed -Finance ACC Amendment shall be commenced and completed in accordance with the following schedule: Activity Commencement Date Completion Date Start of No later than No later than Construction December 17, 1998 July 1, 1999 HUD issuance date: November 25, 1996 24 EXHIBIT E REQUIRED EVIDENTIARY MATERIALS The evidentiary materials to be submitted by the PHA to HUD must be in one complete package or binder(s) (or, if applicable, in one complete package or binder for each phase), with an index describing the material submitted, under tabbed dividers. All evidentiary materials must be submitted in accordance with the provisions of Section. 6 of this Mixed --Finance ACC Amendment and for each phase (if applicable) must consist of the following: I. All government approvals and permits necessary for the commencement of the activities in the proposal have been obtained or provided. Evidence of this requirement may be a written original certification from the PHA. II. Evidence that title to all land necessary to the implementation of the proposal is held by the PHA, the owner entity, or the appropriate participating party. III. All agreements required or permitted to be entered into between the PHA, the owner entity, partner or participating parties under this Mixed -Finance ACC Amendment. IV. Evidence of loans, notes, mortgages, deeds of trust, use restrictions, closings, bond sales, or other financing arrangements, whether private or public financing, necessary to the accomplishment of the proposal unless any such documents are specifically excluded from the evidentiary materials that must be submitted under Item V. M. below. V. Legally binding commitments, agreements, and all other documents as required to satisfy the requirements of this Mixed - Finance ACC Amendment, to be submitted to HUD for approval, must include (but is not limited to) the following for each phase, as applicable: A. A declaration of restrictive covenants, covenant running with the land, ground lease, or other arrangement, of public - record, that will assure to the satisfaction of HUD that the public housing units will be subject to a covenant obligating the owner entity and the PHA, and any successors in title (including any successor who acquires title to the owner entity's or PHA's estate through foreclosure) to: (1) maintain and operate the public housing units for the period required by law in compliance with all applicable public housing requirements, including the ACC between the PHA and HUD, and this Mixed -Finance ACC HUD issuance date: November 25, 1996 25 Amendment; and (2) not to encumber, demolish or sell the public housing units without HUD approval. B. A cooperation agreement executed by and between the PHA and the applicable local jurisdiction. If the cooperation agreement does not specifically cover the proposed mixed -finance units, the PHA must also submit an opinion from counsel for the applicable locality'affirming that the proposed mixed -finance units are covered under the existing cooperation agreement between the locality and the PHA. C. A housing development agreement executed by and between the PHA and the owner entity that establishes the relationships among the parties with. respect to carrying out the proposal, including all rights and liabilities (financial and otherwise) of the parties and the respective commitments of the parties with respect to carrying out the proposal. D. A regulatory and operating agreement that provides, among other things, for: (a) a methodology acceptable to HUD for distribution of a portion of the PHA's operating subsidy to the public housing units; and (b) binding assurances that the percentage of public housing units and number of bedrooms will be maintained, together with an Authority Reserve Escrow Agreement executed by the PHA, the owner entity, and a financial institution acting as escrow agent thereunder. E. A management agreement for the proposed development executed by the owner entity and the managing agent and consented to by the PHA, EDA and MHFA. F. A guarantee of completion from Project for Pride in Living, Inc., General Partner of PPL -Bass Lake Court Limited Partnership to the PHA. G. An opinion of the PHA's counsel, addressed to HUD and set forth in accordance with the requirements of this Mixed - Finance ACC Amendment. H. An opinion of the owner entity's counsel, addressed to HUD and set forth in accordance with the requirements of this Mixed -Finance ACC Amendment. I. A copy of the review and approval form executed by the MHFA official conducting the subsidy layering review pursuant to section 102 of the HUD Reform Act of 1989. J. The Master Subordination Agreement providing for the subordination and preference of funding sources of all parties to HUD issuance date: November 25, 1996 26 the Declaration of Restrictive Covenants K. The Master Disbursing Agreement providing for the method of disbursing funds from the different funding sources. L. The Pledge Agreement between owner entity and MHFA consented to by the PHA, City and HUD. M. The loan documents required under item IV. of this Exhibit E specifically exclude the following documents: None HUD issuance date: November 25, 1996 27 EXHIBIT F This Exhibit is the revised budget for the entire proposal, including all public and private sources of funds, as applied to the uses (by category), as approved by HUD. See attached Schedule of Uses and Public Housing Development Cost Budget HUD issuance date: November 25, 1996 Cil a N C d C U 0) CA D C O 0 0 O Q Q Q O 0 0 CD CO 0 0 0 M O$ O N a0 0 J M C7 O 0 Q V: O O O O N GO Cp [+f ow O 4f� r CO r- n b r b O O co N Q M N h O co O N N M tt Ih CA to r I-- , C5 r r ch co 10IC3 O N C7 CO CU f1 r NO OCD V sN- (00_ N �•-. r M In fp T C) a 0a0 0 Dao o Oao C t O 0 0 C7 0 0 CV tm Om0 W LO C%j M N o r CQ7 r 0 D o o Q o Q o o a° Q Cli t� Ct CL cN,� aFF C Q N O O Q M J 1 3 V r N N CL Q O 0007 Q Q d Q a O O O M S j N N N a LL ZEN O Q CD O O C7 O coco 14 0 C 00 CO co cG w m r W a) 2 C C] 0 �r U i° o o Q o a o $ c M N U) O co Q N w O O M J GO co N0 O C3 N Q 3 ti CO r M r r w r Lfi M CJ co O co co a 71 N I LL Ij 07 rCl) Q CD CV C w cor M r M r N O O Cb C7 O N 00 O co O 0 V cM CD 0 0 0 CD o c M Im w r GO M r n M Lo O N O 00 CL ti M N LO LA r ti U') N N Cf) r Co r I' N co crN w r r r 1 Q1 O O Q Q O O O C7 O Q t' M Cy l" 7 O t8CM] N 00 co C a1 C rb X ifl fZ U c p� C N O~ U- O Leu fn W a m 0 7> y a OD IL ,j m m V o r to yo @ 2��aLu �w E�YCsa�,�a C U V- �. o �aa'RIDUe . cc E O w co 0 cn w Q m � 75 U U P '� U?� 'D 7 r. m Ch ..2 @ N E '� H� C (n om .E C_ C O Ll. C � Q .y U� CA "O Y- w = U 2 C m c in Lx j U C15a) J WmU 7 C Omo_UzU- 7 ([1 Lb O u- U C} 0 0 �� O �UUQ��oF--a O O G O 0 O a1 Cd -6 civ ai z - _c L- 1 a o- " vi N r f �I � i f x � I i V ! S n :--j Lo -`� : � cD r LID U7 G7 J :J C r I Y - = 1 71 J I— o cv c r U 28 EXHIBIT G 1. Public housing development funds (or HOPE VI funds, if applicable) needed for the implementation of the proposal (or, if the proposal is being implemented in phases, for Phase 1 and any other phase for which no separate ratio is specified on Exhibits G - 2 through the applicable number of phases), may be drawn down under this Mixed -Finance ACC Amendment only in a ratio to other public and private funds in the proposal of not more than $1.00 of public housing development funds (or HOPE VI funds, if applicable) to $ 3.35 of the aggregate amount of other public and private funds provided for in the proposal, excluding any amounts agreed to by HUD, as provided below. The dollar amount to which this ratio applies is $690.824 provided, however, that if the proposal is to be implemented in phases and no other ratio is specified for any phase subsequent to Phase 1, this amount shall be deemed to be increased to the total amount of the proposal. 2. Set forth below are the amounts and uses of funds that have been excluded, solely for the purposes of establishing the draw down ratio, from the aggregate amount of public and private funds to be provided under the proposal. The following amounts are not subject to the draw down ratio requirement of Section 7 of this Mixed -Finance ACC Amendment (include amounts for front- end assistance approved by HUD): AMOUNT PURPOSE $595,156 Initial draw $ 70,500 Second Draw $ 0 Third Draw HAD issuance date: November 25, 1996 I, SUSAN E. SEEL, do certify as follows: 1. I am the duly appointed, qualified, and acting Assistant to the Executive Director and the Board of Commissioners of the Public Housing Authority in and for the City of Minneapolis (herein called the "Local Agency"). In such capacity, I am custodian of its records and am familiar with its organization, membership and activities. 2. The proper and co3prect corporate title of the Local Agency is the Minneapolis Public Housing Authority in and for the City of Minneapolis. 3. The Local'Agency was duly created pursuant to the authority of the Constitution and Statutes of the State of Minnesota, including, particularly, the Minnesota Municipal Housing and Redevelopment Act, Chapter 487, Laws of 1947, as amended, and duly organized on the 5th of November, 1947; and since the date of its organization, the Local Agency has continued to exist without interruption in the performance its public corporate purposes. As of June 1, 1981, the Local Agency became known as the Minneapolis Community Development Agency under Ordinance No. 81 -Or -017 adopted by the Minneapolis City Council on January 16, 1981. Effective June 1, 1986, the Agency became known as the MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS under Ordinance No. 86 -Or -034 adopted by the Minneapolis City Council on February. 28, 1986, pursuant to authority contained in Chapter 595, Laws of 1981, with those powers in Minnesota Statutes Sections 462.411 through 462.716 as they relate to public housing. day n4 4. The names and dates of election or appointment, and the dates of the beginning and ending of the terms of office, of the members of the governing body of the Local Agency and of its principal officers are as follows: Date of Date of Com- Date of Expir- Election of mencement of ation of Term Names and Offices Appointment Term of Office of Office Richard Brustad Chairperson 12-20-90 01-16-91 12-31-93 Chairperson 01-03-94 01-03-94 12-31-96 Chairperson 01-01-97 01-01-97 12-31-99 Steven Chapman Commiss oner 05-09-86 06-01-86 12-31-86 Commissioner 01-23-87 01-01-87 12-31-88 Commissioner 01-27-89 01-01-89 12-31-90 Commissioner 12-14-90 12-20-90 12-31-92 Commissioner 12-31-92 01-01-92 12-31-95 Vice Chairperson 06-22-87 06-22-87 next election Vice Chairperson 07-11-88 07-11-88 next election Vice Chairperson 02-06-91 02-06-91 next election Vice Chairperson 01-22-92 01-22-92 next election Vice Chairperson 05-25-94 05-25-94 01-24-96 Commissioner 01-24-96 01-24-96 12-31-98 Thomas Hansen Commissioner 12-20-90 01-16-91 12-31-92 Commissioner 10-26-92 01-22-93 12-31-95 Commissioner 01-12-96 01-12-06 12-31-98 Secretary 01-27-93 01-27-93 next election Secretary 05-25-94 05-25-94 next election Secretary 02-01-96 02-01-96 next election Carol Batsell-Benner Commissioner 05-19-94 05-25-94 12-31-96 Vice Chairperson 02-27-97 02-27-97 next election Travis Emdin Commissioner 05-19-94 05-25-94 12-31-96 Commissioner 02-21-97 02-21-97 12-31-99 Grace Lee Commissioner 05-19-94 05-25-94 12-31-96 Commissioner 02-21-97 02-21-97 12-31-99 Richard Miller Commissioner 01-10-92 01-22-92 12-31-92 Commissioner 10-26-92 01-01-93 12-31-95 Commissioner 01-12-96 01-12-96 12-31-98 Cornell Moore Commissioner 07-11-97 07-11-97 12-31-97 Commissioner 03-09-98 01-01-98 12-31-00 Virginia Pederson Commissioner 02-01-95 02-22-95 12-31-97 Commissioner 03-09-98 01-01-98 12-31-00 5. Each of the above-named officers required to do so has duly taken and filed his/her oath of office and each of them legally required to give bond or undertaking in form and amount as required by law and has otherwise duly qualified to act in the official capacity above designated, and each is the acting officer holding the respective office or offices stated beside his/her name. 6. None of the above-named officers is ineligible to hold or disqualified from holding, under the provisions of applicable law, the respective office, specified above, which he/she holds. 7. None of the above-named Commissioners is an officer or employee of the City of Minneapolis. 8. Since September 22, 1998, there have been no changes in or amendments to the charter, by-laws, ordinances, resolutions, or proceeding of the Local Agency with respect to: A. The time and other provisions concerning regular meetings of the Local Agency; (established annually) B. The provisions concerning the calling and holding of special meetings of the Local Agency and the business which may be taken up at such meetings; C. The requirements concerning a quorum; D. The manner in which the charter or by-laws of the Local Agency may be amended; E. The requirements regarding the introduction, passage, adoption, approval, and publication of resolutions, ordinances, or other measures, relating to the approval and execution of contracts and the authorization, award, execution, or issuance of bonds, notes, or other obligations of the Local Agency; F. The officers required to sign, countersign, or attest contracts, bonds, notes, or other obligations of the Local Agency; G. The office of the Local Agency; or H. The seal of the Local Agency. 9. The seal impressed below, opposite my signature, is the duly adopted official seal of the Local Agency. IN WITNESS WHEREOF, I have hereunto set my hand and the duly adopted official seal of the Local Agency this 17th day of December, 1998. MINNEAPOLI INBLIC HOUSING AUTHO IN AND FO E CITY OF NEAPO ( S EAL) - S n E. Seel Assis t to Execu ive rector and the rd of Commissioners CER TIF__ICATIE I, Sum E 5001, Assistant to the Executive Director and Board of Commissioners of the Mmneapolis Public Housing Authority in and for the City of Mmneapolis, do hereby certify that the attached RESOLUTION was duly adopted at a regular meeting of the Board of Commissioners of said Authority, held on June 24, 1998, and is a true and correct copy of the RESOLUTION adopted at said meeting and on file and of record in the official Mnutes of said Authority. IN WITNESS WHEREOF, I have hereunto set my hand and the seal of said Authority this 24th day of June, 1998. I DO HEREBY CERTIFY THAT I AMDULYAUTHORIZED TO EXECUTE THIS CERTIFICATE 19 � 1,2 E. Seel (SEAL) APPROVED 4 00 ��L% MINNEAPOLIS PUBLIC HOUSING AUTHORITY June 24, 1998 REPORT TO THE COMMSSIONERS FROM: Cora McCorvey, Executive Director SUBJECT: Resolution Authorizing the Board Chair and the Executive Director or Her Designee to Enter into a Cooperation Agreement with the City of New Hope and its Economic Development Authority (EDA) for Twelve MHOP Unit s in the Bass Lake Townhomes Development Previous Directives: The Holtman vs Cisneros Consent Decree requires replacement of 770 public housing units in non -concentrated areas of Minneapolis and the Twin Cities suburbs. In May 1998 the Board of Commissioners authorized its Chair or the Executive Director to negotiate the inclusion of MHOP units in various tax credit developments and provide evidence of such to the Minnesota Housing Finance Agency (the project described in this report is one of these). In February 1997 the Board of Commissioners passed a resolution authorizing the Chairperson and/or the Executive Director or her designee to execute various documents relating to mixed finance development after board approval of the Cooperation Agreement. Resident Council Notification: Notification to a resident council is not required for this action. Budget Impact: All costs associated with the development of the twelve units will be paid for out of Hollman development funds. Affirmative Action Compliance: The City of New Hope and its EDA have written affirmative action plans. RECOMIl UNDATION: It is recommended that the Board of Commissioners approve the attached resolution authorizing the Board Chair and the Executive Director or her designee to enter into a Cooperation Agreement, in substantially the form attached to this Board Report, with the City of New Hope and its EDA; that both are authorized to make such changes in the Agreement as are not inconsistent with its spirit and purpose; and that the resolution take effect immediately. DOCUMENT N0..1d:,e�6 RESOLUTION NO. 98-360 SUBJECT: RESOLUTION AUTHORIZING EXECUTION OF THE COOPERATION AGREEMENT WIWIREAS, the Minneapolis Public Housing Authority in and for the City of Minneapolis (the "MPHA") holds an Annual Contributions Contract ("MPHA ACC") from the United States Department of Housing and Urban Project ("HUD") for funding the capital and operating costs of low rent public housing units and projects throughout the Minneapolis -St. Paul Twin Cities metropolitan area pursuant to that certain consent decree entered in United States District Court (the "Consent Decree"); and WHEREAS, the WHA has established the Metropolitan Housing Opportunity Program (WHOP") pursuant to which it will cooperate with suburban counties and municipalities in the construction and operation of qualified housing units ( the "MHOP Units"); and WHEREAS, Project for Pride in Living, Inc., on behalf of a low income housing tax credit partnership to be formed (the "Owner"), has applied to the WHA and the Economic Development Authority in and for the City of New Hope ("EDA") to locate twelve (12) MHOP Units in a 34 -unit multifamily housing development to be lmown as Bass Lake Townhomes (the "Development") to be located within the City of New Hope, Minnesota (the "City"); and WHEREAS, as part of the funding of the MHDP Units, HUD requires that the City agree, pursuant to the authority granted the City by hTirmesota Statutes, §469.040, to exempt the MHDP Units from property taxation in consideration of agreement by the MPHA and EDA to subject said units to payments in lieu of taxes; and WHEREAS, the vehicle for proposing such tax treatment is a Cooperation Agreement between and among the WHA, the EDA and City, and NOW, THEREFORE, BE IT RESOLVED: That the MPHR shall enter into a Cooperation Agreement in substantially the attached form. 2. That the Chairman and Executive Director of the MPHA are authorized to execute said Cooperation Agreement on behalf of said MPHA. 3. That the Chairman and Executive Director are authorized to make such changes in said Cooperation Agreement as are not inconsistent with the spirit and purpose thereof. 4. That this Resolution shall take effect immediately. Dated: June 24, 1998 CAMMMMMCOOPMOC DRAFT: 05/05/98 COOPERATION AGREEMENT This Agreement made and entered into this day of '199____, by and between the N iinneapolis Public Housing Authority in and for the City of Minneapolis (the "Authority"), the Economic Development Authority in and for the City of New Hope (the "EDA") and the City of New Hope, State of ]Minnesota (the "Municipality"). WITNESSETH: In consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows: 1. Whenever used in this Agreement: (a) The term "MHOP Uriits" means twelve (12) units of low -rent housing hereafter to be developed with the financial assistance of the United States of America acting through the Secretary of Housing and Urban Development (the "Government") and located within a thirty-four (34) unit townhome development (the "Development") to be owned by a low income housing tax credit partnership to be formed in which Project for Pride in Living, Inc., will be the general partner ("Owner") and located at 7300-7332 Bass Lake Road in the City of New Hope, Minnesota (b) The term "Taxing Body" or "Taxing Bodies" means the State of Minnesota and any and all political subdivisions or taxing units thereof in which the MHOP Units are situated and which would have authority to assess or levy real or personal property taxes, or to certify such takes to a taxing body or public officer, to be levied for its use and benefit with respect to the MHOP Units if they were not exempt from such taxation. (c) The term "Shelter Rent" means the total of all charges to all MHOP Unit tenants for dwelling rents and nondwelling rents (excluding all other income of the MHOP Units) less the cost of all dwelling and nondwelling utilities. 2. The Authority shall endeavor: (a) to secure a contract with the Government for capital grants and annual contributions for the MHOP Units; and (b) to cause to be developed and provide for the administration of the MHOP Units. 3. (a) Pursuant to Minnesota Statutes, Section 469.040, the MHOP Units are exempt from all real and personal property taxes levied or imposed by any Taxing Body for so long as either (i) the NMOP Units are owned by a public body or governmental agency and are used for low -rent housing purposes, (ii) the MHDP Units are subject to the CATE AMOORDOC 1 COOPERAMON AGUMW4r NpffA/NEW ROM EDAICrlY OF NEW HOPE BASS LAKE TOWN80MFS (a) Fumish or cause to be famished to the MHOP Units public services and facilities of the same character and to the same extent as are furnished from time to time without cost or charge to other dwellings and inhabitants in the Municipality; (b) Vacate such streets, roads, and alleys within the area of the MHOP Units as may be necessary in the development thereof, and convey without charge to the Authority, the EDA or Owner of the MHOP Units such interest as the Municipality, or other Taxing Body may have in such vacated areas; and, in so far as it is lawfidly able to do so without cost or expense to the Authority, the EDA, the Owner of the MHOP Units or to the Municipality or other Taxing Body, cause to be removed from such vacated areas, in so far as it may be necessary, all public'or private utility lines and equipment; (c) In so far as the Municipality or other Taxing Bodymay lawfully do so, (i) grant such deviations from the building code of the Municipality or other Taxing Body as are reasonable and necessary to promote economy and efficiency in the development and administration of the MHOP Units, and at the same time safeguard health and safety, and (ii) make such changes in any zoning of the site and surrounding territory of the MHOP Units as are reasonable and necessary for the development and protection of the MHOP Units and the surrounding territory; (d) Accept grants of easements necessary for the development of the MHOP Units; and (e) Cooperate with the Authority and EDA by such other lawful action or ways as the Municipality or other Taxing Body and the Authority may find necessary in connection with the development and administration of the MHOP Units. 5. In the initial development of the MHOP Units, the Municipality further agrees, on behalf of all Taxing Bodies, that within a reasonable time after receipt of a written request therefor from the Authority or EDA: (a) that it will accept the dedication of all interior streets, roads, alleys, and adjacent sidewalks within the area of the Development, together with all storm and sanitary sewer mains in such dedicated areas, after the Owner of the MHOP Units, at its own expense, has completed the grading, improvement, paving, and installation thereof in accordance with specifications acceptable Lathe Municipality or other Taxing Body; (b) that it will accept necessary dedications of land for, and will grade, improve, pave, and provide sidewalks for, all streets bounding the Developments as are necessary to provide adequate access thereto (in consideration whereof the Owner shall pay to the Municipality or other Taxing Body such amount as are or could be assessed against the Development); and (c) that it will provide, or cause to be provided, water mains, and storm and sanitary sewer mains, leading to the Development and serving the bounding streets thereof (in consideration whereof the Owner of the MHOP Units shall pay to the Municipality or CATE1 G"A=P.DOC 3COOPERATION AGREEMMr N AINEW HOPE EDAICrfY OF NEW HOPE BASS LAKE TOVIMOSM IN WITNESS WHEREOF the Municipality, the EDA and the Authority have respectively signed this Agreement and caused their seals to be affixed and attested as of the day and year first above written. NIIriNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF NIINNEAPOLIS By. Richard Brustad Its Chairman And by Cora McCorvey Its Executive Director CnE&nACOOP.DOC COOPERAIION AGREEWDIT WHAMEW HOPS EDAICITY OF NEW HOPE BASS LAKE TOWN N)AM EXECUMN PAGE ECONONIIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By Its And by. Its This Docamcnt Drafted by: Holmes & Galey, Ltd. 1200 One Financial Plaza 120 South Sixth Street Minneapolis, MN 55402 612-288-9300 612-288-9400 (Fax) CA7E WPCOOPMM COOPFRAUONAGREMWETr KOHAAMW HOPE EDA rIY OF NEW HOPE SASS LAKE MWNHOMES EXECiT M PAGE CER TI -FIC -AXE I, Was E Seal, Assistant to the Executive Director and Board of Commissioners of the Minneapolis Public Housing Authority in and for the City of Minneapolis, do hereby certify that the attached RESOLUTION was duly adopted at a regular meeting of the Board of Commissioners of said Authority, held on February 26, 1997, and is a true and correct copy of the RESOLUTION adopted at said meeting and on file and of record in the official Minutes of said Authority. IN WITNESS WHEREOF, I have hereunto set my hand and the seal of said Authority this 17th day of December, 1998. I DO HEREBY CERTIFY THAT I AMDULYAUTHORIZED TO EXECUTE THIS CERTIFICATE. i san E. See (SEAL) APPRom NOT ON PRINTED AGENDA MINNEAPOLIS PUBLIC HOUSING AUTHORITY REPORT TO THE BOARD OF COMMISSIONERS February 26, 1997 FROM: Cora McCorvey, Executive Director SUBJECT: Approval of Resolution Authorizing the Chairperson and/or Executive Director or Her Designee to Execute Various Documents Relating to Mixed -Finance Developments rectives: The Hollman vs. Cisneros Consent Decree requires the of replacement of 770 public housing units in non -concentrated areas of and the Twin Cities suburbs. This action does not require Resident Council Costs associated with Mixed Finance Developments are paid out of funds. mative Aetion Corn tin ance: Not applicable to this action; however, all . cipalities and developers developing Mixed -Finance Developments are required to written affirmative action plans. COMMENDATION: It is recommended that the Board of Commissioners pass the ched resolution authorizing the Chairperson and/or the Executive Director or her gnee to execute documents relating to Mixed -Finance Developments in order to close developments on behalf of the MPHR. It is further recommended that (i) the cution of such documents will only occur after the Board has specifically approved the )peration Agreement relating to the development, and (ii) that the Executive Director report the execution of the documents and the related closing at the first regularly eduled meeting of the Board following each closing. The WHA Board of Commissioners has previously approved three Mixed -Finance Developments: Evergreen Pointe in Savage, Minnetonka Mills, and Crown Ridge Apartments, both in Minnetonka. Closings on Evergreen Pointe and Crown Ridge occurred well within the Board's schedule and did not require a Special Meeting. Minnetonka Mills, however, closed outside of the Board Schedule and, subsequently, DOCUMENT N' RESOLMONNO. 97-325 WHEREAS, Minneapolis Public Housing Authority ("MPHA") is a party to an Annual Contributions Contract ("ACC") with the United States Department of Housing and Urban Development (--HUD--) for fimding the capital and operating costs of low rent public housing units and projects throughout the Minneapolis -St. Paul Twin Cities metropolitan area pursuant to that certain consent decree entered in United States District Court ("Consent Decree"); and WHEREAS, MPHA has established the Metropolitan Housing Opportunity Program ('MOP") pursuant to which it will provide fiords from the ACC to suburban counties and municipalities for the construction or rehabilitation and operation of qualified public housing units (WHOP Units") within privately owned apartment developments ("Mixed Finance Developments"); and WHEREAS, MPHA initiates its participation in each Mixed -Finance Development through the approval of a joint powers cooperation agreement ("Cooperation Agreement") between MPHA, a suburban county or city housing and redevelopment authority or economic development authority ("Local Authority') and the elected governmental body which created the Local Authority; WHEREAS, after approval of the Cooperation Agreement, the participating parties prepare for execution an amendment or amendments to the ACC (the "ACC Amendments"), an Initial Agreement, a Housing Development Agreement, a Regulatory and Operating Agreement, a Management Agreement and a Master Disbursing Agreement (coRectively, the "Transaction Documents") for the platy ing, construction, ownership and operation of the MHOP Units within the Mixed -Finance Development; and WHEREAS, the Transaction Documents are required by HUD regulations to be approved by HUD headquarters; and WHEREAS, the MPHR Board of Commissioners has previously approved Transaction Documents relating to three separate Mixed -Finance Developments and has found that (1) such Transaction Documents are similar in form and substance; (2) because of development schedules and financing requirements, time is of the essence in closing such transactions; (3) little advance notice of such closings can be given; and (4) it is difficult to schedule meetings of this Board in order to accommodate such closing schedules. NOW, THEREFORE, BE IT RESOLVED: That the WHA Board shall specifically approve Cooperation Agreements relating to each Mixed -Finance Development in which MPHA is to participate. 4401 Xylon Avenue North New Hope, Minnesota 55428-4896 STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss CITY OF NEW HOPE ) City Wk 612-531-5100 Police. 612-531-5170 Public Works: 612-533-4623 TDD: 612-531-5109 City Hall Fax: 612-531-5136 Police Fax: 612-531-5174 Public Works Fax: 612-533-7650 Fire Dept Fax: 612-531-5175 I, the undersigned, being the duly qualified City Clerk of the City of New Hope, Minnesota, hereby attest and certify that: 1. As such officer, I have the legal custody of the original record from which the attached resolution was transcribed. 2. 1 have carefully compared the attached resolution with the original record of the meeting at which the resolution was acted upon. 3. 1 find the attached resolution to be a true, correct and complete copy of the original: RESOLUTION NO. 98104 RESOLUTION APPROVING COOPERATION AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY; THE NEW HOPE. ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF NEW HOPE FOR THE PPL/BASS LAKE TOWNHOMES PROJECT AT 7300-7332 BASS LAKE ROAD (IMPROVEMENT PROJECT NO. 614) 4. 1 further certify that the affirmative vote on said resolution was 3 ayes, 0 nayes, and 2 absent/abstention. 5. Said meeting was duly held, pursuant to call and notice thereof, as required by law, and a quorum was present. WITNESS my hand officially as such Clerk and the seal of said City, this 26th day of June, 1998. r - Valerie Leone, City Clerk Family Styled City For Family Living CITY OF NEW HOPE RESOLUTION NO. 98-104 RESOLUTION APPROVING COOPERATION AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY, THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF NEW HOPE FOR THE PPUBASS LAKE TOWNHOMES PROJECT AT 7300-7332 BASS LAKE ROAD (IMPROVEMENT PROJECT NO. 614) WHEREAS, the City of New Hope and the New Hope Economic Development Authority desire to cooperate with Project for Pride in Living, Inc. (PPL) on the redevelopment of an area located at 7300-7332 Bass Lake Road: and WHEREAS, a Cooperation Agreement between the City, EDA and Minneapolis Public Housing Authority is necessary to permit PPL to obtain funding from the MHOP program for said project; and WHEREAS, the agreement states that the City will not assess real estate taxes against the 12 MHOP units within the development for the 40 -year exemption period and that in lieu of real estate taxes, the owner will pay the EDA the PILOT (payment in lieu of taxes); and WHEREAS, other provisions of the agreement will require the City to provide the MHDP units with basic City services as provided to all other properties in the City and to cooperate in the successful development and operation of the housing units. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of New Hope that the Cooperation Agreement is approved and that the Mayor and City Manager are authorized to execute the agreement on behalf of the City. Adopted by the City Council of the City of New Hope, Hennepin County, Minnesota, this 22nd day of June, 1998. Attest: City Clerk 4401 Xyton avenue North New Hope, Minnesota 55426-4898 STATE OF MINNESOTA] COUNTY OF HENNEPIN) ss CITY OF NEW HOPE 1 City Harr: 612-531-5100 Police: 612-531-5170 Public Works: 612-533-4823 TDD: 612-531-5109 City Hall Fax: 612-531-5135 Police Fax. 612-531-5174 Public Works Fax: 612-533-7650 Fire Dept. Fax: 612-531-5175 I, the undersigned, being the duly qualified City Clerk of the City of New Hope, Minnesota, hereby attest and certify that: 1. As such officer, I have the legal custody of the original record from which the attached resolution was transcribed. 2. 1 have carefully compared the attached resolution with the original record of the meeting at which the resolution was acted upon. 3. 1 find the attached resolution to be a true, correct and complete copy of the original: EDA RESOLUTION NO. 98-05 RESOLUTION APPROVING COOPERATION AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY; THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF NEW HOPE FOR THE PPUBASS LAKE TOWNHOMES PROJECT AT 7300-7332 BASS LAKE ROAD (IMPROVEMENT PROJECT NO. 614) 4. 1 further certify that the affirmative vote on said resolution was 3 ayes, 0 nayes, and 2 absent/abstention. 5. Said meeting was duly held, pursuant to call and notice thereof, as required by law, and a quorum was present. WITNESS my hand officially as such Clerk and the seal of said City, this 26th day of June, 1998. 'A Aa s Valerie Leone, City Clerk Family Styled City49� For Family living CITY OF NEW HOPE EDA RESOLUTION NO. 98-05 RESOLUTION APPROVING COOPERATION AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY, THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND THE CITY OF NEW HOPE FOR THE PPUBASS LAKE TOWNHOMES PROJECT AT 7300-7332 BASS LAKE ROAD (IMPROVEMENT PROJECT NO. 614) WHEREAS, the City of New Hope and the New Hope Economic Development Authority desire to cooperate with Project for Pride in Living, Inc. (PPL) on the redevelopment of an area located at 7300-7332 Bass Lake Road: and WHEREAS, a Cooperation Agreement between the City, EDA and Minneapolis Public Housing Authority is necessary to permit PPL to obtain funding from the MHOP program for said project; and WHEREAS, the agreement states that the City will not assess real estate taxes against the 12 MHOP units within the development for the 40 -year exemption period and that in lieu of real estate taxes, the owner will pay the EDA the PILOT (payment in lieu of taxes); and WHEREAS, other provisions of the agreement will require the City to provide the MHOP units with basic City services as provided to all other properties in the City and to cooperate in the successful development and operation of the housing units. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of the City of New Hope that the Cooperation Agreement is approved and that the President and Executive Director are authorized to execute the agreement on behalf of the City. Adopted by the Economic Development Authority of the City of New Hope, Hennepin County, Minnesota, this 22nd day of June, 1998. r - 'A )RO, 4401 Xylon Avenue North New Hope, Minnesota 55428-4896 STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss CITY OF NEW HOPE ) City Hall: 612-531-5100 Police: 612-531-5170 Public Works: 612-533-4823 TDD: 612-531-5109 City Hall Fax: 612-531-5136 Police Fax: 612-531-5174 Public Works Fax: 612-533-7650 Fire Cep't. Fax.' 612-531-5175 1, the undersigned, being the duly qualified City Clerk of the City of New Hope, Minnesota, hereby attest and certify that: 1. As such officer, I have the legal custody of the original record from which the attached resolution was transcribed. 2. 1 have carefully compared the attached resolution with the original record of the meeting at which the resolution was acted upon. 3. 1 find the attached resolution to be a true, correct and complete copy of the original: EDA RESOLUTION NO. 98-07 RESOLUTION APPROVING INITIAL AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY AND THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY FOR THE PPL/BASS LAKE TOWNHOMES PROJECT AT 7300-7332 BASS LAKE ROAD (IMPROVEMENT PROJECT NO. 614) 4. 1 further certify that the affirmative vote on said resolution was 5 ayes, 0 nayes, and 0 absent/abstention. 5. Said meeting was duly held, pursuant to call and notice thereof, as required by law, and a quorum was present. WITNESS my hand officially as such Clerk and the seal of said City, this 18th day of August, 1998. (Seal) Valerie Leone, City Clerk Family Styled CityV�o For Family Living NEW HOPE EDA RESOLUTION NO. 98- 07 RESOLUTION APPROVING INITIAL AGREEMENT BETWEEN THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY AND THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY FOR THE PPL/BASS LAKE TOWNHOMES PROJECT AT 7300-7332 BASS LAKE ROAD (IMPROVEMENT PROJECT NO. 614) WHEREAS, the New Hope Economic Development Authority (EDA) desires to cooperate with Project for Pride in Living, Inc. (PPL) on the redevelopment of an area located at 7300-7332 Bass Lake Road; and WHEREAS, a Cooperation Agreement between the City of New Hope, the EDA and Minneapolis Public Housing Authority (MPHR) has already been signed which - will permit PPL to obtain funding from the MHOP program for said project; and WHEREAS, the Cooperation Agreement states that the City will not assess real estate taxes against the 12 MHOP units within the development for the 40 -year exemption period and that in lieu of real estate taxes, the owner will pay the EDA the PILOT (payment in lieu of taxes); and WHEREAS, An Initial Agreement between the EDA and the MPHA is now also necessary to permit PPL to obtain funding from the MHOP program for said project; and WHEREAS, the Initial Agreement basically defines the relationship of the MPHA and EDA with respect to the planning, construction, ownership and operation of the MHOP units; and WHEREAS, the Initial Agreement further indicates the MPHA and EDA will cooperate to submit a proposal to HUD for development funds, the amount still to be determined, to assist PPL in the development, construction and operation of eight (8) replacement and four (4) incentive MHOP units of housing; and WHEREAS, the Initial Agreement will require the EDA, MPHA and PPL to enter into a Housing Development Agreement yet to be prepared which will establish design specifications for the units, confirm amenities in and around the development, establish a float system for the MHOP units within the development rather than specify specific units and require PPL to execute a Regulatory and Operating Agreement and provide a Declaration of Restrictive Covenants relating to the operation of the development; and WHEREAS, the EDA will be required to maintain a Waiting List and administer a Grievance Procedure for those people applying to occupy and occupying the MHDP units. However, this EDA responsibility may be satisfied through a subcontract with the Metropolitan Council and that the Met Council has already agreed to accept this responsibility. NOW, THEREFORE, BE IT RESOLVED by the New Hope Economic Development Authority that the Initial Agreement is approved and that the President and Executive Director are authorized to execute the agreement on behalf of the Economic Development Authority. Adopted by the New Hope Economic Development Authority, Hennepin County, Minnesota, this 27th day of July, 1998. W . Peter si ent Attest: Daniel J. Do e, Executive Director MY -MAW (URSAM 4401 Xylon Avenue North New Hope, Minnesota 55428-4896 STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss CITY OF NEW HOPE ) City Nall: 612-5315100 Police: 612-531-5170 Public Works: 612-533-4623 TDD: 612-531-5109 City Hall Fax: 612-531-5136 Police Fax: 612-531-5174 Public Works Fax 612-533-7650 Fire Dept Fax 612-531-5175 1, the undersigned, being the duly qualified City Clerk of the City of New Hope, Minnesota, hereby attest and certify that: 1. As such officer, I have the legal custody of the original record from which the attached resolution was transcribed. 2. 1 have carefully compared the attached resolution with the original record of the meeting at which the resolution was acted upon. 3. 1 find the attached resolution to be a true, correct and complete copy of the original: EDA RESOLUTION NO. 98-09 RESOLUTION APPROVING AMENDMENT NO. 1 TO THE INITIAL AGREEMENT BETWEEN THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR CITY OF NEW HOPE AND THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY 4. 1 further certify that the affirmative vote on said resolution was 4 ayes, 0 nayes, and 1 absent/abstention. 5. Said meeting was duly field, pursuant to call and notice thereof, as required by law, and a quorum was present. WITNESS my hand officially as such Clerk and the seal of said City, this 25th day of August, 1998. (Seal) Valerie Leone, Cit Clerk Family Styled CityFor Family living fW0Q1 NEW HOPE EDA RESOLUTION NO. 98-Q9 RESOLUTION APPROVING AMENDMENT NO 1 TO THE INITIAL AGREEMENT BETWEEN ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR CITY OF NEW HOPE AND THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY WHEREAS, the New Hope EDA approved the Initial Agreement with the Minneapolis Public Housing Authority (hereafter MPHA) at its July 27, 1998 meeting for the PPL/Bass Lake Townhomes Project (Improvement Project 614), and WHEREAS, the Initial Agreement requires the EDA to maintain and administer a waiting list for four Incentive Units and a grievance procedure, and WHEREAS, MPHA has agreed the Metropolitan Council may assume these responsibilities on behalf of the EDA, and WHEREAS, the Metropolitan Council has agreed it will assume the responsibilities for maintaining and administering the waiting list and grievance procedure for the four Incentive Units within the PPL/Bass Lake Townhomes Project Improvement (Project 614), and WHEREAS, a proposed Amendment establishing this arrangement and amending the Initial Agreement is attached to this resolution as Exhibit I. Now, Therefore, Be It Resolved by the New Hope Economic Development Authority. that Amendment No. 1 to the Initial Agreement attached hereto as Exhibit 1 is approved and that the President and Executive Director are authorized and directed to execute the agreement on behalf of the Economic Development Authority. Adopted by the New Hope Economic Development Authority, Hennepin County, Minnesota, this 24th day of August, 1998. Attest: Daniel J. Donahue, Executive Director APPR-AMD.EDA (283%CNH-RESo) .. 1996 12: 41AM NO. 631 P. 2/2 AMENDMENT NO. I TO THE INITIAL AGREEMENT BETWEEN THE ECONONUC DEYELOPI+IENT AU'T'HORITY IN AND FOR THE CITY OF NEW HOPE AND THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY This Amendment made this day of R 1999 to that certain Initial Agreement between the Economic Development Authority in and for the City of New Hope (the "EDA") and the Minneapolis Public Housing Authority (the "MPIW'). WHEREAS, the EDA has agreed to maintain the waiting list for those applying for housing in both the incentive and replacement MHOP Units in the Bass Lake Road Townhomes development; and WHEREAS, the EDA now wishes to have the Metropolitan Council administer the waiting list for the incentive units and administer the grievance procedure for all MHOP units; and WHEREAS, the Metropolitan Council has agreed to administer the waiting lists for incentive units and administer the grievance procedure for all MHOP units in suburban developincnts upon request of the local sponsoring agency. NOW, THEREFORE, it is agreed by the parties hereto to amend the Initial Agreement as follows: I . The MPHR shall administer the waiting list for the replacement MHOP units in the Bass Lake Road Townhomes development; and 2. The EDA, by agreement with the Metropolitan Council, will administer 6.e waiting list for the incentive units and administer the grievancc procedure for all MHOP units in the Bass Lake Road Townhomes development_ TN WITNESS WHEREOF, the MPHA has caused.this Amendment to be duly executed in its name and behalf and its seal to be hereunto affixed and the City has caused this Amendment to be duly executed in its name and behalf on or as of the date first above written. C:1WL%-Fr1%0MX3'.pIA. COS JIPU5: Egn7 .L- VEW IIOFV uoC 4401 Xylan Avenue North New Hope, Minnesota 55428-4898 STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss CITY OF NEW HOPE ) City Hall: 612-5315100 Police: 612-531-5170 Public Works: 612-533-4823 TDD: 612-531-5109 City Hall Fax: 612-531-5136 Police Fax. 612-531-5174 Public Works Fax. 612-533-7650 Fire Dept, Fax: 612-531-5175 I, the undersigned, being the duly qualified City Clerk of the City of New Hope, Minnesota, hereby attest and certify that: 1. As such officer, I have the legal custody of the original record from which the attached resolution was transcribed. 2. 1 have carefully compared the attached resolution with the original record of the meeting at which the resolution was acted upon. 3. 1 find the attached resolution to be a true, correct and complete copy of the original: EDA RESOLUTION NO. 98-16 RESOLUTION APPROVING BASS LAKE TOWNHOME HOUSING DEVELOPMENT AGREEMENT AND REGULATORY AND OPERATING AGREEMENT AND AUTHORIZING THE PRESIDENT AND EXECUTIVE DIRECTOR TO SIGN SAID AGREEMENTS 4. 1 further certify that the affirmative vote on said resolution was 5 ayes, 0 nayes, and 0 absent/abstention. 5. Said meeting was duly held, pursuant to call and notice thereof, as required by law, and a quorum was present. WITNESS my hand officially as such Clerk and the seal of said City, this 26th day of January, 1999. J c Valerie Leone, City Clerk (Seal) Family Styled City4�� For Family Living EDA RESOLUTION NO. 98-16 RESOLUTION APPROVING BASS LAKE TOWNHOME HOUSING DEVELOPMENT AGREEMENT AND REGULATORY AND OPERATING AGREEMENT AND AUTHORIZING THE PRESIDENT AND EXECUTIVE DIRECTOR TO SIGN SAID AGREEMENTS BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: WHEREAS, the Economic Development Authority has entered into an August 17, 1998 Initial Agreement as amended September 22, 1998 with the Minneapolis Public Housing Authority ("MPHA") which agreement basically defines the relationship between the MPHA, the EDA and Project for Pride in Living, Inc. (hereinafter "PPL") with respect to the planning, construction, ownership and operation of 12 MHOP units within a 34 unit rental townhome development at 7300-7316 Bass Lake Road known as the Bass Lake Townhome development; and WHEREAS, the Initial Agreement further indicates the MPHA and EDA will cooperate to submit a proposal to HUD for development funds, to assist PPL in the development, construction and operation of eight (8) replacement and four (4) incentive MHOP units of housing; and WHEREAS, the Initial Agreement requires the EDA, MPHA and PPL to enter into a Housing Development Agreement to establish design specifications for the units, confirm amenities in and around the development, establish a float system for the MHOP units within the development rather than specify specific units and require PPL to execute a Regulatory and Operating Agreement and provide a Declaration of Restrictive Covenants relating to the operation of the development; and WHEREAS, the attached Housing Development Agreement and Regulatory and Operating Agreement attached hereto as Exhibits A and B are now prepared and ready for execution by the respective authorized officials of the MPHA, EDA and PPL. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope, Minnesota, as follows: The Housing Development Agreement and Regulatory and Operating Agreement in the forms attached hereto as Exhibits A and B are hereby approved. -1- 2. That the President and Executive Director are hereby authorized and directed to sign the Housing Development Agreement and the Regulatory and Operating Agreement as proposed in the attached Exhibits A and B. I That the Executive Director is hereby authorized and directed to take all appropriate steps necessary to implement the terms and conditions of the Housing Development Agreement and Regulatory and Operating Agreement. Adopted by the Economic Development Authority this 281 day of December, 1998. J- 44t',e_ZU��CXA Attest: Daniel J. Donahue, Executive Director MAmmyACd R luCi-W%P ao App Hass Lt Tw hm.wpd '2- �f 7 / L j^. W. Peter Enck, President PROJECT FOR PRIDE IN LIVING, INC. 2516 Chicago Avenue Minneapolis, MN 55404 Phone: 874$511 FAX: 8746444 e-mail: ppl@ppl-inc.org Project for Pride in Living, Inc. RESOLUTION OF THE BOARD OF DIRECTORS OF PROJECT FOR PRIDE IN LIVING, INC. November 4, 1998 I, Jeanne Hatch, do hereby certify that I am the duly elected and quahtied Assistant Secretary and keeper of the corporate records for Project for Pride in Living, Inc., a corporation organized and existing under the laws of the State of Minnesota, and that the following is a true and correct copy of a specific resolution unanimously adopted at a meeting of the Board of Directors of said corporation, held in accordance with law and the charter and bylaws of said corporation at 2516 Chicago Avenue South, Minneapolis, Minnesota, on the 4th day of November, 1998 at which meeting a quorum was present, and that said resolutions are set forth in the minutes of said meeting, have not been repealed or modified, and are now in full force and effect: BE IT HEREBY RESOLVED, that the Board of Directors of Project for Pride in Living, Inc., at a meeting held on November 4, 1998, ratified and approved the attached action of the Executive Committee taken October 26, 1998 pertaining to PPL -Bass Lake Court Limited Partnership. i IN WITNESS WHEREOF, I have hereunto set my hand this day of 1999. 6 Jeanne atc Assi tant S JENNE M. HATCH NOTARY PUBLIC — MINNESM M n.m. . Expires Jen. 31.200 NAMMFOMP pop N-- - Notary Public Give me a fish and 1 eat for a day; teach me to fish and 1 eat for a lifetime. RESOLUTIONS OF EXECUTIVE COIVIIVII'i ME OF PROJECT FOR PRIDE IN LIVING, INC. PERTAOMG TO PPI, -BASS LAKE COURT LEMMTED PARTNERSHIP At a meeting of the Executive Committee of Project for Pride in Living, Inc., a f1lu'tnesom nonprofit corporation (the "Corporation"), held on October 26, 1998, the Executive t::.-mmittee of the Corporation approved the following resolutions: WHEREAS, on September 34, 1998, the Corporation, as general partner, and Y i ive Cramer, as limited partner, formed the PPL -Bass Lake Court Limited Partnership as a 'rinesota limited partnership (the :`Partnership"): WHEREAS, as general pwmer of the Partnership, the Corporation has been ,)r,:sented with an opportunity to construct, operate and manage a low-income housing project Mle "Project") which would qualify for low-income housing tax credits under Section 42 of the Ir.-ernal Revenue Code of 1986, as amended, as further described in a project investment proposal 0:11 ed .August 17, 1998 (the "Proposal'"}, made to National Equity Fund 1997 Limited Partnership TEF ' 9T'), in the manner and pursuam-to the terms and conditions described in the Proposal; and WHEREAS, on August 24, 1998. NEF '97 issued to the Corporation a : ommitment letter puurr.iant to which it would act as an investor limited partner in the Partnership 319d would contribute - ..666,616 as a capital contribution in return for a 99.99°/a limited �•�znership interest in the Partnership. NOW, THEREFORE, BE IT RESOLVED, it is in the best interest of the Ccirporation to participate in the Project as general parmer of the Partnership and the actions of W officers of the Corporation related thereto are hereby authorized and ratified_ FURTHER RESOLVED, that the officers of the Corporation are hereby �'wrized. empowered, and directed to enter into, execute and deliver those Amended and Articles of Limited Partnership (the '`Articles°') continuing the Partnership, in form and ..r` content generally similar to that of NEF '97's model form of project partnership agreement, r:h such modifications as the officers of the Corporation and NEF '97 may deem necessary or ;c.iropnate. and containing substantive provisions in accordance with the Proposal, pursuant to r:1:•ch the Corporation will act as general partner and NEF '97 will invest as limited partner. FURTHER RESOLVED, that the Corporation be and it is herebv authorized, -T..r.-owered. and directed to execute and deliver all other project investment closing documents supplemented by NEF `97 for the Project (the "Checklist,") or otherwise requested by NEF '97 in connection with its investment in the Partnership. FURTHER RESOLVED, that the Corporation be and it is hereby authorized, en,Vowered. and directed to famish to NEF all due diEigence materials specified in the Checklist c: otherwise requested by NEF '97 in connection with its investment in the Partnership. FURTHER RESOLVED, that the officers of the Corporation be and they hereby are authorized, empowered, and directed to execute and deliver all documents, and that such ofr1cers or staff of the Corporation be and are thereby authorized, empowered, and directed to Furnish all materials necessary to consummate the investment by NEF `97 as limited partner t;!_reof in accordance with the Proposal, the Checklist, and the foregoing resolutions, and that any F- evious execution and delivery or fiurishing of documents and materials by such officers or staff be and it is hereby authorized, confirmed, and ratified. FURTHER RESOLVED, that officers of the Corporation, as general partner of tht: partnership, are authorized to negotiate and cause the Partnership to acquire those real properties described on Exhibit A attached hereto (the "Properties") on such terms and conditions a s determined by the officers of the Corporation to be in the best interest of the Partnership for the purpose of constructing the Project and to assign to the Partnership any Purchase agreements on any of such properties which were previously executed by the Corporation. FURTHER RESOLVED, that the officers of the Corporation are hereby .,zed to cause the Partnership to incur indebtedness ("Indebtedness") to further the purposes �•= the Partnership to construct, operate and manage the Project on such terms and conditions as 4mermined by the officers to be in the best interest of the Partnership and is consistent with ,incutments therefore described as follows. Lender Amount I linnesota Housing Finance Agency $348,208 Minnesota Housing Finance Agency S530,000 rCounty of Hennepin $280.000 Family Housing Fund $200,000 FURTHER RESOLVED, that the officers of the Corporation are hereby -3thorized to cause the Partnership to evidence the indebtedness by one or more notes of the xmlersiup and to secure the Indebtedness and notes with one or more mortgages, security ►: eements, assignments of rents and other documents as may be required by the respective °alders. FURTHER RESOLVED, that the Corporation is hereby authorized to accept ti,t +�tts from govaztmental entities, nonprofit corporations or other entities which are made to the Corporation and which are related to the Project, including without limitation the following: I' f Grant Provider Grant Amount r City of New Hope $1,100,000 MHDP $1,356,480 :.•,d further to contribute the amount of such grants or other amounts required under the Articles o!- otherwise as capital contributions to the Partnership by the Corporation as general partner. FURTHER RESOLVED, that the officers of the Corporation are hereby authorized to cause the Partnership to execute such covenants, restrictions and agreements as may ?,. required by the Lenders or Grant Providers as a condition to those Lendersand Grant ?I aviders to provide the funds to be provided by them_ FURTHER RESOLVED, that in the event that Lenders to the Partnership, the ,rrant Providers, or other persons require additional resolutions by the Corporation which more sp,ecifically authorise the Corporation to eater into certain transactions and execute documents rtwed to the construction and operation of the Project, the officers of the Corporation are hereby i thorized to execute any such resolutions on behalf of the Corporation to the extent in the 21- inion of the officers such resolutions describe and refer to transactions which are consistent v:sh and within the scope of the transactions described and approved hereunder. FURTHER RESOLVED, that any one of the officers of the Corporation be, and :- eby is, authorized, empowered and directed, in the name and on behalf of the Corporation, to t ake all such further action and to approve, obtain and/or execute, deliver and/or file, as the case may be, any and all certificates, documents and instruments and to pay such expenses, as they may S-= necessary or appropriate in order to more fully carry out the intent and accomplish the +1 -poses of the foregoing resolutions - FURTHER RESOLVED, that anv and all acts taken or to be taken by the tiers of the Corporation, pursuant to and consistent with the authorizations embodied herein and they hereby are, in all respects, approved ratified and confirmed. FURTHERRESOLVED, that the signature of any single officer of the �'-.rvoration on any document authorized hereunder shall be conclusive evidence that the officers _, the Corporation have found such document to be consistent with the terms of this Resolution :-.J in the best interest of the Corporation and the Parmership. EXHIBIT A TO RESOLUTIONS OF EXECUTIVE COMMITTEE OF PROJECT FOR PRIDE IN LIVING, INC. PROPERTIES ACQUIRED BY THE PARTNERSHIP FOR THE PROJECT: 7300 Bass Lake Road New Hope, Minnesota 7302 Bass Lake Road Now Mone Miimesata 7304 Bass Lake Road, New Hage, Minnesota 7306 Baas Lake Road, New Hope. Minnesota —� 7308 Bass Lake Road, New HOES Minnesota 7310 Bass Lake Road, New Ho , Minnesota 7312 Bass Lake Road, New Ho!, Minnesota T� 7316 Bass Lake Road, Now Hope, Minnesota 7332 Bass Lake Road, New Hope, Minnesota J South 100 feet of Thorsen Community Center property, owned by Independent School District 281 The undersigned hereby certifies to be the qualified and acting Secretary o0roject for Pride in Living, Inc., a Minnesota nonprofit corporation (the "Corporation"). 2. The undersigned certifies that Uis the Se the Corporation, is qualified t Im s on behalf a and that the following signature of�vnruet, is a Steve Cramer, Executive Director Attached hereto is a true and correct copy of reW9ficV1* and adopted by the Executive Committee of the Corporation dated October 26, 1998 (collectively, the "Resolution'); that the Resolution does not conflict with the corporate darter or by. laws of the Corporation, nor has the Resolution been in any way altered, amended, or repealed, and that it is in full force and effect, unrevoked and unrescinded, as of this day, and has been entered upon the regular minute book of this Corporation, as of the aft P nemionod date, and that the Executive Committee of the Corporation has, and at the time of adoption of the Resolution, had, full power and lawful authority to adopt the Resolution and to confer the powers thereby granted to the officers and staff therein named who have full power and lawful authority to exercise the same. IN WI'T'NESS WHEREOF, the undersigned. Secretary of the r ithorized on behalf of the Corporation, executed this certificate this 1=70111f -098_ 5 etary r: e: ?--_ted: 16 I . 1998 PROJECT FOR PRIDE IN LIVING, INC. 2516 Chicago Avenue Minneapolis, MN 55404 F` Phone: 8748511 FAX: 874-6444 e-mail: pplOppkmorg Project for Pride in Living, Inc. CERTIFICATE OF AMENDMENT TO THE CORPORATE RESOLUTION OF THE BOARD OF DIRECTORS OF PROJECT FOR PRIDE IN LIVING, INC. January 6, 1999 I, Jeanne Hatch, do herebyertify that I am the duly elected and qualified Assistant Secretary and keeper of the corporate records foNr-oject for Pride in Living, Inc., a corporation organized and existing under the laws of the State of Minnesota, and that the following is a true and correct copy of a specific amendment to the resolution unanimously adopted at a meeting of the Board of Directors of said corporation, held in accordance with law and the charter and bylaws of said corporation at 2516 Chicago Avenue South, Minneapolis, Minnesota, on the 6th day of January, 1999 at which meeting a quorum was present, and that said resolutions are set forth in the minutes of said meeting, have not been repealed or modified, and are now in full force and effect: WHEREAS, the Executive Committee of the Board of Directors of Project for Pride in Living, jnc., passed a resolution on October 26, 1998, authorizing the continuation of the PPL -Bass Lake Court Limited Partnership housing project and authorizing borrowing and receiving grant and equity funds for the project and authorizing the execution of documents, for the PPL -Bass Lake Court Limited Partnership; NOW THEREFORE BE IT RESOLVED, that the resolution is hereby amended as follows: A On page two, the amount of the Minnesota Housing Finance Agency Loan is decreased to $130,000. a On page two, the amount of the County of Hennepin loan is increased to $680,000. a On page three, the amount of the City of New Hope grant is increased to $1,600,000. All other provisions remain the same. 1999. IN WITNESS WHEREOF, I have hereunto set my hand this day of r JEANNE M. HATCH NOiMPU W—INMMIE X 4 V OMM ROM JOL 9t, 20W 1(� Notary Public Date Give me a fish and l eat for a day; teach me to fish and 1 eat for a lifetime. State of Minne.9 Sta► ° 'v SECRETARY OF STATE Certificate of Good Standing I, Mary Kiffineyer, Secretary of State of Minnesota, do certify that: The limited partnership listed below is a limited partnership formed under the laws of Minnesota; that the limited partnership was formed pursuant to Minnesota Statutes 322A by the filing of a Certificate of Limited Partnership with the Office of the Secretary of State on the date listed below; and that this limited partnership is authorized to do business as a limited partnership at the time this certificate is issued. Name: PPL -Bass Lake Court Limited Partnership Date Formed: 10/01/1998 This certificate has been issued on 01/27/99, Wa4d.1� *OW901V (X-9'ecretak of State. FEB -02 -SS 17:22 FROM- IO= PAGE 2/22 AMM= AND RESTATED ARTICLES OF L724X=D PARTNERSHIP OF PPL SASS LAM COURT L33aTW PARTaMS81p, a Minnesota limited partnership ( the "partnership") Between Project for Pri.d,e in I.3 v1=q, Inc _ , s: Minnesota non-prcrit Corporation ( the "General Partner") and National Equity Lhand 3.997 Series II Limited Partnership, An I111aois limited partnership ( the "Lim-ited pa.e+.► ) February 3, 1999 These Articles consist of this cover page, the table of contents following this page, and the glossary, the text, the exhibits, and any appendices following thereafter. The Partnership was previously formed under the (Revised) Oniform Limited Partnership Act (the "Limited Partnership Act") of the State of Minnesota (the `kChartex state") pursuant to a limited partnership agreement or similarly titled document (the "Prior Agreement -v) between the General Partner .and Steve Cramer (the "Initial Limited 8ertnern) dated September 30, 1998, and a limited partnership certificate dated October 1, 1998, for the development and operation of real estate in the State of Minnesota ( the "Project state") . THE LIMITED PARTNERSHIP INTEEREST EVIDENCED AND REPRESENTED BY THESE AMENDED AND RESTATED ARTICLES OF LIMITED PARTNERSHIP (THE "ARTICLES^) HAS BEEN PLEDGED TO THE ISSUING PARTNERSHIP TO SECURE THE PAYMENT'OF DEFERRED CAPITAL CONTRIBUTIONS. THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THESE ARTICLES HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION, BUT HAS BEEN ISSUED PURSUANT TO EXEMPTIONS UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, AND THE REGISTERED HOLDER OF SUCH LIMITED PARTNERSHIP INTEREST HAS EXECUTED AN INVESTMENT REPRESENTATION WITH RESPECT THERETO_ FURTHER, THE LIMITED PARTNERSHIP INTEREST HAS NOT BEEN REGISTERED WITH THE SECURITIES COMMISSIONER OF THE CHARTER STATE OR ANY OTHER STATE_ ACCORDINGLY, THE SALE, TRANSFER, PLEDGE, HYPOTHECATION, OR OTHER DISPOSITION OF SUCH- LIMITED PARTNERSHIP INTEREST IS RESTRICTED AND MAY NOT BE ACCOMPLISHED EXCEPT IN ACCORDANCE WITH SUCH INVESTMENT REPRESENTATION, THESE ARTICLES, AND AN APPLICABLE REGISTRATION STATEMENT OR AN dPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP THAT A REGISTRATION STATEMENT IS UNNECESSARY. Fl -=B -02 -EIS 17=23 FROM: ID- PAGE 4/72 6.5 Forfeiture of Interest 7 6.6 Security Agreement .._...• -- _ .. 6.7 Additional Cash Contributions . j.� ._ - ... .. B 6-B Withdrawal of Capital ...__.-.... ....... ..-- ••--_. 9 6.9 Capital Priorities ................... -- 9 6.30 Loans and Interest _.._._.. ...._.............. -----_.__----•---•-- 9 ARTICLE VII ........ Partner Loans and G7uaraatLes .. _ .... . 7.1 Partner Loans _-� _ 9 7.2 Guaranty Against+ Development Cost Overruns ..-10 7.3 Guaranty Against Operating Deficits .. .+ ..- 7.4 Guarani ------•------•.,___. 31 Guaranty Against Reduced or Delayed Tax Credits --------- 12 7.5 Guaranty of Partnership Management ...................... 13 7.6 Guaranty by Controlling Entity_ _ _ _ 13 7.7 Certain Guaranty Requirements ........................... +*-...--�� 7.$ Certain Guaranty Limitations ...._,__a_.,•_ LL•---_..... 16 ARTICLE VIII --- Consequences of Tax Credit. Bene :Lts RedxzGta.ons .. _ . _ . _ - _ 8.3. General Principle ......._...-....,..___-. ..- 18 8.2 Definitions ...... _.._......_ 8.3 Revision of Projected Tax Credit Benefitsr� --- 1B 8.4 Reduction of Net Investment _ -- 20 8.5 Amendments to 8.6 Documentsnis ..._.._...._... ........-- _ 2 _...........---.. ............ - -2 Effect on Fees 8.7 Limited Partner Withdrawal Option - - 2 8.8 General Partner Call option -.. ...._. ._ ......3 2 8-9 Other Remedies ..._...._.. ......_..._._...... 23 ARTICLE IX ................ ._ Definitions, Receipts, Pagmsmts, Reserves, Distributions, Allocations, Accauntiag and Reports . ................ .. • 24 9.1 Definitions _._...._.._ _ _ _ 9.2 Receipts, Payments, Reserves and Distributions ----• � - 24 9.3 Allocations ions ._.._._... 28 9.4Income Offset, Gain Chargeback Etc. .- - 38 9-5 Allocation Modifications .-.. .. ............-- 4 9.6 Tax Elections . ......... ..,,._.. 422 9-7 Taxable Year .... ........... . . .. .----•--- --• 43 9.8 Books of Account --•----. .---------- ----- 43 9.9 Capital Accounts ... _.. ._ ..... 43 9.1fl Closing of Books ..__..... ...`_..................._... 43 9.11 Financial Reports ...._.._ ---,-. ........... ... .. 44 9.12 Tax Returns _-._.._. ... _. ._...-.---.._...,._. 44 9.13 Accountants ..... ._. ....-.._._,..-_.,._.,.._ „ _-- •. 4444 iii P8B-02-99 17:23 FROM' ID- PACE 6/22 ARTICLE XIII ... _ .... _ , 75. Reprasentatioas and Warranties ..---•--•......_. ........ 75 13.1 Factual Matters Generally _,_____. ....* .._ . -...-. 75 _ - 13-2 Controlling Entity .............. ._..- 76 13.3 Investment Intent ......._ ... ....... ....76 13.4 Environmental Conditions ............ 76 13-5 Environmental Indemnity ----------------------------- ARTICLE XIV ------------------------•------- ---- ----------------- 78 Admission of Partners; Assigam.6st Restrictions -_._........._ . 7$ 14.1 Sale or Assignment or Admission of Partners by General Partner........... _ _ ____ _ _ __ _ 14.2 Sale or Assignment by General Partner -� -,- 79 78 14.3 Sale or Assignment by Limited Partner ..__._..._._. ....79 14.4 Substituted Limited Partners -------------- ............. 79 14.5 Transfer Documents ........._. ........ ARTICLEXV ......................................................... Withdxama1„ Removal, Bankrcptay, Dissolution, Death or Incapacity of a Partnem..- ..._-•----••----•-----•-•--- 8Q 15.1 No Voluntary Withdrawal -__..-......,,_. . - 80 15-2 Removal, for Cause ....................................... ......-....-.- 15.3 Adverse Events Affecting GeneralPartner .._.,... _ 82 15.4 Substitute General Partner(s) __ _ _ _ 15.5 Adverse Events Affecting Limited Partne- . 83 r 15.6 Definition of Bankruptcy ..................._.... .. 83 15.7 Definition of Incapacity ...........•---.....-,.. 84 --•- .....84 15.8 Controlling Entity or Affiliate Disability 84 15.9 Definition of Affiliate ........ .. ..±._. 84 ART:rr-LE XV: ......................... ........... ------ ........... 84 Dissolution and Liquidation .._._....................... 16.1 Accounting ......_•____,-_-•-- 16.2 Liquidating Trustee ..._.__._ .__• .---_............ 84 16.3 Distributions in Liquidation __.._- -_ „ ....._..'..'---• 85 _. .. 85 ARTIC'i.E XVII ..................... Power of Attorney ....-----.-- ,.__... 86 _._ 17.1 Generally., . .... ................ ..._...._.. $6 x,7.2 Removal for Cause ................,.. ... ....,. ..,86 v FSB -02-59 17=24 FRONz IO: PAGE 13/22 GLOSSARY OF KEY TSRKS Following are brief explanations of certain key terms used in these Articles and exhibits. They are provided as an aid to general understanding and are not exact definitions for legal purposes. In the event of any conflict between the following explanations and the exact definitions in the Articles, the latter shall control. Term & Location Ex lanation Adverse Event Any of the following acts by or against the 1 15.3 General Partner; wrongful withdrawal from the Partnership, removal for cause, bankruptcy, Vii corporate dissolution, or death or incapacity of an individual general partner. Annual Plan 111.18(c) An annual written summary prepared by the General Partner outlining the Project's condition, which includes its description, physical management, fiscal issues, and presents a course of action to remedy any issues during the succeeding year. Break -Even 17.3(b) The end of the third consecutive month following Placement in Service in which there are no operating deficits beyond any projected to be funded out of the operating reserve. Closing Checklist The Project Investment Checklist containing the g 11.10(a)(iii) Partnership closing requirements of the Limited Partner. `Cost Certification. Delivery to the Limited Partner after Placement 3 1z.16(f)(ii) in Service of (1) a letter from the accountants stating that they have examined the books and records and will sign a tax return including the Project coats specified in the letter in tax credit basis, and (2) a certification by the General Partner that the accountants' letter accurately reflects actual Project costs. [See model forms of accountant's letter and General Partner certification.] Deferred Initial Any portions of Initial Fees that are to be Fees 18-2(f) funded not by Limited Partner capital payments but only out of operating income or proceeds of capital transactions under Exhibit C(1). Development Cost Limitation on the General Partner's obligation to Overruns Liability fund development cost overruns, equal to the Limit lesser of 25% of basic rehabilitation or 1 7.8(a) construction cost or 40% of the Limited Partner's capital contribution. Vii FES -02-99 17.24 FROM= 10: PAGE 10/22 Placement in Occurrence of all of the following: (1) Service substantial completion of rehabilitation or 1 11.14 construction, (2) issuance of certificate(s) of occupancy for the entire Project, and (3) placement in service as defined by federal tax law for qualified tax basis and tax credits. Project Start -Up Occurrence of all of the following: (1) Project 11.10 (a) acquisition, (2) closing or compliance with all conditions for all loans, grants, and other financing, (3) submission and approval of all Closing Checklist items, and (4) commencement of rehabilitation or construction_ Projected Tax Total projected federal low-income housing tax Credit Benefits credits from the Limited Partner's investment 11 8-2(b) through its investors, last capital pay -in year. Purchase option The General Partner's right to purchase the 91 11.21 Project after the 15 -year tax credit compliance period for an amount equal to (1) the greater of debt (including Partner loans) plus taxes or fair market value or, if a favorable tax ruling or opinion is obtained, (2) debt (including Partner loans) plus taxes, in either case whether or not a third -party purchase offer is made. Qualified Occurrence of all of the following: (1) Placement Occupancy in Service, (2) Rent -Up, (3) an occupancy level 11..15 achieving the minimum low --income set-aside requirement and the applicable fraction of low- income occupancy (based on number of units or floor space, whichever is lower) specified in Exhibit A, Section Q, and (4) General Partner compliance with all income certification and record-keeping requirements for the tax credits and other tax benefits from low-income occupancy, Qualified Occupancy Delivery to the Limited Partner of a certifica- Certi,fication tion by the General Partner that Qualified 111.16(e) Occupancy has occurred. Qualified occupancy Filing of the federal income tax return for the Tax Filing year in which Qualified Occupancy occurred. 1 11.16(8) Rent -Up The end of the first month in which at least 95% 11 7.3(a) of the residential units and the projected amount of any commercial space have been leased to tenants in occupancy who have begun paying rent. Required Reporting Any of the reports or information required to he 1 11.18 submitted to the Limited Partner under Paragraphs 9.11, 9.12, 11.18 or any other provisions of the Articles, including, but not limited to, ix FSB -02-99 17.25 FROM: I XD, PAGE 12/22 Abu m w Am =STATSD ARTICLSs of IiIMITm P kRTLMMRSHXP THESE AMENDED AND RESTATED ARTICLES OF LIMITED PARTNERSHIP (the "Articles") of the Partnership named on the cover page hereof are made as of the date indicated thereon, by and between the General Partner and the Limited Partner identified thereon. (The General and Limited Partners are sometimes referred to singularly as a "Partnex" and collectively as the „Partners". If there is more than one General Partner or Limited Partner, they are referred to herein singularly as a General or Limited Partner or collectively as the General or Limited Partner, respectively, as the context may require or suggest_) W I T N E S S E T H: WHEREAS, the parties hereto are desirous of continuing the Partnership as a limited partnership under the statutory authority and in accordance with the purposes hereinafter described, while effecting the withdrawal of the Initial LimUted partner from the Partnership, admitting the Limited Partner thereto, and amending and restating the Partners' respective rights and obligations with respect to the Partnership; NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto have agreed and by these presents do agree to abide by and be bound by the following Amended and Restated Articles of Limited Partnership. ARTICLE I Conti.nuatiou and Govezmanepa of Y,imited Partnership 1.1 Statatozy ccntinuataion. The parties hereto have agreed to and by these presents do hereby continue the Partnership under and pursuant to the provisions of the Limited Partnership Act of the Charter State specified on the cover page hereof, for the development and operation of certain real estate in the Project State identified on the cover page hereof. By executing these Articles, the parties agree that the Prior Agreement is hereby amended and restated in its entirety by these Articles and the Limited Partner is hereby admitted - to the Partnership on the terms and conditions set forth herein, and by executing the withdrawal signature page hereof, the Initial Limited Partner hereby concurrently withdraws from the Partnership, zk11 to become effective upon filing of an amended certificate of limited partnership reflecting such changes if and to the extent required by, and compliance with any other requirements for the continuation of the Partnership and its business under, the Limited Partnership Act_ Unless and until such requirements are met, the Prior Agreement shall not be amended and restated by these Articles but shall remain in full force and effect and the Initial Limited Partner shall. not have withdrawn from the Partnership. If the CharterState is also, the Project State, such terms may be used interchangeably herein_ FOB -02-99 17:26 FROM- In= FACE 14/22 otherwise deal with the Project as a real estate development consisting of, or including in significant part, low-income rental housing. The Project is more particularly described in the project investment proposal bearing the date indicated in Exhibit A, Section 8 hereto, as approved in writing by the General and Limited Partners, and as may be amended by them in writing from time to time (the "Project investment Proposal"), which proposal, as it may be amended, contains a budget and projections indicating a total cost of financing the Project in the amount specified in Exhibit A, Section 8 hereto (the `Total Pzoject cost"). The purposes of the Partnership shall include the provision of decent, safe, and sanitary housing affordable to low-income households and qualifying for low-income housing tax benefits. The Partnership shall have all powers necessary to accomplish such purposes. In the event of a conflict between the Project Investment Proposal and these Articles, the latter shall control- ARMCCLS 1V Place of Bw •,mss $erords: t 4.1. Px1im:Lpal Place Of Sassiness. The location of the principal place of business of the Partnership shall be at the address specified in Exhibit A, Section C hereto, or at such other place or places within or without the Project State as may be selected from time to time by the General Partner, upon prior written notice to the Limited Partner. 4.2 Statulea Record- - The Partnership shall keep at its principal place of business the following and any and all other items required by the Limited Partnership Act: (a) a current list of the full name and last known address of each Partner, separately identifying each general partner and all limited partners in alphabetical order and setting forth the amount of cash and a description and statement of the agreed value of any other property or services contributed by each Partner and that each Partner has agreed to contribute in the future, and the date an which each became a Partner; (b) a copy of the certificate of limited partnership of the Partnership, as amended or restated from time to time, together with executed copies of any powers of attorney pursuant to which any such certificate has been executed; (c), copies of the Partnership's federal, state, and local income tax returns and reports, if any, for the three (,3) most recent years; (d) copies of these Articles, any original or prior and any then effective written partnership agreements of the Partnership, and any amendments thereto; 3 FIE8-62-SS 17228 FROM: XD= PAGE I6/22 (c) the withdrawal, removal, bankruptcy, dissolution, death, or incapacity of the last surviving general partner of the Partnership, unless a substitute General Partner is appointed under Paragraph 15.4 hereof; or (d) the sale, exchange, or involuntary conversion of all, or substantially all, of the Partnership's non-cash assets. ARTIMB VI Contri,bntions to Cap3.ta1 6.1 Total Cash Contributions of Partners. The Partners shall contribute cash to the capital of the Partnership in the aggregate amount specified in Exhibit A, Section D hereto, as further provided. hereinbelow. 6.2 Cash Contr?'►boas Of General partner. The General Partner has contributed cash to the capital of the Partnership in the amount specified in Exhibit A, Section E hereto. The General Partner may contribute additional cash if in its sole discretion it deems such to be appropriate from time to time; provided, however, that neither the General Partner's nor the Limited Partner's interest in the profits, losses, credits, cash flow, proceeds of capital transactions, or other operating or capital items of the Partnership shall be changed by virtue of any such additional cash contribution. 6.3 Cash Ccntribmt:L*na; or -r13mited p„ +- Subject to the terms and conditions of these Articles and.the Exhibits attached hereto, the Limited Partner shall contribute cash to the Partnership in accordance with the following procedures: (a) The Limited Partner shall contribute cash in the amounts and at the times specified, in Exhibit A, Section F hereto. (The amounts specified in Exhibit A, Section F hereto are sometimes referred to herein as the '-deferred cash contributions"). The obligations to make the deferred cash contributions shall be further evidenced by one or more promissory notes payable to the Partnership in the form(s) of Exhibit B, Exhibit B(].) and/or Exhibit B(2), as applicable, attached hereto and made a part hereof (referred to individually as a "Note,, and collectively, whether there is one or more, as the "Noires"), which shall be executed and delivered by the Limited Partner upon Project Staart- Up, as such term is defined in Paragraph 11.10 hereof, and shall be secured and perfected with a Financing Statement as provided in Paragraph 6.6 hereof, which shall be executed and delivered by the Limited Partner concurrently with its execution and delivery of these Articles. The Limited Partner's interest in the Partnership shall be issued upon the Limited Partner's execution and delivery of these Articles and such Financing Statement. The General, Partner shall make arrangements for the Limited Partner to pay its deferred cash contributions to the Partnership through a title insurance company, construction loan escrow trustee or 5 FEB -0 2 99 17:27 FROM= ID PAGE 36/22 week U.S. Treasury Bills as determined by the most recent auction thereof from time to time, as provided in each Note; or (d) pursue any other available remedy against the Limited Partner at law or in equity to enforce such payment. Notwithstanding anything in these Articles to the contrary, in the event the Limited Partner fails to execute and deliver the Notes upon Project Start -Up pursuant to Paragraph 6.3 hereof without having wxthdrar.m from the Partnership pursuant to Paragraph 8-7 hereof, then all remedies for nonpayment of the Notes described in Paragraphs 6.4, -6.5, and 6.6 hereof shall be fully applicable to nonpayment of its contractual obligations to contribute capital to the Partnership as if the Notes had been executed and delivered_ 6.5 Forfe3.ture of Iaterest_ Upon failure by the Limited Partner to make its capital contributions, in whole or in part, within the notice and cure period specified in each Note, the Partnership may, but shall not be required to, terminate the Limited Partner's entire limited partnership interest in the Partnership (the `'Interest"), - without public or private sale under the Uniform Commercial Code or otherwise and without return of any capital previously contributed, effective upon delivery of written notice of termination by the Partnership to the Limited Partner, together with the original Notes canceled by the Partnership and a release of the Notes by any holder, assignee, or pledge thereof for value or as security. From and after. such termination, the Limited Partner shall have no further rights or interest in the Partnership and shall have no further obligations to the Partnership under the Notes or otherwise, and the Partnership shall thereupon become the owner of the Interest_ In such instance, the Limited Partner's forfeiture of its Interest as aforesaid shall constitute liquidated damages to the Partnership for the. Limited Partner's failure to crake its capital contributions as aforesaid, and the parties hereby agree and stipulate to the commercial reasonability of such forfeiture as liquidated damages - 6 - 6 amages_ 6.6 security Agre--gaat_ The Limited Partner hereby pledges to the Partnership and grants the Partnership a security interest in all of its limited partnership interest in the Partnership as further security for its obligation to make all capital contributions evidenced by the Notes and agrees that the Partnership shall have, .in addition to the rights provided for herein, all of the rights and remedies of a secured party under the Uniform Commercial Code of - the Project State with respect to the Interest in the event of the failure of the Limited Partner to hake its capital contributions when and as provided herein, in whole or in part. In furtherance of the foregoing pledge, the Limited Partner shall execute and -deliver to the Partnership one or more Uniform Commercial Code Financing Statements (the "Financing Statement"), to be filed in the State of Illinois and, if requested by the General Partner, the Project State. Upon failure by the Limited Partner to make its capital contributions, in whole or in part, within the notice and cure period specified in each Note, the Partnership may, but shall not be required to, realize upon such 7 FEB -02-99 17=26 FPOM= ID. PAGE 20/22 6.10 Loans and late est. During the term of the Partnership, no interest shall be allowed to any Partner upon the amount of such Partner's capital account or capital contributions. In the event that the Partnership borrows any funds from any Partner, above and beyond such Partner's capital account, such Partner shall be paid at the rate of one percent (1%) below the long-term Applicable Federal Rate (as defined in the Internal Revenue Code, as amended), subject to Paragraph 7.1 hereof, and such loan shall be accounted for as a liability of the Partnership_ ARTICLE VII Partner Loans and Qb=anti.es 7.1 Partner Loans. The following provisions shall govern loans from any of the Partners or.their affiliates to the Partnership: (a) Guaeaa Advances. If, as, and when required under its guaranty obligations to fund completion of rehabilitation or construction of the Project pursuant to 'Paragraph 7.2 hereof, to fund operating deficits pursuant to Paragraph 7.3 hereof, or to compensate the Limited Partner for reductions or delays in projected tax credits pursuant to Paragraph 7.4 hereof, to the extent not funded by other sources, the General Partner shall make advances under a revolving credit loan to the Partnership, and the Partnership shall execute and deliver to the General Partner a promissory note payable to the General Partner evidencing such loan bearing interest at the rate specified in Exhibit A, Subsection G hereto, with interest and principal payable to the extent of Available Cash as defined in such note, and any remaining principal balance payable upon sale of substantially all Partnership assets to the extent of receipt of Available Cash therefrom, all subordinated to required prior uses of Available Cash under Paragraph 9.2 hereof, and otherwise as set forth in the form of Exhibit C attached hereto and made a part hereof- In the event the loan is made by an affiliate of the General Partner, the loan shall be made to the General Partner, and the proceeds thereof shall be lent by the General Partner to the Partnership in accordance with the foregoing provisions_ The General Partner hereby agrees to disburse the proceeds of any such loan, to or at the direction of the Partnership, from time to time upon request by the Partnership_ Notwithstanding the foregoing, no such loan shall be made to fund any partnership or property management fee payable to the General Partner or' its affiliate or any operating deficit created by the payment of such fee in -contravention of Exhibit D attached hereto and made a part hereof. (b) D_iscretioa_ary Loans. The eartners or their affiliates may, but are not obligated to, loan to the Partnership such additional sums as the Partners deem appropriate and necessary for the conduct of the Partnership's business. Any such loans made by any'of the Partners or their affiliates shall be upon the FI✓B-02--99 17.29 FROM= ID- PAGE 22/22 to correction of any latent defect that becomes apparent more than one year after completion of rehabilitation or construction (i.e., issuance of both the Project architect's certificate of substantial completion and unqualified certificates of occupancy for all units in the Project), unless any such defect became reasonably apparent prior to the and of'sueh one-year period. 7.3 6Oaraa A mast Operatiaq Defictft. Subject to the requirements and limitations of Paragraphs 7 -7 -and 7.8 hereof, the General Partner hereby agrees and guarantees that it will advance or cause to be advanced from time to time, from reserves if permitted under Paragraph 7.7(a) hereof' Lor from loan proceeds or as otherwise required under Paragraphs 7.7(b') -(d) hereof, all funds necessary to pay any operating deficits of the Partnership that may occur or accrue in connection with the Project during the period commencing upon conclusion of the Project development period and terminating upon the first (1st) anniversary of the later to occur of: (a) the end of the first month in %fhich not less than ninety --five percent (95%) of the residential units have been leased to, tenants who have taken occupancy and commenced rent payments ("Rent -Up"), or (b) the end of the third successive month following Placement in Service (as defined in Paragraph 11.14 hereof) in which there are no operating deficits beyond those, if any, projected in the Project Investment proposal to be funded out of the operating reserve as permitted hereinbelow, as such terms are defined in Paragraph 9.1 hereof ("Sneak --Even'') . 7_4 Gua -rant last Rechwed or Dela Tax Credits. Subject to the requirements and limitations of Paragraphs 7.7 and 7.8 hereof, the General Partner hereby agrees.and guarantees as follows: (a) LCM- MCOMM 11auslag Tax Cr$dits_ It will advance or cause to be advanced from time to time, from reserves if Permitted under Paragraph 7.7(a) hereof, or from loan proceeds or as otherwise required under Paragraphs 7.7(b) -(d) hereof, all funds necessary to reduce the Limited Partner's Net Investment (as defined in Paragraph 8.2(d) hereof) in the amount (the "Reduction. Amount") required by Paragraph 8,4(c) hereof, to compensate for any reductions in Projected Tax Credit Benefits, as defined in Paragraph 8.2(b) hereof, upon request by the Limited Partner, The Reduction Amount shall be subject to increase if treated as a guaranteed payment, as provided hereinbelow, and shall be subject to the limitations set forth hereinbelow. Pursuant to the foregoing guaranty, the General Partner shall cause portions of the Reduction Amount to be funded to the Partnership, and the Partnership shall pay such portions to the Limited Partner, as and when payable under Paragraph $.4(d) hereof. (b) Intentionally omitted. 11 FEB -02-9S 17:31 FRoM . ;d. PAGE 2/9 7.7 Certain Garan oments_ The following requirements shall apply to advances made or caused to be made by the General Partner in accordance with its guaranties against development cost overruns, operating deficits, and reduced tax credits under Paragraphs 7.2, 7.3, and 7.4 hereof: (a) use of_ Project ResoEves. Pro j ect reserves shall not be used to fund any such advances, except that (i) any available construction contingency reserve, as such term is defined in Paragraph 9.1 hereof, may be used to make advances required by the development cost overruns guaranty obligations of Paragraph 7.2 hereof; (ii) any available operating reserve, as such term is defined in paragraph 9.1 hereof, may be used to make advances required by the operating deficits guaranty obligations of Paragraph 7.3 hereof, but only to the extent of any such reserve funds in excess of the amount specified in clause (iii)(B) hereinbelow; . (iii) any available operating reserve may also be used to make advances required by the development cost overruns, operating deficits, and tax credits guaranty obligations of Paragraphs 7.2, 7.3, and 7.4 hereof, but only as provided in clause (ii) hereinabove if applicable and otherwise to the extent of any such reserve funds in excess of the greater of: (A) the amount specified in Exhibit A, Section J(4)(b) hereto, or (B) any amount which, as of the time each such guaranty advance is made, may reasonably be quantified or estimated and has either been projected in the Project Investment Proposal or mended projections, or is reasonably foreseeable (including without limitation operating deficits projected in later years for which operating reserves have been set aside), based on then current information, as necessary or prudent to cover any material anticipated increased future needs for which such reserve funds are designated throughout the fifteen -year low-income housing tax credit compliance period, if applicable, or any other Partnership term Contemplated in "the Project Investment Proposal or these Articles; and (iv) any available capital reserve, as such term is defined in Paragraph 9.1 hereof, representing the Genera? Partner's contingent incentive management fee described in Exhibit D hereto may be used to make advances required by the development cost overruns, operating deficits, and tax credits guaranty obligations of Paragraphs 7.2, 7.3, and 7.4 13 FE13-02-99 17:31 FROiH: ID- PAGE 4/e (a) Ramoval for Cause. Subject to the provisions of Paragraph 7.8 hereof, any failure by the General Partner to Perform its guaranty obligations under Paragraphs 7.2 through 7.4 hereof shall be deemed to constitute willful misconduct or material breach by the General Partner of its obligations under these Articles, subjecting it to removal for cause under Paragraph 15.2 hereof_ The General Partner shall remain liable to perform such obligations or to pay damages resulting from its failure to do so, notwithstanding any such removal. However, any such failure to perform shall not by itself cause any subsequent payment of guaranty obligations not already constituting damages under Paragraph 7.7(d) hereof to be treated as payment of damages thereunder_ M Best Available Terms. Nothing contained in Paragraphs 7.1 through 7.8 hereof shall be construed to diminish the General Partner's general fiduciary obligations under these Articles, including without limitation the obligation to seek any necessary or appropriate third --party financing of development cost overruns, operating deficits, or compensation for reduced tax credits on the best terms and conditions available at all times, both during and after the. applicable General, Partner guaranty period, provided that the General Partner shall in all events have the right to fund its guaranty obligations as permitted under Paragraph 7.7(b) hereof. W Time for - The Gerieral Partner shall have a reasonable period of time to fund its guaranty obligations hereunder; provided, however, that in no event shall any delay in funding its guaranties against development cost overruns and operating deficits under Paragraphs 7.2 and 7.3 hereof cause, directly or indirectly, any financial detriment to , the Partnership, material default in its obligations to third Parties, or jeopardy to the Project or its occupants, and provided further, that in no event shall any delay in funding its guaranty against reduced or delayed tax credits under Paragraph 7.4 hereof exceed a period of thirty (30) days beyond the payment due date specified in Paragraph 8.4(d) hereof. (h) Cc -General partners. If there is more than one General Partner, then all general partners of the Partnership shall be jointly and severally liable for performance of all General Partner guaranty obligations under these Articles - 7.13 Certa= G aranL. Lixdtations. The following limitations shall apply to the General Partner's guaranty obligations under this Article VII: (a) Development cost overruas. The limit of the General Partner's liability for and obligation to fund development cost overruns (the "Development cost overr=s Liability Limit") under Paragraph 7.2 hereof shall be an amount equal to the lesser of (i.) twenty-five percent (25%) of the basic rehabilitation or is FEB -02 -SS 17=32 FROM= ID= PAGE E/6 Partner, as applicable, for any and all damages of whatever kind resulting from such breach, without limitation. (il) Li 'dented 22nagez $lection. In the event the General Partner breaches its guaranty of partnership management by. ceasing to act as general partner of the Partnership for any reason after its development cost overruns, operating deficits, and tax credits guaranty obligations have expired and been satisfied, then the Limited Partner will suffer damages and financial loss that would be impractical or extremely difficult to ascertain, and, therefore, upon written notice of election by the Limited Partner, the General Partner shall pay to the Limited Partner an amount equal to fifty percent (501) of all Initial Fees, as liquidated damages and not as a penalty, which sura represents a reasonable estimate by the parties of fair compensation for the foreseeable damages and loss that might result from such breach, recovery of which sum shall be the Limited Partner's sole remedy for such breach. _ L:iab&3-t'tf-es to Thlyd Parties. In no event shall there be any limitation on the General Partner's liability to third parties for Partnership liabilities incurred prior to any withdrawal by the General Partner from the Partnership, whether permitted or wrongful. (1v) SUrva val After Withdraw&& - The General Partner's liability under its construction cost overruns, operating deficits, and tax credits guaranties, if any, shall remain in effect after any withdrawal by the General Partner from the Partnership, whether permitted or wrongful, until all obligations thereunder are satisfied. (i) Intentiprmlly Omatted. (q) dative ,Obligations_ The various guaranty obligations under this Article VIZ are cumulative, not concurrent. Any limitation of liability under one guaranty shall not affect the amount of liability under any other guaranty, and any payment of obligations under one guaranty shall not reduce the amount of liability under any other guaranty_ The General Partner's guaranty obligations under this Article VII are given solely for the benefit of the Partnership and the Limited Partner, and shall not run to the benefit of, nor be enforceable by, third parties. , 57 roc-nc-tea if=s3 I'Fium- ID- PAGE eze to the Limited Partner under this Article VIII, due to a reduction of Projected Tax Credit Benefits. (e) ."Fee Event;" means the otcurrelnce of any of the followilig events, upon which any Initial Fees are payable under Exhibit D hereto: (i) Project start-up; (ii) Qualified Occupancy Certification, Cost Certification, completion of all contractor's punchlist items to the satisfaction of the inspecting architect, receipt by the Limited Partner of an updated title policy, final lien waivers from the general contractor and all subcontractors, the Project architect's certificate of substantia, completion, fiscal certificate(s) of occupancy, the General Partner's Environmental Certification, a fully executed Form 8609 Allocation for all buildings, and any outstanding Closing Checklist items and Required Reporting; or (iii) Qualified Occupancy Tax Filing. (f) ``Initial Fees," including any "Deterred Initial Fees, means all development fees that are payable to the General Partner or its affiliate upon or after any Fee Event, as specified in Exhibit D hereto_ "De;Eerred Iaitial Fees" means any portions of Initial Fees as to which payment is not to be made from the proceeds of the Notes) but is to be deferred, in accordance with Exhibits C(1) and D hereto, until after the Fee Events upon which such portiona.of fees are payable. (Q) "Cistsi.de Date" means the date specified in Exhibit A, Section I hereto, which date shall be thirty (30) days after Project Start-up, as such term is defined in Paragraph 11.10(a) hereof. 8.3 RevlzLcm of V=Jected Tax ezvms.:Lt Benefits_ Concurrently with any Fee Event, ^and also, at the Limited Partner's option, immediately prior to payment by the Limited Partner of any installment of its capital contribution, until, such time as the Limited Partner has made its final capital contribution hereunder, the Projections shall be revised to account for any changes in assumptions, facts, and circumstances likely to reduce the Limited Partner's Projected Tax Credit Benefits, except to the extent any reduction in Projected Tax Credit Benefits is attributable to: (a) any changes in federal tax laws (except to the extent adverse,effects of a reasonably foreseeable change can reasonably be mitigated); (b) errors in projections prepared by the Limited Partner, and then only to the extent that the underlying data, assumptions, and other information supplied by the General Partner or its affiliates for such Projections were true, correct, complete, and not misleading, such that the information should reasonably have enabled the Limited Partner to prepare Projections that are factually accurate and consistent with 19 tw=d-yak-=Z2 le -J!6 FROM= IO: PACE 4/20 ( c) Tara cxedit GuarantV Pavmentz. If the amount of reduction of the Net Investment exceeds the aggregate remaining installments in Unpaid Capital under Paragraph 8.4(a) hereof plus any distributions made to the Limited Partner under Paragraph 8.4(b) hereof, then the difference shall be paid to the Limited Partner from funds provided to the Limited Partner and the Partnership by the General Partner in accordance with its tax credits guaranty obligations under Paragraph 7.4(a) hereof. W Due Dates and D . Except as provided hereinbelow, any payment of funds underParagraphs 8.4(b) and (c) hereof shall be due within thirty (30) days after the Projections were revised. If any amount is not paid to the Limited Partner when due hereunder, then the Limited Partner shall have a right of action for payment thereof, with interest accrued at the rate of one percent (1%) below the long-term Applicable Federal Rate (as definewas d e untilit Revenue Code, as amended) from the time the payment is made. To the extent the reduction in Projected Tax Credit Benefits did not result from gross negligence or willful misconduct of the General Partner, such amount with interest, to the extent not otherwise paid, shall be payable out of operating income and proceeds of capital transactions, to the extent in excess of the Projected.Tax Liabilities of the Limited Partner, prior to any payments due to the General Partner or its affiliate(s) under any of the priorities of Paragraph 9.2 hereof and prior to any funding of reserves above the specific applicable minimum amount required thereunder. 8.5 Amendments to Documents. Upon any reduction in Unpaid Capital under Paragraph 8.4ta) hereof, the Partners shall execute and deliver an amendment to these Articles, the General Partner shall execute, file, and record, as applicable, an amendment to the Partnership's limited partnership certificate, the Limited Partner shall execute and deliver an amended Note(s), and the Partnership shall exchange the Notes for such amended Notes, all of which shall properly reflect such capital reduction and shall be in form and content satisfactory to the Limited Partner. Notwithstanding any failure or delay in such execution and delivery, however, these: Articles and the Notes shall be deemed to have been amended in accordance with the provisions of this Article V111- 9.6 Xffeot on Fees. The parties understand and agree that under these Articles, the effect of any reduction of Projected Tax Credit Benefits resulting in a reduction in Unpaid Capital under this Article vlll shall be the loss or deferral of payment of all or part of the fees to be received by the General Partner and any affiliate(s) under Exhibit D hereto, unless and to the extent other permitted sources of funds can be used to pay such fees, subject to the limitations of Exhibit D hereto and Paragraph 7.7 hereof. If any reduction of projected Tax Credit Benefits was caused by the, gross negligence or willful misconduct of the General partner, the amount of the reduction 21 r ico-.0c-Sa i f = . tb rieut4. I O = PAGE 6/20 alternative amendments that would not reduce the Initial Fees by more than the foregoing percentage. The Limited Partner makes, Constitutes, and appoints the General Partner its true an�l� awful e and attorney to execute, acknowledge, and, where fate, record all documents necessary to effectuate thhee aacqcq uisition of the Limited Partner's interest as contemplated by this Paragraph 8.8. Upon such acquisition, the Partnership shall cancel and return to the Limited Partner the Notes, and shall execute, fn the recosamrd, and deliver all other documents and do all the=LaitCa�ted Partner from the ner as required of it upon withdrawal by Partnership as described in Paragraph 8.7 hereof. 8.9 Other Renedi,a-, Nothing in this Article VIII shall be construed to limit or modify any other remedies available to the Limited Partner under these Articles. ARTICLE = nefiaitions , Rece1pts , payments, 5t,aser s . D3.strib t.t*DS, s11ocat1ons, Accovua - and oarts 9.1 Degi=J.tioas. For the purposes of these Articles. the following terfis shall have -the following meanings: (a) •`Projeet d,evelapment pexiadl shall mean the period commencing upon formation of the Partnership and terminating upon Placement in service of all residential units and other designated portions of the Project. (b} ••nevel.oua�t fxx�ancus4 Pmaceeids" shall mean all loans to the partnership or secured by the Project, all grants to the Partnership or for the Project, and all capital contributions to the Partnership from the Partners, all to the extent made in connection with the original development of the Project or for funding of the operating reserve as described in the Project Investment Proposal, and any casualty insurance or condemnation award proceeds period, necessary for during development p for r build ngofthe Project, and used therefor. (e) "Development costs" shall mean all costs of construction or rehabilitation of the Project and related soft costs and fees incurred in connection with the original development of the Project as described in the Project Investment Proposal, including any unanticipated cost increases, any costs to remedy any defects in connection with such construction or rehabilitation, and all operating deficits arising during the Project development period - (d) "Development cost overrgns" shall mean the amount, if any, by which development costs exceed development financing proceeds - 23 L ML.JM Ej'/2� Investment Proposal or established in the reasonable discretion contemplatedes shall of the General Partner. asery constructionconti contingency, operating include, without limitation, replacement, capital, and special purpose reserves. (n) "C0s1strt=tloa contingency reserve" shall mean the construction contingency reserve or similarly described reserve, held in an interest -beating account o �ctionsancontained cial institution, in the as specified in the budget at be utilized for the purpose of Project Investment Proposal, t funding Project development cost overruns. (a) ..ppe=ating reserve" shall mean the operating reserve or described reserve(s), held in an interest-bearing similarly account at a financial l institution, as specified in the budget or oject Investment Proposal, to be projections contained in the Pr utilized for the purpose of funding Project operating deficits, including repairs - (p) "Replacement reserve- shall mean the replacement reserve or similarly described reserve(s), held in an interest-bearing Or account at a financial institution, as specified in the budget be projections contained in the Project Investment r placements a and utilized for the purpose of fundingProject improvements. (q) "cap1tal reserve" shall mean the capital reserve or similarly described reserve, held in an interest-bearing account i at a financial institution, as specified in the budget or projections contained in the Project Inapla=nt reserves to be utilired as a back-up to the operating and for the purpose of funding the General Partner's contingent incentive partnership management fee described in Exhibit D hereto, subject to the -General Partner and the General Partner's election to exercise 'the Purchase option or Right of First Refusal as described in Paragraph 11-21 hereof. (r) *`Special. purpose reserve" shall mean the long term operating reserVe, revenue deficit reserve, exit tax reserve, or similarly described reserve, held in an interest-bearing account at a financial institution, as specified in the budget or projections contained in the Project Investment Proposal, to be utilized for the specific �� fs cPosae to eche ated needhforl andmubject ethod to the Limited Par approval of administe-ring such reserve. (s) "Net rofit plusnet capital „ or athe partnership or net hordinary all mean net ordinary p P losses plus net capital losses, respectively - (t) "Net ordinary profits" or "net ordinary losses" of[ the Partnership shall mean: 25 t e..: .. _ -.e, ♦ M%AJFJ s 1 ii a FAGS 1 0/20 "Genas, Partuar operating advances" shall mean advances made by the General Partner as loans to pay operating deficits under paragraph 7,3 hereof, except to the extent arising from General Partner loan debt service: and (iii)-Cerasal Partner tax credits aC1Vaaoes" shall mean advances made by the General Partner as loans to compensate the Limited Partner hereogedexcept to theprojected exte t tax credits under paragraph arising from General Partner loan debt service. (Y) `Other General Parer advances" shall mean advances made by the General Partner as loans, other than General Partner guaranty advances_ (s) -code,' shall mean the Internal Revenue Code of 1986, as amended from time to time (including corresponding provisions of succeeding law). (aa) "Txvmw g Regul&t-Loos" shall mean the Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). 9.2 Receipts. paLymantr., preserves .and IIfstMXRMtaoae- Development financing proceeds, operating income, proceeds or capital transactions, and reserve fund balances shall be utilized, paid, and ,I distributed solely for permitted purposes relating exclusively to this partnership and the Project, in the manner specifically set forth hereinbelow: (a) nevelt Fiaaneinq Proceeds- Development financing proceeds, as and to the extent available, shall be utilized according to the following priorities, subject to any other requirements under Article VIII hereof: (i) Development Costs Ge=era1;X, First, development financing proceeds shall be used (a) to pay or hold for future payment of all current and projected development casts of the Project, except any portions thereof required to be funded by General Partner development advances, and except General Partner and affiliate fees, (b) to fund the operating reserve up to the in!tial dollar amount specified in Exhibit A, Section J(1) hereto, (c) to fund the replacement reserve up to the initial dollar amount specified in Exhibit A, Section J(2) hereto, and (d) to fund the special, purpose reserve, to the extent required, up to the dollar amount specified in the Project Investment Proposal and Exhibit A. Section J(5) hereto. (ii) Pro`)ect Reserves- Second, to the extent ll next any be development financing proceeds remain, they 27 taxes and insurance premiums came due, into a real estate tax and insurance escrow account established by the General Partner . The monthly escrow deposio shall be in amounts equal to one -twelfth (1/12th) one hundred five percent (105$) of the most recent annual real estate tax bill(s) and insurance premium statement(s) for the Project. (C) Paxtnexshlp Third, to the extent any operating income remains, it shall next be used to replenish the Partnership Account, if necessary, so that the balance remaining in such -account s an 50%) of amount equal to one hundred fifty percent the current monthly operating expenses, including debt service and real estate taxes, as shown in the annual budget approved by the Limited Partner. (n) laaement Reserve_ Fourth, to the extent any operating income remains, it shall next be used to fund the replacement reserve the account appli able established amount the General Partner, UP specified in Exhibit A, Section 1(3) hereto, or such higher amount as the General Partner may determine in its reasonable discretion. (R) a=a - pjwezve. Fifth, to the extent any operating income remains, ;Lt shall next be used to fund the operating reserve account established by the l General Partner, up to the amount specified in Exhibit A, Section J(4)(a) hereto, or such higher amount as the General Partner may determine in its reasonable discretion_ (F) Pai=e=Yshi AoCCP=t. Sixth, to the extent any operating income remains, it shall be deposited in the Partnership Account and utilized by the General Partner in succeeding months, together with any additional operating income that is generated, to fund the items described in Subparagraphs 9.2(b)(i) (A) through (E) hereof for such months. (=1) Aaaual 1riorit.ies. on an annual basis, within ninety (90) days of the end of each calendar year, operating income, as shown by the Projects audited financial statements for such year, shall be used as follows: (A) !�plicable Mantbl Eri.orities. First through fifth, operating income shall be used in accordance with the same priorities described in Subparagraphs 9.2(b)(i)(A) through (E) hereof, as necessary. (B) Deferred Iaitial gOes- Sixth, to the extent any operating income remains, it shall next be used to 29 1N• PAGE 14x20 (c) Proceeds of Ca ital Transactions. Proceeds of capital transactions, as and to the extent available, shall be utilized according to the following priorities, subject to any other requirements under Article VIZI hereof, and except as otherwise provided for l.icpxidating distributions under Paragraph 16.3 hereof: (i) Coctain Loan Payments. First, after payment of all expenses reasonably incurred in connection with the transaction, proceeds of capital transactions shall be used as follows: (A) if the capital transaction is a permitted sale or other disposition' of the the first cto such mortgage proceeds shall be used to repayother loans, excluding loan and then to repay any Partner loans, to the Partnership or secured by the Project, including all, accrued interest and any other charges, all to the extent such loans are then due and payable and are not assumed by the purchaser or transferee with release of liability of the Partnership; (B) if the capital. transaction is a permitted financing or refinancing, proceeds thereof shall be used to repay loans as aforesaid, 'exclur.Ung Partner loans, only to the extent they are refinanced through j such transaction; and (C) if the capital transaction is a casualty to or condemnation of the project or portion thereof, resulting in casualty insurance or condemnation award proceeds, such proceeds shall be used to repay loans as aforesaid, only to the extent required by third - party mortgage lenders or as otherwise provided in Paragraph 11.19 hereof. (I.) Deferred Initial Fee$. second, to the extent any proceeds of capital transactions remain. they shall next be used to pay interest and repay principal on any Deferred Initial Fees. (iiy) Cart -Min partner Loans. Third, to the extent that any proceeds of capital transactions remiall ale on hall next be used to pay interest and repay p nd p Partner loans, except General Partner guaranty advances. (iv) Guasan Advances a t. Fourth, to the extent any proceeds of capital transactions remainp they shall next be used to pay interest and repay principal on any General Partner guaranty advances. 0-1 FEB -02-99 17-40 FROMm In- PAGE 16/28 days prior to the Partnership entering into any agreement for a capital transaction, and written confirmation or any revision thereof shall be delivered to the Limited Partner not later than twenty (20) days prior to the making of any such distribution_ (vim)ynxeeovesed Capital C0ntribati0ns- Seventh, to the extent any proceeds of capital transactions remain, they shall next be distributed to the Partners in proportion to the relative amounts of their Unrecovered . Capital Contributions (as defined hereinbelow) until they each have received, cumulatively, an amount equal to their respective Unrecovered Capital Contributions. As used herein, the term „icerecovered C&pital Goatributlon" shall mean, for each Partner, an amount equal to such Partner's total capital contributions to the Partnership minus the sura of any.prior distributions to such Partner under Subparagraphs and 9.2 (c) (v) through (vi) hereof- Distributlow to Paxt- B. Eighth, to the extent any proceeds of capital transactions remain, the balance thereof shall be distributed to the General Partner and to the Limited Partner in the respective percentages set forth in Exhibit A, Section K(2) hereto. Except to the extent otherwise provided under Subparagraph 9.2(c)(vii) hereof, distributions of proceeds of capital transactions hereunder shall not be reduced by reason of any previous return of capital to .2 (b} (i i) (I) hereof ons of net operating any Partners deemed to occur cash flow under Subparagraph (d) Eoastxuetion Con Reserve. Construction contingency fund balances, if any, as and to the extent available, shall be utilized according to the following priorities: (1) Dev 122ment period. During the Project development period, the construction contingency reserve shall be used to fund construction cost overruns_ (ii) After C 18t-•oa- Upon completion of the Project development period and after full payment of all rehabilitation or construction costs, any balance remaining in the construction contingency reserve shall be utilized as development financing proceeds, in accordance with the priorities specified in Paragraph 9.2(a) hereof. (e) Reserve_ Prior to or at the time initial funds for the operating reserve are available from development financing proceeds (as described in Subparagraph 9.2(a) (i) hereof), or from operating income (as described in Subparagraph 9_2(b) W (E) hereof) the General Partner, or the Administrative Agent described in Exhibit A('1) attached hereto, as applicable, 33 r MU -WL- 313 Y i :4 i t-ku[4 1u= c`AUE liyJ Ido (B) second, accordance with A, Section K(2) to be distributed to the Partners in the percentages specified in Exhibit hereto. (f) Replacement Reserve_ Prior to or at the time initial funds for the replacement reserve are available from development financing proceeds (as described in Subparagraph 9.2(a) -(ii) hereof) or from operating income (as described in Subparagraph 9.2(b)(i)(D) hereof) the General Partner, or the Administrative Agent described in Exhibit A(1) attached hereto, as applicable, shall establish a replacement reserve account in the initial dollar amount specified in Exhibit A, Section J(2) hereto, subject to the Limited Partner's prior written approval as to the need for and method of administering such account_ Such account shall be used for the purposes. specified hereinbelow and shall be administered by the General Partner, or such Administrative Agent, as applicable. The General Partner shall submit to the Limited Partner a quarterly financial statement reporting all funds deposited into and disbursed from such account- _ Replacement reserve fund balances, as and to the extent available, shall be utilized according to the following priorities, or the procedures specified in Exhibit A(1) hereto, as applicable, subject to any permitted funding of unrelated guaranty obligations under Subparagraph 7.7(a)(iii) hereof, and except as otherwise provided for liquidating distributions under Paragraph 16.3 hereof: (i) erat3.ons PerlcKt- During operation of the project, throughout the term of the Partnership, the replacement reserve shall be utilized according to the following priorities: (A) first, to fund any capital improvements to the Project, including any replacements constituting capital improvements; and (B) as a back-up to the operating reserve, to fund any operating deficits in excess of available fund balances in the operating reserve, but excluding operating deficits to the extent arising from debt service on Partner loans, Deferred Initial Fees, and General Partner guaranty advances - (ii) sale or Disposition_. Upon sale or other disposition of the Project, any balance remaining in the replacement reserve shall be utilized according to the following priorities: (A) first, as a back-up to the operating reserve, to fund any unpaid amounts described in Subparagraphs 9.2 (c) (i) through (vii) hereof, in that order of priorities, to the extent proceeds of capital 35 A r0—jr- �tof L{7 (h) Capital Reserve Deposits. Notwithstanding any other provision in this Section 9.2(g),^ the General. Partner shall, at any time that a loan from the Family Housing Fund (the NFHF") or the Minnesota Housing Finance Agency (the "MHFA") is outstanding, cause the Partnership to make deposits to the capital reserve account as required by the FHF or the MHFA. Expenditures of the capital reserve account shall require the written consent of the General Partner, the FHF and the MHFA. 9.3 Allocations. Except as otherwise provided under Paragraphs 9.4 and 9.5 hereof, net ordinary profits, net ordinary losses, net capital profits, net capital losses, tax credits, and credit recapture shall be allocated among the Partners as follows: (a) ord tummy Profits and Lasses. Net ordinary profits and net ordinary losses shall be allocated to the General Partner and to the Limited Partner in the respective percentages set forth in Exhibit A, Section KU) hereto. (b) 2MjLt.Lj Profits and Losses. Net capital profits and net capital losses shall be allocated as follows: (i) Net Ca itai Parofits. Net capital profits shall be allocated as follows_ (A) Deflcit C tai Account Balance*. First, net capital profits shall be allocated among those Partners, if any, who have deficit balances in their capital accounts at the close of the fiscal year in which such net capital profits were recognized, up to an aggregate amount not to exceed the sum of such deficit balances calculated after the Partnership's net operating profit or loss, as recognized for federal income tax purposes, with respect to such fiscal year (other than such net capital profits) has been taken into account and after all contributions paid by the Partners and cash distributions made to the Partners (other than cash distributions made or deemed to have been made as a result of such net capital profits) with respect to such year have been taken into account. Such portion of - such not capital' profits shall be allocated among the Partners in the ratios that the deficit balances in their respective capital accounts bear to the aggregate of all deficit balances in Partners' capital accounts. (B) Net Projected Tax Liabilities. Second, to the extent anv net capital profits remain, they shall be allocated to the Partners in proportion to the relative amounts, if any, by which their capital account balances, after any allocations under subparagraph (A) hereinabove, are less than their Net 37 ` "" a - • -6 - I Li * PAGE 3/25 allocated to each Partner bears to the total credit allocated to all of the Partners. (d) netexminatiori of C$ ital AcCO=t Balances. For purposes of making allocations provided in - Subparagraph 9.3(b)(i) hereof with respect to net capital profits, the capitalaccount of each Partner shall be determined prior to such allocation and at the close of business of the last day of the taxable year in which the capital transaction occurs after taking into account all distributions of cash flow (other than any amount. of proceeds anticipated to be distributed. in connection with such net capital profit) and all allocations under this Paragraph 9.3 with respect to periods prior to such date. Any net capital profit. treated as ordinary income for federal income tax purposes because it is attributable to the recapture of any depreciation or the recapture of rent under Section 467 of the Code shall to the fullest extent possible be allocated to each. Partner in the same ratio as prior allocations to such Partner of net profit or net loss attributable to the recaptured depreciation or rent resulting in recapture. For purposes only of the allocations to be made pursuant to this Paragraph 9.3(d), a Partner's capital account balance shall be determined by adding back to such Partner's actual capital account balance such Partner's share of the minimum gain of the Partnership as determined pursuant to Sections 1.709-2(g) and (i)(5) of the Treasury Regulations_ 9.+4 In awe Offset, Gam Etc_ _ Allocations of Partnership tax item pursuant to Paragraph 9.3 of these Articles are subject to and qualified by the following provisions: (a) Qualified Xneme Offset. Notwithstanding any other provision in these Articles to the contrary, no allocation of any Partnership loss or deduction, except for nonrecourse deductions as provided for in subparagraph (c) hereinbelow, shall cause or increase a deficit balance in any Partner's capital account., as of the end of the Partnership taxable year to which such allocation relates, by an amount in excess of the amount the Partner is ,obligated to restore upon liquidation of the Partnership or its interest therein plus the amount the Partner is deemed obligated to restore pursuant to Sections 1.704-2(g) and (1)(5) of the Treasury. Regulations_ In determining compliance with the foregoing sentence, the Partners' capital accounts shall be reduced for reasonably expected adjustments of the nature described in Sections 1.704-l(b)(2)-(ii)(d)(4)1 (5), and (6) of the Treasury Regulations. Any Partner who unexpectedly receives such an adjustment shall be allocated items of income and gain (consisting of a pro rata portion of each item of Partnership income, including gross income, and gain for such year) in an amount and manner, sufficient to eliminate such deficit balance as quickly as possible. (b) Mi.n;.,►.= Gain Chargaback- Notwithstanding anything to the contrary in these Articles, net ordinary profit, net ordinary 39 purposes of this subparagraph (d), as a capital contribution of the General Partner. (e) Allocation of Cartain Tax Items. As stated in Section 1.704-1(b) (4) U) of the Treasury Regulations, when any property of a partnership is reflected in the capital accounts of the partners and on the books of the partnership at a book value that differs from the adjusted tax basis of such property, then certain book items with respect to such property will differ from certain tax items with respect to such property. In -the case of the Partnership, since the capital accounts of the Partners are required to be adjusted solely for allocation of the book items, the Partners' shares of the corresponding tax items are not independently reflected by adjustments to their capital accounts. Such tax items shall be shared among the Partners in a manner that takes account of the variation between the adjusted tax basis of the applicable property and its book value in the same manner as variations between the adjusted tax basis and the fair market value of property contributed to the Partnership are taken into account in determining the Partners' share of tax items_ under Section 704(c) of the Code. In making allocations of tax items of the Partnership, the Partnership shall comply with the foregoing principles. (g) Grant Income Any income recognized as a result of any receipt of grants by -the Partnership, shall be allocated 100% to the General Partner_ Except that this provision shall not apply, to the extent that the General Partner is a tax-exempt entity or the Project will be financed with tax-exempt bond proceeds. 9-5 Alloca.tfon MadiKicat3 cog _ It is the intent of the Partners that each allocation of net profit, net loss, and tax credit (or items thereof) and other items under Paragraphs 9.3 and 9.4 of these Articles (collectively, "Allocation hams") shall be determined and. allocated in accordance with these Articles to the fullest extent permitted by Sections 38, 42, 46, and 104(b) of the Code and the regulations promulgated thereunder (collectively, "A11orstion Laws"). In order to preserve and protect as much as possible the determinations and allocations provided for in these Articles (the "'Eui.stiaq Allocations"), the General Partner shall, allocate any or all Allocation Items arising in any taxable year in a manner different than otherwise provided for herein, if and to the extent the Existing Allocations would cause the determination and allocation of each Partner's distributive share of any or all Allocation Items not to be permitted by the Allocation Laws. Any allocation made pursuant to this Paragraph 9.5 (a "New Allocation") shall be effective only if approved in writing by all Partners, such approval' not to be unreasonably withheld. Any New Allocation shall be deemed to be a complete substitute for any Existing Allocation,, and no amendment of these Articles shall be required, in making any New Allocations, the General Partner is authorized to act only after having been advised in writing by qualified tax counsel to the Partnership that in the opinion of such counsel, after examining the Allocation Laws, the New 41 .,•• •�- �. � _ � • - - - - i iJ - d i"N is a=. a i L � net losses of the Partnership, and distributions, contributions, and other transactions with the Partnership as should under proper accounting principles be reflected in each such Partner's capital account shall be so reflected. 9.1.0 CloslEff of Books. The books of account shall be closed promptly after the end of each taxable year_ 9.11 Fiaamt-1al BMerts. Upon compliance with the provisions of Paragraph 9.8 hereof, the General Partner shall, within fifteen (15) days after each calendar quarter, submit or cause to be. submitted to the .Limited Partner unaudited financial statements for the Partnership. With respect to each taxable year of the Partnership, upon compliance with the provisions of Paragraph 9.8 hereof, the General Partner shall within sixty (60) days after each taxable year make or cause to be made by certified public accountants for the Partnership a written report to each Partner, including a Schedule K-1 or its successor form for preparing federal income tax returns and audited financial statements certified by such accountants, which shall include a balance sheet of the Partnership as at the and of such - year; an itemized statement of income, expenses, surplus and deficits; a financial summary which reconciles and summarizes the financial statements and bank statements as of the end of such year; changes in fund balances and changes in financial position for such year; supporting schedules; a statement of Partners'_ capital; the status, amount, and timing of the projected low-income housing tax credit and other tax benefits from the Project as compared with projections thereof contained in the Project Investment Proposal; and such additional statements with respect to the status of the Partnership j and the distribution of profits and losses therefrom as are considered necessary by the General Partner or such accountants to advise all Partners properly about their investment in the Partnership for federal income tax reporting purposes. 9.12 Ta= Returas. With respect to each taxable year of the Partnership, the General Partner shall cause to be prepared and filed on a timely basis, without extension unless for reasons outside the General Partner's control, Form 1065 and Schedule K-1 or any successor federal return of income forms required to be filed on behalf of the Partnership, and any and all other forms, schedules, materials required in connection therewith. In addition, the General Partner shall comply with all requirements of Paragraph 11.15 hereof with respect to anticipated tax credits and other tax benefits. 1• 9.13 Accountants. The initial accountants for the Partnership shall be the firm specified in Exhibit A, Section L hereto or such other firm of certified public accountants of at least comparable, ability, experience, and reputation as the General Partner may designate from time to time, subject to the Limited Partner's prior written consent. In the event the accountants for the Partnership repeatedly or unreasonably delay in providing reasonably acceptable financial reports and tax returns, as- required under Paragraphs 9.11 and 9.12 hereof, the General Partner shall promptly give notice to the 43 Section 6229 of the Code without first giving reasonable advance notice to each other Partner of such intended action- 10.6its for Tax Adjustments. No Partner shall file, pursuant to Section 6227 of the Code, a request for an administrative adjustment of partnership items for any Partnership taxable year without first notifying each other Partner- If each other Partner agrees with the requested adjustment, the TMP shall file the request for administrative adjustment on behalf of the Partnership. If unanimous consent is not obtained within thirty (30) days, or within the period required to timely file the request for administrative adjustment, if shorter,. any Partner, including the TMP, may file a request for administrative adjustment on its own behalf - 10 - 7 ehalf. x0.7 Tax P Any Partner intending to file a petition under Sections 6226, 6228, or other sections of the Code with respect to any partnership items, or other tax =hatters involving the Partnership, shall notify each other Partner of such intention and the nature of the contemplated proceeding. In the case where the TMP is the Partner intending to file such petition, such notice shall be - given within a reasonable time to allow each other Partner to participate in the choosing of the forum in which such petition will be filed. If the Partners do not agree on the appropriate forum, then the appropriate forum. shall be decided by the TIP. If any Partner intends to seek review of any court decision rendered as a result of a proceeding instituted under the preceding part of this Paragraph 10.7, such Partner shall notify each other Partner of such intended action. 10.8 Tax Settlements. The TMP shall not bind any other Partner 1 to a settlement agreement without obtaining the written concurrence of any such Partner who would be bound by such agreement- Any other Partner who enters into a settlement agreement with the Secretary of the Treasury with respect to any partnership items, as defined by Section 6231(a)(3) of the Code, shall notify the other Partners of such settlement agreement and its terms within ninety (90) days from the date of settlement. 2.0.9 TLS 'tures. The TMP, at the expense of the Partnership, may engage such legal counsel, certified public accountants, or others on behalf of - the Partnership as it may determine to be necessary and appropriate. Any Partner may engage other legal counsel, certified public accountants, or others on its own behalf and at its sole cost and expense. Any reasonable item of expense, including but not limited to fees and expenses for legal counsel, certified public accountants, and others that the TMP incurs on behalf of the Partnership in connection with any audit, assessment, litigation, or other proceeding regarding any partnership item, shall constitute expenses of the Partnership. 10.10 Survival of TMP Provislons. The provisions of Paragraphs 10.1 through 10.10 hereof, including without limitation the obligation to pay fees and expenses described in Paragraph 1.0.9 hereof, shall survive the termination of the partnership or the termination of any 45 a �..— ... — i Y a t y 4 0't \J `� _ !Us i -4Z 1 1/ ;r— of of all such general partners or managers for their performance of the obligations of the General Partner as described herein_ In the event of any inconsistency or conflict between the terms and conditions of Appendix I and these Articles, the terms and conditions of these Articles shall control and prevail. 11.3 Plan and Pro ecti MS. The General Partner shall conduct the business of the Partnership substantially in accordance with the business plan for development and operations set forth in the Project Investment Proposal approved in writing by the General and Limited Partners. The General Partner shall use its best efforts to achieve the development and operating budget and the financial projections set forth in the Project Investment Proposal. The General Partner shall promptly notify the Limited Partner in writing of any facts, circumstances, or intended actions on behalf of the Partnership that constitute or would constitute a material deviation from.such business plan, budget, or projections. 11.4 Net Worth. It is the understanding of the parties and the opinion of independent qualified tax counsel that under present - federal income tax laws, including regulations and rulings, the General Partner is not required to maintain any specific level of net worth to support a determination that the Partnership will be taxed as a partnership and not as a corporation_ In the event of any change in tax laws relating to net worth as a possible requirement for taxation as a partnership, the General Partner shall obtain on behalf of the Partnership an opinion from independent qualified tax counsel as to whether or not the General Partner's net worth is sufficient for such purposes. If such counsel determines that it is not sufficient, the General Partner shall have a reasonable period of time in which to take such actions as it chooses to remedy the problem, not to'exceed ninety (90) days after the change in tax laws unless and to the extent such counsel opines that a longer period will not jeopardize continued partnership- taxation of the Partnership. Such actions may include, without limitation, admitting as a co -general partner a corporation or an individual having sufficient net worth for such purposes. Prior to taking such actions, the General Partner shall obtain an opinion from independent qualified tax counsel concluding that any then applicable net worth requirement will thereby have been complied with and that the Partnership will be taxed as a partnership and not as a corporation. Upon request by the General Partner, the Limited Partner shall consult with it and give it reasonable technical assistance concerning possible remedies, and shall not, unreasonably withhold its consent if required for any actions chosen by the General Partner that will remedy the problem. If the General Partner fails to take such remedial actions or to obtain such opinion in a timely manner, its failure to do so shall be deemed a material breach of its obligations under these' Articles, subjecting it to removal for cause under Paragraph 15.2 hereof. In any event, the General Partner shall furnish copies of its financial statements to the Limited Partner, and shall give the Limited Partner and its agents and accountants reasonable rights to inspect the General Partner's books and records, upon request by the -Limited Partner from time to time_ 47 -- . • . -. a Ru1'i- iU- t'ht. - idl LS 7.2 or 7.3 hereof. In the event the General Partner anticipates the need for any such expenditure on behalf of the Partnership that it is not obligated to incur as described herein, it shall give the Limited Partner prompt written notice of such need for expenditure, summarizing all relevant facts. 11.7 Potential Confl:.cts. The General Partner shall devote so much of its time to the business of the Partnership as is necessary or advisable for the conduct of such business. The General Partner, on behalf of the Partnership and in its reasonable discretion, may deal in any manner directly or indirectly with any other Partner or any affiliate or firm in which any Partner is directly or indirectly interested and may pay any such person reasonable fees or compensation, including without limitation remuneration for any efforts or commitments in connection with the development, investment, financing, supervision, and management of the Partnership or Partnership property or the acquisition thereof, and neither the Partnership nor any other Partner shall have any rights in or to any such fees or compensation to any such person. The parties hereto expressly acknowledge that the General Partner contemplates that from - time to time the Partnership may retain the services, of the General Partner, or firms or entities in which the General Partner or its affiliates have substantial interests, to render such services upon such terms and conditions as the General Partner may determine in its reasonable discretion. In particular and without limiting the generality of the foregoing, the Partners specifically acknowledge the rights of the General Partner and/or affiliates to receive the fees described in Exhibit D hereto. 11.5 General Authord.ty. Except as may be expressly restricted in these Articles, the General Partner shall have all of the rights and powers permitted general partners of limited partnerships under the provisions of the Limited Partnership Act consistent with the purposes of the partnership, including, without limitation, the power and right to: (a) manage the Partnership; (b) execute such documents as it may deem necessary or desirable for Partnership purposes, including but not limited to powers of attorney' for Partnership bank accounts and other Partnership assets and activities; (c) sell, assign, convey, lease, mortgage, or otherwise dispose of or deal with all or any part of the Partnership'. assets, including the modification or amendment of agreements entered into by the Partnership; (d) borrow or lend money upon any terms and conditions (including the subordination of such loans), grant security interests in assets of the Partnership to secure indebtedness or other obligations of the Partnership or others, and guarantee indebtedness or obligations of others, all subject to the provisions of Paragraph 11.10 hereof; 49 A i c rNimk- L4eL5 such inspections and answer (in writing if requested) all inquiries relating thereto. 11.10 isit AM 3F;LRER_O1_Ja end, C1OnmMmcxmmnt. The Partnership shall acquire or has acquired fee simple title to the land and fee simple title to the improvements Comprising the Project, tree and clear of any liens and encumbrances against title, other than those required, approved, or waived by the first, second, third and fourth mortgage lenders for the Project, for the purchase price specified in Exhibit A, Section M hereto. In connection with acquisition of the Project, the General Partner shall cause all loans, grants, and other funding of the Project to be closed and shall comply with all Partnership closing checklist requirements of the Limited Partner. The General Partner shall use best efforts to cause the Project to be acquired, all loans to be closed .and closing checklist items to be complied with, and rehabilitation or construction to be commenced as specified in the Project Investment Proposal, within the time period contemplated therein. (a) Project Start- _ Without limitation of the foregoing, the General Partner shall use best efforts to achieve Project Start -Up (as defined hereinbelow) within the time specified in Exhibit A, Section N hereto. In the event Project Start -Up has not occurred by the Outside Date specified in Exhibit A, Section I hereto, or any of the other events described in Paragraph 8_7 hereof has occurred, the Limited Partner shall have the withdrawal rights described therein. As used herein, the term "Project Start-up" shall mean the occurrence of all of the following: f (i) acquisition of all real estate and personalty comprising the Project; (ii) closing of, or fulfillment of all conditions precedent to initial funding of, all loans, grants, and other financing required to complete the Project in accordance with the Project Investment Proposal; (iii) submission to and approval by the Limited Partner of.all items to he delivezed prior to or at closing as contemplated by its Project Investment Closing Checklist described in Exhibit A, Section N hereto, a copy of which the General Partner acknowledges it has received (the "Closing Checklist'►3; and '(iv) commencement of rehabilitation or construction of each building comprising the Project, or each phase of the Project as may be agreed in writing by the General and Limited Partners, by the general contractor or a major subcontractor of the Project or each such building or phase thereof, on a substantial and continuous basis_ Sl such partners under any of sections 42(k), 49, or 465(b) of the Code; and (v) the General Partner shall not cause the Partnership to agree to the modification of existing financing, the terms of which provide for the forgiveness of all or any part of such indebtedness by the lender, without the prior written consent of the Limited Partner_ 11.11 Title~ Hpide_r. To the extent allowable under applicable law, the Partnership may hold title to all or any part of its properties in the name of a land trust, the beneficial interest in which shall at all times be vested in the Partnership, and may agree that any such title holder be vested with all or any part of the powers that might otherwise reside in the Partnership, subject to the power of direction of one or more individuals designated by the General Partner on behalf of the Partnership_ Any such title holder shall perform any and all of its functions to the extent and upon such terms and conditions as may be determined from time to time by the General Partner. 11.12 Attc r ems . The initial project and tax attorneys for 'the Partnership shall be the firms specified in Exhibit A, section D hereto, or such other firm of at least comparable ability, experience, and reputation as the General Partner may designate from time to time, subject to the Limited Partner's prior written consent. In the event the attorneys for the Partnership repeatedly fail to provide the Partnership reasonably acceptable legal representation, the General Partner shall promptly give notice to the Limited Partner describing such failures and any reasons why the attorneys should not be terminated, and .the General Partner shall consult with the Limited Partner regarding the circumstances_ Unless, within a reasonable Period of time specified in such notice, the Limited Partner consents in writing to the retention of the attorneys, the General Partner shall terminate the attorneys' services for cause and shall contract with substitute attorneys, subject to the Limited Partner's prior written consent. 11.13 In -mance. The General Partner shall obtain and maintain, or shall cause to be obtained, maintained, and evidenced by others, as applicable, at least the following types and amounts of insurance on the Project: (a) Title. Title insurance under an ALTA form of owner's Policy (revised 1990) in an amount not less than Project acquisition, construction, and related costs not exceeding insurable value, insuring good and marketable title to the Project, subject to such exceptions as do mot materially and adversely affect the value of the Project or its intended use. (b) Property_ Property insurance,in an amount equal, to 100% of insurable replacement cost with an agreed amount endorsement, on an all-risk basis, including without limitation; 53 FEB -02-99 17=S2 FROM ID- PAGE 19.-25 and $2,000,000 general aggregate, including explosion/collapse/underground (x -c -u), and hired and non - owned automobile coverage_ W Contractor's/Subcontractors, Z&abcLJ:Lty. During the Project development period, (i) evidence of contractor's liability insurance maintained by the Project general contractor and any other principal contractors with a minimum limit of $1,000,000 per occurrence and $2,000,000 general aggregate, including owner's contractor's protective liability insurance, explosion/collapse/underground (x -c -u), and automobile coverage, (ii) evidence of statutory and employer's liability worker's compensation insurance, and (iii) evidence: of subcontractors' liability insurance maintained by all Project subcontractors with the same - coverage as that specified in clause (i) hereinabove. (a.) Acehitect's Rr's_ During the development period, (i) evidence of errors and omissions insurance maintained by all Project architects and engineers with a minimum limit of $1,000,000 per occurrence and annual aggregate, (ii) evidence of commercial general liability insurance with a minimum limit or $1,000,000 per occurrence and $2,000,000 aggregate, (iii) evidence. of statutory and employer's liability worker's compensation insurance, and (iv) evidence of hired and non -owned automobile coverage. (j? Pr r Mangy a, Evidence of crime insurance or fidelity bonding of employees maintained by the Project property manager in an amount equal -to not less than two (2) months' rental income. The General Partner shall also obtain and maintain prudent and commercially reasonable insurance coverage over and above the minimum requirements specified hereinabove in the event circumstances warrant_ All insurance policies shall be with reputable insurance carriers with a Best Key Rating of A or better (or equivalent rating if Best discontinues its present system), in form and content as specified herein and otherwise reasonable and customary_ All policies and certificates thereof shall list the Partnership and any land trust holding title to the Project as named insured and shall have thirty 55 tr- 0 - W Z - - : a r . nc i Mva1W . Ip: PAGE 21/2S and the Project construction budget; (ii) the review of the progress of construction and the adequacy of funds; and (iii) the review of lien waivers and other assurances that construction payments are being made in an appropriate manner. Throughout the period commencing upon Project Start -Up and terminating upon Placement in Service, the. General Partner shall cause a sign to be placed at each of the locations specified in Exhibit A, Section B hereto, indicating prominently that the Limited Partner is the limited Partner of the Partnership and that the Limited Partner has provided equity financing for the Project. As used herein, .the terra "Plaorent in Service" shall mean the occurrence of all of the followings (a) substantial completion of rehabilitation or construction of all buildings or phases constituting the Project to the satisfaction of its first mortgage leader's inspecting architect or, if none, of a similar qualified independent party; (b) issuance of a certificate or certificates of occupancy for the entire Project; and _ (c) all events resulting in the Project being placed in service for purposes of establishing the projected amounts of depreciable basis and eligible basis for the low-income housing tax credit available under the Code and regulations thereunder and qualifying for allocation of the required tax credit amount. As security for completion of construction and rehabilitation, the General Partner shall cause the Partnership to enter into a construction contract that provides for a retainage from each progress payment for a portion of the work completed, equal to ten percent (10%) of the portion of the contract price allocable to such portion of work. The General Partner shall enforce the contractor's obligations under the construction contract and shall not disburse the accumulated retainage amount until final completion of the Project, including completion of all punch list items, without the prior written consent of the Limited Partner. Prior to approving any change orders, the General Partner shall enforce the contractor's obligation to provide supporting documentation stating the reasons for the change order and the costs of all labo., materials, and equipment needed to complete the requested change or modification. Single change orders exceeding the amount of Five Thousand Dollars ($5,000) shall be subject to the Limited Partner's review and approval, width approval shall not be unreasonably withheld, prior to delivering an approved COPY of such change order to the contractor. Further, in the event the construction contingency reserve, as such term is defined in Paragraph 9.1 hereof, is reduced to an amount that is leas than fifty percent (50%) of the amount specified in the Project Investment Proposal., all change orders, whether or not in excess of $5,000, shall be subject to the Limited Partner's review and approval, prior to delivering an approved copy of such change order to the contractor. As further security for completion of the Project, the General Partner shall cause to be obtained and maintained a performance and payment bond issued in the full amount of the contract price or an irrevocable 57 A. rr+amt dal25 set-aside for low-income tenants, and any other matters now or hereafter required to qualify for and maintain the federal low- income housing tax credit and any other available tax benefits in connection with low-income occupancy of the Project. (c) Set -Azide Election. The General Partner shall elect the minimum low-income set-aside requirement specified for Qualified Occupancy in Exhibit A, section Q(1) hereto within twelve (12) months after Placement in Service or such other time period as may hereafter be required by the Code or regulations thereunder for such tax credit; provided, however, that in the event it becomes reasonably certain that such set-aside either will not be met or' will be exceeded, the General Partner shall promptly so notify the Partners in writing and shall proceed to elect such other minimum set-aside requirement as will best protect or enhance the projected tax benefits to the Partners under the circumstances. (d) _�-�� Wax Credit; Year_ The General Partner shall elect to claim such tax credit commencing with the earlier of the year in which Qualified Occupancy is achieved or the year succeeding the year in which placement in service occurs. The General Partner shall use best efforts to develop and lease the Project within such time that the initial year during which such tax credit is elected to be claimed will be. the year specified in Exhibit A, Section Q hereto. (e) A=Ual iance Procedures_ As soon as feasible after Qualified Occupancy has occurred and annually thereafter, prior to the times such information is required for low-income housing tax credit reporting purposes, the General Partner shall (i) cause the Partnership's property managing agent to submit to it the certifications and all other applicable materials related to low-income leasing described in Paragraph 11.17 hereof; (ii) check and verify the same against leases, certifications, and other appropriate back-up materials to the extent necessary or advisable to determine with reasonable assurance that the low-income leasing requirements have been met for tax credit purposes; and (iii) execute and deliver to the Limited Partner a certification, in form reasonably acceptable to the Limited Partner, stating that the General Partner has complied with the foregoing requirements and attaching copies of the. massaging agent's certification and rent roll in a format reasonably acceptable to the Limited Partner. The General Partner's initial certification following Qualified Occupancy shall also specify that Qualified Occupancy has occurred ("Qualified Occupancy cert rLcatiou") . 59 i Y1+.aG i�� CJ determine the tax credit percentage(s) applicable to the Project or any portion thereof in advance of the date of its placement in service as determined under the Code. Such election shall be made as soon as possible, at the time a binding agreement is entered into between the Partnership and the state or local housing credit allocation agency or as soon as may otherwise be provided by law, so as to determine the credit percentage(s) as consistently as possible with the rate(s) assumed in the projections contained in the Project Investment Proposal or agreed amendment thereto. Such election shall be filed with the Treasury Department by the fifth day of the month following the date the commitment is made or as may otherwise be required by law. Prior to making such election, the General Partner shall give not less than ten (10) business days' prior written notice to the Limited Partner of its intent to do so, and the Limited Partner shall have the right to disapprove such election by giving written notice to the General Partner within such ten (10) day period, in which event such election shall not be made. (j) Notice cE Tax Ben rlts ReductLan. In the event at any- time it becomes apparent that the tax benefits projected in the Project Investment Proposal are likely to be reduced, the General Partner shall promptly notify the Limited Partner of the circumstances. M Coss s of Tax Cxedit Benefits Reduction. In the event there is a reduction of Projected Tax Credit Benefits, as such term is defined in Paragraph 8.2(b) hereof, then the provisions of Paragraphs 8.4 and 8.7 hereof relating to reduction in unpaid capital, payments to the Limited Partner, withdrawal from the Partnership, and other consequences described therein shall govern where applicable_ (1) Extended Use Ce=MLItent. The General Partner, on behalf of the Partnership, shall enter into art extended low-income housing use commitment pursuant to Section 42(h)(6) of the Code, in the form of an agreement between the Partnership and the state or local government agency that has allocated or will allocate such credits to the Project, and shall cause such agreement to be recorded pursuant to state law as a restrictive covenant as soon as feasible but in any event prior to the end of the tax year during which the Project is deemed to be placed in service under Section 42 of the Code_ (m) L*C&l Code Comllance _ The General. Partner shall maintain the Project in compliance with rules prescribed by the Secretary of Treasury pursuant to Section 42 (i) (3) (B) (ii) of the Code, and shall promptly notify the Limited Partner in writing if the Partnership is notified by any state or local governmental agency of any health, safety, building, or other state or local violation relating to the Project. (n) Intentionally Gm_i.tted. 61 PEW—m2—gib lt: :2 S FROHm LD PAGE 3/25 the obligations of the managing agent thereunder and shall perform all of the Partnership's obligations as owner thereunder, subject to the following terms and conditions= (a) Renewal or Successor its. Upon the termination of such management agreement or any subsequent management agreement, the General Partner shall renew the same or enter into an agreement that does not differ materially from the initial management agreement in managing agent obligations and owner remedies, or in any other respect, with the same managing agent or another managing agent of at least comparable ability and experience who can reasonably be expected to perform at least as well, subject to the requirements of subparagraphs (b) and (c) hereinbelow. (b) Not'- e and Coasvlta,tion. The General Partner shall not anter into a new management agreement or retain the services of a different managing agent without giving the Limited Partner at least ten (10) business days' prior written notice of the proposed change, accompanied by a copy of any proposed new management agreement and a written description of the identity and qualifications of any proposed new managing agent, and the General Partner shall consult with the Limited Partner as to whether the proposed change would violate the foregoing requirements. (c) Limited Partner conseaat. Under any circumstances, the General Partner shall not enter into a new management agreement materially different from the initial management agreement in any } respect without the prior written consent of the Limited Partner, which consent shall not be unreasonably withheld, as to the forts and content of such new management agreement, nor shall the General Partner retain the services of a managing agent other than that specified in Exhibit A. Section R hereto without the prior written consent of the Limited Partner as to the identity and qualifications of such new management agent. (d.) Terminatlon of Non--Perfa iaq A9ent. In the event that the managing agent breaches any of its obligations under the management agreement, whether general, or specific obligations, in any material respect (including without limitation failure to manage capably the Project as measured by sustained high Project vacancies, delinquent rents, or operating deficits (in each case beyond levels specified in the Project Investment Proposal); inadequate maintenance, or failure to qualify tenants under low-income housing tax credit requirements, or repeated failure to provide or unreasonable delay in providing accurate financial or operating repotts to the General and Limited Partners), the General Partner shall, promptly give the Limited Partner written notice describing such breach and stating any reasons why the managing agent should not be terminated for cause, and shall, consult with the Limited Partner regarding the circumstances. Unless, within a reasonable period of time 63 �- tc -`, ira: tai &-K%JJ-J: iLIF = eAGE S/25 information as is reasonably necessary to Partner advise the Limited about its investment in the Partnership and the development or operation of the Project (including, to the extent now or hereafter requested by the Limited Partner, a rent roll containing tenant names and addresses, monthly rent, security deposit, lease renewal date, and rent owed at month's beginning, cash received during month, and balance due at month's end, an accounts payable listing, and an income and expense statement with budget comparison)_ In addition to the quarterly management reports, the General Partner shall immediately notify the Limited Partner, in writing, of any default in the payment of the Partnership's debt service to any lender. (c) manual Plan. Annually, no later than October 15th of each calendar year, throughout the term of the Partnership, the General Partner shall prepare and submit, for approval by the Limited Partner; an Annual Plan that provides financial forecasts based upon annual budgetary projections, beginning with the first full calendar year after the year of Placement in Service and for each succeeding year thereafter, Such Annual plan shall include - without limitation an annual itemized budget of operating income, expenses, surplus and deficits and the most recent rent roll for the Project. (i) The Limited Partner shall review and approve or disapprove the Annual Plan based on the financial statements for preceding operating years, the anticipated increases in operating expenses, the current and projected operating income, and the completeness of documentation provided by the General Partner_ (ii) The Limited Partner shall submit to the General Partner, in writing, any comments on the Annual Plan within thirty (30) days after receipt of same_ If the Limited Curtner does not submit comments on the Annual plan %rithin said 30 day period, the Annual Plan shall be deemed approved by the Limited Partner, (iii) The General Partner shall have fifteen (15) days to submit a response, in writing, to the Limited Partner's comments on the Annual Plan. If the Limited Partner does not respond in writing to the General Partner's comments within 15 days after receipt of same, the Annual Plan shall be deemed approved by the Limited Partner. (iv) If the Limited Partner responds in writing to the General Partner's comments within 15 days after receipt of same, the General Partner shall submit a revised Annual Plan within 15 days after receipt of the Limited Partner's comments, responding to same_ (d) Other Information. Upon request from time to time, the General Partner shall provide such information as may be 65 r yrs—,uc—may Lcd. i i i-ku" , ID. PAGE 7/25 Proposal., proceed to selling terminate and liquidate the Partnership, Partnership assets, repaying s, and distributing net proceeds of capital transactions etoethesPartners as provided in Paragraph 9.2(c) hereof. (0) costs, Gmaranties Fees, $t'- In the event of rebuilding, the General Partner shall have no obligation to enter into construction or rehabilitation contracts at a exceeding the amount of casualty insurance or condemnation award Proceeds available for rebuilding, but the General Paztner's guaranties against development cost overrues and operating deficits, as provided in and limited by Paragraphs 7.2, 7.3, 7.7, and 7.8 hereof shall apply to the new rebui.l;ding and lease -up Period, and the General Partner's Project development and Operation obligations under this Article XI shall remain fully applicable, subject to the provisions of this Paragraph 11.19. In such event, all fees to the. General Partner and affiliates shall remain as set forth in Exhibit D hereto and shall be subject to the limitations contained therein, and the General Partner shall not pay additional amounts to third parties to_ perform its obligations hereunder, unless otherwise agreed in writing by the General and Limited Partners, provided that the Limited Partner shall not withhold such agreement if and to the extent there are sufficient casualty insurance or condemnation award proceeds to pay additional and reasonable fees to the General Partner and affiliates or third parties without adversely affecting the rebuilding of the Project or the preservation of tax benefits as a result thereof, Payment of and further provided that any such additional fees shall be subject to the limitations of Exhibit D hereto_ In the event of liquidation of the Partnership, any such fees not then paid to the General Partner or affiliates shall be deemed earned only to the extent Of the equitable value of services actually rendered in relation to the value of remaining services that would have been required for payment thereof. In the event the casualty or condemnation occurs prior to such time as the Limited Partner has made its final capital contribution to the Partnership, the Limited Partner's rights under Article VIII hereof and the General Partner's tax credits guaranty under Paragraph 7.4(a) hereof shall apply. M Recapture_ In the event a casualty or condemnation of all or any part of the Project results in a recapture of all or any portion of the. Projected Tax Credit. Bendfits (as defined in Paragraph 8.2 hereof), which cannot be avoided by rebuilding the Portion of the Project affected by the casualty or Condemnation, the General Partner shall, subject to the rights of any Project mortgagee, refrain from rebuilding and shall use any casualty insurance or condemnation award proceeds allocable to the Project or such portion thereof which is affected by the casualty or condemnation to compensate the Limited Partner for the reduction of Projected Tax Credit Benefits. 67 1-6 — au= t AGE 9125 Determination of the Partners' best interests shall give significant weight to the low-income housing purposes of the Partnership and those of the General Partner and its affiliate(s), subject to the best efforts obligations of the General Partner to achieve the financial projections for the Partnership relating to sale or.other disposition of the Project. Upon any such determination that a sale of the Project would likely be ire the Partners' best interests or that the purchase price would likely be at least the aforesaid debt (including Partner loans) plus taxes price, the General Partner shall use its best efforts to sell the Project, provided that the terms and conditions of any such sale shall be subject to the prior written consent of the Limited Partner, which consent shall not. be unreasonably withheld or delayed. If the price offered by a prospective purchaser of the Project is less than the amount the General Partner would be required to pay under such Purchase Option or Right of First Refusal, then the Limited Partner may withhold its consent to such sale and such withholding shall be deemed reasonable_ In connection with the foregoing, the General Partner shall consider any offer by the Limited Partner, or by its managing partner or any affiliate thereof, to purchase or resyndicate the Project. (b) At no time prior to the expiration, of the Compliance Period shall the General Partner cause the refinancing of all or any portion of the mortgage indebtedness of the Project or cause the Project to incur any additional mortgage indebtedness without the prior written consent of. -the—Limited-..gartne . MY be --withheld if the General Partner fails to demonstrate eto the reasonable satisfaction of the Limited Partner that such Mortgage refinancing or additional mortgage indebtedness will not materially and adversely affect either_ with {i) the ability of the Project to service its debt commercially reasonable debt coverage (i.e., to generate monthly net operating income at least equal to one hundred twenty percent (120&) of total monthly debt service on all mortgage indebtedness) or (ii) the likely net proceeds and tax consequences to the Partners of a sale or refinancing of the Project pursuant to the foregoing provisions of this Paragraph 11.20, and which consent may also be withheld if such mortgage refinancing or additional mortgage indebtedness' would materially fail to conform to the requirements of the-. Limited Partner's model forms of mortgage loan checklist and mortgage loan rider, a copy of each of which the General Partner acknowledges it has received. 11_21 puz-chase lkiahtg. The provisions of Paragraph 11.20 hereof shall be subject to thacertain Purchase option and Right of First Refusal Agreement between the Partnership, as grantor, and the General Partner, as grantee, dated on or about the date hereof, pursuant to which the Partnership has granted to the General Partner an option to 69 a&%i..= c i, 15 Partner shall not be liable to the Limited Partner for the return or repayment- of the capital of the Limited Partner, subject, however, to the provisions of this paragraph, and the Limited Partner shall look solely to the assets of the Partnership for the return of its capital; and if the assets of the Partnership remaining after payment or discharge of the debts and liabilities of the Partnership are insufficient to return such capital, the Limited Partner shall. have no recourse against the General Partner for such purpose. 11-25 fioati.on. In any threatened pending, action, suit, or proceeding to which the General Part er was a or oor is e Party or is threatened to be made a party, by reason of the fact that it was or is a general partner of the Partnership, the following indemnification provisions shall govern: (a) = emnificati.on. GQn4w4al In any such threatened,pending, or completed action, suit, or action by the Limited Partner securities action as in him eit ng' other than an discussed in Paragraph 11-25(b) hereof, or a involving an alleged hereof, cause of action for damages arising out of the performance of the Partnership's business, the Partnership shall indatnnify, to the extent of its assets, the General Partner against expenses, including attorneys' fees, ajudgments, andamounts paid in settieent,' actually and reasonably incurred by the General Partner in connection with such action, suit, or Proceeding, provided the General Partner acted in good faith and in a manner it reasonably believed to be in or not opposed to, the best interests of the Partnership, and further provided that its conduct does not constitute gross negligence or willful misconduct. The termination of anv action, suit, or proceeding by judgment, order, or settlement shall not, of itself, create a Presumption that the General Partner did not act in good faith and in a mariner which it reasonably believed to be in, or not Opposed to, the best interest of the Partnership. (�a) Secur1tles Act -ices. In any such threatened, pending, or completed action, suit, or proceeding under the 1933 Act or any state securities law or at common law or otherwise, that arises out of or is based upon: (i) any failure or alleged failure to register the Limited Partner's interest in the Partnership under the 1933. Act or such other securities laws; (ii) any untrue statement of any material fact contained in any document used or distributed in connection with the offer and sale of the Limited Partner's interests (iii) any omission or alleged omission to state in any such document a material fact required to be stated therein or necessary to make the statement therein not misleading; or 71 rIe -ta) --�= i+7=i� rft%iiq= IE)= PAGE 13/2S the best interests of the Partnership with due regard for the preservation of the Limited Partner's anticipated economic benefits and as a last resort after considering all possible alternatives and exercising diligent efforts to continue to operate the Partnership without such protection_ The General Partner shall give the Limited Partner prompt written notice of any such bankruptcy petition or insolvency proceeding or action filed or initiated against the Partnership, and shall respond to the same in such manner as is in the best interests of the Partnership with due regard for the preservation of the Limited Partner's anticipated tax benefits_ The filing of any bankruptcy petition or initiation of any similar insolvency proceeding or action. by or against the Partnership shall not terminate or otherwise adversely affect any of the General Partner's guaranty obligations under these Articles. ARTICLN XII Right -s -and Restxictions of the Limited VaXtner 12-1 r inL tx� yecaurse Illi Subject to the conditional rights of the Limited Partner under Paragraph 8.7 hereof to withdraw from the Partnership and to adjust its eapxtal contribution amounts; the Limited Partner shall be liable for Partnership liabilities and obligations in an amount equal to the portion of its- capital contribution to the Partnership that at any time has not yet been paid by .it- For example, if the Limited Partner has not paid in full the first installment under each Note to the Partnership, it shall be personally liable for Partnership liabilities to the extent of the aggregate amount of the unpaid installments udder each Note, as and when due, until each Note has been paid by it. 12.2 f`iab13A!' a=d t tERera113t- Except to the extent set out in Paragraph 12.1 hereof, the Limited partner shall not be personally liable for any of the liabilities or obligations of the Partnership or any of the losses thereof beyond the amounts which it has contributed and agreed to contribute to the capital of the Partnership, anything to the contrary herein expressed or notwithstanding. The Limited Partner shall not be re died to le funds to the Partnership for any purpose, The Limited Partner as na limited partner shall not take part in the management of the business or transact any business for the Partnership, and the Limited Partner as a limited -partner shall not have the power to sign for or to bind the Partnership_ The Limited Partner shall not be entitled to the return of its contribution except to the extent provided for in these Articles. 12-3 Access to Books and Records- The books and records of the Partnership shall -be maintained at the office of the Partnership and shall be available for examination and photocopying by the Limited Partner or its duly authorized representative at any and all reasonable times for any purpose reasonably related to the Limited Partner's interest in the Partnership. Whenever circumstances require, in the reasonable discretion of the Limited Partner, the 73 F=EB-e2-59 1D-14 FROM: ID= PAGE 1S/2S 13.4 Rnvix=, ntal Conditions. represents and warrants as follows. The General. Partner hereby (a) To the best of its knowledge, after due inquiry and investigation, except to the extent, as particularly, disclosed on Pages 49---J-A in the environmental. report($) for the Project heretofore delivered to the Limited Partner or except to the ✓ extent encased, encapsulated, or otherwise corrected in a manner consistent with federal, state, or local law: (i) the project does not contain any substance known to be hazardous, including without limitation hazardous waste, lead-based - paint, asbestos, methane gas, formaldehyde insulation, urea storage oil, toxic substances, underground tanks, polychlorinated biphenyls (PCBs), and the Project or radon is not affected by the presence of oil, toxic substances, or other pollutants that could be a detriment to the Project; (ii) the Project is not in violation of any federal, state, or local environmental law or regulation, and no violation of the Clears Air Act, Clean Water Art, Resource Conservation and Recovery Act, Toxic Substance Control Act, Safe Drinki.rig Water Act, Comprehensive Enviror=ental Response Compensation and Liability Act, or Occupational Safety and Health Act has occurred or is continuing; and (iii) the General Partner has no knowledge and has not received any notice from any source whatsoever of the existence of any of the foregoing hazardous conditions or substances on the Project, or of a violation of any such federal, state, or local lana or regulation with respect to the Project, and the General Partner shall throughout the term of the Partnership, notify the Limited Partner in writing of arty notice it may receive that such a condition or violation exists. (b) If any such hazardous condition or the presence of any hazardous substance is discloses{ ire the aforesaid environmental report(s) for the Project and such condition oz substance has not already been properly encased, encapsulated or otherwise corrected in a manner consistent with federal, state or local law: (i) the Project budget includes an amount necessary for recommended removal, encapsulation, or other remediation of such condition or substance ant (ii) the General Partner will verify that rehabilitation or construction of the Project has been or is being completed in accordance with the recommendations for removal, encapsulation, or remediation of such conditions or substances and will certify to such in writing to the 75 a ..0 Y.._ A - : k%,Jjj : 10: PAGE 27/2S and/or the death, retirement, incompetency, insolvency, bankruptcy, or withdrawal of the General Partner. ARTICLE SIV Adm:LsS1on of Partners; A_sz t Re3t=:.CtjOzW 14-1 Sale or AsziT=entt or Admission of $artaera mal Partner- The General Partner shall not, without the prior written approval of the Limited Partner, which. approval may be granted or withheld in its sole discretion, substitute a general partner -in its stead or admit any additional general partners or any additional limited partners, No person shall become a substitute or additional partner unless and until such person has executed such certificates and other documents and performed such acts as may be necessary to constitute such person a partner and to preserve the status of the limited partnership. 14.2 Sale or "zLcW=mt bv Gexxeral partster. Except as provided in Paragraph 14.1 hereof, the General Partner -shall not sell, transfer, or assign all or any part of its interest as a general Partner of the Partnership. 14.3 Salo or Assigzrm,eat by y,yNd teA Partner. r rtn Pa d '1'h@ Limited e or any substituted limited partner shall not sell, tedassPa r otherwise transfer (except as security for debt) all or any portion of its interest in the Partnership without the prior written consent of the General Partner, which consent may be granted or withheld in the j sole discretion of the General Partner. Provided, however', that in the event the General Partner acquires all or any part of the limited partnership interest of the Partnership, the General Partner may cause the Partnership to redeem all or any part of such interest (and to cancel all or any part of the Note attributable to such interest) and sell such interest to one or more investors, subject to the following restrictions. In no event shall the General Partner consent to such an assignment, nor cause such a redemption and sale, unless, in the opinion of counsel for or reasonably satisfactory to the Partnership, such assignment would neither terminate the Partnership for federal income tax purposes nor violate any applicable securities laws or require a securities registration, and unless such assignee agrees to be bound by all the terms and provisions of these Articles, as amended from, time to time. Any such assignment shall be subject to any additional reasonable restrictions that may be imposed at the disczetion of the General Partner. The cost of processing and perfecting any such assignment shall be borne by the assignee. 14.4 Substituted Limited Fartaers_ Unless otherwise expressly Provided herein, no assignee, legatee, distributee, heir, or transferee (by conveyance, operation of law or otherwise) of the whole ar any portion of the Limited Partner`s interest in the Partnership shall have the right to become a substituted limited partner pursuant to the Limited Partnership Act unless and until, the General Partner 77 A u e t` A"k. 15/ 1 S (:-) oaerzans or Deficits. Material unanticipated development cost overruns or operating deficits lasting more than ninety (90) days, excluding the period prior to projected Rent -Up, unless funded by loans or other sources that do not materially and adversely affect the financial Projections for the Project. (ii) Loan Default. A material loan default caused by events within the control of the General Partner not cured Within thirty (30) days after the occurrence of such default. (iii) Foreclosure, Eankiuptcv, etc. The filing of a foreclosure or other lender's action or exercise of control over the Project by a lender, or the filing of any bankruptcy petition or initiation of any similar insolvency proceeding or action by or against the Partnership or any general partner thereof, Or any affiliate of such general partner, as defined in Paragraph 15.9 hereof, including without limitation any assignment for the benefit of creditors, except for any such action by a lender or creditor that is dismissed or stayed within thirty (30) days. CLIO Property - Xanagnment Honeomplianee. Failure by the General Partner to terminate the managing agent for breach of obligations under the management agreement pursuant to Paragraph 11.17(d) hereof_ (v) Requixed gep-ar 201. a Acy. Failure by the General Partner to prepare or cause to be prepared properly and deliver or cause to be delivered in its entirety the Required Reporting due under any of Paragraphs 9.11, 9.12, 11.16, 11.18 or any other provisions of these Articles, including without limitation the accountantsf certification described in Subparagraph 11-16(o)(ii) hereof_ (Qi) General Paxtner Nonccsepliance. Material failure to comply with the General Partner's obligations under these Articles, including without limitation those relating to low-income housing development in accordance with the related corporate purposes of the General Partner and its affiliate(s) and best efforts to achieve and preserve financial projections of tax and economic benefits for the Partnership. (vii) 9e91igence, MiscoMftct, Etc_ Gross negligence or willful misconduct by the General Partner, grossly negligent or willful misrepresentation, or breach of warranty by the General Partner in any material respect_ (b) Effectiveness. Prior to removing and replacing any general partner for an Event Of Default, the Limited Partner 79 Limited Partner's percentage interest as limited partner, subject to further transfer under Paragraph 15.4 hereof, or the legal representative or other successor to the interest of such general partner shall become a special of partner (a "spec:LaJL limite equalPartnpercentaid. ) having a Percentage interest as special limited partner equal to its former percentage interest as general p to the terms and conditions set forth hereinbelowartner, pursuant limited partner shall, to the extent of the Any special t acquired, be entitled only to the rights, if any. In he profits, losses, cash flog, proceeds of capital transactions, and other operating and capital items of the partnership, but shall not acquire any right or interest in any payment or distribution to, or become subject to any. monetary obligation of, the Limited Partner, Pursuant hereto. No specispecialas such, limited partner shall have any right to Participate in the management of the affairs of the Partnership, and the interest acquired by such person shall be disregarded in determining whether any approval, consent, or other action has been given or taken by the Limited Partner. No special limited partner shall be entitled to any general, partner fees not previously paid under Paragraph 11.6 hereof or Exhibit D hereto or an under Paragraph 11.21 hereof. All parties hereto shall execute Band deliver such instruments in form and substance satisfactory to the remaining partners as they deem necessary or desirable to affect such transformation of the interest of such former general partner to $ special limited partner. 15.4 svbstitute Gcmera1 gamer(a). If a general partner of the Partnership at any 'time withdraws from the Partnership, is removed as general partner for cause, or suffers any other Adverse Event such withdrawal, removal, or other Adverse Event being referred o ny � herein as a to •`g,f�a�.aca,1 partaar other general w), and there is at least one 9 partner, the business of the Partnership shall be carried on by such remaining general partner: provided, however, that whether or not there is at least one remaining general Limited Partner shall have the right, within ninetypartner` the thereafter, to appoint one or more new general (gDl days general g 9 partners as substitute g partners havin all o€ the management rights, duties, restrictions, power, and authority provided the departed general partner in these Articles. In such event, the Limited Partner shall create for such substitute general partner(s) such interest in the Profits, losses, cash flow, proceeds of capital transactions, and other operating and capital items of the Partnership as the Limited Partner determines, either from the departed general partner's interest if it was forfeited or from the Limited Partner's interest in the Partnership, or from any combination thereof, and the Articles shall be amended by the Limited Partner and shall in any event be deemed amended, and the relationship of the Partners shall be governed by the provisions of these Articles as so amended_ if upon a general partner departure there is at least one other general partner who carries on the business of the Partnership or the Limited appoints one or more subpartner stitute general•partners to do so pursuant to this Paragraph 15.4, then the Partnership shall not dissolve and be liquidated but shall be continued, In the event the Limited Partner 91 __ — A r ID= PAGE 23/2S 16.2 LigruidatIn Trustee - Partnership for Upon the dissolution of the any reason, the Partnership shall be liquidated. In such event, the General Partner shall act as liquidating trustee, or if there are then no general partners Partner may elect or act as of the Partnership, the Limited trustee shall have a liquidating trustee. The liquidating full power and discretion to sell,, assign, and encumber Partnership assets. Notwithstanding such liquidating trustee shall not sell any assets except in thepowercase+of the (a) sales necessary in order to raise cash for payment of creditors; and (b) assets not- readily distributable in kind, as determined in the sole discretion of the liquidating trustee. All cash shall, to the extent necessary, be used to pay creditors, and any assets remaining shall be allocated and distributed in kind to the partners in divided or undivided portions in the discretion of the liquidating trustees. Any assets that are distributed in kind shall be valued at their fair market value as of the date of distribution. 16.3 DIstcibut:LCMM 3M TA' datiaa_ In the event of the dissolution and liquidation o�fr M� including any such event as definedthe in Secti,onrship 1.704-1(b) (2) (ii,) (g) reason) f the Treasury Regulations, the assets of the Partnership shall be paid and distributed in the following order of priority: (a) First, assets of the Partnership shall be used to pay creditors and expenses of the Partnership or to provide therefor, in accordance with the saltie priorities as proceeds of capital transactions under Subparagraphs 9.2(c)(i) through (v) hereof. (b) Second, an amount (but not in excess of the amount of assets available for distribution by the Partnership) equal to the sum of the capital accounts of all Partners whose capital accounts are then in amounts greater than zero shall be distributed to such partners in the ratios that their respective capital accounts bear to all Partners' positive capital accounts until the capital accounts of all Partners are equal to zero. Liquidating distributions shall be made by the later of the end of the year in Which the event of liquidation occurs or the ninetieth (90th), day after such liquidation, provided that the Partnership may retain reserves reasonably required to provide for liabilities of the Partnership. ARTICLE SvlI Power of Attorne 17.1 Generali . The Limited Partner, by the execution hereof, hereby irrevocably constitutes and appoints the General Partner its true and lawful attorney-in-fact, with full, pourer and authority in its 83 iu= FACE 25/25 these Articles will be relying upon the power of the Limited Partner to act as contemplated by Paragraphs 15.2, 15.3, 15.4, and 15.8 hereof in any filing and other action by it on behalf of the Partnership_ The foregoing power of attorney shall survive the dissolution and termination of the General Partner or the assignment by the General Partner of the whole or any part of its interest hereunder. ARTICLE XVIII General Pz v3.si ons 18.1 Notices_ All notices, offers, or• other communications required or permitted to be given pursuant to these Articles shall be in writing and shall be deemed properly given or made upon the earliest of: (a) three (3) business days after mailing from within the United States by first class United States mail, postage prepaid, addressed to the address of the intended Partner set forth beneath such Partner's signature to these Articles or a counterpart hereof; or (b) receipt by certified or registered mail, air express, telegram, facsimile, or personal delivery. The Limited Partner may change its address by giving notice in writing stating its new address to the General Partner, and the General Partner may change its address by giving such notice to the Limited Partner_ Notice shall be given to the intended partner within seven j(7) days of the effective date of the address change. Commencing on the tenth (10th) day after the giving of such notice, such newly designated address shall be effective for purposes of all notices or other communications required or permitted to be given pursuant to these Articles. 18.2 Ia tation and Effect. These Articles shall be construed in conformity with the laws of the Project State_ It is agreed that the parties hereto intend to form a limited partnership hereby, but, in the event that the General Partner fails to comply substantially with the requirements of the formation of a limited partnership under the lams of the Charter State, the Partnership shall be administered pursuant to the provisions of the Limited Partnership Act of the Charter State as if it were a limited partnership. 161.3 5everabi3-ity. Whenever possible', each provision of these Articles shall be interpreted in such manner as to be effective and valid under applicable law; but if any provision of these Articles or the application thereof to any party or circumstance is prohibited by or invalid under applicable law, such provision shall be effective only to the minimal extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of these Articles or the application of such provisions to other panties or circumstances. 85 — —— .—- cJum PAGE 9/10 19.2 The Partnership is authorized to execute and deliver a mortgage note and mortgage to the MHFA relating to the land on which the Project is to be constructed (the "Land" is also authorized to execute a regulatory }agreementthe nd suchtother documents as are required by the MHFA in connection with an MHFA Loan. 19.3 The regulatory agreement shall be a binding obligation upon the Partnership, its successors or assigns, for so long as an MHFA Loan on the Land and the Project is outstanding. The regulatory agreement includes within its terms provisions limiting (x) the amounts of distributions, as defined therein, to the Partners for each fiscal year in amounts as determined by the MHFA in accordance with Minnesota Laws of 1971, chapter 702, as amended, and the rules and regulations of the MHFA and (ii) the use of monies generated by the operation of the Project. Any incoming General Partners shall as a condition of receiving an interest in the Partnership agree to be bound by the terms of the MHFA's mortgages, notes, and regulatory agreements related to thereto, and such other documents required by the MHFA to the same extent and on the same terms as Partners_ Upon dissolution of the the other - Partnership, no title or right to Possession and control, of the Land or the Project to be constructed thereon, and no right to collect the rents therefrom shall pass to any person who is not bound by the regulatory agreement in a manner satisfactory to the MHFA. 19.4 The Partnership is authorized to execute'such other notes, mortgages, construction loan agreements, loan Ct►mmitments or other documents or agreements as may be necessary to effectuate the purposes of this Agreement. 19,5 No General Partner will, voluntarily Withdraw from or be substituted by the Partnership without MHFA's which a Prion written approval, approval will not be unreasonably withheld If thare are one or more remaining or substitute general partners who, in the MHFA's opinionsthe and sole discretion, cause are financially capable and competent to Partnership to have the capacity to effectively own and operate the Project to be built and operated on the Laud, subject to the terms and provisions of the regulatory agreement and of this Agreement_ 19-4 The partnership created by this agreement may not become a Limited Liability Partnership pursuant to Minn.Stat, or similar or amended statute, or file with the Secretary of, State na registration as a Limited Liability Partnership pursuant to such statute or any similar or amended statute without the express written consent of the Minnesota Housing Finance Agency. 19.7 No amendments will be made to this Agreement which would effect the MHFA's rights under its MHFA Loans including the note, mortgage and regulatory agreement or other agreements made between the MHFA and the Partnership, without the MHFA's prior written approval,, 87 IN WITNESS WHEREOF, the parties hereto have hereunto set forth their respective hands and seals, as of the day and month and year first above written_ [ SEAL] Attest Title: General Partner: Project F=' -r ide In Living, Inc., a Minnesota corporation By: Address of General Partner: Project for Pride in Living, Inc. 2515 Chicago Avenue South Minneapolis, MN 55404 Attention: Steve Cramer E�7 Limited Partner Acknowle t STATE OF ZLLeJOES ) ) 55. COUNTY OF CA ` r• , a Notary Public in and for said Count 'n the nate aforesaid, do hereby certify that 4, r President of National Equity Fund, Inc. , and Secretary of said corporation, both personally known to me to be the same persons whose names are subscribed to the foregoing instrument as such respective officers, appeared before me this day in person and acknowledged that they signed and delivered such instrument as their own free and voluntary acts, and as the, free and voluntary act of said corporation, and as the free and voluntary act of the partnership known as National Equity Fund 1997 Series II Limited Partnership on behalf of which said corporation has executed the foregoing instrument as general partner, all for the uses and purposes set forth therein; and the latter officer also then and there acknowledged that (s)he, as custodian of the corporate seal of said corporation, affixed the same to the foregoing instrument as his/her free and voluntary act and as the free and voluntary act of said corporation, for. the uses and purposes set forth therein_ Given under my hand and notarial seal on February. , 1999. DOERING' S. MEyER 31 My Commission Expires: NOTARY ESOTA [SEAL] MN CammWN .I�n 31, 2000 a 92 In1t.i,al Limited Partner Acknajrlett meAt - {individvJal) STATE OF Minnesota } ) 55. COUNTY OF Hennepin } Y, A , a Notary Public in and for said County it_)the Stat aforesaid, do hereby certify that Steve Cramer, personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he signed and delivered such instrument as his own free and voluntary act, for the uses and purposes set forth therein. Given under my hand and notarial seal on February , 3999. ■ DOERING S. MEyER My Commission Expires: N0rARYK8X.M*M orA [SEAL] * CWnMh6bft EzPhM Jft 31.2Doo a 94 Partnership AC)MQVle t STATE OF Minnesota ) ) SS. COUNTY OF Hennepin ? a Notary Public in and for said County in the St afo esa�id, do here b certify that , ` of Project for Pride in Living, Inc., and , Secretary of said corporation, both personally known to me to be the same persons whose names are subscribed to the foregoing instrument as such respective officers, appeared before me this day in person and acknowledged that they signed and delivered such instrument as their own free and voluntary acts, and as the free and voluntary act of the partnership known as PPL - Bass lake Court Limited Partnership on behalf of which said corporation has executed the foregoing instrument as a general partner, all for the uses and purposes set forth therein; and the latter officer also then and there acknowledged that (s)he, as custodian of the corporate seal of said corporation, affixed the same to the foregoing instrument as his/her free and voluntary act and as the free and voluntary act of said corporation, for the uses and purposes set forth therein. Given under my hand and notarial seal on February lf�, 1999. DOERING S. MEYER SEAL ] My Commission Expires: NbTAR MM-MINMESOTA RAMSEY COUNTY W CGMMbabn E*ft Jan. 31,21= 9 Attest: sma Title: Limited Partner: NATIONAL EQUITY FUND 1997 SERIES II LIMITED PARTNERSHIP, an Illinois limited partnership By: NATIONAL EQUITY FUND, INC., an Illinois not- for-profi corporation, Managing Partner By: i le: Address of Limited Partner: c/o National Equity Fund, Inc. 547 West Jackson Boulevard, Suite 601 Chicago, Illinois 60661 Attention: President 99 r d-m.c . . .-..s:: A LJ I Yli4�t 2/22 The following provisions are incorporated into and made a part of the foregoing Amended and Restated Articles of Limited Partnership between Project for Pride in Living, Inc_, a Minnesota non-profit corporation, as General Partner, and National Equity Fund 1997 Series II Limited Partnership, an Illinois limited partnership, as Limited Partner, dated February _, 1999, to which this exhibit is attached. A- Article 1:1. The name of the partnership is: "PPL - Bass Lake Court Limited Partnership." 8- The Project consists of eight (8) residential buildings containing thirty-four (34) vni.ts, located at 7302, 7304, 7306, 7308, 7310, 7312, 7316, and 7332 Lass Lake Road, New Hope, Minnesota : to be rehabilitated and to be constructed- The date of the Project Investment Proposal is August 17, 1.99$, and the date of any amended budget and projections constituting a part thereof is January 28, 1999. The Total Project Cost is Six Million Twenty -Six Thousand seven Hundred Eighty and No/100 Dollars ($6,026,780.00)- C. A=Cla XZ. The Partnership's principal place of business is presently at 2516 Chicago Avenue South, Minneapolis, MN 55404. The Partnership's registered argent and registered office in the Project State are presently Project for Pride in Laving, Xnc., 2516 Chicago Avenue South, Minneapolis, Mid 55404. D. PAXR93agh The Partners' total cash contributions to the capital of the Partnership shall be one Hinton Nine hundred Twelvire Thousand Ninety -Sight and No/100 Dollars ($1,912,098.00). E. The General Partner's cash contribution is Two Hundred Thousand and No/100 Dollars ($200,000.00). F_ Pa3agraph„ 6�_ Subject to the terms and conditions of the Articles, the Limited Partner's cash contribution is One Million Seven Hundred Twelve Thousand Ninety -Eight and No/100 Dollars ($1,712,098.00), consisting of: (1) Orxe Million Four Rundred Thirty -Seven Thousand Ninety - Eight and N01100 Dollars ($1,437,098.00), which shall be due and payable by the Limited Partner under and in accordance with the terms of Note 1, in the form of Exhibit B(1) attached hereto, upon Project Start-up, as defined in Paragraph 11.10 hereof. A-1 YQb—.6dVi riKUM= +L+= PACE 4/22 Dollars ($236,175.00), minus the°amount of any reduction in Unpaid Capital under s.4(a) hereof. H- EUXA B-ZCb). Projected Tact Credit Benefits during the period from the formation of the Partnership through December 31, Zoos (the last year in which the Limited Partner's investor limited partners or their respective partners, if any, are to make cash paymezts of their capital contributions to the Limited Partner or to any partnership investing in the Limited Partner, respectively) are One Million Six Hundred Ninety -Three Thousand Five Hundred Seventy -Five and N6/100 Dollars ($1,693,575:00): 1- The Outside Date shall be Manch 5, 3.999 J- Development financing proceeds and operating income, as applicable, under Subparagraphs 9.2(a)(i), 9.2(a)(ii), 9.2 (b) (i) (D) and (S) , 9.2 (b) (ii) (A) and (B) , and Paragraph 9.2 (e) shall be used to fund: (1) The operating reserve in the initial amount of party_ Four Thousand and No/1o0 Dollars ($44,000); (2) The replacement reserve in the initial amount of an one- a percent (1.5w) of gross rent collections, for each month ccumpncing with the month during which the last unit in the Project was placed in service until the date the deposit is made, less an amounr_ equal, to the total of any prior deposits that have been made to the operating reserve account, cumulati'rely, until the amount of the reserve has reached (b) One Hundred Thirteen Thousand Five hundred Seven and N0/100 Dollars ($113,507-00); (5) The MHOP reserve in an amount of Seventy -One Thousand Two Hundred Eighty and N0/3.00 Dollars ($71,2so_o4); and (6) The MHFA DCE Reserve in an amount of Thirteen Thousand Three Hundred Ninety -Two and N0/100 Dollars ($13,392.00)_. A-3 Seventeen Thousand and Ido/108 Dollars ($17,000); Po -CAj J (3) The replacement reserve in a cumulative amount equal to ()' Three Hundred Twenty -One and No/loo Dollars ($321.00) per n h}�� year for each residential unit in the Project from the date 1V+4 such unit -was placed in service until the date the deposit is #zq,A � made, less an amount equal to the total of any prior deposits Ums o that have been made to the replacement reserve account; 'o� OU) (4) The operating reserve in a cumulative amount equal to (a) Oned h If an one- a percent (1.5w) of gross rent collections, for each month ccumpncing with the month during which the last unit in the Project was placed in service until the date the deposit is made, less an amounr_ equal, to the total of any prior deposits that have been made to the operating reserve account, cumulati'rely, until the amount of the reserve has reached (b) One Hundred Thirteen Thousand Five hundred Seven and N0/100 Dollars ($113,507-00); (5) The MHOP reserve in an amount of Seventy -One Thousand Two Hundred Eighty and N0/3.00 Dollars ($71,2so_o4); and (6) The MHFA DCE Reserve in an amount of Thirteen Thousand Three Hundred Ninety -Two and N0/100 Dollars ($13,392.00)_. A-3 I 4/i—vr= .. ia:-Gi rKiii-t- IU, PACE 6/22 Checklist is that dated September 1, 1997 (Limited Partner's current model form checklist or most currently dated modification thereof), subject to such modifications and additions as the Limited Partner may require in connection with its due diligence review of any matters that may affect the Partnership or the value of the Limited Partners interest therein_ o- PiaXR93M2h 3,1. 12. The attorneys for the Project acquisition and financing are presently as follows: (1) [Project Attorneys] Firm Name: Dorsey & Whitney, LLP; Address: 220 South Six Street, Minneapolis, MU 55402; Contact: Robert J. Silverman; Phone: (612) 340-2762- (2) [Tax Attorneys] Firm Name: Dorsey & Whitney, LLP.- Address- LP;Address: 220 South Six Street, Minneapolis, MN 55402; Contact: Jon L. Peterson; Phone: (612) 340-2709. F- P _ The scheduled time for Placement in Service is on or before August 1, 1999 (which date shall be at least thirty (30) days prior to the end of the calendar year). In addition, and without affecting the General Partner's obligation to achieve Placement in Service by the aforesaid date, if the Project will not or might not be placed in sez-rice during the same calendar year as that for which an allocation of the federal low-income housing tax credit under Section 42 of the Code has been reserved for the Project (the "allocation bear,,), then prior to December 31 of the allocation year, the General Partner shall cause the Partnership to incur Project costs such that the Partnership's tax credit basis in the Project is more than ten percent (lot) of the Partnership's total expected tar basis in the Project at the time the Project is placed in service, so as to permit a carryover of such low-income housing tax credit into the first or second calendar year immediately succeeding the allocation year, pursuant to Section 42 of the Code. In the event such costs are not incurred on or }Before December 31 of the allocation year, the Project is placed in service after December 31 of the allocation year, and the Project is consequently ineligible for the low- income housing tax credit as projected, then Placement in Service shall be deemed not to have occurred within the scheduled time, A-5 c r -- o. cc R RAXAMM11-17_ The managing agent for the Project is presently as follows: Firm Name: Project for Pride in Living, inc_; Address: 2516 Chicago Avenue South, Minneapolis, Mff 55444; Contact: Shari,Pleiss; Phone: (512) 874-8511- S. P The General Partner was incorporated in the State of Minnesota as a not-for-profit corporation. 0 A-7 shall be immediately due and payable in the all projected tax benefics to Maker from the received or are then reasonably anticipated. Ll F1l,IM 1 W e22 amount necessary to support Partnership that have been No delay or omission of the holder of this Note to exercise rights hereunder shall impair any such right or power or shall be construed to be a waiver of any such default or any acquiescence therein. No waiver of any default shall be construed, taken, or held to be a waiver of any other default, or waiver or acquiescence in, or Consent to any further or succeeding default of the same nature. Maker waives demand, notice, and protest and any defense by reason of extension of time for payment or other indulgence granted by the holder hereof- This ereof_ This Note is subject to the provisions of Paragraph 6.3(b) and Exhibit D, Section S(4) (concerning withholding or reduction of capital contributions evidenced by this Note due to pending General Partner or Controlling Entity defaults), Paragraphs 6.4 through 6.6 (concerning the Partnership's remedies for nonpayment of capital contributions by - the Maker), Paragraph 8.4 (concerning reduction in unpaid capital contributions evidenced by this Note in the event of reduction of projected tax Credit benefits, unless waived in writing by Maker), and Paragraph 8.7 (concerning withdrawal by Maker from the Partnership and cancellation of this Note upon certain contingencies, unless waived in writing by Maker), of the Articles, to which Macer is a party, dated 1999, which provisions are specifically incorporated herein by this reference. This Note evidences the obligation of Maker to make certain capital contributions to the Partnership pursuant to the Articles. As security for the payment of this Note and any other notes noir or hereafter held by the Partnership evidencing obligations to make such capital contributions, Maker has agreed by the terms of the Articles, and Maker does hereby agree, that the Partnership shall have the forfeiture and ownership rights with respect to the entire limited partnership interest of Maker as described in the Articles, and Maker has pledged and granted by the terms of the Articles, and Maker does hereby pledge and grant, to the Partnership a security interest in Maker's entire limited partnership interest in the Partnership as described in the Articles. In the event of default by Maker in the payment of any principal or interest due under this Note or any other, such notes, the Partnership shall have, and is hereby granted, at its election, all of the forfeiture and ownership rights and all of the rights and remedies of a secured parity as described in the preceding sentence with respect to such limited partnership interest, without prejudice to any other rights and remedies of the Partnership under the Articles or at lain or in equity, B (1) -2 As used herein, the term Partnership shall include each holder, from time to time, of this -Note, including without limitation any permitted collateral assignee hereof. IN WITNESS WHEREOF, Maker has executed this Note as of the day and year first written hereinabove_ Title: NATIONAL BWITY FUND 3-999 SERIES II LIMITED PARTNERSHIP, an Illinois limited partnership By: NATIONAL EWXTY FMM, INC_, an Illinois not -far -profit corporation, Managing Partner By: Title: �~ B (l) -4 Demand for payment shall be Presumed to have been issued and the entire unpaid principal sutra of this Note, together with accrued interest thereon, if any, shall become immediately due in the event of the occurrence of any one or more of the following: default in the payment of any installment due hereunder continuing for a. period in excess of ten (10) days after written notice from the Partnership to Maker, the filing by Maker of a voluntary petition in bankruptcy; or the failure by Maker within thirty (30) days thereof to lift any filing against Maker of any involuntary petition, execution or attachment; or the adjudication of Maker as bankrupt; or any assignment by. Maker for the benefit of its creditors; or the invalidity or illegality of any portion of this Note by reason of any act or omission by Faker. Notwithstanding anything herein to -the contrary, in the event of the liquidation of the Partnership or of maker's iYiterest in the Partnership, prior to the payment of all installments due hereunder, the unpaid principal balance of this Note shall be deemed to be, and shall be immediately due and payable in the amount necessary to support all projected tax benefits to Maker from the Partnership that have been received or are then reasonably anticipated_ No delay or omission of the holder of this Note to exercise rights hereunder shall impair any such right or poorer or shall be construed to be a waiver of any, such. default or any acquiescence therein. No waiver Of any default shall be construed, taken, or held to be a waiver of any other default, or waiver or acquiescence in, or consent to any further or succeeding default of the same nature. Maker waives demand, notice, and protest and any defense by reason of extension of tithe for payment or other indulgence granted by the holder hereof . This Note is subject to the provisions of Paragraph 6.3(b) and Exhibit D, Section G(4) (concerning withholding or reductions of capital contributions evidenced by this Note due to pending General Partner defaults), Paragraphs 6.4 through 6.6 (concerning the Partnership's remedies for nonpayment of capital contributions by the Limited Partner), Paragraph 8.4 (concerning reduction in unpaid capital contributions evidenced by this Note in the event of a reduction of projected tax credit benefits unless waived in writing by Maker); and Paragraph 8.7 (concerning withdrawal by Maker from the Partnership and cancellation of this Note upon= certain contingencies unless waived in writing by Maker) of the Articles to which Maker is a party, dated 1999, which provisions are specifically incorporated herein by this reference- This eference_ This Note evidences the obligation of Maker to make certain capital contributions to the Partnership pursuant to the Articles. As security for the payment of this Note and any other notes now or 8 (2) -2 i- .e :sc c RKui�i _ i v n c rano 1e/22 party (including any party related to Maker) to secure indebtedness of Maker to such party, in those certain promissory notes payable to Maker by its limited partners and in the limited partnership interests in Maker pledged and granted to Maker to secure payment of such promissory notes, but such holder shall otherwise have recourse against Maker and all of its other assets, for the satisfaction of all principal and interest due and any other obligations arising by reason of this Note. Maker hereby acknowledges that its making its investment in the Partnership, Maker has not relied upon the advice or representations of any bank, insurance company, or other institutional lender to whom this Note may be negotiated for value or assigned as security for debt with Maker's consent. This Note shall not be assigned, hypothecated, pledged, sold, or otherwise transferred without the prior written consent of Maker, and any such other transfer without Maker's consent shall be null and void. As used herein, the term Partnership shall include each holder, from time to time, of this Note, including without limitation any permitted collateral assignee hereof. IN WITNESS WHEREOF, Maker has executed this Note as of the day and year first written hereinabove, Title; NATIONAL EQUITY FUND 1997 SERIES II LIMITED PARTNERSHIP, an Illinois limited partnership By. 14ATIONAL EQUITY not-for-profit Partner By, TitleF: B (Z) -4 FUND, INC., an Illinois corporation, Managing w._ rr: t'P4lut 18/22 subject to the limitations hereinbelow, such fees shall be deemed earned as services are provided during the Project development period. 2. Partnershio Man cement 9 . To the General Partner, a partnership management fee conxisting of annual payments cou nencing in the amount of Eight Thousand and No/loo Dollars ($8, flO0) on March 1 of the first year in which such date occurs after Qualified occupancy is achieved (provided that if on such date the Partnership has been in existence for less than 365 days, the amount of such fee shall be prorated for the initial partial year), and increasing cumulatively by three percent (3%) each year thereafter; provided, however, that if any of the Required Reporting due under any of Paragraphs 9.11, 9_12, or 11.18, or any other provisions of these Articles has not been prepared properly and delivered in its entirety, then no such amount otherwise due according to the foregoing schedule shall be deemed payable, and the Limited Partner may withhold payment of any capital obligations due under any Note or Notes to the extent of such amount of partnership management fee until such report has been delivered in full; and Provided further, however, that if and to the extent such partnership management fee has not been paid in accordance with these Articles, prior to the time of sale of all or substantially all of the assets of the Partnership, the Partnership's obligation to pay such fee shall terminate upon such sale_ 3- pea. To the General Partner (provided that if there is more than one, then to that General Partner which is affiliated with the Controlling Entity described in Exhibit A, Section S hereto), a contingent incentive partnership management fee equal to thirty-three and one-third percent (33-1/3%k) of net operating cash flow, if any, prior to deduction of such incentive fee, which amount shall be set aside as the capital reserve and utilised in accordance with the requirements for such reserve, arid, to the extent of any capital reserve fund balance remaining. available upon sale or other disposition of the Project, shall be paid to the General Partner or its Permitted assignee in the manner provided in Paragraph 11.21 hereof, its remaining in good standing without occurrence of any event under Paragraphs 1S.1 through 15.3 hereof, closing of the purchase of the Project by the General Partner or its Permitted assignee in accordance with the Purchase option or the Right of First Refusal granted thereunder. Payment of such contingent incentive management fee shall also be contingent upon the delivery by the General Partner or the fee assignee to the Partnership of a ruling from the Internal Revenue Service (the applicability' of which ruling shall be determined by counsel to the Limited Partner in its sole judgment), or an opinion of counsel to the Limited Partner, concluding that a contingent fee of the nature described hereinabove may be paid without limiting any tax credits or deductions that would otherwise be available to the Limited Partner. D-2 in any such promissory note or Paragraph 7.1(c) hereof, if applicable, or any other provisions of these Articles, the Partnerships payment obligation shall not bear interest or otherwise be subject to Paragraph 7.1 hereof, except during the period after the time of projected availability in the case of fees other than, Deferred Initial Fees. D. —PeMitteel X&Ans. in the event sufficient cash to pay such fees, other than any Deferred Initial Fees unless otherwise specifically provided in these Articles, was projected to be available under the Project Investment Proposal and.under any revised Projections and reduction of Net Investment pursuant to Paragraph 8.4 hereof, but is not available at the time such fees are scheduled to be paid, then the shortfall shall constitute a development cost overrun or an operating deficit, as the case may be, and Paragraphs 7.1 and 7.2 or 7.3 hereof, as applicable, shall apply; provided, however, that the General Partner shall not borrow funds on behalf of the Partnership from any third -party lender in order to pay any of its fees, and provided further that there shall be no loans for payment of partnership or property management fees to the Ger;eral Partner or its affiliate(s). Any permitted loan for payment of fees shall be made by the General Partner or its affiliate (a) in accordance with the terms and conditions of Paragraph 7.1 hereof. R. Exis<ti.ngSho fa la. Cash shall be deemed not available to pay any organizational or development fee if and to the extent there are any existing or projected development cost overruns, operating deficits, or compensation, for reduced tax credits for which other Projected sources of funding are insufficient- F. nsufficient_ F. M gmmt . Fee svyor inatim _ In the event any partnership management fee or property management fee is payable to the General Partner or its affiliate(s), payment thereof shall ba subordinated to the payment of operating deficits, and such fee shall be accrued until operating income or other permitted sources of funds are available for payment thereof. The property management agreement shall contain Provisions to the foregoing effect with respect to any property management fee payable to the General Partner or its affiliate(s). G_ Further Limitationa. Consistent with the foregoing and in further limitation of the availability of cash to pay fees: (1)Q3MXXMn0 =d DeficitsIf any General Partner guaranty payment obligations under Paragraphs 7_2, 7.3, oz 7.4 hereof are outstanding at the time cash becomes available to pay any fee otherwise due to the General Partner or its affiliate(s), then to the extent of such unpaid guaranty obligations, such cash shall not be paid to the General Partner but shall instead be used by the Partnership to fund directly the development cost overruns, D-4 .�.L4 .i`Vd'i= ilk• i,i\eG 42/12 AF1?1Tj3: B _ FS33 %TDMWER If any specified recipient of any of the Initial Fees, as defined in Paragraph 8.2 (f ) hereof and described in Exhibit D hereinabove, is other than the General Partner, each such undersigned recipient hereby acknowledges and agrees that it is an affiliate of the General Partner, that it is familiar with the Amended and Restated Articles of Limited Partnership (the "Articles") to which such Exhibit D is attached, that the foregoing schedule of fees and expenses accurately reflects all such amounts to be received by it for services and goods provided by it, that it has read the foregoing limitations on payment of fees, that its collection of such fees shall be subordinated to the funding of all development costs, operating expenses, debt service, and required reserves for the Project and subject to the fee payment limitations contained in such Rxhibit D. and that in the event of the Partnership's inability to pay any fees due to it as a result of such fee subordination or fee payment limitations, the undersigned shall defer receipt thereof or shall look solely to the General Partner to fund _ paymant thereof pursuant to its development cost overruns or operating deficits guaranty obligations, as aforesaid, and shall have no recourse against any Partnerahip assets for payment thereof, unless and until cash becomes available for such purpose. If any of the undersigned is the property management agent for the Project, it also acknowledges and agrees to the subordination of its monthly property management fee to the, payment of any operating deficits of the Project, as required by Paragraph 11.17 of the Articles land its property management agreement with the Partnership. Executed as of the date of the Articles to which the foregoing Exhibit D is attached. Project for Pride in Living, lnc., a Minnesota not-for-profit corporation By: Title: [Add signature blacks for any additional fee recipients.] D-6 CONSENT AND AUTHORIZATION This Consent and Authorization is made as of the 2nd day of February, 1999, by National Equity Fund Series 11 1997 Limited Partnership, an Illinois Iimited partnership, as limited partner (the "Limited Partner") of the PPL -Bass Lake Court Limited Partnership (the "Partnership"). WITNESSETH, WHEREAS, on February 2, 1999, the Limited Partner and Project for Pride and Living, Inc., as general partner, entered into certain Amended and Restated Articles of Limited Partnership which amend and restate a prior partnership agreement (said Articles, together with any amendments that may be executed by the parties thereto from time to time, being referred to hereinafter as the "Articles"). WHEREAS, the Section 11.10(b) of the Articles provides: Notwithstanding anything in these Articles to the contrary, the General Partner shall not cause the Partnership to obtain any loan or grant, nor to enter into any modification of any existing loan or grant, nor agree to any sale, transfer, or conveyance of any loan (or any interest therein), nor shall the General Partner make a capital contribution to the Partnership, without the prior written consent of the Limited Partner, which consent shall not be unreasonably withheld. WHEREAS, in connection with the amendment and restatement of the original Articles, the General Partner has agreed to make a capital contribution to the Partnership in the amount of $200,000 (the "Capital Contribution"). WHEREAS, the Partnership contemplates entering into the following loans which will be used to acquire and construct a low-income housing project (collectively, the "Loans"), and each of which is further described in the Articles: (1) $348,202 first mortgage loan with the Minnesota Housing Finance Agency (the "MHFA') which is secured by a mortgage on the project, which will bear a market rate of interest and will be payable on a level annuity basis by equal monthly payments of principal and interest based on a 20 -year amortization schedule; (2) $200,000 loan with the Family Housing Fund, which is secured by a mortgage on the project, which will bear interest at 1% per annum and which will obligate the Partnership to pay the entire principal amount of the loans, together with accrued and unpaid interest thereon, in 30 years (or earlier in the event of default); (3) $680,000 with Hennepin County pursuant to the HOME Investment Partnerships Act, which is secured by a mortgage on the project, which will bear interest at 1% per annum and which will obligate the Partnership to pay the entire principal amount of the loans, together with accrued and unpaid interest thereon, in 30 years (or earlier in the event of default); (4) $130,000 loan from the NVIHFA pursuant to its Affordable Rental Investment Fund Program, which is secured by a mortgage on the project, which will bear interest at 1% per annum and which will obligate the Partnership to pay the entire principal amount of the loans, together with accrued and unpaid interest thereon, in 30 years (or earlier in the event of default); and (5) $1,400,000 loan from the Economic Development Authority in and for the City of New Hope, which is secured by a mortgage on the property, which will bear interest at 1% per annum accruing from the initiation of the loan until February 1, 2029, at which time payments of interest only shall be due through February 1, 2049, and then at which time the total unpaid principal and all accrued but unpaid interest shall be due in full (unless due earlier in the event of default). WHEREAS, the Partnership contemplates receiving a development grant and an annual operating subsidy from The Mnneapolis Public Housing Authority which are derived from funds provided by the U.S. Department of Housing and Urban Development pursuant to the U.S. Housing Act of 1937 (collectively, the "Grants") . WHEREAS, the Limited Partner has been provided with copies of all applicable financing documents related to the Loans and ail applicable grant documents for the Grants. NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Limited Partner hereby consents to the Partnership's receipt of the Capital Contribution and the Grants, and authorizes the Partnership to enter into each of the Loans. IN WITNESS WHEREOF, the Limited Partner has executed this Consent and Authorization as of the date first above written. NATIONAL EQUITY FUND 1997 SERIES II LIMITED PARTNERSHIP, an Illinois limited partnership By: NATIONAL EQUITY FUND, INC., an Illinois not -for, -profit corporation Title: EXECUTION COPY 06/29/98 COOPERATION AGREEMENT This Agreement made and entered into this � day of 199_%_, by and between the Minneapolis Public Housing Authority in and for the City of Mnneapolis (the "Authority"), the Economic Development Authority in and for the City of New Hope (the "EDA") and the City of New Hope, State of Minnesota (the "Municipality"). WITNESSETH: In consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows: Whenever used in this Agreement: (a) The term "MHOP Units" means twelve (12) units of low -rent housing hereafter to be developed with the financial assistance of the United States of America acting through the Secretary of Housing and Urban Development (the "Government") and located within a thirty-four (34) unit townhorne development (the "Development") to be owned by a low income housing tax credit partnership to be formed in which Project for Pride in Living, Inc., will be the general partner ("Owner") and located at 7300-7332 Bass Lake Road in the City of New Hope, Minnesota. (b) The term "Taxing Body" or "Taxing Bodies" means the State of Minnesota and any and all political subdivisions or taxing units thereof in which the MHOP Units are situated and which would have authority to assess or levy real or personal property taxes, or to certify such taxes to a taxing body or public officer, to be levied for its use and benefit with respect to the MHOP Units if they were not exempt from such taxation. (c) The term "Shelter Rent" means the total of all charges to all MHOP Unit tenants for dwelling rents and nondwelling rents (excluding all other income of the MHOP Units) less the cost of all dwelling and nondwelling utilities. 2. The Authority shall endeavor: (a) to secure a contract with the Government for capital grants and annual contributions for the MHOP Units; and (b) to cause to be developed and provide for the administration of the MHOP Units. (a) Pursuant to Minnesota Statutes, Section 469.040, the MHOP Units are exempt from all real and personal property taxes levied or imposed by any Taxing Body for so long as either (i) the MHOP Units are owned by a public body or governmental agency CA FbiRCOORDOC 1 COOPERATIONAGREEMENT NOHAINEW HOPE EDAICrrY OF NEW HOPE BASS LAKE TOWNHOMES and are used for low -rent housing purposes, (ii) the MHOP Units are subject to the requirements of Section 5 of the United States Housing Act of 1937, (iii) the contract between the Authority and the Owner in connection with the MHOP Units continues to obligate the Owner to operate the MHOP Units as a low income housing project, or (iv) any obligations issued in connection with the MHOP Units or any moneys due to the Government in connection with such MHOP Units remain unpaid, whichever period is the longest (the "Exemption Period"). (b) During the Exemption Period, the Municipality, on behalf of the Taxing Bodies, agrees that it will not levy or impose any real or personal property taxes upon the MHOP Units or upon the Authority with respect thereto. Because the MHDP Units consists of twelve (12) units located within and under common private ownership with 22 additional housing units which comprise the Development, the property taxes and property tax exemption shall be determined as follows: (i) the tax capacity of the total Development shall be multiplied by a fraction, the numerator of which equals the total number of MHOP Units and the denominator of which equals the total number of housing units in the Development and (ii) the product thereof shall be deducted from said tax capacity. (c) During the Exemption Period, the EDA shall make, or cause to be made, annual payments in lieu of taxes ("PILOT") in payment for the public services and facilities famished from time to time without other cost or charge for or with respect to the MHOP Units. Each PILOT shall be matte at the time when real property taxes on the MHOP Units would be paid if it was subject to taxation, and shall be in an amount equal to either (i) five percent (5%) of the Shelter Rent actually collected but in no event to exceed five percent (51/6) of the Shelter Rent charged with respect to such MHOP Units during the preceding calendar year, or (ii) the amount permitted to be paid by applicable State law in effect on the date such payment is made, whichever is lower. (d) Pursuant to Minnesota Statutes, Section 469.040, subdivision 3, the County shall distribute the PILOT among the Taxing Bodies in the proportion which the real property taxes which would have been paid to each Taxing Body for such year if the MHOP Units were not exempt from taxation; provided, however, that no payment for any year shall be made to any Taxing Body in excess of the amount of the real property taxes which would have been paid to such Taxing Body for such year if the MHOP Units were not exempt from taxation. (e) In the event the PILOT is not paid, no lien against the MHOP Units or assets of the Authority or EDA shall attach, nor shall any interest or penalties accrue or attach on account thereof. 4. During the Exemption Period, the Municipality, or other appropriate Taxing Body, without cost or charge to the Authority, the EDA or tenants of the MHOP Units (other than PILOT) shall: C:ITEMFSCOOP.DOC 2 COOPERATION AGREEMENT MPHAINEW HOPE EDAICrrY OF NEW HOPE BASS LAM TOWNHOMES (a) Furnish or cause to be famished to the MHOP Units public services and facilities of the same character and to the same extent as are famished from time to time without cost or charge to other dwellings and inhabitants in the Municipality; (b) Vacate such streets, roads, and alleys within the area of the MHOP Units as may be necessary in the development thereof, and convey without charge to the Authority, the EDA or Owner of the MHOP Units such interest as the Municipality, or other Taxing Body may have in such vacated areas; and, in so far as it is lawfully able to do so without cost or expense to the Authority, the EDA, the Owner of the MHOP Units or to the Municipality or other Taxing Body, cause to be removed from such vacated areas, in so far as it may be necessary, all public or private utility lines and equipment; (c) In so far as the Municipality or other Taxing Body may lawfully do so, (i) grant such deviations from the building code of the Municipality or other Taxing Body as are reasonable and necessary to promote economy and efficiency in the development and administration of the MHOP Units, and at the same time safeguard health and safety, and (ii) make such changes in any zoning of the site and surrounding territory of the MHOP Units as are reasonable and necessary for the development and protection of the MHOP Units and the surrounding territory; (d) Accept grants of easements necessary for the development of the MHOP Units; and (e) Cooperate with the Authority and EDA by such other lawful action or ways as the Municipality or other Taxing Body and the Authority may find necessary in connection with the development and administration of the MHOP Units. 5. In the initial development of the MHOP Units, the Municipality further agrees, on behalf of all Taxing Bodies, that within a reasonable time after receipt of a written request therefor from the Authority or EDA: (a) that it will accept the dedication of all interior streets, roads, alleys, and adjacent sidewalks within the area of the Development, together with all storm and sanitary sewer mains in such dedicated areas, after the Owner of the MHOP Units, at its own expense, has completed the grading, improvement, paving, and installation thereof in accordance with specifications acceptable to the Municipality or other Taxing Body; (b) that it will accept necessary dedications of land for, and will grade, improve, pave, and provide sidewalks for, all streets bounding the Developments as are necessary to provide adequate access thereto (in consideration whereof the Owner shall pay to the Municipality or other Taxing Body such amount as are or could be assessed against the Development); and (c) that it will provide, or cause to be provided, water mains, and storm and sanitary sewer mains, leading to the Development and serving the bounding streets thereof (in consideration whereof the Owner of the MHOP Units shall pay to the Municipality or C:ITEMPICOOP.DOC 3 COOPERATION AGREEN NT MORA/NEW HOPE EDA/CrIY OF NEW HOPE BASS LAKE TOWNHOMES other Taxing Body such amount as are or could be assessed against the Development). 6. If by reason of the Municipality's or other Taxing Body's failure or refusal to furnish or cause to be furnished any public services or facilities which it has agreed hereunder to furnish or cause to be fumished to the Authority, the EDA, the Owner or tenants of the MHOP Units, and the Authority, the EDA or the Owner of the MHOP Units incurs any expense to obtain such services or facilities, then the Authority or EDA may cause to be deducted the amount of such expense from any PII.OT due or to become due to the Municipality or other Taxing Body in respect to the MHOP Units. 7. No Cooperation Agreement heretofore entered into between the Municipality and the Authority or EDA shall be construed to apply to any MHOP Units covered by this Agreement. 8. No member of the governing body or any other public official of the Municipality or other Taxing Body who exercises any responsibilities or functions with respect to the MHOP Units during his/her tenure or for one year thereafter shall have any interest, direct or indirect, in the MHOP Units or any property included or planned to be included in the MHOP Units, or any contracts in connection with the MHOP Units or property. If any such governing body member or such other public official of a Taxing Body involuntarily acquires or had acquired prior to the beginning of his/her tenure any such interest, he/she shall immediately disclose such interest to the Authority. 9. During the Exemption Period this Agreement shall not be abrogated, changed, or modified without the consent of the Government. The privileges and obligations of the Municipality and other Taxing Bodies hereunder shall also remain in full force and effect with respect to the MHOP Units so long as the beneficial title to the MHOP Units is held by the Authority or by any other public body or governmental agency, including the Government, authorized by law to engage in the development or administration of low -rent housing projects. If at any time the beneficial title to, or possession of, the MHOP Units is held by such other public body or governmental agency, including the Government, the provisions hereof shall inure to the benefit of and may be enforced by, such other public body or governmental agency, including the Government. C:\TZX61C00P.D0C 4 COOPERATION AGREEMENT MPIL INEW HOPE EDA/CrrY OF NEW HOPE BASS LAKE TOWNIIOMEs IN WITNESS WHEREOF the Municipality, the EDA and the Authority have respectively signed this Agreement and caused their seals to be affixed and attested as of the day and year first above written. MINNEAPOLIS PUBLIC HOUSING. AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS Richard Brasted Its Chairman C And by j 1 � U - Cora McCorvey Its Executive Director D-.)MNN12510171D0CS\C00P.D0C COOPERATON AGREEMENT MPHA1NEW HOPE EDA/MTY OF NSW HOPE BASS LAKETOWN CESS EXIMMON PAGE CrrY OF NEW HOPE, nmvxESOTA By O'b �-' - " c W. Peter Enck Its Mayo r And b)A I/ y ` Daniel J , naf ue Its City Manager DAM12.5%au ocscOOP.DOc COOPBAATIONACaEZ &Wr LeHAMW HOPE EDA/C= OFMWNWE BASS LQM TowNt uE3 EXE=ON PAGE This Document Drafted by: Holmes & Galey, Ltd. 1200 One Financial Plaza 120 South Sixth Street Minneapolis, MN 55402 612-288-9300 612-288-9400 (Fax) ,� air: •�■• ECONObUC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By W. Peter Enck Its President And by Daniel J. Donahue Its Executive Director COMMATMAMMUaW' IeHA/NWH=EDA/=0FNWHM BM3L=T0WNHCMM $)MC[T1MPAM DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration) dated as of , 199_, by PPL -Bass Lake Court Limited Partnership (Partnership), its successors and assigns, is given to the Minneapolis Public Housing Authority in and for the City of Minneapolis (MPHA) and to the U.S. Department of Housing and Urban Development (HUD). RECITALS WHEREAS, the Partnership entered into a Housing Development Agreeme and a Regulatory and Operating Agreement (the "Agreements") with the MPHA dated as of� IL 199_ ; and WHEREAS, pursuant to the Agreements, the Partnership is obligated to construct and operate a thirty-four (34) unit rental housing project on property described in Exhibit A hereto (the "Property"), in which twelve (12) units are to be maintained and operated as public housing units as defined by the Agreements; and WHEREAS, the Partnership has received financial assistance provided by the MPHA for construction of the project, and will continue to receive financial assistance throughout the term of the Agreements from the MPHA to operate the public housing units; and WHEREAS, the MPHA has provided financial assistance and will continue to provide financial assistance received through a Mixed -Finance Amendment to Consolidated Annual Contributions Contract with the Secretary of HUD dated as of 3, 194J, as amended (the "ACC Amendment"); and WHEREAS, the ACC Amendment provides for annual contributions by HUD to the MPHA to assist in achieving and maintaining the lower income character of the twelve (12) public housing units to be located on the Property, which units are known as Project No. MN46POO207395A, and as a requirement for receiving said funding, the MPHA is required to include certain restrictions in all Agreements; and WHEREAS, the Partnership is required through the Agreements to cause to be executed an instrument in recordable form which obligates the Partnership, its successors and assigns to operate and maintain the public housing units in accordance with the Agreements, the ACC and ACC Amendments as provided for in the Agreements, and all federal, state and local regulations; and WHEREAS, the Partnership under this Declaration intends, declares and covenants that the restrictive covenants set forth herein shall be and are covenants running with the Property for the term described herein and binding upon all subsequent owners of the Property for such term, and are not merely personal covenants of the Partnership; NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth and of other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Partnership declares as follows: I. That for the period established by the ACC, that is, forty (40) years beginning on the date of full availability of the facilities, the Partnership, its successors or assigns, shall maintain and operate the public housing units in accordance with the terms of the Agreements, the ACC and ACC Amendments as provided for in the Agreements, and all federal, state and local regulations. 2. That the Partnership shall remain seized of the title to the Property and shall refrain from transferring, conveying, assigning, leasing, mortgaging, pledging, or otherwise encumbering or permitting or suffering any transfer, conveyance, assignment, lease, mortgage, pledge or other encumbrance of the Property or any part thereof or appurtenant thereto, or any rent, revenues, income or receipts therefrom, or in connection therewith, or any of the benefits or contributions granted to it by or pursuant to the Agreements, or pursuant to the ACC through the Agreements or any interest in any of the same, or demolishing any appurtenant thereto, without the approval of the MPHA and HUD. (a) To the extent permitted by Section 9.1 of the Housing Development Agreement, the Partnership may encumber the Property, provided that any and all encumbrances permitted by this clause shall at all times be subject and subordinate to the terms and conditions of the Agreements and the ACC. (b) To the extent and in the manner provided by the Agreements and the ACC, the Partnership may (i) lease dwelling units and other spaces and facilities in the Property; (ii) convey or dedicate land for use as alleys, streets, or other public right-of-way, and grant easements for the establishment, operation and maintenance of public utilities. (c) The MPHA with the prior approval of HUD may, in its sole discretion, approve release of the project and Property from the restrictions hereby created and said release shall be effective to terminate this Declaration. Upon expiration of the period during which the Partnership is obligated to operate the Property in accordance with the Agreements, the ACC, and the ACC Amendments as provided for in the Agreements, this Declaration shall terminate and shall no longer be effective. 3. The MPHA with the prior approval of HUD, acting by and through duly authorized officials, may approve such action as may be necessary to allow the transfer, conveyance, assignment, leasing, mortgaging, or encumbering of the Property or to accomplish the acts described above. 4. This Declaration and the covenants set forth herein regulating and restricting the use and occupancy of the Property (i) shall be and are covenants running with the Property, encumbering the Property for the term of this Declaration, and binding upon the Partnership's successors in title and all subsequent owners of the Property, (ii) are not merely personal covenants of the Partnership, and (iii) shall bind the Partnership and its respective successors and assigns during the term of this Declaration. 5. Any and all requirements of the laws of the State to be satisfied in order for the provisions of this Declaration to constitute deed restrictions and covenants running with the land shall be deemed to be satisfied in full, and that any requirements or privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the land. For the term of this Declaration, each and every contract, deed, or other instrument hereafter executed conveying the Property or portion thereof shall expressly provide that such conveyance is subject to this Declaration, provided, however, that the covenants contained herein shall survive and be effective regardless of whether such contract, deed or other instrument hereafter executed conveying the Property or portion thereof provides that such conveyance is subject to this Declaration. 6. The invalidity of any clause, part or provision of this Declaration shall not affect the validity of the remaining portions thereof. IN WITNESS WHEREOF, the Partnership has caused this Agreement to be signed by its duly authorized representatives, as of the day and year first above written. PPL -BASS LAKE COURT LMTED PARTNERSHIP a Minnesota limited partnership BY; PROJECT OR PRIDE IN LIVING, INC. ITS GE PARTNER A STATE OF MINNESOTA ) COUNTY OF " } }ss. The foregoing instrument was acknowledged before me this ) -'� day of 199_, by Steve Cramer, President of Project for Pride in Living, Inc., the general partner of PPL -Bass Lake Court Limited Partnership, a Minnesota limited partnership, named in the foregoing instrument, on behalf of the partnership. IN AAAMu+n %&&.N nAAM&Af"AAA,%^ ,^^ —^ m DOERING S. MEYER NOTARY PUBUC - MINNEMA €2AMSEY COUNTY My Gammission Expires Jan. 3a, 2000 N vrn Vn W. r This Document was drafted by- U.S. y•U.S. Department of Housing and Urban Development Notary Public DECLARATION OF RESTRICTIVE COVENANTS LEGAL DESCRIPTION Parcel 1: The South 56 feet of the North 101 feet of the East 62.59 feet of the West 226.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast comer of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 2: The South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 101 feet of the following described tract. That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast comer of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 175.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 3: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast comer of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof, thence East parallel with the South line of said Lot 32 to its intersection with the Fast line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 4: That South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 5: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast comer of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast comer of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest comer of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof, thence East parallel with the South line of said Lot 32 to its intersection with the Fast line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 6: The East 56 feet of the West 282.17 feet of the South 60.50 feet of the North 174.87 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 7: The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly from the South line of said Northeast Quarter of the Southwest Quarter as measured along said West line and its Southerly extension, to a point on the East line of Murray Lane -3rd Addition 444.66 feet Northerly from its intersection with said South line. Being registered land as is evidenced by Certificate of Title No. 820577. Parcel 8: The South 145.2 feet of the West 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 9: The South 80 feet of the East 166.76 feet of the West 296.76 feet of Lot 32, Auditor's Subdivision No. 226, Hennepin County, Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. Abstract Property. Parcel 10: The North 100 feet of that part of the West Half of Lot 32, lying South of the North 6 acres thereof, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 11: That part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, described as beginning at the intersection of the South line of said Northeast Quarter of the Southwest Quarter with the Southerly extension of the West line of Murray Lane 4th Addition; thence Northerly along said Southerly extension and along said West line a distance of 444.49 feet; thence Westerly in a straight line to a point on the East line of Murray Lane 3rd Addition distant 444.66 feet Northerly from its intersection with said South line; thence Southerly along said Fast line to. the North line of the South 178.2 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line to a line drawn parallel with and 100 feet East from said East line of Murray Lane 3rd Addition; thence Southerly along said parallel line to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said South line to a line drawn parallel with and 196.76 feet West from said West line of Murray Lane 4th Addition; thence Northerly parallel with said West line to the North line of the South 113 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line of the South 113 feet to a line drawn parallel with and 30 feet West from said West line of Murray Lane 4th Addition; thence Southerly parallel with said West line and its Southerly extension to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said South line to the point of beginning. Except those portions of the above-described property described as follows: The East 56 feet of the West 101 feet of the South 182.37 feet of the North 227.37 feet; The East 62.59 feet of the West 226.17 feet of the South 56 feet of the North 101 feet; The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet; The East 56 feet of the West 282.17 feet of the South 182.37 feet of the North 227.37 feet, according to the United States Government Survey thereof and situate in Hennepin County, Minnesota. Being registered land as is evidenced by Certificate of Title No. 820576. EXECUTION COPY 08/04/98 INITIAL AGREEMENT THIS AGREEMENT, made this.4:ih day of +- 1998 by and between the Minneapolis Public Housing Authority in and for the ity of Minneapolis a public body corporate and politic (the "MPHR") and the Economic Development Authority in and for the City of New Hope, a public body corporate and politic (the "EDA") is entered into pursuant to Mnnesota Statutes, § 471.59 and § 469.012, Subds. 1(1 1) and 3. WHEREAS, the MPHR has entered into an Annual Contributions Contract ("ACC") with the United States Department of Housing and Urban Development ("HUD") for funding the capital and operating costs of low rent public housing units and projects throughout the Minneapolis -St. Paul metropolitan area; and WHEREAS, the MPHA has established the Metropolitan Housing Opportunities Program ("MHOP") pursuant to which it will cooperate with suburban counties and municipalities in the construction and operation of qualified housing units (the "MHOP Units"); and WHEREAS, Project for Pride in Living, Inc., a Minnesota nonprofit corporation, on behalf of a low income housing tax credit partnership to be formed (the "Owner") has applied to the MPHA to locate twelve (12) MHOP Units within its development of a 34 -unit multifamily housing project to be known as Bass Lake Townhomes (the "Development") to be located in the City of New Hope (the "City"); and WHEREAS, the MPHA, the EDA and the City have agreed to cooperate in the location of six (6) MHOP Units in the Development; and WHEREAS, the purpose of this Agreement is to define the relationship of the MPHA and EDA, with respect to the planning, construction, ownership and operation of the MHOP Units. NOW, THEREFORE, it is agreed by the parties hereto as follows: I. PROPOSAL. The parties will jointly prepare and submit to HUD a proposal for development funds in the approximate amount of $1,356,480 and ongoing operating subsidy under the ACC for the construction and operation of 8 replacement units and 4 incentive units of MHOP housing. A. All required Development information, including financial pro formas and design and construction documents, will be gathered and assembled by the EDA and delivered to the MPHA. r_ ATEh ADmTAL N)C INMAL AGREEMEW MPHVMW HOPE EDA BASS LAKE TOWNHoum B. Final document preparation, including initial operating budgets, and conformity with federal regulations and HUD requirements will be the responsibility of the MPHR. C. The MPHA shall be responsible for administering the processing of the Proposal and obtaining its approval by HUD. D. The EDA shall be responsible for all liaison with the Metropolitan Council and the Minnesota Housing Finance Agency ("MHFA') with respect to all other funding effecting the Development. E. The EDA will provide to the MPHR a copy of the EDA's Equal Opportunity Housing Plan and the MPHA will provide the EDA with a copy of the current MPHR plan. The parties will make reasonable efforts to coordinate the substance and implementation of these plans in the development and operation of the MHOP Units. F. The MPHR will monitor the application of federal Davis -Bacon wage requirements which shall apply to the Development provided that the Housing Development Agreement between and among the EDA,, MPHA and the Owner shall require the Owner and construction contractors to provide the MPHA such information as it may reasonably require in order to meet its obligation hereunder. 11 DEVELOPMENT. The MPHR and the EDA shall enter into a Housing Development Agreement with the Owner which will: A Establish the design and construction specifications of the twelve (12) MHOP Units as 6 three-bedroom and 6 four-bedroom units; B. Confirm the amenities to be provided within and around the Development; C. Provide that the level of MHOP funding for the Development will equal certified construction costs (pro rata based on bedroom size); D. Provide that the operating subsidy reserve fund be drawn upon in the event operating subsidies paid by the MPHA are inadequate to pay the difference between MHOP Unit income and expenses, as defined below; E. Provide for the draw -down of public housing development funds on a pro rata basis with other Development funding sources; F. Establish a system by which the MHOP units within the Development will not be physically identified, but rather will "float" throughout the Development depending upon vacancies and availability; D Vv� 12M0171OOCSUMTLAL.DOCINirTIAL AGPZMAEW MPHAMEW EM HDA BASS LAIE TOWMM ES G. Identify the system for construction inspections, cost certifications and development audits; H. Require execution by the Owner of the Regulatory and Operating Agreement and a Declaration of Restrictive Covenants creating a covenant running with the land obligating the Owner of the Development and all successors in interest to maintain and operate the MHOP Units in compliance with all applicable requirements of Section 5 of the United States Housing Act of 1937 and the ACC; and I. Require the recording of the Declaration of Restrictive Covenants against the Development property. 11L MANAGEMENT. The Regulatory and Operating Agreement shall provide that Project for Pride in Living, Inc. (the "Managing Agent") shall manage all the units at the Development, including the MHOP Units and: A. shall comply with all federal law, regulations and policies and the ACC. B. shall provide the WHA/EDA, HUD and MHFA with access to all books and records maintained by the manager or managers with respect to the MHOP Units. C. shall be subject to termination and replacement as to the entire Development if it is determined by the MPHA/EDA or by the MHFA, subject to appropriate judicial review by any court of competent jurisdiction, that the Managing Agent or any successor has materially violated, breached, or failed to comply with any provision of federal law, regulation, policy, or the ACC. D. shall receive from the MPHAIEDA the names of persons and families who meet theincome and waiting list criteria for admission into the MHOP Units and shall carry out such administrative functions as (but not limited to) applicant interviews and screening, verifications, determination of suitability for admission, unit assignment, execution of leases, terminations and evictions. IV. WAITING LIST MANAGEMENT. The IDA shall maintain the waiting lists for those applying for housing in the MHOP Units,- using applicable federal, MHOP and local priorities. Applicants for the twelve (12) MHOP Units will be selected from waiting lists based upon the following priorities: A. The Replacement Authority Units (as defined in the Regulatory and Operating Agreement) will be selected based upon the following priorities: 1. First, to families displaced by the demolition of Minneapolis public housing units pursuant to that certain Consent Decree entered in settlement of Holtman et al. vs. Cisneros et al., U.S.D.C. (Nunn. Dist., 4th Div.) Civil Case No. 4-92-712. nAMNN125\017Mo0cs\1an1AL.E= 3 M MPHAMMEMMA Bass LA= TOWNHOWS 2. Second, to families on the MPHA waiting and transfer lists who live in minority or poverty concentrated areas in the metropolitan area. 3. Third, to families on the MPHA waiting list. This will include all families wishing to participate in MHOP, including both Minneapolis waiting list families and applicants from the EDA The MPHA will automatically place all applicants from the EDA on its waiting list, thus (subject to HUD approval) making both Minneapolis and City of New Hope residents equally eligible for this priority. B. The Authority Incentive Units (as defined in the Regulatory and Operating Agreement) will be filled pursuant to the EDA's waiting list procedures. The EDA will have full and complete control over the management of the waiting list, and the Managing Agent will have complete control over the selection of residents, so long as the MHOP priorities and all federal and state laws are followed. The MPHA will promptly and continuously refer all Minneapolis applicants to the EDA for placement on the MHOP waiting list. If the referral system results in no eligible and suitable tenant with Consent Decree priorities, the unit can be filled with other applicants on the waiting list. The EDA shall provide HUD a certification, in the form attached hereto as Exhibit A, certifying that its waiting list procedures will conform with applicable law and regulations. V. POST CONSTRUCTION DUTIES. As a part of the HUD close-out requirements with respect to the MHDP Units, the following responsibilities will be assigned: A. The MPHA shall designate the End of the Initial Operating Period ("EIOP") and shall coordinate the inclusion of the MHOP Units in the MPHA Annual Operating Budget. B. Within 12 months of HIOP, the EDA shall gather information and provide HUD with the Actual Development Cost Certificate ("ADCC"). C. The MPHA shall be responsible for the preparation of an audit by an independent public accountant as a part of its submission of the ADCC. The EDA shall provide such information as is in its possession or can be reasonably obtained in order to assist the MPHR with such audit. D. The MPHA shall monitor the Managing Agent's procedures and results in screening applicants provided from the EDA waiting lists and report the results thereof to HUD as may be requested or required. D%a4N 125\01700CS1INMALDOC 4 WMAL AGREEhOW mow HOM MA BASS LMM TOWN HONM VL TAX CERTIFICATIONS The EDA shall annually certify to the appropriate assessing officials the number of MHOP units located within the Development, pursuant to Nfinnesota Statutes, Section 469.040, subdivision 4. VII. OPERATING SUBSIDY. Under the ACC, HUD contracts to provide an operating subsidy to the WHA for all units subject to the ACC, which will include these MHOP Units. It is therefore necessary to establish a methodology by which the WHA will pay operating subsidy to the Owner of the MHOP Units. That system, to be described more My in a Regulatory and Operating Agreement between the WHA and the Owner, will be generally as follows: A. As used in this Section VII., the following terms shall have the following meanings: 1. "Allowed Project Expenses" means all necessary and reasonable operating expenses of the Development for any period, including: (a) all ordinary and necessary expenses of operations of the Development shown as line items on Form HUD -92547 A (Budget Worksheet), exclusive of real estate taxes and debt service requirements of any lender and exclusive of utility expenses which are the direct responsibility of tenants; provided, however, that if the Owner shall be required to borrow funds for repairs, replacements or improvements not funded from a Development reserve fund for replacements, debt service requirements for any such borrowing approved by the MPHA (which approval shall not unreasonably be withheld) shall be included in Allowed Project Expenses; provided, further, that MHOP Unit Expenses (as hereinafter defined) shall be reduced by any amounts contributed by the MPHA or EDA, on a grant basis, for repairs, replacements or improvements; (b) management fees payable pursuant to the Property Management Agreement; (c) legal expenses associated with the operation of the Development as well as accounting and audit expenses, including tax return preparation expenses, permitted to be charged as project expenses pursuant to HUD Handbook 4370.2 REV -1, Financial Operations and Accounting Procedures for Insured Multifamily Projects, or any successor thereto; and DAMNN125W1700CMINITLALDOC 5 INMALAGRETWE rr WHAIMw Hors HDA BASS LAXB TOVINHOIARS (d) reserves for replacements and for any other purposes, as required by any lender and approved by the MPHA. 2_ WHOP Percentage" shall mean the higher of (i) the number of MHOP Units, divided by the total number of units at the Development, or (ii) the net rentable square feet of the MHOP Units (assuming 6 three-bedroom units and 6 four-bedroom units), divided by the net rentable square feet of all the units at the Development. 3. ' NMOP Unit Expenses" shall mean (A) Allowed Project Expenses, multiplied by the MHOP Percentage, plus (B) the payment in lieu of real estate taxes made in respect of the MHOP Units, if any, plus (C) amounts paid to MHOP Unit occupants as utility reimbursement (i.e., "negative rent"); provided, however, that if any line item expense shall be included in Estimated MHOP Unit Expenses on the basis of a percentage other than the MHOP Percentage pursuant to the second sentence of Section VII.B.1. hereof, such expense shall be included in MHOP Unit Expenses on the basis of the same percentage; 4. "MHOP Unit Income" shall mean all income received in respect of 141HOP Units, including tenant rents ("Tenant Rent" as defined in 24 CFR § 913.102) and any other sources of income received in respect of MHOP Units, including all types of revenue shown as line items on Form HUD 92547-A, but exclusive of operating subsidy. 5. "Estimated Allowed Project Expenses," "Estimated MHOP Unit Expenses," and "Estimated MHOP Unit Income" shall mean the estimated amounts of such items for any period determined in accordance with subsection B. hereof B. Not later than 90 days prior to the anticipated Date of Full Availability ("DOW) for occupancy of any unit of the Development, and not later than 150 days before the first day of any subsequent MPHA Fiscal Year, the Owner shall prepare and submit to the MPHA a proposed operating budget for the following WHA Fiscal Year (or, in the case of the year in which DOFA occurs, the remainder thereof) ("Operating Budget")_ The Operating Budget shall project Estimated Allowed Project Expenses, Estimated MHOP Unit Expenses, and Estimated MHOP Unit Income for the subject period, subject to the following conditions: Estimated Allowed Project Expenses shall be as reasonably estimated by the Owner. The WHA may comment upon and propose changes to the Estimated Allowed Project Expenses as provided by the Owner and set forth in the Operating Budget submitted to the WHA, but the Owner shall not be required to reduce any estimated expense below the Development - wide amount for such expenditure reasonably anticipated by the Owner for D:W1Nmr125\01 rmCS\Ugr 7AL.noc atMAL ACWJU04Wr 15RAINEWIHMEDA Bnssr.n M TOWNRCOM the period. However, the portion of any line item within the Estimated Allowed Project Expenses included in Estimated MHOP Unit Expenses shall be altered from the MHOP Percentage if the MPHA demonstrates satisfactorily that allocation of such item to the MHOP Units on the basis of the MHOP Percentage is inappropriate (e.g., marketing and advertising costs, if such relate solely or preponderantly to the non MHOP units). 2. Until the completion of initial rent -up of the MHOP Units, Estimated MHOP Unit Income shall be determined on the basis of assumed tenant rent collections for each unit size equal to the average tenant rent collections for all units of comparable size owned and administered .by the MPHA in the most recent annual or semiannual period for which such statistics are available at the time of the Owner's submission of the Operating Budget for such period to the MPHA. For each subsequent WHA Fiscal Year, Estimated MHOP Unit Income shall be determined on the basis of the aggregate tenant rents actually collected for all MHOP Units during the first six months of the preceding MPHA Fiscal Year. Notwithstanding the foregoing, with respect to any MPHA Fiscal Year, the WHA may agree to project Estimated MHOP Unit Income at a level different from that which would otherwise be established pursuant to the preceding sentence, taking into account (a) the reasonably anticipated level of incomes of tenants anticipated to be admitted to the MHOP Units during such period, based on anticipated turnover and the admissions policies, and (b) reasonably anticipated increases in income levels of existing tenants based on tenant participation in employment training and other supportive services programs_ C. During each MPHA Fiscal Year commencing with the first WHA Fiscal Year after DOFA, and subjedt to any limitations arising from application of Section 20 (e) of the Act and operation of the Development Operating Subsidy Cap, the MPHA, shall pay to the Owner an amount equal to (1) Estimated MHOP Unit Expenses for such period, less (2) Estimated MHOP Unit Income for the period (the "Operating Subsidy Requirement"). The WHA shall pay to the Owner, on the first day of each month of an MPHA Fiscal Year, one -twelfth (1/12) of the Operating Subsidy Requirement for such MPHA Fiscal Year, provided, however, that the Owner and the MPHA may agree, upon determination of the Operating Budget and Operating Subsidy Requirement for any WHA Fiscal Year, to provide for unequal monthly payments for such year. vm. REGULATORY AND OPERATING AGREEMENT RESPONSIBILITY. The Regulatory and Operating Agreement provides for ongoing joint monitoring and decision- making by the EDA and MPHA. If the two entities cannot agree as to any action or response called for in said Agreement, or any other agreement involving the MHOP Units, the decision of the MPHA shall be controlling with respect to all matters which directly or indirectly effect either its financial obligations with respect to the MHOP Units or its a:%4NN12510171 W3UNUL4L.DW7 AGREMMW t ORAMW HM EDA BM5LAKET0W1 nDMRS relationship with HUD arising from the ACC. In all other matters, the decision of the EDA shall control. IX. RESERVE FUND. An operating reserve will be created by the Owner from its funds. The reserve will equal three years' estimated operating subsidy for the MHOP Unit$, but will be allowed to grow through interest earnings and certain operating subsidy reimbursements, if any. Shortfalls, either because of the recalculation of three years' estimated operating subsidy or because of necessary withdrawal from the reserve may be made up by the MPHA or EDA, but they are not obligated to do so. X. ADMINISTRATIVE COSTS. The MPHA- and EDA shall each bear the- costs associated with their respective obligations and responsibilities described herein or otherwise related to the construction and operation of the MHOP Units. The MPHR and the EDA shall separately agree as to reimbursements to the EDA, if any, for administering the waiting list and grievance procedure. XI. TERMINATION AND/OR ASSIGNMENT A In the event the EDA wishes to terminate this Agreement it may do so as follows: 1. Ninety (90) days' notice of its intention to terminate shall be served upon the MPHA by the EDA in writing; 2. The EDA shall assume and undertake all of the obligations and responsibilities of the MPHA as set forth in all written agreements relating to the Development between the MPHA, on the one hand, and the EDA, the Owner, the MHFA, HUD or any other contracting party, on the other; 3. The EDA shall become the contracting party with HUD with respect to the annual contributions contract governing the construction and operation of the Development; 4. HUD shall consent in writing to such termination; and 5. The MPHA shall be released from all future liability arising from and responsibility for the ongoing construction or operation of the Development. B. -In the event the EDA and the Metropolitan Council or any other eligible governmental entity ("Successor Public Entity") agree that the Successor Public Entity will undertake the responsibilities and obligations of the MPHA with respect to the Development, and provided that the Successor Public Entity fums the conditions described in paragraph XI.A 1. through 5., above, the MPHA shall assign to the Successor Public. Entity all of the agreements to which it is a party as they may relate to the construction or operation of the Development. nAMNN125\01700CSNIN rrALDOc $ n`rrMLAGRE9MSNT lulelIAIN6w HOPS $na EMS LAX3 TOWNHOhES C. All agreements executed by the MPHA with respect to the Development shall provide for the eventualities described in this paragraph Xl. XII. MISCEII ANVE®US. A. No member, official, or employee of the MPHR or EDA shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation, partnership, or association in which he or she is, directly or indirectly, interested. No member, official, or employee of the MPHA or EDA shall be personally liable to a party to this Agreement, or any successor in interest, in the event of any default or breach by any party or for any amount which may become due a party or successor or on any obligations under the terms of this Agreement. B. The parties hereto, for themselves and their successors and assigns, agree that during the term of this Agreement they will comply with all affirmative action and non-discrimination requirements of applicable federal, state or local laws or regulations_ C. Any titles of the several parts, Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. D. Except as otherwise expressly provided in this Agreement, a notice; demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, and in the case of the MPHR, is addressed to or delivered personally to the MPHA at 1001 North Washington Avenue, Minneapolis, MN 55401, Attention: Executive Director, and 2. in the case of the EDA, is addressed to or delivered personally to the EDA at 4401 Xyion Avenue North, New Hope, MN 55428-4898 Attention: Executive Director, or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. E. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. U:1MNN1VD17TX)CSi4MA1-Doc 9 err MALAc�rrr na%VVMWH=H ► Bass LAKE TOWNM&S IN WITNESS WHEREOF, the MPHA has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the IDA has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. A EPMEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS By r Richard Brustad Itis Chairman By, STATE OF 1VIINNESOTA ) ) ss. CITY OF EMNNEPIN Cora McCorvey E Its Executive Director On this &t—'�day of 1998, before me, a notary public within and .for Hennepin City, personally app Richard 2Brustad and Cora McCorvey, the Chairman and Executive Director, respectively, the Minneapolis Public Housing Authority in and for the City of Minneapolis, a public body corporate and politic under the laws of the State of Minnesota (the "MPHR"), named in the foregoing instrument and acknowledged said instrument on behalf of the MPHR. 1,,9 i`7 x SUSAN E. SEE! NoTAAR,r Pueerc-wNwEsorA 1hr Coy 6Eplru da, st, l000 r)!%dN 1125w17WcSwrrraL.noc MULALAGR NT nd4wNEW tis EDA BASS LAKE TOWNHamw EXECLni W COPY ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE B Y ete Enck Its President r By Danie J. Donahue Its Executive Director STATE OF NUNNESOTA ) COUNTY OF Hennepin )ss. On this 17th day of _August , 1998 , before me, a notary public within and for Hennepin Cody. personally appeared _ W. Peter Enck and Daniel J. Donahue the President and EXgtutive Director , respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic under the laws of the State of Minnesota (the "EDA"), named in the foregoing instrument and acknowledged said instrument on behalf of the IDA VALERIE J. LEONE my NOTARY lonMFxolr" � immy 31. D:\M N1254017A=S%aTIAL-DDC Q • Wil '•:, A- ' Waiting List Certification We hereby certify that the waiting list of the Economic Development Authority in and for the City of New Hope for the Metropolitan Housing Opportunity Program at the Bass Lake Townhomes Development in New Hope, Kmesota will conform to a Consent Decree in settlement of Hollman et al. v. Cisneros et al., U.S.D.C. (Minn. Dist., 4th Div.) Civil No. 4-92- 712 and 24 CFR Part 5, Part 8, 913, 960 and 966 and applicable Fair Housing and Equal Opportunity laws and regulations. Dated: August 17 , 1998 ECONOA HC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE � MAN Its President t B Da fifel J . Do nah ue ItsExecutive Director STATE OF MINNESOTA } )ss. COUNTY OF Hennepin On this 1 7 th day of August , 199 before me, a notary public within and for Hennepin County, personally appeared W. Peter Enck and Daniel J. Donahue_ the President and respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic under the laws of the State of Minnesota (the "EDA!), named in the foregoing instrument and aclmowledged said instrument on behalf of the EDA - VALERIE J. LEONE NOTARY PUBLIC - MINNESOTA a' My Januae ry 31. Expfrss D:%dNN 125VD171DXS\n;MALJ= A-1 Bt's 1APHA tMW HM $DA BMS LA= Td MIChM EXECUTION COPY 09102198 AMENDMENT NO. I TO THE INITIAL AGREEMENT BETWEEN THE ECONONIIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE AND THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY L This Amendment made thio day oY- 1998 to that certain Initial en Agreement, dated August 26, 1998,betwea Economic Development Authority in and for the City of New Hope {the "IDA"} and the Minneapolis Public Housing Authority (the " UHA"). WHEREAS, the EDA has agreed to maintain the waiting list for those applying for housing in both the incentive and replacement MHOP Units in the Bass Lake Road Townhomes development, and WBEREAS, the IDA now wishes to have the Metropolitan Council HRA administer the waiting fist for the incentive units; and WHEREAS, the Metropolitan Council HRA has agreed to administer the waiting lists for incentive units in suburban developments upon request of the local sponsoring agency- NOW, gency NOW, THEREFORE, it is agreed by the parties hereto to amend the Initial Agreement as follows: 1. The MPHR shall administer the waiting list for the replacement MHOP units in the Bass Lake Road Townhomes development; and 2. The EDA, by agreement with the Metropolitan Council HRA, will administer the waiting list for the incentive MHOP units in the Bass Lake Road Townhomes development. IN WITNESS WHEREOF, the NPHA has caused this Amendment to be duly executed in its name and behalf and its seal to be hereunto affixed and the City has caused this Amendment to be duly executed in its name and behalf on or as of the date first above written. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS Richard Brustad Its Chairman r �L By. Cora MCCorvey Its Executive Di ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By. W. Peter Enck Its President By lv-,� 42r,42,z yZ=15::i:L1r .DA'rel J. Donahue Its Lxecutive Director 113$RYER\t OC%&RN125WI71DOCS\AhiSMNO. l DMALMM EXECUTION December 28, 1998 HOUSING DEVELOPMENT AGREEMENT By and Between THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS and PPL - BASS LAKE COURT LIMITED PARTNERSHIP and THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE This document was drafted by: HOLMES & ASSOCIATES, LTD. Two Carlson Parkway, Suite 155 Minneapolis, Minnesota 55447 (612) 249-0888 (612) 249-0777 (fax) DAUM 1 25\0 1 ADOCSOEVAGR.DOC HOUSING DEVELOPMENT AGREEMENT PARTIES.......................... ........................................................................................................ I RECITALS..................................................................................................................................2 ARTICLE I Definitions Section1.I. Definitions................................................................................................................2 ARTICLE H Representations and Warranties Section 2.1. General Representations..........................................................................................5 Section 2.2. Representations and Warranties of the MPHA........................................................5 Section 2.3. Representations and Warranties of the EDA...........................................................5 Section 2.4. Representations and Warranties by the Owner........................................................5 ARTICLE III The Development Section3.1. Description...............................................................................................................8 Section3.2. Construction.............................................................................................................8 Section 3.3. Construction Plans.................................................................................... ...8 Section 3.4. Commencement and Completion of Construction....................................................9 Section 3.5. Certificate of Completion......................................................................................10 ARTICLE IV The Public Housing Units Section4.1. Described...............................................................................................................I I Section 4.2. Interchangeable Units............................................................................................11 ARTICLE V Public Assistance Section 5.1. Funds Description ........................................... --.....................................................12 Section 5.2. Development Funds.................................................................. ........ ..12 DAMNN 125\0171DOCSWEV AGR. DOC i HOUSING DEVELOPMENT AGREEMENT Section 5.3. Operating Subsidy..................................................................................................12 Section 5.4. Payments in Lieu of Taxes.....................................................................................13 Section 5.5. Payment Limitations..............................................................................................13 ARTICLE VI Additional Regulatory Requirements Section 6.1. Additional Regulatory Requirements....................................................................14 ARTICLE VII Mortgage Financing Section 7.1. Mortgage Financing and/or Equity........................................................................16 Section 7.2. Authorities' Option to Cure Default on Mortgage.................................................16 ARTICLE VIII Insurance Section8.1. Insurance................................................................................................................17 Section 8.2. Damage or Destruction..........................................................................................18 ARTICLE IX Encumbrances; Sale; Indemnification Section 9.1. Encumbrances........................................................................................................20 Section9.2. Sale............................................................................................. ...................20 Section 9.3. Indemnification......................................................................................................20 ARTICLE X Events of Default Section 10.1. Event of Default Defined.............................................................................. ....22 Section 10.2. Remedies Upon Default.........................................................................................22 Section 10.3. No Remedy Exclusive............................................................................................22 Section 10.4. No Additional Waiver Implied by One Waiver.....................................................22 Dc1XM125\017\DOCSIDEVAGR.IJOC ii HOUSING DEVELOPMENT AGREEMENT T'ESTIMONIUM SIGNATURES EXHIBIT A ARTICLE XI EXHIBIT B Declaration of Restrictive Covenants Additional Provisions Certificate of Completion Section 11.1. Duration of Agreement..........................................................................................23 Section11.2. Assignment............................................................................................................23 Section 11.3. Recording of Agreement........................................................................................23 Section11.4. Amendment.............................................................................._.............................23 Section11.5. Authorities..............................................................................................................23 Section 11.6. Conflict of Interests; MPHA and EDA Representatives NotIndividually Liable..........................................................................................23 Section11.7. No Merger..............................................................................................................24 Section 11.8. Notices and Demands............................................................................................24 Section 11.9. Counterparts...........................................................................................................24 Section11.10. Law Governing......................................................................................................24 Section11.11. Severability............................................................................................................25 T'ESTIMONIUM SIGNATURES EXHIBIT A Legal Description EXHIBIT B Declaration of Restrictive Covenants EXHIBIT C Certificate of Completion EXHIBIT D Title Insurance Commitment D:VYM125\01RDOCSIDEVAGR.DOC iii HOUSING DEVELOPMENT AGREEMENT HOUSING DEVELOPMENT AGREEMENT THIS AGREEMENT, made this 31st day of December, 1998 by, between, and among the MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS, a public body corporate and politic under the laws of the State of Minnesota (hereinafter referred to as the "MPHA"), PPL - BASS LAKE COURT LIMITED PARTNERSHIP, a Minnesota limited partnership (hereinafter referred to as the "Owner"), and the ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, a public body corporate and politic under the laws of the State of Minnesota (hereinafter referred to as the "EDA"). WITNESSETH: WHEREAS, the parties to this Agreement have participated in negotiations concerning a 34 -unit multi -family housing facility (the "Development") to be constructed in the City of New Hope, Minnesota; and WHEREAS, the MPHA has received an approval dated December 17, 1998 from the United States Department of Housing and Urban Development ("HUD") to a Proposal (the " Proposal") pursuant to which the MPHA has been granted funding for Public Housing Units within Mixed -Finance Developments throughout the Minneapolis -St. Paul metropolitan area; and WHEREAS, the MPHA and the EDA have entered into that certain Initial Agreement dated November 19, 1997, and amended August 26, 1998, for the purpose of seeking the inclusion of Public Housing Units within the Development; and WHEREAS, the parties to this Agreement have proposed to include twelve (12) Public Housing Units within the Development and to fund the development of the twelve (12) Public Housing Units in accordance with the terms and conditions of this Agreement. WHEREAS, the MPHA, EDA and the Owner will entered into a Regulatory and Operating Agreement (the "Regulatory Agreement") providing for the maintenance and operation of the Public Housing Units and the payment of operating subsidy by the MPHA. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: DAMI 25%0171DOCSWEVAGR,DOC 1 HOUSING DEVELOPNIENTAGREEMENT ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means the United States Housing Act of 1937, as amended. "Authorities" means the MPHA and the EDA collectively. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "ACC" means the Annual Contributions Contract between the MPHA and HUD. "ACC Amendment" means the Mixed -Finance Amendment to Consolidated Annual Contributions Contract between the MPHA and HUD which define the terms of Mixed Finance Developments. "Certified Costs" means the Owner's cost of constructing twelve (12) Public Housing Units, which shall equal (i) the sum of all site acquisition, relocation, demolition, construction and equipment, on-site utilities, non -dwelling facilities, construction period insurance premiums and other costs necessary to develop the Development, (ii) divided by 90 (the number of bedrooms in the Development), (iii) multiplied by 42 (number of Public Housing Unit bedrooms). "City" means the City of New Hope, Minnesota. "Closing" means delivery of the Development Funds to the Owner which shall occur upon the closing of the Mortgage and submission of evidentiary documents to MPHR and HUD. "Construction Plans" means the Construction Plans submitted in connection with Article III of the this Agreement. "Cooperation Agreement" means the agreement between the MPHA, the EDA, and the City exempting the Public Housing Units from property taxes and providing for payments in lieu of taxes (PILOT). "County" means the County of Hennepin, Minnesota. "Development" means the 34 -unit multi -family housing facility to be constructed upon the Development Site, which shall contain twelve (12) Public Housing Units. D:V&,TN12MOI71DOCMDEVAGR.DOC 2 HOUSING DEVELOPMENT AGREEMENT "Development Cost Budget" means the line item budget approved by the MPHA and HUD for the construction and development of the Public Housing Units. "Development Funds" means funds derived by the MPHA from HUD and to be paid to the Owner for Certified Costs of twelve (12) Public Housing Units within the Development. "Development Site" means the property legally described in Exhibit A to this Agreement upon which the Development will be constructed. "EDA" means the Economic Development Authority in and for the City of New Hope. "Event of Default" means an action by the Parties as provided in Article X of this Agreement. "Fund" means Family Housing Fund. "HUD" means the United States Department of Housing and Urban Development. "Initial Operating Deficit Account" means an account maintained by the MPHA during the Initial Operating Period into which all rental income from the Public Housing Units is deposited and from which expenses of the Public Housing Units are paid. "Initial Operating Period" or "IOP" means the period between (i) the date on which construction of the Public Housing Units is substantially complete and they become available for occupancy, and (ii) the beginning of the next quarter of the MPHA's fiscal year. "Management Agreement" means the agreement between the Owner, the EDA, the MPHA and Project for Pride in Living, Inc., or any approved successor management company, for the management of the Development, including the Public Housing Units. "Mortgage" means that certain first mortgage made by the Owner, as mortgagor, and Minnesota Housing Finance Agency, as mortgagee, or any successor mortgage which is secured, in whole or in part, by the Development Site and which is a permitted encumbrance pursuant to Section 9.1. "MHFA" means the Minnesota Housing Finance Agency_ "MPHA" means the Minneapolis Public Housing Authority in and for the City of Minneapolis. "Mixed Finance Development" means the development of Public Housing Units through the use of both public and private financing in accordance with HUD regulations and the ACC Amendment_ D:\MM12540171DOCSIDEVAGR.DOC 3 HOUSING DEVELOPMENT AGREEMENT "Net Proceeds" means any proceeds paid by an insurer to Owner or the Authorities under a policy or policies of insurance required to be provided and maintained by the Owner pursuant to Article VIII and remaining after deducting all expenses (including fees and disbursements of counsel) incurred in the collection of such proceeds. "Operating Subsidy" means funds derived by the MPHA from HUD to be paid to the Owner to reimburse the Owner for all or a part of the difference between the cost of operating and income derived from the Public Housing Units. "Owner" means PPL - Bass Lake Court Limited Partnership, a Minnesota limited partnership having its principal office at 251.6 Chicago Avenue South, Minneapolis, Minnesota 55404, Attention: Steve Cramer. "Parties" mean the MPHA, the EDA, and the Owner collectively. "Public Assistance" means the total financial assistance paid to the Owner by the MPHA in accordance with Article V of this Agreement for the purpose of funding the development and operation of the Public Housing Units. "Public Housing Units" means the twelve (12) residential units within the Development that will be reserved for low-income public housing pursuant to this Agreement and the Regulatory Agreement and will be eligible to receive both the Public Assistance under this Agreement and the Operating Subsidy under the Regulatory Agreement. "Regulatory Agreement" means the agreement by, between., and among the Parties setting forth the rights and obligations of each with respect to the day-to-day operation of the Public Housing Units and the operating subsidy payable by the MPHA in connection therewith. "Restrictive Covenant" means the Declaration of Restrictive Covenants attached as Exhibit B to this Agreement which obligates the Owner to operate and maintain the Public Housing Units in accordance with the Act, the ACC, the ACC Amendment and all federal, state and local laws and regulations. "State" means the State of Minnesota. "Unavoidable Delays" means delay in the performance of obligations hereunder due to acts of God, acts of the public enemy, acts of the federal government, acts of the other party, fire, floods, epidemics, quarantine restrictions, strikes, freight embargoes, unusually severe weather or delays of subcontractors due to such causes or any other cause beyond the reasonable control of a party. DAINN125\0171DOCSIDEVAGR.DOC 4 HOUSING DEVELOPMENT AGREEWNT ARTICLE II Representations and Warranties Section 2.1. General Representations. The Parties to this Agreement acknowledge and understand that the purpose of this Agreement is to provide for the development of the Public Housing Units within the Development in accordance with the terms hereof and the ACC Amendment and all federal and state laws and regulations. Section 2.2. Representations and Warranties of the MPHA. The MPHA represents and warrants the following: (a) The MPHA is a public body corporate and politic duly organized and existing under the laws of the State. (b) The MPHA is a party to the ACC Amendment which grants HUD funding to the MPHA for the development and operation of Public Housing Units in Mixed Finance Developments. (c) The MPHA shall provide Public Assistance to the Owner in accordance with the provisions of this Agreement and the ACC Amendment. (d) This Agreement constitutes a valid and binding obligation upon the MPHA and is enforceable according to its terms. Section 2.3. Representations and Warranties of the EDA. The EDA represents and warrants the following: (a) The EDA is a public body corporate and politic duly organized and existing under the laws of the State. (b) This Agreement constitutes a valid and binding obligation upon the EDA and is enforceable according to its terms. Section 2.4. Representations and Warranties by the Owner. The Owner represents and warrants the following: (a) The Owner is a Minnesota limited partnership duly organized and in good standing under the laws of the State, is not in violation of any provisions of its partnership agreement or, to the best of its knowledge, the laws of the State or federal government, and has all necessary power and authority to enter into this Agreement and to carry out its obligations hereunder. D:V* NN 125W171DOCSIDEVAGR.DOC 5 HOUSING DEVELOPMENT AGREEMENT (b) The Owner will construct, or cause to be constructed, the Development in accordance with the terms of this Agreement and all local, State and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations), as contemplated in Construction Plans approved by the Authorities. (c) The Owner has received no notice or communication from any local, State or federal official that the activities of the Owner, the MPHA, or the EDA with respect to the Development may be or will be in violation of any environmental law or regulation_ The Owner is aware of no facts the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any person a valid claim under the Minnesota Environmental Policy Act or the Minnesota Environmental Rights Act with respect to the Development Site. (d) The Owner will use all reasonable efforts to obtain, in a timely manner, all required permits, licenses and approvals, and meet in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Development and the Public Housing Units may be lawfully constructed. (e) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a material breach of, the terms, conditions or provisions of any restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Owner is now a party or by which it is bound, or constitutes a default under any of the foregoing. (f) The Owner will cooperate with the Authorities with respect to any litigation commenced with respect to this Agreement or the Development. (g) The Owner has full authority and financial capacity to execute and perform this Agreement to completion. (h) The Owner will comply with the requirements set forth in the ACC Amendment as they relate to the development of the Public Housing Units and the eligibility and payment of Public Assistance to the Owner in connection therewith. (i) The Development constitutes a permitted use under the zoning ordinances of the City. (j) Upon execution of this Agreement, the Owner will execute the Restrictive Covenant and the Regulatory Agreement. DAM12514175DOCSIDFVAGR.DOC 6 HOUSING DEVELOPMENT AGREEMENT (k) In the event that there occurs an Event of Default by the Owner under the terms of this Agreement and the MPHA and/or the EDA incurs legal fees or other costs or expenses in connection with the enforcement of any term or provision of this Agreement or the recovery of any damages as a result of the Event of Default, the Owner agrees that it will, upon demand by the MPHA and/or the EDA, pay the amount of such costs and expenses, including reasonable attorneys' fees. (1) The Owner possesses or will possess fee simple title to the Development Site, free and clear of any encumbrances except for the encumbrances set forth in Section 9.1 hereof. D:VMNN12514171DOCSIDEVAGR,DOC 7 HOUSING DEVELOPMENT AGREEMENT ARTICLE III The Developmenk Section 3.1. Description. The Development consists of a 34 -unit multifamily, rental, housing project for families to be constructed upon the Development Site located on Bass Lake Road in the City of New Hope, Minnesota. Section 3.2. Construction. The Owner agrees that it will construct, or cause to be constructed, the Development on the Development Site in accordance with the approved Construction Plans and at all times prior to the termination of the ACC Amendment will operate and maintain, preserve and keep the Development or cause the Development to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 3.3. Construction Plans. (a) The Development and all of the units therein shall comply with the design and construction standards for public housing units set forth in 24 CFR 941.203. (b) The Owner shall submit Construction Plans to the Authorities for the proposed Development within thirty (30) days of the Agreement Date. The Construction Plans shall provide for the construction of the Development and shall be in conformity with this Agreement and all applicable State and local laws and regulations. The Authorities. shall approve the Construction Plans in writing if, in the reasonable discretion of the Authorities: (i) the Construction Plans conform to the terms and conditions of this Agreement; (ii) the Construction Plans conform to all applicable federal, State and local law, ordinances, rules and regulations, (iii) the Construction Plans are adequate to provide for the construction of the Development and (iv) the Construction Plans shall comply with Section 3.3 hereof Such Construction Plans shall, in any event, be deemed approved unless rejected in writing by the Authorities, in whole or in part, within twenty (20) days after their receipt by the Authorities. Any rejection shall set forth in detail the reasons therefor, and shall be made within twenty (20) days after the receipt of the Construction Plans by the Authorities. If the Authorities reject the Construction Plans in whole or in part, the Owner may submit new or corrected Construction Plans within thirty (30) days after written notification to the Owner of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authorities or until this Agreement has been terminated pursuant to the terms hereof. Approval by the Authorities shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Development, if constructed in D: VMNN12510171DOCSUJEVAGR.DOC 8 HOUSING DEVELOPMENT AGREEMENT accordance with said plans) comply with the provisions of this Agreement relating thereto. (c) The Owner shall submit to the Authorities for their approval any substantial changes of single items over $5,000 in the Construction Plans. The Authorities shall approve changes in the Construction Plans in writing if, in the reasonable discretion of the Authorities: (a) the changed Construction Plans conform to the terms and conditions of this Agreement; (b) the changed Construction Plans conform to all applicable federal, State and local law, ordinances, rules and regulations; (c) the changed Construction Plans are adequate to provide for the construction of the Development; (d) the changed Construction Plans comply with Section 3.3. hereof, (e) the changed Construction Plans do not provide for expenditures in excess of the funds available to the Owner for the construction of the Development; and (f) no Event of Default has occurred. No approval by the Authorities of changes to the Construction Plans shall relieve the Owner of the obligation to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Development. Such changed Construction Plans shall, in any event, be deemed approved unless rejected in writing by the Authorities, in whole or in part within ten (10) days of receipt. Any rejection shall set forth in detail the reasons therefore. Approval by the Authorities shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the changed Construction Plans (and the Development, if constructed in accordance with said plans) comply with the provisions of this Agreement relating thereto. Section 3.4. Commencement and Completion of Construction. (a) Subject to Unavoidable Delays, the Owner shall complete the construction of the Development on or before June 30, 1999. All work with respect to the Development to be constructed or provided by the Owner on the Development Site shall be in conformity with the Construction Plans as submitted by the Owner and approved by the Authorities. During the construction of the Development, the Owner shall make available to the Authorities such inspection opportunities and project information, including cost certifications, as they may from time to time request. (b) The Owner agrees for itself, its successors and assigns, and every successor in interest to the Development Site, or any part thereof, that the Owner, and such successors and assigns, shall promptly begin and diligently prosecute to completion the development of the Development Site through the construction of the Development thereon, and that such construction shall in any event be commenced and completed within the period specified in this Section 3.4, subject to Unavoidable Delays. Until construction of the Development has been completed, the Owner shall make reports, in such detail and at such times as may D:VAN NI 251017\DOCSIDEVAGR.DOC 9 HOUSING DEVELOPMENT AGREEMENT reasonably be requested by the Authorities as to the actual progress of the Owner with respect to such construction. (c) The Owner agrees to notify the MPHA in writing (a) when the Public Housing Units become substantially complete and available for occupancy, and (b) when 95% of the Public Housing Units first become occupied. For purposes of this subclause "substantially complete" shall mean upon the later of (a) the issuance of the Certificate of Completion by the Authorities, or (b) the issuance of a certificate of occupancy by the City. During the IOP, operating expenses for the Public Housing Units will be paid by the MPHA from the Initial Operating Deficit Account to the extent contained as a line item of the Development Cost Budget. The Owner will submit all rental income from the Public Housing Units to the MPHA for deposit into the Initial Operating Deficit Account. Section 3.5. Certificate of Completion. (a) It is the intention of the Authorities to rely upon the inspections, punch lists, cost certifications and other lender directives of the MHFA throughout the construction and rehabilitation phase. The Owner shall forward to the Authorities, or cause the MHFA to forward to the Authorities, copies of all written communications to the Owner regarding these matters. Promptly after substantial completion of the Development in accordance with those provisions of the Agreement relating solely to the obligations of the Owner to construct the Development (including the dates for beginning and completion thereof), the Authorities will furnish the Owner with a Certificate of Completion in the form attached hereto as Exhibit C so certifying. Such certification by the Authorities shall be a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement with respect to the obligations of the Owner, and its successors and assigns, to construct the Development and the dates for the beginning and completion thereof. Such certification and such determination shall not constitute evidence of compliance with ongoing obligations under this Agreement or satisfaction of any obligation of the Owner to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Development, or any part thereof. (b) If the Authorities shall refuse or fail to provide any certification in accordance with the provisions of this Section 3.5, the Authorities shall, within thirty (30) days after written request by the Owner, provide the Owner with a written statement, indicating in adequate detail in what respects the Owner has failed to complete the Development in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts will be necessary, in the opinion of the Authorities, for the Owner to take or perform in order to obtain such certification. DAMNN12510I71D0CSIDEVAGR.D0C 10 HOUSING DEVELOPMENT AGREEMENT ARTICLE IV The Public Housing Units Section 4.1. Described. Upon completion of the Development, and for the term of the ACC, the Owner shall set aside twelve (12) Public Housing Units within the Development for the term of the ACC Amendment. Six Public Housing Units will be four-bedroom units located in the rehabilitated fourplex buildings and six Public Housing Units will be three-bedroom units located in the new construction townhomes. Section 4.2. Interchangeable Units. Any unit wittun the Development shall be eligible to constitute a Public Housing Units at any given time, at the Owner's discretion, provided: (a) The Public Housing Units to be reserved within the Development shall consist of 6 three-bedroom units and 6 four-bedroom units; (b) The Public Housing Units shall be comparable to the non -Public Housing Units with respect to size, location, internal and external appearance and amenities; and (c) The four-bedroom units being utilized as the Public Housing Units shall float throughout the rehabilitated buildings of the Development and the three-bedroom units will float throughout the new construction buildings of the Development. D:IMNN 125\0171DOCSIDEVAGR.DOC l l MOUSING DEVELOPMENT AGREEMENT ARTICLE V Public Assistance Section 5.1. Funds Description. The funds payable to the Owner with respect to the development and operation of the twelve (12) Public Housing Units consists of the following components: (a) The lesser of (i) the Certified Costs or (ii) $1,356,480; (b) Operating subsidy in accordance with the Regulatory Agreement. Section 5.2. Development Funds. (a) Payment. The Development Funds described in Section 5.1(a) of this Agreement shall be disbursed pursuant to the following terms: (i) The MPHA shall pay the amount set forth in Section 5.1(a) to the Owner during construction pursuant to a Disbursement Agreement to be entered into at Closing, to which the MPHA, EDA and Owner are parties. Development Funds shall be paid in a HUD -approved ratio to all other public and private funds and shall be applied by the Owner to a pro rata share of the following costs in the following order of priority: (1) Non -depreciable costs, including titling and syndication costs; (2) Land acquisition costs, exclusive of buildings located thereon; (3) Existing building acquisition costs, exclusive of associated land acquisition costs; (4) Amortizable costs, including organizational costs; (5) Construction costs; and (6) Expensed costs. (ii) The Owner shall deposit in the "Operating Subsidy Reserve" provided for in Article V of the Regulatory Agreement, an amount equal to three (3) years' estimated Operating Subsidy, which shall be payable in accordance therewith. (iii) The Development Funds paid to the Owner pursuant to this Article V shall be used only for eligible costs actually incurred by the Owner with respect to the Public Housing Units as provided in the ACC Amendment. D:VAM 12A0171DOCSOEVAGR.DOC 12 HOUSING DEVELOPMENT AGREEMENT (b) Payment Conditions, Payment of Development Funds as provided in this Article V is conditioned upon each of the following: (i) The approval by HUD of all evidentiary materials required to be provided under the ACC Amendment, including this Agreement. (ii) The satisfaction of all conditions precedent to the MPHA's authority to draw down the Public Assistance from HUD, as provided in the ACC Amendment. (iii) The Owner's compliance with the terms and conditions of this Agreement, including the regulatory requirements set forth in Article VI. No payment of Public Assistance shall be required if there exists an Event of Default. (iv) The written approval by HUD of the MPHA's proposal for the development and operation of the Public Housing Units provided for in this Agreement. (v) For final payment, the issuance of Certificate of Completion by the Authorities pursuant to Section 35. Section 5.3. Operating Subsidy. Simultaneously with the execution of this Agreement, the parties hereto have entered into the Regulatory Agreement. The MPHA shall pay to the Owner the Operating Subsidy in accordance with the Regulatory Agreement. Section 5.4. Payments in Lieu of Taxes. Minnesota Statutes, § 469.040 provides for the exemption of the Public Housing Units from property taxation and that payments in lieu of taxes in the amount of five percent (5%) of "shelter rents," as defined therein, be paid as though property taxes. Owner shall make the appropriate calculations and shall remit such payments in lieu of taxes at such times and in such manner as though such payments were property taxes, except the obligation to do so shall be a direct and personal obligation of the Owner. A copy of each payment shall be mailed to the EDA. Failure by the Owner to timely remit such payments or notify the EDA thereof shall constitute a default hereunder. Section 5.5. Payment Limitations. (a) The payment of Public Assistance to the Owner shall not be deemed to be an assignment of the grant funds paid by HUD to the MPHA, and the Owner shall not succeed to any rights or benefits of the MPHA under the ACC Amendment or the ACC, or attain any privileges, authority, interests, or rights under the ACC Amendment or the ACC. D:\M NN12510171DOCSUDEVAGR.DOC 13 HOUSING DEVELOPMENT AGREEMENT (b) Nothing contained in the ACC Amendment, the ACC, or in any agreement or contract between the Parties, nor any act of HUD or the Parties, shall be deemed or construed to create any relationship of third -party beneficiary, principal and agent, limited or general partnership, joint venture, or any association or relationship involving HUD, except between HUD and the MPHA as provided under the ACC Amendment and the ACC. DAMNN125\0175DOCSIDEVAGR.DOC 14 HOUSING DEVELOPMENT AGREEMENT ARTICLE VI Additional Regulatory Requirements Section 6.1. Additional Regulatory Requirements. The Development shall be subject to and the Owner shall comply with the following regulatory requirements and shall provide evidence of such compliance as deemed necessary by the MPHA: (a) The labor and wage requirements set forth in the Davis -Bacon Act, 40 U.S.C. 276a et seq. The Owner shall provide such records and information as reasonably requested by the EDA in order to confirm Owner's compliance with this clause. (b) All Federal statutory, regulatory, and executive order requirements applicable to public housing and the activities undertaken by the Owner under this Agreement pertaining to civil rights, equal opportunity, and nondiscrimination, as those requirements now exist, or as they may be enacted, promulgated, or amended from time to time. Such requirements include, but are not limited to, the following: (i) The Fair Housing Act, 42 U.S.C. 3601-19, and regulations issued thereunder, 24 CFR Part 100; Executive Order 11063 (Equal Opportunity in Housing) and regulations issued thereunder, 24 CFR Part 107; the fair housing poster regulations, 24 CFR Part 110, and advertising guidelines, 24 CFR Part 109. Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d, and regulations issued thereunder relating to nondiscrimination in housing, 24 CFR Part 1. (iii) Age Discrimination Act of 1975, 42 U.S.C. 6101-07, and regulations issued thereunder, 24 CFR Part 146. (iv) Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, and regulations issued thereunder, 24 Part 8; the Americans with Disabilities Act, 42 U.S.C. 12181-89, and regulations issued thereunder, 28 CFR Part 36; and the elderly and handicapped requirements of Section 209 of the Housing and Community Development Act of 1974. (v) Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. 1701u, and its implementing regulations at 24 CFR Part 135. (c) In the event that any other federal, state, or local government assistance is received, or can reasonably be expected to be received, by the Owner with respect to the Public Housing Units within the Development in addition to the Public D:IMNN 125101 TIDOCSIDE V AGR.DOC 15 HOUSING DEVELOPMENT AGREEMENT Assistance under this Agreement, the Owner shall comply with the requirements of Section 102 of the Housing and Urban Development Reform Act of 1989. (d) The Uniform Relocation and Property Acquisitions Act in the event there are any "displaced persons," as that term is defined therein, as a result of the Development. (e) 24 CFR §§ 941.202, 941.203, 941.205, 941.207, 941.208, 941.209, 941.306, 941.401, 941.402, 941.403, and 941.404. D:IMNN12AUi7%DOCSIDEVAGR.DOC 16 HOUSING DEVELOPMENT AGREEMENT ARTICLE VII Mortgage Financing Section 7.1. Mortgage Financing and/or Equity, (a) Prior to commencement of construction of the Development, the Owner shall provide to the Executive Directors of the Authorities evidence of one or more commitments for mortgage financing or equity, or both, which is sufficient for the construction of the Development. Such commitments may be provided as short term financing, long term mortgage financing, a bridge loan with a long term take-out financing commitment, or any combination of the foregoing. Such commitment or commitments for short term or long term mortgage financing shall be subject only to such conditions as are normal and customary in the mortgage banking industry. (b) The Executive Directors of the Authorities, together with such legal and financial advisors to the Authorities as the Executive Directors shall choose, shall review such information as is submitted pursuant to Section 7.1(a). If the Executive Directors of the Authorities find that the financing and/or equity is sufficiently committed and adequate in amount to provide for the construction of the Development, then the Authorities shall notify the Owner in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within fifteen (15) days from the date when the Authorities are provided the evidence thereof A failure by the Authorities to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If the Authorities reject the evidence of financing as inadequate, they shall do so in writing specifying the basis for the rejection. In any event, the Owner shall provide adequate evidence of financing prior to commencement of construction of the Development. Section 7.2. Authorities' Option to Cure Default on Mortgmee. In the event that there occurs a default under any Mortgage, the Owner shall cause the Authorities to receive copies of any notice of default received by the Owner from the holder of such Mortgage. Thereafter, the MPHA or the EDA shall have the right, but not the obligation, to cure any such default on behalf of the Owner within such cure periods as are available to the Owner under the Mortgage documents. DAMXN12510171DOCSSIDEVAGR.DOC 17 HOUSING DEVELOPMENT AGREEMENT ARTICLE VIII Insurance Section 8.1. Insurance. The Owner shall agree to provide and maintain at all times from the date of its possession of property which comprises the Development Site and thereafter throughout the period of this Agreement the insurance coverages set forth in this section, and to otherwise comply with the provisions that follow_ (a) Builders' Risk. Builders' Risk Insurance, written on a Completed Value coverage form (non -reporting), in an amount equal to one hundred percent (100%) of the insurable value of the Development at the date of completion. Such coverage shall become effective concurrent with the beginning of the process of construction, and shall continue until replaced by the permanent all risk Property Insurance described below. Coverage shall be provided on an "all risk" basis. (b) Workers' Compensation. Workers' Compensation insurance in compliance with all applicable statutes. Such policy shall include Employer's Liability coverage in at least such amount(s) as are customarily provided in workers' compensation policies issued in Minnesota. The Owner shall further agree to require all contractors and subcontractors involved in the project to maintain Workers' Compensation insurance in compliance with all applicable statutes, and to monitor (by requirements for and review of Certificates of Insurance or by other reasonable means) the compliance of such contractors and subcontractors with such Workers' Compensation insurance requirements. (c) General Liability. Occurrence -Based Commercial General Liability insurance, providing coverage on an "occurrence", rather than on a "claims made" basis, which policy shall include coverage for the Completed Operations Hazard, and which shall also include a Broad Form General Liability Endorsement GL 0404 (Insurance Services Office form designation), or an equivalent form (or forms), so long as such equivalent form (or forms) affords coverage which is in all material respects at least as broad. The Owner shall agree to maintain total liability policy limits of at least $1,000,000, applying to liability for Bodily Injury, Personal injury, and Property Damage, which total limits may be satisfied by the limits afforded under its Occurrence -Based Commercial General Liability Policy (which Policy is to include the Broad Form Endorsement coverage specified above), or by such Policy in combination with the limits afforded by an Umbrella Liability Policy (or policies); provided, however, that the coverage afforded under any such Umbrella Liability Policy shall be at least as broad as that afforded by the underlying Occurrence -Based Commercial General Liability Policy (including Broad Form coverage). DAMNN 125\0 1 7\DOCS\DEVAGR.DOC 18 HOURNG DEVELOPMENT AGREEMENT Such Occurrence -Based Commercial General Liability Policy and Umbrella Liability Policy (or policies) may provide aggregate limits for some or all of the coverages afforded thereunder, so long as such aggregate limits have not, as of the slate of the Owner's possession of the Development Site, been reduced to less than the total required limits stated above, and further, that the Umbrella Liability Policy provides coverage from the point that such aggregate limits in the underlying Occurrence -Based Commercial General Liability Policy become reduced or exhausted. An Umbrella Policy which "drops down" to respond immediately over reduced underlying limits, or in place of exhausted underlying limits, but subject to a deductible amount, shall be acceptable in this regard so long as such deductible amount does not cause the Owner's total deductible for each occurrence to exceed the amount shown in the provision immediately below. The Owner's liability insurance coverage may be subject to a deductible (or "retention" or similar provision) requiring the Owner to remain responsible for stated amount of each covered loss. (d) Property Insurance. All risk property insurance in an amount not less than the full insurable replacement value of the Development. The term "full insurable replacement value" shall mean the actual replacement cost of the Development (excluding foundation and excavation costs and costs of underground flues, pipes, drains, and other items customarily omitted from replacement cost valuation for insurance purposes), without deduction for depreciation. Net Proceeds of insurance shall be paid as required by the Mortgage and related documents. Section 8.2. Damage or Destruction. (a) In the event of damage to the Development which permanently diminishes the total number of residential units: (i) thirty-five percent (35%) of the remaining units, in as near as practicable the same bedroom mix as the original Development, shall constitute Public Housing Units; and (ii) thirty-five percent (35%) of the Net Proceeds payable to the Owner shall be paid to the MPHA for the purpose of constructing or acquiring replacement Public Housing Units. (b) In the event of partial or total destruction of the Development and the application of Net Proceeds to the reconstruction thereof, the ratio of Public Housing Units to other units, including bedroom mix, shall be the same in the reconstructed development as in the original development. b;\MNN 125\017\D005\DE VAGR.DOC 19 HOUSING DEVELOPMENT AGREEMENT (c) In the event of total destruction and the application of Net Proceeds to the Mortgage rather than to reconstruction, thirty-five percent (35%) of the Net Proceeds shall be paid to the MPHA for the purpose of constructing or acquiring replacement Public Housing Units. D;\M[ N12M0171DOCSIDEVAGR.DOC 20 HOUSING DEVELOPMENT AGREEMENT ARTICLE IX Encumbrances; Sale; Indemnification Section 9.1. Encumbrances. The Public Housing Units shall not be encumbered, except for (a) the Mortgage, (b) the Declaration of Restrictive Covenants, (c) such security interests as shall be required by the EDA, the Fund, the County, City and the MHFA, as a part of any loan or grant to the Development, and (d) such title matters as are set forth in the title insurance commitment attached hereto as Exhibit D. Section 9.2. Sale. There shall be no disposition of the Public Housing Units during and for a period of ten (10) years after the end of the period in which the Public Housing Units receive operating subsidy under the Regulatory Agreement. Section 9.3. Indemnification. (a) The Owner shall release from and covenants and agrees that the Authorities and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to defend, indemnify and hold harmless the Authorities, and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any damages, injury to, or death of any person occurring at or about or resulting from the acquisition of, and from any defect in the construction and operation of the Development, provided, however, that this release and indemnification shall not apply to an entity or individual named in this paragraph if the loss, damage, injury or death was caused by such entity or individual. (b) Except for any misrepresentation or breach of any covenant hereunder or any willful or wanton misconduct or negligence of the following named parties, the Owner agrees to protect and defend the Authorities and the governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Development. (c) The Authorities and the governing body members, officers, agents, servants and employees thereof shall not be liable for any damage or injury to the persons or property of the Owner or its officers, agents, servants or employees or any other person who may be on or about the Development, due to any act of negligence of any person or entity other than the Authorities and the governing body members, officers, agents, servants and employees thereof. D:IAMI2A4171DOCs1DEVAGR.DOC 21 1IOUSING DEVELOPMENT AGREEMENT (d) All covenants, stipulations, promises, agreements and obligations of the Authorities contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authorities and not of any governing body member, officer, agent, servant or employee of the Authorities in the individual capacity thereof. (e) As a condition of the indemnification covenant, the Owner shall have the right to defend any claim or suit for any loss or damage to property or any damages, injury to, or death of any person occurring at or about or resulting from the acquisition of, from any defect in the construction and operation of the Development, provided, however, that this right to defend shall not apply to an entity or individual named in Section 9.3(a), if the loss, damage, injury or death was caused by such entity or individual. DAM 1251D 171DOCSIDEVAGR.DOC 22 HOUSING DEVELOPMENT AGREEMENT ARTICLE X Events of Default Section 10.1. Event of Default Defined. Event of Default shall mean any failure by any party to this Agreement to observe or perform any covenant, condition, obligation or agreement to be observed or performed on its part under this Agreement or according to any governing law, regulation, or other agreement referenced herein. Section 10.2. Remedies Upon Default. (a) Upon the occurrence of an Event of Default, the non -defaulting party shall notify the defaulting party of. (i) the nature of the default; (ii) the actions required to cure the default; and (iii) the time within which the defaulting party shall respond with a showing that all required actions to cure the default have been taken. (b) If the defaulting party fails to respond or take corrective action to the satisfaction of the non -defaulting party within thirty (30) days of receipt of such notice, the non -defaulting party shall have the right to exercise any remedy available to it by reason of the default, if any, including legal and equitable remedies available in any court having proper jurisdiction. The MPHA and EDA shall have the right to exercise any remedies available under the ACC Amendment and/or the ACC. Section 10.3. No Remedy Exclusive. No remedy conferred in this Article X is intended to be exclusive of any other available remedy or remedies. Each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or hereafter existing at law or in equity. No delay or omission to exercise any remedy accruing upon any default shall impair any such remedy or be construed to be a waiver thereof. Any such remedy may be exercised from time to time and as often as may be deemed expedient. Section 10.4. No Additional Waiver Implied by One Waiver. In the event any default under this Agreement shall be waived by the non -defaulting party, such waiver shall be limited to the particular default so waived and shall not be deemed to waive any other concurrent, previous, or subsequent default. D:1MNN 125111171DOCSIDEVAGR.DOC 23 HOUSING DEVELOPMENT AGREEMENT ARTICLE XI Additional Provisions Section 11.1. Duration of Agreement. This Agreement shall continue in full force and effect for the entire term of the ACC Amendment or for such shorter period as may be agreed to by the Parties in writing and consented to by HUD. Section 11.2. Assig9ment and Release. (a) This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties, provided, the Owner may not sell or assign its rights or obligations under this Agreement without the prior written consent of the MPHR, the EDA and HUD. Such consent shall not be unreasonably withheld. (b) In the event that HUD agrees to enter into an annual contributions contract directly with the EDA, which said contract includes Development Funds and/or Operating Subsidy for the Public Housing Units, simultaneously with the execution of said contract the MPHA shall be forever released from all responsibilities and obligations contained in this Agreement, without further action of the parties hereto, and this Agreement shall exist solely as an agreement between the Owner and the EDA. Section 11.3. Recording of Agreement. This Agreement and/or any other document containing the ongoing obligations of the parties described herein may be recorded by the MPHA with the County Recorder and/or Registrar of Titles for the County of Hennepin. The Parties understand and acknowledge that terms and conditions of this Agreement, or such other document containing the ongoing obligations of the parties described herein, including the requirements with respect to Public Housing Units, shall run with the land for the entire term of this Agreement as set forth in Section 11.1. Section 11.4. Amendment. This Agreement may be modified or amended only by a written instrument signed on behalf of each of the Parties. Section 11.5. Authorities. Each of the Parties warrants that it has full authority to execute this Agreement, and each individual signing this Agreement on behalf of the Parties warrants that he/she has frill authority to sign on behalf of the party he/she represents and binds such party by such signature. Section 11.6. Conflict of Interests; MPHA and EDA Representatives Not Individuall Liable. No member, official, or employee of the MPHA or the EDA shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his/her personal interests or DAMNN125101700CSIDEVAOR.DOC 24 HOUSING DEVELOPMENT AGREEMENT the interests of any corporation, partnership, or association in which he/she is, directly or indirectly, interested. No member, official, or employee of the MPHA or the EDA shall be personally liable to the Owner, or any successor in interest, in the event of any default or breach by the MPHA or the EDA or for any amount which may become due to the Owner or successor or on any obligations under the terms of this Agreement. Section 11.7. No Merger. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Development Site and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 11.8. Notices and Demands. Except as otherwise expressly provided in this Agreement, any notice, demand, or other communication under this Agreement between the Parties shall be deemed given if. (i) delivered personally or by courier; (ii) telecopied with proof of transmission; or (iii) sent by overnight express delivery or registered or certified mail, postage prepaid, return receipt requested to the party at the following respective address (or at such other address with respect to each party as that party may, from time to time, designate in writing and forward to the other parties as provided in this Section): To the MPHA: Minneapolis Public Housing Authority in and for the City of Minneapolis 1001 North Washington Avenue Minneapolis, Minnesota 55401 Attention: Executive Director To the EDA: Economic Development Authority in and for the City of New Hope 4401 Xylon Avenue North New Hope, MN 55428-4898 Attention: Executive Director To the Owner: PPL - Bass Lake Court Limited Partnership 2516 Chicago Avenue South Minneapolis, Minnesota 55404 Attention: Steve Cramer All such notices and other communications shall be deemed to be received on the date of receipt thereof by the party to which such notice or communication is directed. Section 11.9. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 11.10. Law Governing. This Agreement will be governed and construed in accordance with the laws of the State of Minnesota. DAMNN12A0171DOCS0EVAGR.D0C 25 HOUSING DEVELOPMENT AGREEMENT Section 11. 11. Severability. If any provision of this Agreement is declared void or otherwise unenforceable, that provision shall be deemed to have been severed from this Agreement and the remainder of this Agreement shall otherwise remain in full force and effect. D:VvQdN125%0171D0050EVAGR.DOC 26 HOUSING DEVELOPMENT AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. M NEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS By Richard Brustad Its Chairman And by - L m �L=, Cora McCorvey Its Executive Director STATE OF MINNESOTA ) .)Ss COUNTY OF On this _�ay of 119 before me, a notary public, personally appeared Richard Brustad and Cora McCorvey, the Chairman and Executive Director, respectively, of the Minneapolis Public Housing Authority in and for the City of Minneapolis, a public body corporate and politic under the laws of the State of Minnesota (the "MPHR"), named in the foregoing instrument and acknowledged said instrument ql behalf of the MPHA) 'otary Public D;U,dX 125101ADOCSIDEVAGRDOC HOUSiNGDHVELOPMENrAGREEMENT ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE Its President r And by 't "Mo Its Execu ve Director STATE OF MINNESOTA ) ) ss COUNTY OF Hennepin ) The foregoing instrument was acknowledged before me this 29thday of December 19 98,by W. Peter Enck and Daniel J. Donahue ,the President and , Executive Director , respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic under the laws of the State of Minnesota, on behalf of suchpublic body. VALERIE J. LEONE Notary Public NOTARY PUBLIC - MINNESOTA My Commission a yea January 81, 200 D.NUNN125\0171DOCS\DEVAGA.DOC HOUSING DEVELOPMEN r AGREEMENT PPL -BASS LAKE COURT LIMITED PARTNERSHIP BY: PROJECT FOR PRIDE IN LIVINGS INC.. , ' ITS.GiE PARTNER By b�� _A STATE OF MINNESOTA ; COUNTY O ) On this ��-� day o1`"e-bef19QQ� ore me,notarypublic, personally appeared r the of Project for Pride in Living, Inc, the general partner of PPL -Bass Lake Court Limited Partnership, a Minnesota limited partnership, named in the foregoing instrument and acknowledged said 'instrument on behalf of the partnership. Notary) JEAME M. HATCH NOTARY PUBLIC — MINNESOTA IytiOMM Expires Jan. 31, 20n EXHIBIT A Legal Descriptio Parcel 1: The South 56 feet of the North 101 feet of the East 62.59 feet of the West 22617 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 2: The South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. DAMNN] 2510171D0CSIDEVAGR.DOC A-1 HOUSING DEVELOPMENT AGREEMENT Abstract Property. Parcel 3: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 10(1 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 4: That South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 5: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: D:\MNN125\Oi 71DOCSIDEVAGR.DOC A-2 HOUSING DEVELOPMENT AGREEMENT Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 6: The East 56 feet of the West 282.17 feet of the South 60.50 feet of the North 174.87 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along -the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 7: The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly from the South line of said Northeast Quarter of the Southwest Quarter as measured along said West line and its Southerly extension, to a point on the East line of Murray Lane 3rd Addition 444.66 feet Northerly from its intersection with said South line. Being registered land as is evidenced by Certificate of Title No. 820577. DAN NN 125\0171DOCSIDEVAGR.DOC A-3 HOUSING DEVELOPN ENT AGREEMENT Parcel 8: The South 145.2 feet of the West 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 9: The South 80 feet of the East 166.76 feet of the West 296.76 feet of Lot 32, Auditor's Subdivision No. 226, Hennepin County, Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. Abstract Property. Parcel 10: The North 100 feet of that part of the West Half of Lot 32, lying South of the North 6 acres thereof, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 11: That part of the Northeast [quarter of the Southwest Quarter of Section 5, Township 118, Range 21, described as beginning at the intersection of the South line of said Northeast Quarter of the Southwest Quarter with the Southerly extension of the West line of Murray Lane 4th Addition; thence Northerly along said Southerly extension and along said West line a distance of 444.49 feet; thence Westerly in a straight line to a point on the East line of Murray Lane 3rd Addition distant 444.66 feet Northerly from its intersection with said South line; thence Southerly along said East line to the North line of the South 178.2 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line to a line drawn parallel with and 100 feet East from said East line of Murray Lane 3rd Addition; thence Southerly along said parallel line'to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said South line to a line drawn parallel with and 196.76 feet West from said West line of Murray Lane 4th Addition; thence Northerly parallel with said West line to the North line of the South 113 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line of the South 113 feet to a line drawn parallel with and 30 feet West from said West line of Murray Lane 4th Addition; thence Southerly parallel with said West line and its Southerly extension to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said South line to the point of beginning. D7\MNN12A017%D0C%DEVAGR.DOC A-4 HOUSING DEVELOPMENT AGREEMENT Except those portions of the above-described property described as follows: The East 56 feet of the West 101 feet of the South 182.37 feet of the North 227.37 feet; The East 62.59 feet of the West 226.17 feet of the South 56 feet of the North 101 feet; The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet; The East 56 feet of the West 282.17 feet of the South 182.37 feet of the North 227.37 feet, according to the United States Govemment Survey thereof and situate in Hennepin County, Minnesota- Being innesota Being registered land as is evidenced by Certificate of Title No. 820576. D:4&MI25\0I ADOCS\DEVAGR.DOC A-5 HOUSING DEVELOPMENT AGREEMENT EXHIBIT B Declaration of Restrictive Covenants DAMNN 125\01711)OCS%DEVAGR.DOC B-1 HOUSING DEVELOPMENT AGREEMENT DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration) dated as of 199 , by PPI -Bass Lake Court Limited Partnership (Partnership), its successors and assigns, is given to the Minneapolis Public Housing Authority in and for the City of Minneapolis (MPHA) and to the U.S. Department of Housing and Urban Development (HUD). RECITALS WHEREAS, the Partnership entered into a Housing Development Agreement and a Regulatory and Operating Agreement (the "Agreements") with the MPHA dated as of 199; and -- WHEREAS, pursuant to the Agreements, the Partnership is obligated to construct and operate a thirty-four (34) unit rental housing project on property described in Exhibit A hereto (the "Property"), in which twelve (12) units are to be maintained and operated as public housing units as defined by the Agreements; and WHEREAS, the Partnership has received financial assistance provided by the MPHA for construction of the project, and will continue to receive financial assistance throughout the term of the Agreements from the MPHA to operate the public housing units; and WHEREAS, the MPHA has provided financial assistance and will continue to provide financial assistance received through a Mixed -Finance Amendment to Consolidated Annual Contributions Contract with the Secretary of HUD dated as of , 199, as amended (the "ACC Amendment"); and WHEREAS, the ACC Amendment provides for annual contributions by HUD to the MPHA to assist in achieving and maintaining the lower income character of the twelve (12) public housing units to be located on the Property, which units are known as Project No. MN46P00207395A, and as a requirement for receiving said funding, the MPHA is required to include certain restrictions in all Agreements; and WHEREAS, the Partnership is required through the Agreements to cause to be executed an instrument in recordable form which obligates the Partnership, its successors and assigns to operate and maintain the public housing units in accordance with the Agreements, the ACC and ACC Amendments as provided for in the Agreements, and all federal, state and local regulations; and WHEREAS, the Partnership under this Declaration intends, declares and covenants that the restrictive covenants set forth herein shall be and are covenants running with the Property for the term described herein and binding upon all subsequent owners of the Property for such term, and are not merely personal covenants of the Partnership; NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth and of other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Partnership declares as follows: 1. That for the period established by the ACC, that is, forty (40) years beginning on the date of full availability of the facilities, the Partnership, its successors or assigns, shall maintain and operate the public housing units in accordance with the terms of the Agreements, the ACC and ACC Amendments as provided for in the Agreements, and all federal, state and local regulations. 2. That the Partnership shall remain seized of the title to the Property and shall refrain from transferring, conveying, assigning, leasing, mortgaging, pledging, or otherwise encumbering or permitting or suffering any transfer, conveyance, assignment, lease, mortgage, pledge or other encumbrance of the Property or any part thereof or appurtenant thereto, or any rent, revenues, income or receipts therefrom, or in connection therewith, or any of the benefits or contributions granted to it by or pursuant to the Agreements, or pursuant to the ACC through the Agreements or any interest in any of the same, or demolishing any appurtenant thereto, without the approval of the MPHA and HUD. (a) To the extent permitted by Section 9.1 of the Housing Development Agreement, the Partnership may encumber the Property, provided that any and all encumbrances permitted by this clause shall at all times be subject and subordinate to the terms and conditions of the Agreements and the ACC. (b) To the extent and in the manner provided by the Agreements and the ACC, the Partnership may (i) lease dwelling units and other spaces and facilities in the Property; (ii) convey or dedicate land for use as alleys, streets, or other public right-of-way, and grant easements for the establishment, operation and maintenance of public utilities. (c) The MPHA with the prior approval of HUD may, in its sole discretion, approve release of the project and Property from the restrictions hereby created and said release shall be effective to terminate this Declaration. Upon expiration of the period during which the Partnership is obligated to operate the Property in accordance with the Agreements, the ACC, and the ACC Amendments as provided for in the Agreements, this Declaration shall terminate and shall no longer be effective. 3. The MPHA with the prior approval of HUD, acting by and through duly authorized officials, may approve such action as may be necessary to allow the transfer, conveyance, assignment, leasing, mortgaging, or encumbering of the Property or to accomplish the acts described above. 4. This Declaration and the covenants set forth herein regulating and restricting the use and occupancy of the Property (i) shall be and are covenants running with the Property, encumbering the Property for the term of this Declaration, and binding upon the Partnership's successors in title and all subsequent owners of the Property, (ii) are not merely personal covenants of the Partnership, and (iii) shall bind the Partnership and its respective successors and assigns during the term of this Declaration. S. Any and all requirements of the laws of the State to be satisfied in order for the provisions of this Declaration to constitute deed restrictions and covenants running with the land shall be deemed to be satisfied in full, and that any requirements or privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the land. For the term of this Declaration, each and every contract, deed, or other instrument hereafter executed conveying the Property or portion thereof shall expressly provide that such conveyance is subject to this Declaration, provided, however, that the covenants contained herein shall survive and be effective regardless of whether such contract, deed or other instrument hereafter executed conveying the Property or portion thereof provides that such conveyance is subject to this Declaration. 6. The invalidity of any clause, part or provision of this Declaration shall not affect the validity of the remaining portions thereof. IN WITNESS WHEREOF, the Partnership has caused this Agreement to be signed by its duly authorized representatives, as of the day and year first above written. PPL -BASS LAKE COURT LIMITED PARTNERSHIP a Minnesota limited partnership BY: PROJECT FOR PRIDE IN LIVING, INC. ITS GENERAL PARTNER By: Steve Cramer, its President STATE OF MINNESOTA ) )ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of '199 _, by Steve Cramer, President of Project for Pride in Living, Inc., t e general partn�PPL- Bass Lake Court Limited Partnership, a Minnesota limited partnership, named in the foregoing instrument, on behalf of the partnership. Notary Public This Document was drafted by: U.S. Department of Housing and Urban Development 220 South Second Street Minneapolis, MN 55401 EXHIBIT A TO DECLARATION OF RESTRICTIVE COVENANTS PROPERTY LEGAL DESCRIPTION Parcel 1: The South 56 feet of the North 101 feet of the East 62.59 feet of the West 226.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 2: The South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast comer of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast comer of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 3: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast comer of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof, thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 4: That South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast comer of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast comer of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 5: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 6: The East 56 feet of the West 282.17 feet of the South 60.50 feet of the North 174.87 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 7: The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly from the South line of said Northeast Quarter of the Southwest Quarter as measured along said West line and its Southerly extension, to a point on the East line of Murray Lane 3rd Addition 444.66 feet Northerly from its intersection with said South line. Being registered land as is evidenced by Certificate of Title No. 820577. Parcel 8: The South 145.2 feet of the West 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 9: The South 80 feet of the East 166.76 feet of the West 296.76 feet of Lot 32, Auditor's Subdivision No. 226, Hennepin County, Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. Abstract Property. Parcel 10: The North 100 feet of that part of the West Half of Lot 32, lying South of the North 6 acres thereof, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 11: That part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, described as beginning at the intersection of the South line of said Northeast Quarter of the Southwest Quarter with the Southerly extension of the West line of Murray Lane 4th Addition; thence Northerly along said Southerly extension and along said West line a distance of 444.49 feet; thence Westerly in a straight line to a point on the East line of Murray Lane 3rd Addition distant 444.66 feet Northerly from its intersection with said South line; thence Southerly along said East line to the North line of the South 178.2 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line to a line drawn parallel with and 100 feet East from said East line of Murray Lane 3rd Addition; thence Southerly along said parallel line to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said South line to a line drawn parallel with and 196.76 feet West from said West line of Murray Lane 4th Addition; thence Northerly parallel with said West line to the North line of the South 113 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line of the South 113 feet to a line drawn parallel with and 30 feet West from said West line of Murray Lane 4th Addition; thence Southerly parallel with said West line and its Southerly extension to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said South line to the point of beginning. Except those portions of the above-described property described as follows: The East 56 feet of the West 101 feet of the South 182.37 feet of the North 227.37 feet; The East 62.59 feet of the West 226.17 feet of the South 56 feet of the North 101 feet; The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet; The East 56 feet of the West 282.17 feet of the South 182.37 feet of the North 227.37 feet, according to the United States Government Survey thereof and situate in Hennepin County, Minnesota. Being registered land as is evidenced by Certificate of Title No. 820576. EXHIBIT C Certificate of Completion The undersigned hereby certifies that PPL - Bass Lake Court Limited Partnership (the "Owner") has fully and completely complied with its obligations under Article III of Housing Development Agreement by, between and among the Minneapolis Public Housing Authority in and for the City of Minneapolis, the Economic Development Authority in.and for the City of New Hope and the Owner dated , 199_ with respect to construction of the "Development" (located on the real property legally described in Attachment A hereto) in accordance with the "Construction Plans" as such terms are defined therein, and the Owner is released and forever discharged from its obligations under the above -referenced Article III. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS By Its Chairman By Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF } On this day of , 19 before me, a notary public, personally appeared Richard Brustad and Cora McCorvey, the Chairman and Executive Director, respectively, of the Minneapolis Public Housing Authority in and for the City of Minneapolis, a public body corporate and politic under the laws of the State of Minnesota (the "MPHA"), named in the foregoing instrument and acknowledged said instrument on behalf of the MPHA. Notary Public DAMNN i 25\0171D0CSIDEVAGR.D0C C-1 HOUSING DEVELOPMENT AGREEMENT ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By Its And by_ Its STATE OF MINNESOTA ) ) ss COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 19 ,by and ,the and , respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic under the laws of the State of Minnesota, on behalf of such public body. Notary Public DAVI N125\0171DOCMDEVAGR.DOC C-2 HOUSING DEVELOPMENT AGREEMENT ATTACHMENT A Legal Description DAINN1251O171DOCSIDEVAGR.DOC C-3 HOUSING DEVELOPMENT AGREEMENT EXHIBIT D Title Insurance Commitment DAMNN 125\0171DOCSIDEVAGR.DOC D-1 HOUSING DEVELOPMENT AGREEMENT 12i07/98 MON 11:23 FAX Biz 340 7800 DORS$Y & WHITNEY ALTA COMMITMENT - 1982 REV. SCHEDULE A APPLICATION NO- H OR949677 C (Supplemental )Ta. 1) EFBECTIVE DATE: October 19, 1998 AT 7:00 A.M. (as to Parcels 1, 2, 3, 4, S, 6, 8, 9 and 10) and July 9, 3.998 AT 7:00 A.M. (as to Parcels 7 and 11) 2. POLXCY OR POLICIES TO BE ISSUED: 'ALTA' RESIDENTIAL OWNERS POLICY REV 1987 $ X 'ALTA' OWNER'S POLICY 10-17-92 $To Coxae PROPOSED INSURED: PPL -Baas Lake Court Limited Partnermhip % 'ALTA' LOAN POLICY 10-17-92 $373,000.00 (1st Mortgage) $530,000.00 (2nd Mortgage) PROPOSED INSURED: Minnesota Housing Fina de Agency X ALTA' LOAN POLICY 10-17-92 $280,000.00 PROPOSED INSURED (3rd Mortgage) County of Hennepin 7 X ALTA' LOAN POLICY 10-17-92 $200,000.00 - (4th Mortgage) PROPOSED INSURED: Family Housing Fund 3. THE ESTATE OR INTEREST IN THE LAND DESCRIBED OR REFERRED TO IN THIS COMMITMENT AND COVERED iMREIN IS A FEE SIMPLE AND TITLE THERETO IS AT THE EFFECTIVE DATE HEREOF VESTED IN: PPL -Base Lake Court Limited Partnership, (a Xjuneaota limited partnership) (as to Parcels 1, 2, 3, 4, 5, 6, 7, 8 -and 11)) Murphy Oil USA, Inc. (a Minnesota Corpa=4tion) (as to Parcel 9); Independent School District No. 281 (as to Parcel 10) 4. THE LAND REFERRED TO IN THIS COMMITMENT IS D$SCRIBED AS FOLLOWS: Parcel 1: [a 004 OLD R,LF'TJBj,,,1C, _y ► phai-w 1w. Ina.rm Gim F � P"M � o M ORT PORN 3120 12/07/98 MON 11:43 FAX 612 340 7800 DORSEY & VRJTNEY Q005 H OR9.49677 C (Supplemental No. 1) Page: 2 The South 56 feet of the North 101 feet of the East 62.59 feet Of the West 226.17 feet Of the followiUg described tract: That part of the Wast Ralf of Lot 32, AudLtor's Subdivision Number 226, Reannepi,n County, Minneseota, described as follows; COJ=eacing at the Southeast corner of the West Salf of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Ralf of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Let 32; thence South along the West line of said Lot 32 to a point 17a.2 feet North of the Southwest corner of said Lot 32; thence East Parallel with tha SOUth line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its i,xxtereection with the East line o€ the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 2: The South 69.37 feet of the Worth 114.37 feet of the East 56 feet of the West 101 feet of the following described tract; That part of the West 1141f of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Mitiresota, described as follows: Co.ntmencing at the Southeast Corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from"tbG Southeast corner of the North 6 acres of the West Half of said Lot 32 to &Otual point of beginning; thence at right angles -'West to the West line of said Lot 32; thence South along the West lime of said Lot 32 to a, point 176.2 feet Worth of the Southwest corner of said Lot 32; thence East parallel wit]& the South line of said Lot 32 a distance of 100 feast; thence South parallel with the West Iixse of said Lot 32 to a point 173.0 feet North of the South line thereof; thence Ears p,ara1161 with the South line of said Lot 32 to its intersection with the East Zine of the West Ralf of said Lot 32; thence North to the point Of beginning. Abstract Property. Parcel 3e The South 52.5 feet of the North 227.37 feet of the East 56 feet of they West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdiviaion flffflf�l�f iflfr�.� .- OLD REPUBLIC F DAT Palm MID 12/07/98 MON 11:2$ FAX 612 340 2800 DORSEY & WHITNEY H OR949677 C (Supplemental. No. 1) Page: 3 Number 226, XOnnepin County, Ninnasota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles Lest to the West line of said Lot 32; thence South along the West zine of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 321 thence East parallel with the South line of said Lot 32 a distance of loo feet; thence South parallel with the West Line of said Lot 32 to a point 173.0 feet North of the South Zine thereof; thenoe East parallel with the South lime of said Lot 32 to its intersection with the East line of the west Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 4: That South 69.37 feet of the North 114.37 feet of the East 55 feet of the Wast 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin, Co=ty, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of Haid Lot 32; thence at right angles Northarly to a point 100 feet South from the Southeast corner of the North 6 aares of west Half of maid Lot 32 to actual point of begixming; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of Said Lot 32; thence East parallel with tb.a South Zine of said Lot 32 a distance of 100 feet; thence South parallel with Q10 West 11ne of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the Went Ralf of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 5: The Soutl% 52.5 feet of the North feet of the West 282.17 feet of That part of the West Half Subdivision Number 2.26, He=epin as follows: 227.37 feet of the East 56 the following descirbed Bract_ of the Lot 32, Auditor's County, Minnesota, described Ij • OLD REPUMIC � NpYON01 TlIM IF+NAnFn req ORT Form 3120 12/07/96 MON 11:24 FAX 812 340 7500 DORSEY & WHITNEY X007 H OR949677 C (Supplemental No. 1) Page: 4 Commencing at the Southeast corner of the West Half of maid Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 &area of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32= thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest ao=er of said Lot 32; thence East parallel with the South line of said Lot 32 a distanas of loo (esti thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel, with the South line of said Lot 32 to its intersection with the East line of the west $aif of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 6; The East 56 feet of the West 282.17 feet of the South 60.50 feet of the North 174.87 feet of the following described tract: That part of the West galf of Lot 32, Auditor's subdivision Number 226, Hennepin County, Minnesota, described &a follows: Commencing at the Southeast corner of the West Half of Lot 32; thence at right angles Northerly to a point 100 feet South from the southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginn mg; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feat North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the Fest line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South iiae of said Lot 32 to its intersection with the East line of the west Half of said Lot 32; thence North to the point of beginuiug. Abstract Property. Parcel 7: The East 52.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly from: the South line of said Northeast Quarter of the Southwest Quarter no measured along said Nest line and its y P Y EI ( • OLD REPLIRUC, CMT Farm 3120 12/09/98 VON 11:24 FAX 612 340 7800 DORSEY & WHITNEY Q008 s H OR949677 C (Supplemental No. 1) Page: 5 Southerly extension, to a point on the East kine of Murray Lane 3rd Addition 444.66 feet Northerly from its intersection with said South line. Being registered land as is evidenced by Certificate of Title No. 920377. YNFOMQTYON NOTE: The office of the Registrar of Titles advises that the Owner's Duplicate Certificate is at the Torreus Office. Parcel 8: The South 145.2 feet of the Waat 100 feet of Lot 32, Auditor's subdivision Number 226, Hennepin Cotmty, Minnesota. Abstract Property. Parcel 9: The South 8D feet of the East 166.76 feet of the West 296_76 feet of Lot 32, Auditor's Subdivseion No. 226, Hennepin County, Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minneacta. Abatract Property. Parcel 10: The North 100 feet of that part o,f the West Half of Lot 32, lying South of the North ,6 acres thereof, Audi tor In Subdivision Number -226, Hennepin County, Minn&aota. Abstract. Property. Parcel 11: That part of the Northeeat Quarter of the Southwest Quarter of Section 5, Tnwtiship 118, Range 21, described as beginning at th-e inharseetion of the South lane of said Northeast Quarter of the Southwest Quarter with the Southerly extension of the West line of Murray Lane 4th Addition; thence Northerly along Said Southerly extension and along said West lire a distance of 444.49 feet; thence Westerly in a straight 1ir4e to a point on the East line of Murray Lane 3rd Addition distant 444.66 feet Northerly from ita intersection with said South line; thence Southerly along said East line to the North line of the South 178.2 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line to a line drawn �� I.-C"P T ORT Form M20 12/07/99 MON 11:25 FAC 012 340 7800 DORSEY & WHITNEY la 009 Ii OR949677 C (Supplemental No. 1) Page: 6 parallel with and 100 feet East from said East line of hurray Lane 3rd Addition; thence Southerly along said parallel line to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said Souti line to a line drawn parallel with and 196,76 feet West from said West lane of Murray Lane 4th Addition; thence Northerly parallel with said West line to the North line of the South 113 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line of the South 113 feet to a line drawn parallel with and 30 feet West from said West line of Murray Lane 4th Addition; thence Southerly parallel with said West line and its Southerly extension to said South line of the Northeast Quarter of the Southwest Quarters thence Easterly along said South line to the point of beginning. Except those portion& of the above-described property described as follows: TUG Esst 56 feet of the West 101 feet of the South 182.37 feet of the North 227.37 fact; The East 62.59 feet of the West 226.17 feet of the South 56 feet of the North 101 feet; The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet; The East 56 feet of the West 282.17 feet of the South. 182.37 feet of the North 227.37 feet, nacording to the United States Government Survey thereof and situate in Hennepin County, Minnesota. Being registered land as is evideaced by Certificate of Title No. 820575. INFORMATION NOTE: The office of the Registrar of Titles advises that the Owner's Duplicate Certificate is at the Torrens office. N.1h .e IrneIngm Gmq-w 6R7 Form 3120 12/07/00 SON 11:25 PAX 612 340 7800 DORSEY & WHITNEY Q010 1r H OR94 9 677 C (Supplemental No. 1) Page. 7 SCHMULE S - SECTION 1 REQUIREMENTS The following are the requirements to be complied with: 1. We have been advised that Parcel 9 has been transferred to The Economic Development Authvri.ty in and for the City of Mew Hope, Minnesota, (a 1Kinaesota Municipal Corporation) by condemnation in District Court File No. CD -2504. Recording of an order transferring title and possession voutaJaing the legal description for parcel 9 is required. 2. Warranty Deed from The Economic Development Auti:arity in and for the City of New Hope, Minnesota, (a Ninnesota Municipal Corporation) to PPL -Bass Lake Court Limited Partn.erhaip (a Minnesota limited partnership). (as to Parcel 9 ) 3. Warranty Deed from Independent School District No. 281 to PPL -Base Lake Court Limited Partnership, (a Mitutesota limited partnership) , (as to Parcel 10) 4. We have been advised that the premises and other land are to be platted as PPL Addition. The plat must be approved by the City, the Registrar of Titles Office, the County Recorders Office, the County Surveyors and the County Tax Department. In addition, taxes for the current year must be paid in full. Recordation in required after approvals. 5. A properly executed mortgage from PPL -Sass Lake Court Limited Partnership to Minnesota Housing Finance Agency, (1 mortgage for $373, ODQ.00 and 1 mortgago for $S30,000.00) 6. A properly executed mortgage from PPL -Bass Lake Court Limited Partnership to County of Rennepin. 7, A properly executed mortgage from PPL -Sass Lake Court Limited Partnership to Family Housing Fund. 8. Mortgage, security Agreement and Fixture Financing Statemeaxt executed by PPL -Bass Lake Court Limited Partnership, a non-profit limited partnership in favor of Marquette Bank, OLD REPUBLIC 'F Wlpnaf 7Mm7nauranee CJiny.nY ORT Foran 3120 12/07/98 MON 11:29 FAX 812 340 7800 DORSEY I WHITNEY v H OR949977 C (Supplemental No. 1) Page: 8 National Asavcxation, dated No 10, 1998, filed as Document No. , in the original. amount of $ASO,Oao.oco. (as to Parcels 1, 2, 3, 4, Sr 6, 7, B and 1.1) SUbject to any other sums which may become due and payable under the terms thereof. 94tisfacti0n, release or subordination is required. g• Assl3rmeat of Leases and Renta by PFL-Hass Lake Court Limited Paxtnerahip, , a Ninnesota Partnership, to Marquette tank, National AOaoci.atiom, dated November 10, 1998, filed IF as Document No. (as to Parcels 1, 2, 3, 4, S, 6, 7, 8 and 11) Satisfaction, releaesis or subordinatiozi is required. SCHEDULE 8 - SECTION 2 STA=ARD EXCEPTIONS A. Facts which would be disclosed by a comprehensive survey of the premises described herein. H. Rights amd claims of Parties in possession. C. Mechanics', Contractors', Or Materialmener liens and lien claims, it any where no notice appears of record. D. Any Change in title oceuring subsegUeat to the effective date of this Commi.tmant and prior to the date of issuance of the Title Policy. E. Easements, or claims of easements, not shown by the public records. IN ADDITION TO THE STANDARD EXCEPTIONS, CONDITIONS, STIPULATIONS AND EXCLUSIONS FROM COVERAGE CONTAINED HEREIN AND IN THE COMPANy''S USUAL FORM OF POLICY, THE LAND nFERRED TO IS, AS OF THE EFFFCTIVS DATE HEREOF, SUBJECT TO TRE FOLLOWING: I. There are no levied or pending special aeseoxments. OLD REPUBLIC s I II +, . * n�i.�rnM.au�ecainy.nr OAT Fcwxn 3120 12/07/98 SON 11:28 FAX 812 340 7800 DORSEY A WHITNEY 11012 H OR949677 C (Supplemental No. 1) Page: 9 The data of the Special aaeeaenteat search is August 26, 1996. 2. Taxes for the year 1998 in the amount of $4,469.22 are paid. (Base tax amount $4,448.98) (Tax No. 05 -t18 -21-31-o3.04.) NOTE_ 9ena0pin County tax records indicate property is non -homestead for takes payable in the year 1998. (as to Parcel 1) Taxes for the year 1996 in the &Mount of $4,469.22 are paj.d. (Base tax amount $4,449.98) (Tax No. 05-7.18-21-31-0106.) NOTE: Beanspin County tax records indicate property is non -homestead for taxes palrable in the year 1998. (as to Parcel. 2 ) Taxes for the year 199$ In the amount of $2,394.88 are paid. (Base tax amount $2,374.64) (Tax No. 05-118-21-31-0108.) NOTE: Hennepin County tax records indicate property is homestead for taxes payable in the year 1998. (as to Parcel. 3) Taxes for the year 1998 in the amount of $2,394.88 are paid. (Base tax amouat $2,374.64) (Tax No. 05-118-21-31.-0103.) NOTE: Hensepin County tax records indicate property is homestead for taxes payable in the year 1998. (as to Parcel 4) Taxes for the year 1998 in the amount of $4,499.22 are paid. (Base tax amount $4,448.98) (Tax No. 05-118-21-31-0101.) NOTE: Hennepin County tax records indicate property is non -homestead for taxes payable in the year 1998. (as to Parcel. 5) Taxeffi for 1998 in the an unt of $4,469.22 are paid. (Base tax amount $4,448.98) (Tax No. 05-118-21-31-0702.) NOTE: Hennepin County tax records indicate property is non -homestead for taxes payable in the year 1998. (as to Parcel 6) I'f 'r *y 4IIII,I�* ( P OLD REPUBLIC kl� � KU11.naF THle h.uwuee Coinyany ORT Farah 3120 12%07/88 11011 11:28 FA1 612 340 7800 DORSEY & WHITNEY X OR949677 C (Supplemental No. 1) Pages 10 Taxes for the year 1998 in the amount of $4,469.22 are paid. (Base tax amount $4,448.98) (Tax No. 05-118-21-31-0105.) NOPE: Hennepin County tax records indicate property is non -homestead for taxes payable is the year 1998. (as to Parcel 7) 'faxes for th4 year 1998 in the amount of $6,812.16 are paid. (Base tax amount $6,781.62) (Tax No. 05-118-21-31-0007.) NOTE: Hennepin County tact records indicate property is non -homestead for taxes payable in the year 1996. (as to Parcel. 8) Taxes for the year 1998 in the amount of $5,256.06 are paid. (Base tax amount $5,231.47,) (Tax No. 05-11,8-21-31-0D08.) NOTE: He=epin County tax records indicate property is non -homestead for takes payable in the year 1998. (as to Parcel 9) Taxes for the year 1998 are exempt. (Rase tax exempt) (Tax No- 05-118-21--31-0006.) NOTE: Hennepin County" tax records indicate property is non -homestead for taxer, payable in the yeas 1998: (as to Parcel 10) Taxes for the year 1998 are exempt. (Base rax exempt) (Tax No. 05-118-21-31-0109.) NOTE: Hennepin County tax records indicate property is non-homeatead for tares payable in the year 1.998. (as to Parcel 11) 3. Gas main easement(s) over the Eart 20 feet of Parcel 11 in favor of Minneapolis Gas Company now known as Minnegaseo, as created in DOCUMent No. 3503229, reformed in Torriens Case No. 19861 and partially released by Document dated November 2, 1998. 013 4. Street easement(s) over the South 7 feet of Parcels 9 and 11 as evidenced by Document No(a). 3940679. 5. Subject to easements for power, telephong and cable television "-OLD REPUBLIC: fi ' NaLanx }atm nxraren Gti�• 0RT Poen► 11211 12/07/98 XON 11;26 FA[ 612 840 7800 DORSITY & WHITNEY R OR949677 C (Supplemental No. 1) Page: 11 linen along the West line of the North line of Parcel 11 as determined in Torreas+ Case No. 19861_ 6_ Subject to the right of Northern States Power Company to maintain, repair and zeplace electric transmission limes *ver and across Parcel 11 as determined in Torrens Case No. 19861. 7. Road easement over the most Southerly 33 feet of Parcel 11 as recited on the Certificate of Title_ 6. utility and drainage easements as shown on the unrecorded plat of PPL Addition. NOTRa if there are any questions concerning. the exceptions shown on this commitment, please call Mary A. Edgeton at 371-1111, Ext. 284 OR Kaaren Butler at 371-1178. Q 014 I1IiIll.*", OLD REPUBLIC JIy � i4 �� NMM1eN?hle eaJmnce Carp.■y } ORT Form 31 24 JRN.27.1999 2!04PM ORT coMMERCIRL January 27, 1999 Bass Tjake To be added to the Policy fare Qui file no. OR949677 Court Ptn. survey coverage ie granted as to any matters disclosed on survey of Lot SurveyO Company xnc. dated october 7, 1996 revised November 2, 1999, December 22, 1999 and January 2, 1999, such time as a survey is provided showing the Job Na. 77975. At location of the footings on all buildings to be constructed on the property, the final policy to be issued is subject to endorsement so as to reflect any mattes affecting the title or use of the property as reflected thereon. n * *+ �* CLD REPUBLIC of r FOrm 9129 EXECUTION COPY: February 2, 1999 REGULATORY AND OPERATING AGREEMENT BY, BETWEEN AND AMONG THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS, THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, AND PPL -BASS LAKE COURT LIMITED PARTNERSHIP Dated: February 3, 1999 This document drafted by: HOLMES & ASSOCIATES, LTD. Two Carlson Parkway, Suite 155 Minneapolis, NLN 55447 612-249-0888 (Telephone) 612-249-0777 (Facsimile) DANNN12510171D0CSIR&OAGR,D0C REGULATORY AND OPERATING AGREEMENT TABLE OF CONTENTS REGULATORY AND OPERATING AGREEMENT Page PREAMBLE..................................................................................................................................1 ARTICLE I Definitions Section1.1 Definitions................................................................................................................2 ARTICLE II Authority Units Section 2.1. Owner Commitment.................................................................................................4 Section 2.2. Authority Units Described.......................................................................................4 Section 2.3. Casualty and Condemnation....................................................................................4 Section 2.4. Excess Insurance Proceeds.......................................................................................4 ARTICLE III Operation of Authority Units Section 3.1. Legal Compliance....................................................................................................6 Section 3.2. Administrative Flexibility........................................................................................6 Section3.3. Management.............................................................................................................6 Section 3.4. Waiting Lists ..... ........... .................................................................................7 Section 3.5. Managing Agent Responsibilities............................................................................7 Section 3.6. Lease Forms............................................................................................................7 Section 3.7. Grievance Procedures..............................................................................................7 ARTICLE IV Development Operating Subsidy Section 4.1. Further Definitions...................................................................................................9 Section 4.2. Operating Budget Submittals.................................................................................10 Section 4.3. Payment of Operating Subsidy .........................................................................11 Section 4.4. Development Operating Subsidy Cap....................................................................11 Section 4.5. Segregated Account...............................................................................................12 Section 4.6. Monthly Operating Reports ................................................................................13 Section 4.7. Audited Financials and Supplemental Data...........................................................13 Section 4.8. Post -Year Adjustments..........................................................................................13 Section 4.9 Vacancy Adjustment..............................................................................................14 Section 4.10. Incidental Development Income............................................................................14 Section 4.11. Future Legislation..................................................................................................14 ARTICLE V Development Operating Subsidy Reserve Section 5.1. Establishment of Reserve and Accounts................................................................15 Section 5.2. Investments............................................................................................................15 Section 5.3. Floor Level Adjustments........................................................................................15 D:1MNN]2510171DOCSIR&OAGR.DOC i REGULATORY AND OPERAT]NG AGREEMENT Section 5.4. Voluntary Replenishment of Reserve....................................................................15 Section 5.5. Owner Surplus Cash Contribution.........................................................................16 Section 5.6 Utilization of Reserve............................................................................................16 ARTICLE VI Owner Remedies Section 6.1. Limited Owner Obligation.....................................................................................18 Section 6.2. Relationship to Separate Agreements....................................................................18 Section 6.3. Remedies When Vacancy......................................................................................18 Section 6.4. Remedies When No Vacancy................................................................................19 Section 6.5. MPHA Failure to Elect..........................................................................................21 ARTICLE VII Non -Discrimination and Other Federal Requirements Section 7.1. Non -Discrimination and Other Federal Requirements..........................................22 ARTICLE VIII Owner Default Section8.1. Defined...................................................................................................................23 Section8.2. Notification............................................................................................................23 Section 8.3. MPHA Remedies......................................................... ....23 ARTICLE IX Disclaimer of Relationships Section 9.1. No Assignment of ACC.........................................................................................24 Section 9.2. No Third Party Beneficiary....................................................................................24 ARTICLE X Miscellaneous Section 10.1. Binding Obligation................................................................................................25 Section10.2. Assignment............................................................................................................25 Section10.3. No Waiver..............................................................................................................25 Section10.4. Amendment............................................................................................................25 Section10.5. Notice ...................................................................................................................25 Section 10.6. Law Governing.....................................................................................................26 Section10.7. Severability............................................................................................................26 Section 10.8. Headings and Titles................................................................................................26 TESTIMONIUM SIGNATURES EXHIBIT A Development Site EXHIBIT B Dispute Resolution Procedures EXHIBIT C Development Operating Subsidy Cap Worksheet EXHIBIT D Management Agreement Di\MNN125WI7\DOCMR&OAGR.DOC ii REGULATORY AND OPERATING AGREEMENT REGULATORY AND OPERATING AGREEMENT AGREEMENT made this 3rd day of February, 1999 by, between and among the MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS, a public body corporate and politic, organized and existing under the laws of the State of Minnesota (the "MPHR"), the ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE, a public body corporate and politic, organized and existing under the laws of Minnesota (the "EDA") (together with the MPHA sometimes called the "Authorities") and the PPL -BASS LAKE COURT LIMITED PARTNERSHIP, a Minnesota limited partnership ("Owner"). The MPHA and the United States Department of Housing and Urban Development ("HUD") are parties to an Annual Contributions Contract ("ACC") pursuant to which the MPHA has been granted funding for the demolition and replacement of 770 units of low rent public housing pursuant to Section 5 of the United States Housing Act of 1937, as amended (the "Act"), and pursuant to the terms of that certain Consent Decree entered in settlement of Holtman et al. vs. Cisneros et al, U.S.D.C. (Minn. Dist., 4th Div.) Civil Case No. 4-92-712. As a part of its effort to locate replacement units in areas of nonconcentration as to race and poverty throughout the Minneapolis -St. Paul Metropolitan area it has entered into a joint powers agreement with the EDA for the purpose of seeking inclusion of replacement units in the Owner's multifamily housing project to be constructed within the City of New Hope, Minnesota (the "Development"). The Development is to be a mixed -income community consisting of 34 units. Twelve (12) units shall be set aside and maintained as "public housing," as defined in Section 3(b) of the Act, and eligible to receive the benefit of operating subsidies by HUD pursuant to Section 9 of the Act for the term of the ACC. Owner intends that the 22 other units of the Development will be operated and maintained as Tax Credit Units. NOW, THEREFORE, the parties hereto agree as follows: D:1MNN125\0171D0051R&OAGR.DOC i REGULATORY AND OPERATING AGREEMENT ARTICLE I Definitions Section 1.1. Definitions. As used herein, the following terms shall have the following meanings: "ACC" shall mean the Consolidated Annual Contributions Contract between HUD and the MPHA dated April 10, 1971, as amended from time to time including, specifically, as amended by a Mixed -Finance Amendment dated February 3, 1999. "Act" shall mean the United States Housing Act of 1937, as amended from time to time, and any successor legislation. "Authority Units" shall mean the dwelling units in the Development operated and maintained from time to time as "public housing" units in accordance with the Act, the ACC, and this Agreement. "Consent Decree" shall mean the Order of the United States District Court, District of Minnesota in the action entitled Hollman et al vs. Cisneros et al, Civil Action No. 4-92-712, which provides, among other things, for the development of 770 public housing units in the Minneapolis -St. Paul metropolitan area and for priority occupancy by certain families relocated or displaced from demolished public housing in Minneapolis. "Development" shall mean the 34 -unit rental housing development to be constructed and operated by Owner, during the term of the ACC, on the Development Site. "Development Fiscal Year" shall mean the fiscal year of the Owner, irrespective of whether such fiscal year coincides with the MPHA Fiscal Year. "Development Site" shall mean the real property upon which the Development will be constructed, as more particularly described in Exhibit A hereto. "Development Operating Subsidy" shall mean that part of the Operating Subsidy received by the MPHA from HUD which the MPHA shall pay to the Owner pursuant to this Agreement. "Development Operating Subsidy Reserve" shall mean the trust account established by the Owner pursuant to Article V hereof and consisting of an Owner Account and a Public Account to which contributions made by the Owner, MPHA and EDA to their respective accounts, shall fund shortfalls in Development Operating Subsidy. "Fair Market Rent" shall mean the maximum allowable rent permitted to be charged under Section 8 of the Act. "Housing Agreement" shall mean the Housing Development Agreement dated December 21, 1998 by and between the EDA, the MPHA and the Owner. "Incentive Authority Units" shall mean four (4) Authority Units which are not subject to the waiting list requirements of the Consent Decree. "Lender" shall mean the lender under a first mortgage loan secured by the Owner's interest in the Development Site obtained by Owner to assist in financing the construction of the Development. Upon the date hereof and so long as the MHFA Mortgage remains outstanding, Lender shall mean "MHFA." D: MNN12510171DOCSIR&OAGRBOC 2 REGULATORY AND OPERATING AGREEMENT "MHFA Mortgage" shall mean that Minnesota Housing Finance Agency New Construction Tax Credit :Mortgage Loan Program Mortgage dated February 3, 1999, which provides first mortgage financing for the Development. "MHFA Regulatory Agreement" shall mean that certain Minnesota Housing Finance Agency New Construction Tax Credit Program Regulatory Agreement dated February 3, 1999. "MPHA Fiscal Year" shall mean the MPHA's October 1 through September 30 fiscal year, used for purposes of calculating the Operating Subsidy received by the MPHA pursuant to Section 9 of the Act. "Managing Agent" shall mean the managing agent named in the Management Agreement, or any successor managing agent of the Development named from time to time and approved by MHFA, pursuant to the MHFA Regulatory Agreement, and the Authorities as provided herein. "Management Agreement" shall mean the agreement governing management of the Development to be entered into between the Owner and the Managing Agent pursuant to Section 3.3 hereof. "Operating Subsidy" shall mean financial payments provided to the MPHA by HUD pursuant to Section 9 of the Act or pursuant to any successor legislation providing for project - based or tenant -based operating or rental assistance in respect of units in public housing developments or eligible occupants thereof. "Proposal" shall mean the MPHA and EDA proposal for the Development approved by HUD. "Replacement Authority Units" shall mean those eight (8) Authority Units which are subject to the waiting list requirements of the Consent Decree. "Restrictive Covenant" shall mean the covenants and restrictions contained in that certain Declaration of Restrictive Covenants granted by the Owner which shall run with the land obligating the party and any successors in title, including any successor who acquires title to the Owner's estate by foreclosure of a mortgage, to maintain and operate the Authority Units in compliance with all applicable requirements of the Act, the ACC and this Agreement during the period required by law. "Tax Credit Units" shall mean 22 units in the Development to be operated and maintained as qualified low-income units under Section 42 of the Internal Revenue Code for a period of not less than the compliance period and any extended use period (as such terms are defined in said Section 42 of the Internal Revenue Code, as the same may be amended from time to time). WMNN125W i 71DOCSIR&OAGR. POC 3 REGULATORY AND OPERATING AGREEMENT ARTICLE II Authority Units Section 2.1. Owner Commitment. During the term of this Agreement, but subject to Article VI hereof, Owner will continuously set aside twelve (12) units of the Development, having a total of 42 bedrooms and having initially the unit size distribution set forth below, for occupancy by public housing -eligible households at rents and subject to all other conditions of the Act, the ACC and the Consent Decree. Provided that the Owner continues operating the public housing units in accordance with the Act, the ACC and the Consent Decree, and in accordance with the terms of this Agreement, such units shall be eligible to receive the benefits of Operating Subsidy. Consistent with the requirements currently applicable to public housing, a unit shall not lose its status as an Authority Unit solely because the income of the tenant residing therein rises above the applicable public housing income limit; any such unit shall be governed by rules generally applicable to units occupied by over -income tenants in the public housing program (subject to such modifications in lease and occupancy terms as are permitted hereunder). Section 2.2. Authority Units Described. The Authority Units shall initially comprise the following mixture of unit sizes and descriptions: Owner may change the specific units designated as Authority Units at any time provided that (a) the number of bedrooms contained in the Authority Units remains 42, (b) if such change is to be made with respect to an occupied Authority Unit, the tenant of such unit shall have the same rights with respect to occupancy and rent as applied prior to removal of the unit's designation as an Authority Unit, and (c) the Authority Units shall at all times, to the extent feasible, be scattered evenly throughout the Development, and shall not be concentrated in any particular area or areas within the Development, except that the four-bedroom Authority Units shall float throughout the rehabilitated buildings of the Development and the three-bedroom Authority Units will float throughout the new construction of the Development. Section 2.3. Cas!!ft and Condemnation. In the event of a casualty loss or taking by eminent domain, Owner shall apply the proceeds of such casualty loss or condemnation to the rebuilding of the units, and units representing the same bedroom mix described above to the extent possible, shall be set aside as Authority Units. Section 2.4. Excess Insurance Proceeds. In the event of (a) a casualty, (b) a decision by the Lender to apply insurance proceeds to a first mortgage loan rather than reconstruction of units, and (c) the existence of excess insurance proceeds, such excess insurance proceeds shall be deposited in the Public Account of the Development Operating Subsidy Reserve. WMNN I2510171DOCSIR&OAGRDOC 4 REGULATORY AND OPERATING AGREEMENT ARTICLE III Operation of Authority Units Section 3.1. Legal Compliance. Owner shall maintain and operate the Authority Units in compliance with all applicable requirements of the Act, HUD regulations thereunder, and the applicable regulations and policies of the Authority, and in accordance with the ACC (including any waivers granted pursuant thereto), the Consent Decree, and this Agreement. In the event of any conflict among the foregoing authorities, the ACC (including any waivers granted pursuant thereto) shall control (to the extent permitted by law). Notwithstanding the Owner's agreement to perform substantial obligations and responsibilities with regard to the Authority Units pursuant hereto, and the agreement of the EDA to assist in carrying out certain functions and responsibilities, the MPHA remains accountable to HUD for performance of such functions under and pursuant to the ACC and must monitor the performance of the Owner and the EDA to assure compliance therewith; provided, however, that the MPHA shall be entitled to rely upon the truth and accuracy of information provided to it by the Owner or the EDA. Section 3.2. Administrative Flexibility_ Authorities and Owner acknowledge that the goal of achieving long-term sustainability of the Development as a mixed -income community will be enhanced by administrative procedures and terms and conditions of occupancy which reduce discernible distinctions in maintenance and operation, and conditions of continued occupancy, between the Authority Units and other units in the Development to the greatest extent feasible while assuring that the Authority Units are available to house families who meet the occupancy objectives of the Authorities. Sections 3.3 to 3.7 of this Article III enumerate certain respects in which operating procedures and other requirements as to the Authority Units will differ from those in effect with respect to public housing units owned by the MPHA. The Authorities and Owner agree that, if experience demonstrates a need for or the desirability of further departures from standard procedures applicable to PHA -owned public housing, they will consult with each other regarding such further modifications and will take such further implementing steps as they agree to be advisable, including, as appropriate, requests to HUD for revision or waiver of regulations necessary to permit the Authorities to undertake measures that enhance the long-term viability of the Development, or requests to implement statutory revisions made by Congress from time to time affecting either public housing in general or public housing located within privately -owned mixed -income communities in particular. Section 3.3. Management. Owner will retain a Managing Agent for the Development, including the Authority Units (the "Managing Agent"), pursuant to a management agreement (the "Management Agreement") as required by Section 5 of the MHFA Regulatory Agreement. The Management Agreement shall be in the form attached hereto as Exhibit D, except to the extent modification thereof is approved by MHFA, pursuant to the MHFA Regulatory Agreement, and the Authorities. The initial Managing Agent shall be Project for Pride in Living, Inc. The Owner may change the Managing Agent only as provided in the MHFA Regulatory Agreement, with the consent of the Authorities, so Iong as the MHFA Regulatory Agreement remains outstanding. At such time as the MHFA Regulatory Agreement is no longer outstanding, the Managing Agent will be subject to written approval by the Authorities and HUD, provided that if the MPHA and EDA fail to agree upon the discharge or hiring of a Managing Agent, the EDA's judgment shall be final. The Managing Agent will be responsible to Owner for management of the Authority Units in accordance with the terms of this Agreement and all applicable requirements referenced in Section 3.1 hereof. The Management Agreement will contain appropriate provisions providing access by the Authorities, upon request therefor, to books and records maintained by the Managing Agent with respect to the Development, and pursuant to which the Owner may be required to terminate the Management Agreement and the appointment of the Managing Agent thereunder, subject to appropriate judicial review in any court of competent jurisdiction, if the Authorities determine that the Managing Agent has violated, D;1MNN 125\0171DOCSIR&OAGR.DOC S REGULATORY AND OPERATING AGREEMENT breached, or tailed to comply with any provision of, or obligation under, this Agreement (including, without limitation, by reason of its violation, breach or failure to comply with any governing law, regulation, or agreement referenced in Section 3.1 or Article VIII hereof). Section 3.4. Waiting Lists. The Authorities shall create, maintain and manage the waiting list or lists for occupancy to the Authority Units in accordance with the Consent Decree and all applicable laws and regulation. Upon request of the Managing Agent, the EDA shall supply the names of potentially eligible tenants to the Managing Agent as more fully described in the Management Agreement. The waiting list or lists policy created by the Authorities is subject to HUD approval. Section 3.5. Managing Agent Responsibilities. The Authorities delegate to Owner, subject to re-delegation to the Managing Agent, the following administrative fixnctions in connection with admission of applicants to occupancy of the Authority Units: applicant screening, income and data verification, income recertification, record maintenance, unit assignment, execution of leases and terminations, all in accordance with criteria and procedures approved by the Authorities. Screening criteria and procedures proposed by the Managing Agent with respect to the Authority Units will not necessarily be identical to those utilized by the MPHA with respect to MPHA-owned public housing but will, to the maximum extent permissible under applicable HUD requirements and the ACC, be consistent with those utilized by the Managing Agent with respect to other units of the Development; provided, however, that such procedures shall at all times be fair and evenhanded and shall not be more stringent as they relate to Replacement Authority Unit applicants than the Incentive Authority Unit applicants or other applicants. The MPHA shall have the right to monitor the procedures and results of the Managing Agent's activities in this regard. The EDA shall establish procedures for informal and formal review of eligibility or suitability determinations for applicants for admission to the Authority Units consistent with HUD regulations. Section 3.6. Lease Forms. Tenant leases executed with respect to Authority Units will be on form attached to the Management Agreement as Exhibit E, subject to HUD approval, if required, of variations from the requirements of 24 CFR Part 966, Subpart A, as amended or replaced from time to time. Such leases shall accommodate the remedies available to the Owner pursuant to Section 6.3 and 6.4 hereof. Section 3.7. Grievance Procedures. The EDA will establish a tenant grievance procedure for residents of the Authority Units in compliance with the requirements of Section 6(k) of the Act and consistent, to the maximum extent feasible, with the intent stated in Section 3.2 above. Such procedures will provide for such informal and formal hearings as set forth in the HUD regulations. The Authorities will seek HUD approval, to the extent required, of variations from the requirements of 24 CFR Part 966, Subpart B, as amended or replaced from time to time. D:1MNN125\0171DOCSIR&OAGR.DOC 6 REGULATORY AND OPERATING AGREEMENT ARTICLE IV Development Operating Subsidy Section 4.1. Further Definitions. As used herein: (a) "Allowed Development Expenses" shall mean all necessary and reasonable operating expenses of the Development for any period, including: (i) all ordinary and necessary expenses of operations of the Development shown as line items on Form HUD -92547-A (Budget Worksheet), exclusive of (A) the amount by which real estate taxes attributable to the Authority Units exceed the amount of the payment in lieu of taxes, for so long as under Minnesota law the Authority Units are entitled to payment in lieu of tax treatment, (B) debt service requirements of any lender (including the Authorities) and (C) utility expenses which are the direct responsibility of the tenant. if the MPHA and HUD approve the borrowing of funds for repairs, replacements or improvements not funded from the Development reserve for replacements established in Section 3.C.(3) of the MHFA Regulatory Agreement (which approval shall not be unreasonably withheld), then the debt service requirements for such borrowing shall be included in Allowed Development Expenses. Authority Unit Expenses (as hereinafter defined) shall be reduced by any amounts contributed by the Authorities, on a grant basis, for repairs, replacements or improvements of the Authority Units, up to the amount of the Authorities' share (based on the Authority Percentage, as hereinafter defined) of debt service requirements for any such borrowing for similar repairs, replacements or improvements to units other than the Authority Units; (ii) management fees payable pursuant to the Management Agreement; (iii) legal expenses associated with the operation of Development and accounting and audit expenses, including tax return preparation expenses, permitted to be charged as project expenses pursuant to the MHFA Regulatory Agreement, so long as it remains outstanding, and then the HUD Handbook 4370.2 REV -1, Financial Operations and Accounting Procedures for Insured Multifamily Projects, or any successor thereto; and (iv) reserves for replacements and for any other purposes, as required by the Lender and approved by the MPHA. (b) "Authority Percentage" shall mean the higher of: (i) the number of Authority Units, divided by the total number of units in the Development; or (ii) the net rentable square feet of the Authority Units, divided by the net rentable square feet of all units of the Development. Any change in the "Authority Percentage" resulting from a change in the composition of the units comprising the Authority Units permitted by Article 11 hereof shall become effective for the MPHA Fiscal Year following the year in which such changes occur. (c) "Authority Unit Expenses" shall mean (i) Allowed Development Expenses, multiplied by the Authority Percentage, plus (ii) the portion of any payment in lieu of real estate taxes to be paid in respect of the Authority Units, if any, made by the Owner and not directly by the Authority, plus (iii) amounts payable to Authority Unit occupants as utility reimbursement (i.e., "negative rent"); provided, however, that if any line item expense shall be included in Estimated Authority Unit Expenses on the basis of a percentage other than D:\NM12510171DOCSIR&OAGR.DOC 7 REGULATORY AND OPERATING AGREEMENT the Authority Percentage pursuant to the second sentence of Section 4.2(a) hereof, such expense shall be included in Authority Unit Expenses on the basis of the same percentage; (d) "Authority Unit Income" shall mean all income received in respect of Authority Units, including tenant rents ("Tenant Rent" as defined in 24 CFR 913.102) and any other sources of income anticipated in respect of Authority Units, including all types of revenue shown as line items on Form HUD 92547-A, but exclusive of operating subsidy. (e) "Estimated Allowed Development Expenses," "Estimated Authority Unit Expenses," and "Estimated Authority Unit Income" shall mean the estimated amounts of such items for any period determined in accordance with Section 4.2 hereof. Section 4.2. Operating Budget Submittals. Not later than 90 days prior to the anticipated date of first availability for occupancy of any unit of the Development, and not later than the first day of rune preceding any subsequent MPHA Fiscal Year, the Owner shall submit to the MPHA its proposed Operating Budget for the following MPHR Fiscal Year (or, in the case of the year in which first availability for occupancy occurs, the remainder thereof). The Operating Budget shall project Estimated Allowed Development Expenses, Estimated Authority Unit Expenses, and Estimated Authority Unit Income for the subject period, subject to the following conditions: (a) Estimated Allowed Development Expenses shall be reasonably within industry standards for similar housing type, materials and location. The MPHR may comment upon and propose changes to the Estimated Allowed Development Expenses set forth in the Operating Budget submitted by the Owner, but the Owner shall not be required to reduce any estimated expense below industry standards for such expenditure reasonably anticipated by the Owner for the period provided, however: (i) the portion of any line item within the Estimated Allowed Development Expenses including in Estimated Authority Unit Expenses shall be altered from the Authority Percentage if either the MPHA or the Owner demonstrates satisfactorily that allocation of such item to the Authority Units on the basis of the Authority Percentage is inappropriate (e.g., marketing and advertising costs, if such relate solely or preponderantly to the Tax Credit Units); and (ii) if the MPHA and Owner disagree about whether the Estimated Allowed Development Expenses, or any line -item therein, are consistent with industry standards, the Owner's estimate shall be utilized for budget purposes, but the MPHA may institute the dispute resolution procedures described in Exhibit B hereto. (b) For the period in which first occupancy of the Development is anticipated to occur, Estimated Authority Unit Income shall be determined on the basis of assumed tenant rent collections for each unit size equal to the average tenant rent collections for all units of comparable size owned and administered by the MPHA in the most recent annual or semiannual period for which such statistics are available at the time of Owner's submission of the Operating Budget for such period to the MPHA. For each subsequent MPHA Fiscal Year, Estimated Authority Unit Income shall be determined on the basis of the aggregate tenant rents actually collected for all Authority Units during the first nine months of the preceding WHA Fiscal Year. Notwithstanding the foregoing, with respect to any MPHA Fiscal Year, Owner and the MPHA may agree to project Estimated Authority Unit Income at a level different from that which would otherwise be established pursuant to the preceding sentence, taking into account (i) the reasonably anticipated level of incomes of tenants anticipated to be admitted to the Authority Units during such period, based on anticipated turnover and the admissions policies referenced in Section 3.5 hereof, and (ii) D:IWINN12516171D0CS1R&0AGR.D0C 2 REGIII.ATORY AND OPERATRiG AGREEMENT reasonably anticipated increases in income levels of existing tenants based on tenant participation in employment training and other supportive services programs. Section 4.3. Payment of Operating Subsidy. (A) Between the date upon which the Authority Units are substantially complete and available for occupancy, as described in Section 3.4(c) of the Housing Agreement, and the date upon which ninety-five percent (95%) of the Authority Units become first occupied, the MPHA shall pay operating costs of the Authority Units from the Initial Operating Deficit line item of the Development budget. During such period, all rental income received by the Owner from the Authority Units shall be delivered to the MPHA for deposit in said Initial Operating Deficit account. (B) During each MPHA Fiscal Year after the end of the Initial Operating Period, the MPHA shall pay to the Owner a Development Operating Subsidy equal to the lesser of (a) (i) Estimated Authority Unit Expenses for such period less (ii) Estimated Authority Unit Income for the period or (b) the Development Operating Subsidy Cap (such amount with respect to any period being referred to herein as the "Development Operating Subsidy Requirement"). The MPHA shall pay to Owner, on the first day of each month of an MPHA Fiscal Year, one -twelfth (1/12) of the Development Operating Subsidy Requirement for such MPHA Fiscal Year•, provided, however, that Owner and the MPHA may agree, upon determination of the Operating Budget and Development Operating Subsidy Requirement for any MPHA Fiscal Year, to provide for lump sum or unequal monthly payments for such year. Section 4.4. Development Operating Subsidy Cap. The Development Operating Subsidy Cap shall be determined annually as follows: (a) On or before September 15 of each year the MPHA shall determine, in accordance with its budget submittals to HUD (i) the total number of available public housing units which are then subject to the ACC, (ii) the distribution of such units by number of bedrooms and (iii) the total Operating Subsidy for such units approved by HUD for the following MPHA Fiscal Year, exclusive of that portion of the Operating Subsidy allocable to accounting costs. (b) The MPHA shall multiply the number of units of each bedroom size by the number of rooms per unit using the following Minnesota Housing Finance Agency table of rooms per unit and add the products for each bedroom size in order to calculate (i) the total number of rooms existing in the MPHA inventory and (ii) the total number of rooms in the Authority Units: Unit Size Rooms per Unit 0 3.5 1 3.5 2 4.5 3 6.0 4 7.0 (c) The MYHA shall divide the total Operating Subsidy approved by HUD for the following MPHA Fiscal Year by the total number of rooms determined under Section 4.4(b)(i) hereof to determine an average subsidy per room per year for all MPHA units. (d) The MPHA shall multiply the average subsidy per room determined under Section 4.4(c) times the number of rooms in the Authority Units determined under Section 4.4 (b)(ii) which shall constitute the Development Operating Subsidy Cap for the following MPHA Fiscal Year. D:1MNN12510171DOCS\X&0AGR.D0C 9 REGULATORY AND OPERATING AGREEMENT (e) On or before December 15 of each year the MPHA shall submit to HUD its post -year audit with respect to the preceding MPHA Fiscal Year. On or before February 1 of each succeeding year the MPHA shall take into account all HUD -approved post -year adjustments in MPHA Operating Subsidy and shall recalculate the Development Operating Subsidy Cap pursuant to Section 4.4 above (the "Recalculated Development Operating Subsidy Cap"). The calculations required by this Section 4.4 shall be made on the form attached hereto as Exhibit C and shall be mailed to the Owner and the EDA on or before October 1, the beginning of the MPHA Fiscal Year. Section 4.5. Segregated Account. All payments of Development Operating Subsidy received from the MPHA, plus all payments, if any, made to Owner from the Development Operating Subsidy Reserve (as hereinafter defined), shall be deposited by Owner in a Development -wide operating account maintained, so long as the MHFA Regulatory Agreement is in effect, as required by the MHFA Regulatory Agreement, and subsequent thereto, in a financial institution whose deposits are insured by an agency of the Federal Government; provided, however, that at all times the funds shall be invested in a manner consistent with Minnesota Statues, Section 469.12, Subdivision 1, paragraph 16. Owner shall also cause all receipts in respect of Development units, including tenant rents and other revenues (but exclusive of tenant security deposits), to be deposited into the Development -wide operating account and shall make all Allowed Development Expenses disbursements therefrom. Section 4.6. Monthly Operating Reports. Monthly operating budget and expense reports shall be prepared on forms supplied y the MPHA and submitted by the Owner to the MPHA on or before the twentieth (20th) of each calendar month showing activity for the previous month. Not later than 60 days after the end of each successive quarterly period commencing with the calendar quarter in which first occupancy of the Development occurs, Owner shall deliver to the Authorities, separately with respect to the Authority Units and with respect to the Development (including the Authority Units), itemized statements of income and expenses, prepared on an accrual basis, in form substantially comparable to Form HUD -92410 (Statement of Profit and Loss), certified by the chief financial officer of the Managing General Partner of Owner, for the quarterly period and from the beginning of the Development fiscal Year to the end of such quarterly period. Section 4.7. Audited Financials and Supplemental Data. Not later than March 1 of each year, Owner shall deliver to the Authorities a copy of the audited financial statements of Owner for such year and the period then ended, prepared in accordance with generally accepted accounting principles and accompanied by the report of independent public accountants thereon, together with a copy of any additional financial statements or reports delivered by Owner to its partners. Such financial statement shall be accompanied by supplemental data, together with the report of independent public accountants thereon, which shall show on a cash basis for such period (a) actual income from the Authority Units, (b) actual expenditures for Authority Unit Expenses, (c) the amount of Development Operating Subsidy received by Owner, showing separately amounts received from the Authorities and amounts withdrawn from the Development Operating Subsidy Reserve, (d) the balance of the Development Operating Subsidy Reserve at the end of the period, and (e) aggregate stated lease rents and the amounts thereof uncollected from Authority Units for which no eviction actions have been commenced ("Supplemental Data"). If Owner shall fail to deliver such financial statements and Supplemental Data to the Authorities, the Authorities shall have the right to retain an independent auditor to conduct an audit of the financial statements of the Owner and to charge the reasonable cost thereof to the Owner. D-.UANN12510171DOCSIR&OAGR.DOC 10 REGULATORY AND OPERATING AGREEMENT Section 4.8. Post -Year Adjustments. If the Supplemental Data provided pursuant to Section 4.7 above shall show that the sum of the amounts described in clauses (a) and (c) of Section 4.7 shall exceed the amount described in clause (b) thereof, the Owner shall immediately forward the amount of such excess to the Public Account of the Development Operating Subsidy Reserve. If the Supplemental Data shall show that the sum of the amounts described in clauses (a) and (c) shall be less than the amount described in clause (b), the MPHA shall immediately reimburse the Owner for the amount of such deficit, provided that total Development Operating Subsidy payable by the MPHA for such preceding year shall not exceed the Recalculated Development Operating Subsidy Cap. If the Supplemental Data shall show that the amount described in clause (a) alone shall exceed the amount described in clause (b), the excess shall be deposited immediately by the Owner in the Public Account in the Development Operating Subsidy Reserve. Section 4.9. Vacancy Adjustment. Separately and independently from the reconciliation provided for under Section 4.8 above, the Owner shall contribute to the Development Operating Subsidy Reserve, not later than March 1 of each year, the amount, if any, of Development Operating Subsidy received by Owner during such period attributable to any Authority Unit for a period in which such Authority Unit was vacant for more than 90 days, provided that such period of vacancy shall not be attributable to any action or omission by the Authorities. For purposes of this provision: (a) an Authority Unit shall be deemed vacant (i) commencing on the first day for which rent is not charged for the unit following termination or expiration of its occupancy as an Authority Unit, and (ii) ending on the day preceding the first day for which rent is charged for such unit based on re -occupancy as an Authority Unit, or the first day for which rent is charged for occupancy as an Authority Unit of a different unit which was not previously occupied as an Authority Unit, whichever shall first occur; and (b) the amount of Development Operating Subsidy attributable to a unit for a period in which such unit was vacant more than ninety (90) days shall be determined by multiplying the amount of Development Operating Subsidy received by Owner during such year, as reported pursuant to Section 4.3 above, by the product of (x) the net rentable square feet of such unit, divided by the net rentable square feet of all Authority Units (including such vacant unit), multiplied by (y) the number of days in excess of ninety (90) during which such unit is vacant, divided by 365. Section 4.10. Incidental Development Income. Separately and independently from the reconciliation provide or under Section 4.8 a ove, the Owner shall contribute to the Public Account of the Development Operating Subsidy Reserve, not later than March 1 of each year, 12174 of all incidental income derived from the operation of the Development to the extent it is derived from charges applied to both Authority Units and Tax Credit Units. Incidental income shall include, but not be limited to (1) vending and laundry machine income and (2) income received from rental of parking spaces, garage spaces and commercial space. Section 4.11. Future Legislation. Subject to remedies provided in Article VI hereof, nothing contained herein shall prevent or diminish the full application to the Authority Units of any legislation enacted after the date hereof which provides for the termination of operating subsidies under Section 9 of the Act or of other Federal project -based assistance to public housing developments, including, without limitation, any provision thereof releasing or otherwise modifying occupancy or tenant rent restrictions previously applicable to units in such developments. D:1MNN12510171D0CSIR&OAGR.DOC I I REGULATORY AND OPERATING AGREEMENT /.\111v011NDWA Development Operating Subsidy Reserve Section 5.1. Establishment of Reserve and Accounts. Prior to initial occupancy of each Authority Unit, the Owner will establish a separate trust account known as the "Development Operating Subsidy Reserve"), consisting of two separate accounts in a financial institution chosen by the Owner and acceptable to the MPHR whose deposits are insured by an agency of the Federal Government (the "Escrow Agent"), provided, however, that at all times the funds shall be invested in a manner consistent with Minnesota Statutes, Section 469.12, Subdivision 1, paragraph 16. One account shall be designated the "Owner Account" and the Owner shall deposit therein an amount not less than $5,940 for each Authority Unit (the "Initial Owner Deposit"), which represents an amount equal to three times the estimated annualized amount of the Development Operating Subsidy Requirement determined pursuant to Article IV hereof with respect to the MPHA Fiscal Year in which first occupancy of the Development occurs. Additional deposits to the Development Operating Reserve by the Owner shall be deposited and maintained as provided herein. All funds in the Owner's Account shall remain funds of the Owner, but shall be held in trust by the Escrow Agent, and shall be held and applied in accordance with the terms and conditions hereof All deposits to the Development Operating Subsidy Reserve made by any public entity, except as otherwise provided herein, shall be deposited in an account known as the "Public Account," shall remain the funds of the entity making such contributions and shall be held and applied in accordance with the terms and conditions hereof. Interest earnings in the Development Operating Reserve shall be allocated to the Owner's Account and Public Account in accordance with their respective balances. When a withdrawal is authorized or required by the terms of this Agreement, such withdrawal shall be made first from the Public Account and then, if the Public Account has been exhausted, from the Owner Account. Section 5.2. Investments. The Escrow Agent shall be directed by the Owner to invest and re -invest funds held in the Development Operating Subsidy Reserve in investments permitted for the general funds of the MPHA provided, however, that at all times the funds shall be invested in a manner consistent with Minnesota Statues, Section 469.12, Subdivision 1, paragraph 16. Income from investments shall be retained in the Development Operating Subsidy Reserve and shall be deemed part thereof. Section 5.3. Floor Level Adjustments. As used hereinafter, the term "Floor Level" shall mean, initially, the amount required by Section 5.1 to be held in the Development Operating Subsidy Reserve as of the date of first occupancy of each public housing unit. The "Floor Level" amount shall be adjusted annually, following delivery of the annual financial statements fumished pursuant to Section 4.7 hereof, to an amount equal to three times the difference between actual annual Authority Unit Income and actual annual Authority Unit Expenses as shown in such financial statements. The MPHA and the Owner shall jointly give notice to the Escrow Agent of adjustments in the Floor Level as promptly and practicable following the calculation of such adjustments. Section 5.4. Voluntary Replenishment of Reserve. If at any time the amount in the Development Operating Subsidy Reserves all be below the Floor Level as a consequence of either (a) adjustment to the Floor Level pursuant to Section 5.3 or (b) payments authorized to be made therefrom pursuant to this Agreement, the Escrow Agent shall notify the MPHR, the EDA and the Owner in writing of such fact and of the amount of such deficit (the "Upper Floor Level Shortfall"). Within ninety (90) days following receipt of such notice, the MPHA and/or the EDA may, but shall not be obligated to pay to the Escrow Agent, for deposit into the Development Operating Subsidy Reserve, from any funds legally available therefor (which may include Operating Subsidy or other public housing or nonpublic housing funds) the amount of D:1MNN12R0171DOCSIR&OAGR.DOC 12 REGULATORY AND OPERATING AGREENOIENT the Upper Floor Level Shortfall. "lb the extent such deposit (a) replaces funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced and (b) do not cause the Floor Level of the Development Operating Subsidy Reserve to be exceeded, such deposit shall be credited to the Owner's Account. To the extent such deposit (a) is in excess of funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced or (b) causes the Floor Level of the Development Operating Reserve to be exceeded, such deposit shall be credited to the Public Account of the Development Operating Subsidy Reserve. Section 5.5. Owner Surplus Cash Contribution. (a) If at any time the amount in the Development Operating Subsidy Reserve shall fall below seventy-five percent (75%) of the Floor Level, the Escrow Agent shall (a) notify the MPHR, the EDA and the Owner in writing of such fact, and (b) five (5) days before the end of the next following Development Fiscal Year notify the MPHA, the EDA and the Owner in writing of the amount by which the then balance of the Development Operating Subsidy Reserve is less than seventy-five percent (751/6) of its Floor Level (the "Mid Floor Level Shortfall"). At the end of such next following Development Fiscal Year the Owner shall deposit into the Owner's Account of the Development Operating Subsidy Reserve the lesser of (i) the amount of the Mid Floor Level Shortfall or (ii) fifty percent (50%) of the surplus cash from the Development. For purposes of this Section 5.5, "surplus cash" shall mean funds available for distribution to those having a beneficial interest in the development pursuant to Section 9 of the MHFA Regulatory Agreement. (b) There shall be deducted from any amount payable by the Owner pursuant to Section 5.5(a), with respect to the applicable Development Fiscal Year, an amount equal to the difference between (i) the rental income received by the Owner from a Development unit occupied by a tenant with a Section 8 certificate by operation of Section 6.4(c), and (ii) the rental income which would have been received by the Owner from such Development unit without the operation of Section 6.4(c). Section 5.6. Utilization of Reserve. If (a) by the tenth day of any month (i) the MPHA shall not have paid to Owner the full amount of the scheduled installment of the Development Operating Subsidy Requirement due for such month or (ii) the amount of Development Operating Subsidy paid by the MPHA is less than the amount by which the Estimated Authority Unit Expenses for such period exceed the Estimated Authority Unit Income for such period or (b) the MPHA shall not have fully reimbursed the Owner for the amount of the actual deficit described in the second sentence of Section 4.8 hereof, the Owner shall be authorized to request a disbursement in the amount of the deficiency from the Development Operating Subsidy Reserve. The Escrow Agent shall make such disbursement upon receipt of a certification from the Owner as to the failure of the MPHA to fulfill the conditions described in subclauses (a) and (b) of this Section 5.6 and shall immediately notify the MPHA of the amount of the withdrawal from and balance in the Development Operating Subsidy Reserve. DAMNN12510MDOCSIR&OAGR.DOC 13 REGULATORY AND OPERATING AGREEMENT V!140(i)91 DMA 1 Owner Remedies Section 6.1. Limited Owner Obligation. It is of the essence of this Agreement that during the term of the ACC, Owner will maintain and operate the number and type of dwelling units in the Development stated in Article II hereof as public housing units in accordance with all applicable requirements of the Act, the Consent Decree, and the ACC; provided, however, that if Authority Unit Income, plus any form of governmental operating or rental assistance received in respect of the Authority Units (including, without limitation, withdrawals from the Development Operating Subsidy Reserve or other contributions by the Authorities) shall be less than Authority Unit Expenses, the Owner shall at no time be required to contribute from its own funds (except as set forth in Section 5.5) toward Authority Unit Expenses in order to preserve the character of the number of units stated in Article II as public housing units. Section 6.2. Relationship_ to Separate Agreements. The obligations of the Owner with respect to the Authority Units are separate from other obligations which may arise under the Development Agreement or as a result of some or all of the other units in the Development being Tax Credit Units. Accordingly, Owner remedies provided herein are not intended to diminish or otherwise effect such other obligations. Section 6.3. Remedies When Vacanc . If at the time of a vacancy in an Authority Unit the balance of the Development Operating Su sidy Reserve is determined to be less than its Floor Level, the Owner shall notify the MPHA and HUD of such fact and, if the last Supplemental Data delivered to the MPHA pursuant to Section 4.7 is more than one -hundred eighty (180) days old, shall deliver to the MPHA and HUD with such notice Supplemental Data updated through the last month end. Within ten (10) days of receipt of such notice, the Owner, the EDA, the MPHA and HUD shall confer regarding the course of action to pursue with respect to the Authority Units. The MPHA shall, within thirty (30) days of receipt of such notice (the "Section 6.3 Option Date"), exercise one or more of the following options: (a) Replenish the Development Operating Subsidy Reserve to its Floor Level. To the extent such a deposit (a) replaces funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced and (b) does not cause the Floor Level of the Development Operating Subsidy Reserve to be exceeded, such deposit shall be credited to the Owner's Account. To the extent such deposit (a) is in excess of funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced or (b) causes the Floor Level of the Development Operating Reserve to be exceeded, such deposit shall be credited to the Public Account of the Development Operating Subsidy Reserve; (b) Agree to and provide such Operating Subsidy in excess of the Development Operating Subsidy Cap necessary to assure the Owner that no further withdrawals from the Operating Reserve will be required; (c) Authorize the Owner to select a qualified public housing applicant for such vacant Authority Unit with income sufficient to afford rent in an amount which will prevent the Authority Unit Expense from exceeding the Authority Unit Income (including Development Operating Subsidy). Such selection shall first be attempted within the priorities established by the Consent Decree and other waiting list criteria; provided that if such a tenant cannot be so identified or selected, the Owner shall be authorized to select such a tenant notwithstanding Consent Decree priorities, other waiting list criteria or percentage of family income required to meet said rental obligation; DAMNN125W1700CSIR&0AGR.D0C 14 REGULATORY AND OPERATING AGREEMENT (d) Notify the Owner of such other option agreed upon by the MPHA and HUD as will reasonably assure the Owner that sufficient funds will be received with respect to the Authority Units so that further withdrawal from the Development Operating Subsidy Reserve Fund will be avoided. Section 6.4. Remedies When No Vacancy. If the balance of the Development Operating Subsidy Reserve is determined to be less then fifty percent (50%) of the Floor Level and no vacancy in Authority Units exists, the Owner shall notify the TMIPHA and HUD of such fact and, if the last Supplemental Data delivered to the MPHA pursuant to Section 4.7 is more than one - hundred eighty (180) days old, shall deliver to the MPHA and HUD with such notice Supplemental Data updated through the last month end. Within ten (10) days of receipt of such notice, the Owner, the EDA, the MPHA and HUD shall confer regarding the course of action to pursue with respect to the Authority Units. The MPHA shall, within thirty (30) days of receipt of such notice (the "Section 6.4 Option Date"), exercise one or more of the following options: (a) Replenish the Development Operating Subsidy Reserve so that it remains above the seventy-five percent (75%) of its Floor Level. To the extent such a deposit (a) replaces funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced and (b) does not cause the Floor Level of the Development Operating Subsidy Reserve to be exceeded, such deposit shall be credited to the Owner's Account. To the extent such deposit (a) is in excess of funds previously withdrawn from the Owner's Account of the Development Operating Subsidy Reserve and not previously replaced or (b) causes the Floor Level of the Development Operating Reserve to be exceeded, such deposit shall be credited to the Public Account of the Development Operating Subsidy Reserve; (b) Agree to and provide such Operating Subsidy in excess of the Development Operating Subsidy Cap necessary to assure the Owner that no further withdrawals from the Operating Reserve will be required; (c) Notify the Owner that the MPHA intends to make available to the tenants of a specified number of Authority Units (not to exceed twelve, in the aggregate, at any time) Section 8 certificates, whereupon the Owner shall agree not to exercise the remedy provided by Section 6.4(e) but shall continue to operate the Authority Units, drawing upon the Development Operating Subsidy Reserve as necessary, until vacancies occur in reasonably comparable Tax Credit Units. As such vacancies occur, (i) the Owner shall convert the vacant non Authority Unit to an Authority Unit ("Converted Authority Unit"), which Converted Authority Unit shall replace an existing Authority Unit ("Replaced Authority Unit"), (ii) the Replaced Authority Unit shall be converted to a Section 8 unit, (iii) the MPHA shall provide the existing tenant of the Replaced Authority Unit with a Section 8 certificate, (iv) the Owner shall lease the Replaced Authority Unit to the existing tenant thereof at the Fair Market Rent and (v) the Owner shall lease the Converted Authority Unit pursuant to Section 6.3(c); (d) Notify the Owner of such other option agreed upon by the MPHA and HUD as will reasonably assure the Owner that sufficient funds will be received with respect to the Authority Units so that further withdrawal from the Development Operating Subsidy Reserve Fund will be avoided; ox (e) If in the sole judgment of the MPHA no other remedy contemplated by this Section 6.4 is reasonably available to prevent the Authority Unit Expenses from exceeding the Authority Unit Income (plus available Development Operating Subsidy), notify the Owner that it may elect not to renew existing Authority Unit leases at the end of their then current term, beginning with the Incentive Authority Units, and relet such Authority Units D:1MNN12510171DOCSIR&OAGR.DOC 15 REGULATORY AND OPERATING AGREEMENT in accordance with the provisions of Section 6.3(c). Authority Unit tenants whose leases are not renewed pursuant to this provision shall be given not less than sixty (60) days' advance written notice to vacate by Owner. In such event, the MPHA shall make all reasonable effort to relocate such tenant to another public housing unit owned by the MPHR. Such effort shall include: (i) making up to two (2) offers of the first available and suitable MPHA units to such tenant, without regard to Consent Decree or other waiting list priorities or criteria. The MPHA shall use its best efforts to provide such tenant with thirty (30) days' written notice of the availability of a suitably sized unit. Such tenant's written response to such notice must be received by the WHA within five (5) days of receipt. If such tenant rejects the first unit offered, the MPHA shall again offer the next available, suitably sized unit to such tenant and such tenant shall have five (5) days of receipt of such second notice to deliver to the MPHA written acceptance of such offer. Rejection of said second offer or failure to respond to an MPHA notice shall relieve the MPHA of any further best efforts obligation; and (ii) offering such tenant a Section 8 certificate, if one is available to the MPHA. Section 6.5. MPHA Failure to Elect. Failure by the MPHA to notify the Owner of the selection of an option escribed in Section 6.3 on or before the Section 6.3 Option Date shall constitute MPHA approval of the option described in Section 6.3(c). Failure by the MPHA to notify the Owner of the selection of an option described in Section 6.4 on or before the Section 6.4 Option Date shall constitute MPHA approval of the option described in Section 6.4(e). D:1MNN12510171D0CSIR&0AGR.D0C 16 REGULATORY AND OPERATING AGREEMENT ARTICLE VII Non -Discrimination and Other Federal Requirements Section 7.1. Non -Discrimination and Other Federal Requirements. Owner will comply with all applicable requirements of the following, as the same may be amended from time to time: (a) The Fair Housing Act, 42 U.S.C. 3601-19, and regulations issued thereunder, 24 CFR Part 100; Executive Order 11063 (Equal Opportunity in Housing) and regulations issued thereunder, 24 CFR Part 107; the fair housing poster regulations, 24 CFR Part 110, and advertising guidelines, 24 CFR Part 109. (b) Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d, and regulations issued thereunder relating to nondiscrimination in housing, 24 CFR Part 1. (c) Age Discrimination Act of 1975, 42 U.S.C. 6101-07, and regulations issued thereunder, 24 CFR Part 146. (d) Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, and regulations issued thereunder, 24 Part 8; the Americans with Disabilities Act, 42 U.S.C. 12181-89, and regulations issued thereunder, 28 CFR Part 36. (e) Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. 1701u, and its implementing regulations at 24 CFR Part 135. DANM12510171D0CS1R&0AGR.D0C 17 REGULATORY AND OPERATING AGRFXNM-NT ARTICLE VIII Owner Default Section 8.1. Defined. A default by Owner under this Agreement shall occur if (a) Owner violates, breaches, orf s to comply with any provision of, or obligation under, this Agreement (including, without limitation, by reason of its violation, breach, or failure to comply with any governing law, regulation, or agreement referenced in Section 3.1 hereof); or (b) Owner asserts or demonstrates an intention to violate, breach or fail to comply with any such provision or obligation. A default by Owner which is attributable to an action or omission, or assertion or demonstration of an intended action or omission, of the Managing Agent shall be deemed a default by Owner for purposes of this Article. Section 8.2. Notification. Upon a determination by the Authorities that a default by Owner has occurred, the Authorities shall notify Owner of (a) the nature of the default, (b) the actions required to be taken by Owner to cure the default, and (c) the time within which Owner shall respond with a showing that all required actions have been taken, which period of time shall be not less than that reasonably necessary to affect a cure. If the default or alleged default is attributable to the Managing Agent, the Authorities shall give a copy of such notice to the Managing Agent. Section 8.3. MPHA Remedies. If Owner (or, as applicable, the Managing Agent) fails to respond or take corrective action to the satisfaction of the Authorities, the Authorities shall have the right to (a) Withhold further operating subsidy payments until such time such corrective action is taken. All operating subsidy payments so withheld shall be forfeited by the Owner and retained by the MPHR and such withholding and forfeiture shall not constitute an event of default with respect to any agreement between the Owner and the MPHA which would excuse the continued operation of the MHDP Units as public housing units in accordance with the ACC and Declaration of Restrictive Covenants. (b) Exercise any remedy available to it by reason of the nature of such default under and in accordance with the terms of this Agreement, the Housing Agreement or the ACC, to institute the dispute resolution procedure set forth in Exhibit B hereto, or to seek appropriate relief in any court having jurisdiction, including but not limited to specific performance or injunctive relief. D:\MM12510171D0CSIR&OAGR.D0C 18 REGULATORY AND OPERATING AGREEMENT ARTICLE IX Disclaimer of Relationships Section 9.1. No Assignment of ACC. The Authorities and Owner acknowledge that any transfer of public housing development grant funds by the MPHA to Owner shall not be or be deemed to be an assignment of grant funds, and Owner shall not succeed to any rights or benefits of the MPHA under the ACC, or attain any privileges, authority, interests, or rights in or under the ACC. Section 9.2. No Third Party _Beneficiary. Nothing contained in the ACC or in any agreement between the Authorities and Owner, nor any act of HUD or the Authorities, shall be deemed or construed to create any relationship of third -party beneficiary, principal and agent, limited or general partnership, joint venture, or any association or relationship involving HUD, except between HUD and the MPHA as provided under the terms of the ACC. D:1JVNN 12510171D0CSIR&OAGR_DOC 19 REGULATORY AND OPERATING AGREEMENT ARTICLE X Miscellaneous Section 10.1. Binding Obligation. This Agreement shall continue in full force and effect during the entire term of the ACC, or for such shorter period during which the Authority Units shall be required by law or by the ACC to be set aside, and maintained and operated, as public housing. Through the recording of a Declaration of Restrictive Covenants, the obligations and restrictions contained herein shall run with the land and bind all future owners and encumbrancers thereof. Section 10.2. Assignment. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of each of the parties; provided, however, that Owner may not assign its interest in the Agreement without the prior written consent of the Authorities and HUD, which shall not unreasonably be withheld. The Authorities shall have the right to assign their interests in this Agreement, including the right of the MPHA to assign its interest in the ACC, without the consent of the Owner. Section 10.3. No Waiver. No delay or omission by either party in exercising any right or remedy available here�sTiall impair any such right or remedy or constitute a waiver thereof in the event of any subsequent occasion giving rise to such right or availability of remedy, whether of a similar or dissimilar nature. Section 10.4. Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties and approved by HUD. Section 10.5. Notice. Any notice or other communication given or made pursuant to this Agreement shall betwnln ing and shall be deemed given if (a) delivered personally or by courier, (b) telecopied, (c) sent by overnight express delivery, or (d). mailed by registered or certified mail (return receipt requested), postage prepaid, to a party at its respective address set forth below (or at such other address as shall be specified by the party by like notice given to the other party): To the MPHA: Minneapolis Public Housing Authority in and for the City of Minneapolis 1001 North Washington Avenue Minneapolis, Minnesota 55401 Attention: Executive Director To the EDA: Economic Development Authority in and for the City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428-4898 Attention: Executive Director To the Owner: PPL -Bass Lake Court Limited Partnership 2516 Chicago Avenue South Minneapolis, Minnesota 55404 Attention: Steve Cramer All such notices and other communications shall be deemed given on the date of personal or local courier delivery, telecopy transmission, delivery to overnight courier or express delivery service, or deposit in the United States Mail, and shall be deemed to have been received (a) in the case of personal or local courier delivery, on the date of such delivery, (b) in the case of telecopy, D:\MNN12516171D0CSa&OAGF-DOC 20 REGULATORY AND OPERATING AGREEMENT upon receipt of electronic confirmation thereof, (c) in the case of delivery by overnight courier or express delivery service, on the date following dispatch, and (d) in the case of mailing, on the date specified in the return receipt therefor. Section 10.6. Law Governing. This Agreement shall be governed by and construed in accordance with the aws -of-the State of Minnesota applicable to contracts made and to be performed therein. Section 10.7. Severability. If any provision of this Agreement is declared void or otherwise unenforceable, that provision shall be deemed to have been severed from this Agreement and the remainder of this Agreement shall otherwise remain in full force and effect. Section 10.8. Headings and Titles. Any titles or headings of the several parts, Articles and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. D:%0MJ25W171DOCSIR&OAGR.D0C 21 REGULATORY AND OPERATING AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS B � l Richard Brustad Its hairman And by: g Cora McCorvey Its Executive Director STATE OF SOTA ) ss. COUNTY O On this4zg y of 190 before me, a notary public, personally appeared Richard Brustad and Cora McCorvey, the Chairman and Executive Director, respectively, of the Minneapolis Public Housing Authority in and for the City of Minneapolis, a public body corporate and politic under the laws of the -State of Minn ota (the " HAM), named in the foregoing instrument and acknowledged said instrument on bq6df of the HA Public x SUSAN E. SEEL. NOTARY PUBM-AMNNESOTA 14D wyCWMWMaqiM,Nn.31,z0M VX D:IUM12MMDOMR&OAGRDOC REGULATORY AND OPERATING AGREEMENT ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By: %; Its: President c And by Its Execut ve Director STATE OF MINNESOTA ) ) ss. COUNTY OF Hennepin On this 25th day of January 1999 , before me, a notary public, personally appeared W. Peter Enck and Daniel J. Donahue the President and Executive Director respective y, of the Economic Development Authority in and for a City o New Hope, a public body corporate and politic under the laws of the State of Minnesota (the "EDA"), named in the foregoing instrument and acknowledged said instrument on behalf of the EDA. EMM WVALERIE J. LEONE My qWOTARY PUBLIC - MINNESOTA enu'jry 31, no( rea — /V1, U t- . Notary Public 4z&�- \1SEaVER\DOCVANN125\017\DDCS\R&OAGR.DOC REGULATORY AND OPERATING AGREEMENT PPL -BASS LAKE COURT LIMITED PARTNERSHIP BY: PROJECT FOR PRIDE IN LIVING, INC. ITS GENERAkPARTNER By: -14. -- STATE OF MINNESOTA ) ) ss. COUNTY OF ) On this day o , 1 before e, a notary public, personally appeared , the A , of Project for Pride in Living, Inc., the general partner of PPL -Bass Lake Court Limited Partnership, a Minnesota limited partnership, named in the foregoing instrument and acknowledged said instrument on behalf of the partnership. DOERING S. MEYER NOTARY PUBLIC . MINNESOTA RAMSEY COUNTY 1(9MyCommMIonEx0r9&Jan.31,20W I N 0- �011 ilk,�... 4 .0 D:1MNN12510171DOCSIR&OAGR.DOC REGULATORY AND OPERATING AGREEMENT 1 W4 61 up.] Y 1.1 Development Site The Property referred to is situated in the State of Minnesota, County of Hennepin, and is described as follows: Parcel 1: The South 56 feet of the North 101 feet of the East 62.59 feet of the West 226.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof, thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning, Abstract Property. Parcel 2: The South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 3: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast comer of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of D:IMNN125\417\DOCS\R&OAGR.DOC A-1 REGULATORY AND OPERATING AGREEMENT said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South Iine of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 4: That South 64.37 feet of the North 114.37 feet of the East 56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof, thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 5: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 6: The East 56 feet of the West 282.17 feet of the South 60.50 feet of the North 174.87 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of D:IMNN125101ADOCSIR&OAGR.DOC A-2 REGULATORY AND OPERAn NG AGREEIDNT said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 7: The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly from the South line of said Northeast Quarter of the Southwest Quarter as measured along said West line and its Southerly extension, to a point on the East line of Murray Lane 3rd Addition 444.66 feet Northerly from its intersection with said South line. Being registered land as is evidenced by Certificate of Title No. 820577. Parcel 8: The South 145.2 feet of the West 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 9: The South 80 feet of the East 166.76 feet of the West 296.76 feet of Lot 32, Auditor's Subdivision No. 226, Hennepin County, Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. Abstract Property. Parcel 10: The North 100 feet of that part of the West Half of Lot 32, lying South of the North 6 acres thereof, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 11: That part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, described as beginning at the intersection of the South line of said Northeast Quarter of the Southwest Quarter with the Southerly extension of the West line of Murray Lane 4th Addition; thence Northerly along said Southerly extension and along said West line a distance of 444.49 feet; thence Westerly in a straight line to a point on the East line of Murray Lane 3rd Addition distant 444.66 feet Northerly from its intersection with said South line; thence Southerly along said East line to the North line of the South 178.2 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line to a line drawn parallel with and 100 feet East from said East line of Murray Lane 3rd Addition; thence Southerly along said parallel line to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said South D-.\MNN1254175D0CSIR&OAGR.DOC A-3 REGULATORY AND OPERATING AGREEMENT line to a line drawn parallel with and 196.76 feet West from said West line of Murray Lane 4th Addition; thence Northerly parallel with said West line to the North line of the South 113 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line of the South 113 feet to a line drawn parallel with and 30 feet West from said West line of Murray Lane 4th Addition; thence Southerly parallel with said West line and its Southerly extension to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said South line to the point of beginning. Except those portions of the above-described property described as follows: The East 56 feet of the West 101 feet of the South 182.37 feet of the North 227.37 feet; The East 62.59 feet of the West 226.17 feet of the South 56 feet of the North 101 feet; The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet; The East 56 feet of the West 282.17 feet of the South 182.37 feet of the North 227.37 feet, according to the United States Government Survey thereof and situate in Hennepin County, Minnesota. Being registered land as is evidenced by Certificate of Title No. 820576. DAM M12510171DOCSIR&OAGR,DOC A-4 REGULATORY AND OPERATING AGRFXA4EW -19 IX4._I 1:3 Y SI Dispute Resolution Procedures (1) The MPHA shall give written notice thereof to the Owner, describing briefly the nature of its disagreement with the Owner. The date of receipt of such notice shall constitute the Submission Date. (2) The parties shall have five (5) days from the Submission Date to agree upon a mutually acceptable neutral person not affiliated with either of the parties (the "Neutral"). If no Neutral has been selected within such time, the parties agree jointly to request the American Arbitration Association to supply within five (5) days a list of potential Neutrals with qualifications as specified by the parties in the joint request. Within five (5) days of receipt of the list, the parties shall simultaneously exchange rankings, and shall select as the Neutral the individual receiving the highest combined ranking who is available to serve. (3) In consultation with the Neutral, the parties shall promptly designate a mutually convenient time and place for the Mediation and unless circumstances require otherwise, such time to be not later than ten (10) days after selection of the Neutral. (4) In the event either of the parties has substantial need for information in the possession of the other party in order to prepare for the Mediation, the parties shall attempt in good faith to agree on procedures for the expeditious exchange of such information, with the help of the Neutral if required. (5) One week prior to the first scheduled session of the Mediation, each party shall deliver to the Neutral and to the other party a concise written summary of its view as to the facts_ in connection with the matter in dispute. (6) In the Mediation, each party shall be represented by such persons, including counsel, as needed to respond to questions, contribute information and participate in the negotiations, the number of such additional persons to be agreed upon by the parties in advance, with the assistance of the Neutral, if necessary (the "Participating Persons" ). (7) The parties, in consultation with the Neutral, will agree upon a format for the meetings, designed to assure that both the Neutral and Participating Persons have an opportunity to hear an oral presentation of each party's view on the matter in dispute, and that the Participating Persons attempt to negotiate a resolution of the matter in dispute, with or without the assistance of counsel or others, but with the assistance of the Neutral. To this end, the Neutral is authorized to conduct both joint meetings and separate private caucuses with the parties. During the Mediation the Neutral will be free to divulge to either party all information learned in private caucus with either party unless specifically requested by a disclosing party to keep such information confidential as to the other party. (8) The Neutral, not later than thirty (30) days after the first scheduled session of the Mediation, (i) shall provide his or her opinion to both parties on matter being mediated and the probable outcome of litigation, and (ii) shall make one or more recommendations as to the terms of a possible settlement, upon any conditions imposed by the parties. The Neutral shall base his or her opinions and recommendations on information then requested by the parties to be kept confidential. The opinions and recommendations of the Neutral shall not be binding on the parties. DA NN12510171DOCSIR&OAGR.DOC B-1 REGULATORY AND OPERATING AGREEMEW (9) The parties agree to participate in the Mediation to its conclusion (as designated by the Neutral) and not to terminate negotiations concerning resolution of the matters in dispute until at least ten (10) days thereafter. Each party agrees not to commence litigation or seek other remedies prior to the conclusion of the ten (10) day post -Mediation negotiation period; provided, however, that either party may commence litigation within thirty (30) days prior to the date after which the commencement of litigation could be barred by an applicable statute of limitations or at any time in order to request an injunction to prevent irreparable harm or other equitable relief, in which event, the parties agree (except as prohibited by court order) to nevertheless continue to participate in the Mediation to its conclusion. (10) The fees of the Neutral shall be shared equally by the parties. The Neutral shall be disqualified as a witness, consultant, expert or counsel for either party with respect to the matters in dispute and any related matters. (11) The Mediation is a compromise negotiation for purposes of applicable State and Federal Rules of Evidence. The entire procedure is confidential, and no stenographic, visual or audio record shall be made. All conduct, statements, promises, offers, view and opinions, whether oral or written, made in the course of the Mediation by either of the parties, their agents, employees, representatives or other invitees and by the Neutral (who will be the parties' joint agent for purposes of these compromise negotiations) are confidential and shall, in addition and where appropriate, be deemed to be work product and privileged. Such conduct, statements, promises, offers, views and opinions shall not be discoverable or admissible for any purposes, including impeachment, in any litigation or other proceeding involving the parties, and shall not be disclosed to anyone not an agent, employee, expert, witness, or representative of any of the parties; provided, however, that evidence otherwise discoverable or admissible is not excluded from discovery or admission as a result of its use in the Mediation. D:\NM12510171DOC9IR&OAGR.DOC B-2 REGULATORY AND OPERATING AGREEMENT EXHIBIT C Development Operating Subsidy Cap Worksheet Line 1 Annual MPHA Operating Subsidy Approved by HUD for the next fiscal year Line 2 Rooms in all MPHA units by size of unit Total Units of- f(a) (a)0 BR X 3.5 = (b) 1 BR X 3.5 (c) 2 BR X 4.5 = (d) 3 BR X 6 = (e) 4+ BR X 7 = Line 3 Sum of all rooms in all MPHA units (sum of Lines 2(a) through 2(e)) Line 4 Average annual MPHA Subsidy Per Room Divide Line 1 by Line 3 Line 5 Rooms in Authority Units by size of unit Total Units of: (a) 0 BR X 3.5 — (b) 1 BR X 3.5 (c) 2 BR X 4.5 (d) 3 BR X 6 (e) 4+ BR X 7 = Line 6 Sum of all rooms in all Authority Units (sum of Lines 5(a) through 5(e)) Line 7 Development Operating Subsidy Cap (line 6 X Line 4) DAMfdN12510171D0051R&OAGR.DOC C-1 REGULATORY AND OPERATING AGREEMENT Line 1 Line 2 Line 3 EXHIBIT C Develonment Oneratina Subsidv Can Worksheet (EXAMPLE) Average annual MPHA Subsidy Per Room Annual MPHA Operating Subsidy Approved by HUD for the next fiscal year Rooms in Authority Units by size of unit Rooms in all MPHA units by size of unit Total Units of- f(a) (b) 1 BR --- X 3.5 - (a)0 BR 688 X 3.5 (b) 1 BR 4,320 X 3.5 = (c) 2 BR 556 X 4.5 - (d) 3 BR 675 X 6 - (e) 4+ BR 376 X 7 = Sum of all rooms in all MPHA units (sum of Lines 2(a) through 2(e)) Line 4 Average annual MPHA Subsidy Per Room Divide Line 1 by Line 3 Line 5 Rooms in Authority Units by size of unit Total Units of: (a) 0 BR X 3.5 (b) 1 BR --- X 3.5 - (c) 2 BR --- X 4.5 - (d) 3 BR 6 X 6 = (e) 4+ BR 6 X 7 - Line 6 Sum of all rooms in all Authority Units (sum of Lines 5(a) through 5(e)) Line 7 Development Operating Subsidy Cap (line 6 X Line 4) 13,497,415 2,404 15,120 2,505 4,050 2,632 26,712 505.29 0.00 0.00 0.00 36.00 42.00 VE:11101 39,412.62 D:IMANN1n0171DOCSIR&OAGR.DOC C-2 REGULATORY AND OPERATING AGREEMENT EXHIBIT D MANAGEMENT AGREEMENT D:kMNN12510171DOCSIR&OAGRD0C D -Z REGULATORY AND OPERATING AGREEMENT EXECUTION COPY: February 2,1999 COMBINED MINNESOTA HOUSING FINANCE AGENCY AND MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS MANAGEMENT AGREEMENT THIS AGREEMENT is effective this 3rd day of February, 1999, between PPL -BASS LAKE COURT LIMITED PARTNERSHIP, a Minnesota limited partnership, with its principal place of business located at 2516 Chicago Avenue South, Minneapolis, Minnesota 55404 (hereafter referred to as "Owner") and PROJECT FOR PRIDE IN LIVING, INC., a Minnesota corporation, with its principal place of business located at 2516 Chicago Avenue South, Minneapolis, Minnesota 55404 (hereinafter referred to as "Agent"). WITNESSETH: In consideration of the terms, conditions and covenants hereinafter set forth, Owner and Agent mutually agree as follows: Section 1. Definitions. As used in this Agreement: 1.1. "ACC" shall mean the amended annual contributions contract dated February 3, 1999 between the MPHA and HUD. 1.2. "Authority Units" shall mean the twelve (12) low income public housing units to be located within the Development pursuant to the Housing Agreement and for which the MPHA is obligated under the MPHA Regulatory Agreement to provide certain operating subsidies. 1.3. "Consent Decree" shall mean the consent decree entered in the case of Hollman et al. v. Cisneros et al., U.S.D.C. (Minn. Dist., 4th Div.) Civil No. 4-92-712. 1.4. "Development" shall mean the real property and the improvements, buildings, appurtenances and equipment thereon, of the Owner known as PPL -Bass Lake Court, located in the City of New Hope, County of Hennepin, State of Minnesota, and consisting of thirty-four (34) dwelling units and no commercial or other non - dwelling spaces (MHFA Development No. NCTC-2558). I.S. "EDA" shall mean the Economic Development Authority in and for the City of New Hope. D;V0N12510171DOCSITAX CREDIT MGT AGREE.DOC 1 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT 1.6. "HUD" shall mean the United States Department of Housing and Urban Development. 1.7. "Housing Agreement" shall mean the Housing Development Agreement dated December 31, 1998 between the MPHR, EDA and the Owner. 1.8. "Housing Covenants" shall mean the MPHA Act, the ACC, the Consent Decree, the Housing Agreement and the MPHA Regulatory Agreement. 1.9. "Lease" shall mean the form of agreement between the Owner and a Tenant under the terms of which said Tenant is entitled to enjoy possession of a dwelling unit. 1.10. "Low Income Housing Tax Credit Program" or LIHC Program" shall mean the provisions of Section 42, as described below, and the requirements set forth in the Low Income Housing Tax Credit Program Procedural Manual and Compliance Manual issued by MHFA. 1.11. "MHFA" shall mean the Minnesota Housing Finance Agency as established under the Provisions of the MHFA Act. 1.12. "MHFA Act" shall mean Laws of Minnesota, 1971, Chapter 702, as amended. 1.13. "MPHA" shall mean the Minneapolis Public Housing Authority in and for the City of Minneapolis. 114. "MPHA Act" means Section 5 of the United States Housing Act of 1937. 1.15. "MPHA Regulatory Agreement" shall mean the Regulatory and Operating Agreement dated February 3, 1999 between the MPHA, the EDA and the Owner. 1.16. "Non -Housing Income" shall mean all amounts actually collected by the Agent, other than as provided in Section 1.18 below, including, but not limited to (1) vending and laundry machine income, (2) income received from rental of parking spaces, garage spaces and commercial space. 1.17. "Public Agencies" shall mean the MHFA, MPHA and EDA, collectively. 1.18. "Rent" shall mean that monthly amount which a Tenant is obligated to pay the Owner pursuant to the terms of a Lease. 1.19. "Section 42" shall mean and refer to Section 42 of the Internal Revenue Code and any regulations and ruling issued thereunder, as it may be amended from time to time. D:\MNN125\0171DOCS\TAX CREDIT MGT AGREE.DOC 2 MHFA LOW INCOME HOUSING TAX CREDIT' PROGRAM MANAGEMENT AGREEMENT 1.20. "Tenant" shall mean a person occupying a dwelling unit in the Development pursuant to a Lease. Section 2. Appointment_of Agent. The Owner hereby appoints the Agent, and the Agent hereby accepts appointment, on the terms and conditions hereinafter provided, as exclusive management agent for the Development. The Agent shall carry out the obligations of the Owner as set forth in the Housing Covenants and as they relate to the management and operation of the Development; provided, however, that assumption of such obligations by the Agent shall not relieve the Owner of the responsibility therefor. Section 3. Management Plan. Attached to this Agreement as "Exhibit A" and incorporated herein by reference is a copy of a Management Plan (the "Management Plan") for the Development, which contains a detailed description of the policies and procedures to be followed in the management of the Development. In many of its provisions, this Agreement briefly defines the nature of the Agent's obligations, with the intention that reference is made to the Management Plan for more detailed policies and procedures. Accordingly, the Agent and the Owner will comply with applicable provisions of the Management Plan, regardless of whether specific reference is made thereto in any particular provision of this Agreement. To the extent the Management Plan and this Agreement are inconsistent, this Agreement shall control. Section 4. Regulation by MHFA. The Agent fully understands that the Owner is a limited -profit or non-profit housing entity receiving a mortgage loan from the MHFA and an allocation of tax credits from the Low Income Housing Tax Credit Program, and is required to comply with the MHFA Act and rules and regulations of the MHFA and the LIHC Program. The Agent further fully understands that the operation of the Development is subject to that certain Minnesota Housing Finance Agency New Construction Tax Credit Program Regulatory Agreement (hereinafter referred to as the "MHFA Regulatory Agreement", and attached hereto as Exhibit B) between the Owner and MHFA. In the performance of its duties hereunder, the Agent agrees to become conversant with and comply with the provisions of the MHFA Act, the policies, procedures, rules and regulations of the MHFA, the MHFA Regulatory Agreement, the LIHC Program and Section 42, all as may be amended from time to time. Section 5. Authoritx Units. 5.1. The Agent hereby agrees to perform for and on behalf of the Owner all rights, powers, authorities and obligations of the Owner under and pursuant to the Management Plan and any relevant portions of the Housing Covenants pertaining to the day-to-day operation and maintenance of the Development and the Authority Units; it being acknowledged and agreed that the agency relationship hereby created is for the benefit and security of HUD, MPHA and EDA under the Housing Covenants and that this Agreement cannot be modified or terminated or the obligations of the Agent hereunder modified in any material way or terminated without the express prior written consent of the MPHA and EDA. D:\MNN12RO171DOCSITAX CREDIT MGT AGREE.DOC 3 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT 5.2. All parties hereto acknowledge that the goal of achieving long-term sustainability of the Development as a mixed -income community will be enhanced by administrative procedures and terms and conditions of occupancy which reduce discernible distinctions in maintenance and'operation, and conditions of continued occupancy, between the Authority Units and other units in the Development to the greatest extent feasible while assuring that the Authority Units are available to house families who meet the occupancy objectives of the MPHA. This Agreement enumerates certain respects in which operating procedures and other requirements as to the Authority Units will differ from those in effect with respect to public housing units owned by the MPHR. The parties agree that, if experience demonstrates a need for or the desirability of further departures from standard procedures applicable to MPHA-owned public housing, they will consult with each other regarding such further modifications and will take such further implementing steps as they agree to be advisable, including, as appropriate, requests 'to HUD for revision or waiver of regulations necessary to permit the MPHA and EDA to undertake measures that enhance the long-term viability of the Development, or requests to implement statutory revisions made by Congress from time to time affecting either public housing in general or public housing located within privately -owned mixed -income communities in particular. 5.3. Tenant Selection. (a) The Agent will follow the resident selection policy described in the Management Plan. (b) With respect to the Authority Units, the EDA shall create, maintain and manage one or more waiting lists in accordance with the Housing Covenants. When a vacancy will occur in an Authority Unit, the Agent shall request and the EDA shall supply to the Agent the names of potentially eligible tenants for the Authority Units. Screening criteria and procedures employed by the Agent with respect to applicants for Authority Units shall, to the extent permissible under the Housing Covenants, be consistent with those utilized by the Agent with respect to other units in the Development; provided that at all times such procedures shall be fair and evenhanded and shall not be more stringent as they relate to other waiting list applicants. The MPHA shall have the right to monitor the procedures and results of the Agent's activities in this regard. The EDA shall establish procedures for formal and informal review of eligibility or suitability determinations for applicants for admission to the Authority Units, consistent with HUD regulations. (c) Leases for the Authority Units will be on the form attached hereto as Exhibit C, subject to such changes as shall be approved in writing by the MPHA. D.VvM125W170OC9ITAX CREDIT MGT AGREE.DOC 4 NWA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT (d) The Agent shall provide training for key management personnel, including attendance at conferences and seminars on housing management. The Agent will cooperate with the EDA to facilitate resident awareness of and access to available social services. Such cooperation shall include keeping and displaying, on site or in the rental office, information concerning such services as is from time to time provided to the Agent by the EDA. Training on public housing will be made available as needed by MPHR. 5.4. It is agreed that payments of Development Operating Subsidy from the MPHA shall be made directly to the Agent. In the event that the MPHA does not provide the Agent with the Development Operating Subsidy Requirement or the Development Operating Subsidy Requirement is inadequate to pay the difference between Authority Unit Income and Authority Unit Expenses, all as defined in Article IV of the MPHA Regulatory Agreement, the Agent shall utilize funds in the Development Operating Subsidy Reserve as described in Section 5.6 of the MPHA Regulatory Agreement. In the event the Development Operating Subsidy Reserve reaches the levels described in Sections 6.3 and 6.4 of the MPHR Regulatory Agreement, the Agent may exercise the remedies provided therein. 5.5. Taxes. (a) The parties hereto acknowledge that property taxes shall be paid by the Owner according to law. The Agent shall obtain statements for ad valorem property taxes and assessments against the Development and transmit copies thereof to the Owner promptly upon receipt thereof by the Agent. (b) Pursuant to Minnesota Statutes, §469.040, the Authority Units are exempt from property taxation and instead the Owner will be obligated to forward payments in lieu of taxes equal to five percent (5%) of "shelter rents," as defined therein. It shall be the duty of EDA to annually certify to the appropriate assessing officials the number of Authority Units in the Development and the obligation of the Agent to calculate and provide to the Owner the amount of such payments in such a manner as to permit the timely payment thereof. (c) Notwithstanding anything in the preceding paragraphs of this Section 5.5 to the contrary, the Owner or Agent shall have the right at any time during the term of this Agreement to contest the amount of or assessment pertaining to real estate taxes, assessments, or any other imposition levied or imposed by any governmental authority concerning the Development. Section 6. Confer with Owner and the MHFA. Agent agrees to keep itself informed on the policies of the MHFA, and, notwithstanding the authority given to the Agent in this DWNN125\0i'ADOCS\TAX CREDIT MGT AGREE.DOC 5 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT Agreement, to confer fully and freely with the Owner, the marketing agent, if any, and the MHFA in the performance of its duties hereunder. Section 7. Meetings with Owner and Marketing Agent. The Agent agrees to cause an officer of the Agent to attend meetings with the Owner and marketing agent, if any, at any time or times requested by the Owner, marketing agent, or the MHFA. Section 8. Personnel Agent. 8.1. Em to ees of Agent. On the basis of wage rates previously approved by the Owner and MHFA, the Agent shall investigate, hire, pay, supervise, and discharge all managerial and non -managerial personnel as follows: NO. POSITION TITLE 1 Manager 1 Caretaker ANNUAL PAYROLL INCLUDING WITHHOLDING $12,000 $14,124 Such personnel shall in every instance be in the employment of the Management Agent. Compensation for the services of such employees (as evidenced by certified payrolls) shall be considered an operating expense of the Development. The Agent shall hire in its own name, and have physically present at the Development, all managerial and non -managerial personnel necessary for the full and efficient performance of its duties under this agreement, including the physical presence of responsible personnel at such times as may reasonably be requested by the Owner. in any event, no less than one (1) responsible managerial or nonmanagerial person(s) of the Agent shall be physically present at the Development not less than eight (8) hours per day, five (5) days per week. 8.2. Employment of Tenants and Contractors. To the greatest extent possible, opportunities for training and employment will be given to lower income Tenants residing in the Development, and contracts for work in connection with the Development will be awarded to business concerns which are located in or owned in substantial part by persons residing in the area of the Development. Notwithstanding the above, these opportunities shall not compromise the quality of maintenance and management services or the financial condition of the Development. 8.3. On -Site Management. The Owner will provide and the Agent shall maintain an employee of the Agent to reside in the Development, which shall include such furniture, telephonic and other equipment, utilities and janitorial supplies as are reasonably necessary for the operation of the Development. D;1MNN12510171DOCS1TAX CREDIT MGT AGREE.DOC G MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT Section 9. Services of Agent. 9.1. Review of Architectural Pians and Specifications. The Agent shall advise the Owner with respect to design and construction of the Development throughout the planning and design period at each state of design (schematic, preliminary, and final working drawings and specifications) and shall recommend such changes as deemed necessary based upon the experience of the Agent, particularly with regard to items which may reduce operating expenses and create a more maintenance -free Development. 9.2. Services Prior to Construction. Prior to the initial closing and the initiation of construction of the Development, the Agent shall (i) furnish to the Owner and to the Public Agencies, detailed estimates and supporting material regarding a maintenance and operating expenses for the Development and (ii) review the MHFA Pre -Commitment Marketing Plan prepared by the marketing agent. 9.3. Services During Construction. Prior to completion of construction and prior to occupancy of the Development, the Agent shall (i) furnish to the Owner and the Public Agencies in a format acceptable to each of them, and no later than 60 days prior to occupancy of the Development, revised estimates of maintenance and operating expenses accompanied by documentation in the form of bids, contracts or comparable for any and all items so requested by the MHFA; (ii) establish and maintain a close working relationship with the marketing agent, if any (iii) review the "Pre -Occupancy Marketing Plan" prepared by the marketing agent; (iv) retain such management and maintenance personnel as necessary for the Development no later than 60 days prior to occupancy; (v) provide training for on-site management and maintenance personnel, including attendance at conferences and seminars on housing management and compliance with Section 42; (vi) establish "Rules and Regulations" for the Development as required in the MHFA Lease (vii) establish a book-keeping and accounting system in accordance with the MHFA and HUD requirements (refer to 9.18 herein); (viii) provide for insurance coverage in accordance with MHFA requirements (refer to 9.10 herein); (ix) secure all necessary equipment and supplies; (x)participate in pre -occupancy conferences and training sessions as required by the MHFA and/or the MPHR; and (xi) provide an accounting for all expenses to be paid from interim income in accordance with the MHFA standards and requirements for cost certification. 9.4. Structure and Warranties. The Agent shall obtain from the Owner a complete set of plans and specifications as approved by the MHFA and copies of all guarantees pertinent to construction, fixtures, and equipment. With the aid of this information and inspection by competent personnel, the Agent shall thoroughly familiarize itself with the character, location, construction, layout, plan, and operation of the Development and especially of the electrical, heating, plumbing, air conditioning, and ventilating systems, and all other mechanical equipment. D:WM12RO171DOCSITAX CREDIT MGT AGREE.DOC 7 MHFA LOW INCOME HOUSING TAX CREDrr PROGRAM MANAGEMENT AGREEMENT 9.5. Inspection of Development. The Agent shall participate in the final inspection(s) to certify the readiness of the units for occupancy and shall (i) inform the Owner, the Architect, the Contractor, and the Public Agencies of all defects in material and workmanship discovered within the construction warranty period; (ii) monitor the action taken by the contractor to correct the defects; and (iii) participate in any formal inspection held for the purpose of identifying construction defects. 9.6. Inspection Prior to Occupancy. The Owner or Agent shall certify on a move -in inspection form, prior to occupancy of any unit by a Tenant, that they have inspected the unit, and have determined it to be decent, safe, and sanitary. Copies of the move -in inspection forms shall be kept by the Owner for at least three Years. 9.7. Annual Inspection. As part of a continuing program to secure full performance by the Tenants of all obligations and maintenance for which they are responsible, Agent shall make an annual inspection of all dwelling units and report its findings in writing to the Owner and the Public Agencies. 9.8. Maintenance and Repairs. Agent shall cause the buildings, appurtenances, equipment and grounds of the Development to be maintained and repaired according to standards acceptable to the Owner and the MHFA. 9.9. Preventive Maintenance. The Agent shall develop a preventive maintenance schedule including, but not limited to, periodic inspections of the units; residency commencement and termination checklists; inventory control; common area main-tenance; equipment maintenance; exterior maintenance on a seasonal basis; and painting, decorating, and replacement timetables, as necessary. 9.10. Property Insurance. In accordance with 9.3(viii), herein, the Agent shall obtain recommendations for, and cause to be placed in force, all forms of insurance needed to adequately protect the' Owner and the Development (or as required by law), including, where appropriate, public liability insurance, boiler insurance, fire and extended coverage and burglary and theft insurance_ All of the various types of insurance coverage required for the benefit of the Owner and the Development shall be placed with such companies, in such amounts, and with such beneficial interest appearing therein as shall be acceptable to the Owner and MHFA. The Agent shall promptly investigate and make a full written report to the Owner and MHFA as to all accidents or claims for damage relating to the ownership, operation, and maintenance of the Development, the estimated cost of repair, and shall cooperate and make any and all reports required by any insurance company in connection therewith. 9.11. Notice of Authority. The Agent, in accordance with Minnesota Statutes § 504.22, shall place in conspicuous place on the premises a notice that the Agent is D:IMNN12510175DOCSITAX CREDIT MGT AGREE.DOC 8 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT authorized to manage the premises and is authorized by the Owner to accept service of process and to receive and give receipt for notices and demands. 9.12. Service Requests of Tenants. The Agent shall maintain business -like relations with Tenants whose service requests shall be received, considered and recorded on a systematic, written basis in order to show the action taken with respect to each. Complaints of a serious nature and all written complaints shall, after thorough investigation, be reported to the Owner with appropriate recommendations. 9.13. Review of Opgahon. The Agent shall permit the Public Agencies to conduct on- site evaluations of the performance of any or all management services which the Agent has agreed to provide as stipulated in this Agreement, and the Management Plan, if required. An authorized representative of the Agent shall be available during on-site evaluations. The Public Agencies may render to the Owner and Agent written reports based on such evaluations. The Agent shall correct any deficiencies noted in these evaluations within 30 days of the receipt of the report from MHFA. In the event such correction cannot be made within 30 days, the Agent shall provide the Public Agencies with a written plan for such correction, including a timetable of proposed actions. 9.14. Collections and Delinquencies The Agent shall collect and deposit in the account established pursuant to Section 11 hereof of all Rents and other charges due from Tenants and all Rents or other payments due the Owner from users of garage spaces and from users or lessees of other non -dwelling facilities in the Development. All payments of Operating Subsidy made to the Development pursuant to the MPHA Regulatory Agreement shall be deposited by the Agent into such account. The Initial Deposit to the Authority Reserve shall be segregated and invested as set forth in Section 5.1 of the MPHA Regulatory Agreement. The Agent agrees, and the Owner hereby authorizes the Agent, to request, demand, collect, receive, and give receipts for any and all charges or rents which may at any time be or become payable to the Owner. Rents and other charges shall not be accepted in cash by the Agent. The Agent agrees to take such action, including legal action, with respect to delinquencies in payments due the Owner as the Owner may from time to time authorize. The Agent shall furnish the Owner an itemized list of all Tenants with a delinquent account immediately following the fifteenth day of each month. 9.15. Payments and Expenses. From the funds collected and deposited in the account established pursuant to Section It hereof, the Agent shall cause to be disbursed regularly and punctually in accordance with the provisions of the MHFA Regulatory Agreement in the order and priority as set forth in the MHFA Regulatory Agreement. D:1MNN12510170OCSWAX CREDIT MGT AGREEAOC 9 Mfr -EFA LAW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT With the exception of payments provided for in the MHFA Regulatory Agreement, the Agent shall not make any disbursement in excess of $2,000.00 unless specifically authorized by the Owner and approved by the MHFA; provided that emergency repairs, involving manifest danger to life and property, or immediately necessary for the preservation and safety of the Development, or for the safety of Tenants, or required to avoid the suspension of any necessary services to the Development, may be made by the Agent without regard to the cost limitation imposed by this paragraph with the understanding that the Agent will, if at all possible, confer immediately with the Owner regarding every such expenditure, and will submit the request for the required MHFA approval promptly following the emergency. The Agent shall not incur liabilities of the Owner (direct or contingent) which, in the aggregate will exceed at any time $2,000.00 unless specifically authorized by the Owner and approved by the MHFA. In addition, the Agent shall not incur liabilities of the Owner (direct or contingent) which require payment more than one year from the creation thereof, unless specifically authorized by the Owner and approved by the MHFA. 9.16. Government Orders. The Agent shall take such action as may be necessary to comply promptly with any and all orders or requirements affecting the Development which may be placed thereon by any federal, state, county, or municipal authority having jurisdiction hereover, and orders of the Board of Fire Underwriters or other similar bodies. The Agent shall not take any action under this paragraph unless the MHFA so directs so long as the Owner is contesting or has affirmed its intention to contest any such order or requirement. The Agent shall promptly, and in no event later than forty-eight (48) hours from the time of their receipt, notify the Owner and the MHFA in writing of all such orders and notices of requirements. 9.17_ Utility Service and Purchases. Subject to the approval of the Owner and in accordance with the rules and regulations of the MHFA, the Agent shall make contracts for garbage and trash removal, fuel, oil, extermination, snow removal, elevator maintenance, and other necessary services. Further, the Agent shall place orders for such equipment, tools, appliances, materials, and supplies as are necessary to maintain and repair the Development properly. When taking bids or issuing purchase orders, the Agent shall act at all times in the best interests of the Owner and shall be under a duty to secure for and credit to the Owner any discounts, commissions or rebates obtainable as a result of such purchases. 9.18. Records and Reports. (a) The Agent shall establish and maintain a comprehensive system of records, books, and accounts in a manner satisfactory to the Owner and the Public Agencies. All records, books, and accounts will be subject to examination at reasonable hours by any authorized representative of the Owner or the MHFA. D:\MNN125\017W0CSITAX CREDIT MGT AGREE.DOC 10 MHFA LOW INCOW HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT (b) With respect to each fiscal year ending during the term of this Agreement, the Agent will have an annual financial report prepared by a Certified Public Accountant based upon the preparer's examination of the books and records of the Owner and the Agent. The report will be prepared in accordance with the requirements of the Public Agencies, will be certified by the preparer and the Agent, and will be submitted to the Owner within sixty (60) days after the end of the fiscal year, for the Owner's further certification and submission to the Public Agencies. Compensation for the preparer's services will be considered an operating expense of the Development. (c) The Agent will prepare a Monthly Operating Report which compares actual and budgeted income and expenses for the month and for the "year- to-date". The Agent will prepare a monthly aged schedule of accounts receivable and accounts payable and a monthly occupancy report. The Agent will prepare a monthly analysis of security deposits and monthly cash reconciliation, and will submit each statement to the Owner and the Housing Management Division of the MHFA within fifteen (15) days after the end of the month covered. (d) The Agent will furnish such information as may be requested by the Owner or the MHFA from time to time with respect to the financial, physical, or operational condition of the Development. (e) By the fifteenth (15th) day of each month, the Agent will furnish the Owner with an itemized list of all rent delinquencies as of the tenth (10th) day of the same month. (f) The Agent shall prepare, execute, and file for the Owner all forms, reports, and returns required by law in connection with the employment of personnel, including unemployment insurance, worker's compensation insurance, disability benefits, social security, and other similar insurance benefits or taxes now in effect or hereafter imposed. (g) All records, books, and accounts will be subject to examination at reasonable hours by any authorized representative of the MPHR, HUD and EDA. The Agent shall be responsible for providing the budgets and reports described in Article IV of the MPHA Regulatory Agreement. The Agent must submit periodic occupancy data as required by HUD on HUD forms 50058 and 51234. 9.19. Operating Budget. At least 60 days before the beginning of each new fiscal year for the Development, the Agent shall prepare and submit to the Owner, the MPHR, the EDA and the MHFA an Operating Budget, in such form as may be D:1MNN12510171DOCSITAX CREDIT MGT AGREE.DOC 1 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT prescribed by the MHFA, setting forth an itemized statement of the anticipated receipts and disbursements for the Development. In addition, the Agent shall prepare and submit to the MPHA and EDA the initial estimated and subsequent operating budgets for the Authority Units pursuant to Article IV of the MPHA Regulatory Agreement and shall provide such other information and reports as required by the Owner, the MPHR or the EDA. 9.20. Assumption of Marketing Duties. Upon expiration or termination of the Marketing Agreement (attached hereto as Exhibit D), the Agent shall immediately assume responsibility for all functions and services of the marketing agent as set forth in the agreement. 9.21. Compliance of Tenants. (a) The Agent shall at all times during the term of this Agreement operate and maintain the Development according to the provisions of Section 42 and any regulations thereunder, and by the Owner's covenants to the MHFA relating to the Low Income Housing Tax Credit Program. The Agent shall secure full compliance by the Tenants with the terms and conditions of their respective Leases and with the provisions of the LIHC Program. (b) Voluntary compliance shall be emphasized, and the Agent shall counsel Tenants and make referrals to social service agencies in cases of financial hardship or under other circumstances deemed appropriate by the Agent, so that involuntary termination of tenancies may be avoided to the maximum extent consistent with sound management of the Development. The Agent will not, however tolerate willful evasion of payment of rent. (c) The Agent may lawfully terminate any tenancy when, in the Agent's judgement, sufficient cause occurs under the terms of the Tenant's Lease. Documentation of eviction for reasons other than non-payment of Rent will be on file with the Owner. (d) The Agent is authorized to consult with legal counsel designated by the Owner to bring actions for eviction and to execute notices to vacate and to commence appropriate judicial proceedings; provided, however, that the Agent shall keep the Owner informed of such actions and shall follow such instructions as the Owner and the MHFA have prescribed. (e) Subject to the Owner's approval, costs incurred in connection with such actions shall be considered as operating expenses. (f) With regard to the Authority Units, the EDA, with the cooperation of the MPHA, will establish a tenant grievance procedure for residents of the Authority Units in compliance with the requirements of Section b(k) of the D-.\MNNI2nO 171DOCSITAX CREDIT MGT AGREE.DOC 12 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT MPHA Act and consistent, to the maximum extent feasible, with the intent stated in Section 5.2, above. Such procedures will provide for informal discussion and settlement of grievances by the Agent and hearing before a formal hearing panel appointed in accordance with such grievance procedures. The MPHA and EDA will seek HUD approval, to the extent required, of variations from the requirements of 24 CFR Part 966, Subpart B, as amended or replaced from time to time. 9.22. Certification and Recertification Income. Prior to move -in and at least annually thereafter, the Agent shall certify/recertify incomes of Tenants, as required by the Housing Covenants and the LIHC Program and the MHFA. Tenant incomes must be in compliance with Section 42 and the MPHA Act, any subsidy contract for the Development, and/or as required by any federal or state law relating to the use of proceeds for the funding of the Development's mortgage loan by the MHFA. 9.23. Gross Rent. For purposes of the LIHC Program, gross rent is determined by adding Rent plus the applicable utility allowance. Agent shall ensure that gross rent is in compliance with the LIHC Program and, with respect to the Authority Units, the Housing Covenants. Rents for the non Authority Units shall initially be established according to the Schedule set forth in the MHFA Regulatory Agreement. All requests for increases in rents shall be submitted in writing, to MHFA for approval. 9.24. Compliance with Section 42. (a) Agent, property managers/supervisors and on-site office staff appointed or assigned to the Development and all site personnel shall carefully review and become familiar with all regulatory requirements promulgated under the LIHC Program. The aforementioned personnel (hereinafter referred to as "Staff') shall attend L1HC compliance training as soon as is practicable. At least once every 2 years thereafter, Staff must attend seminars, conference and/or workshops on the LIHC Program to ensure continued knowledge of and compliance with Section 42, as may be periodically amended by the Treasury Department or Internal Revenue Service (IRS). Agent shall ensure that the Development is operated and managed in compliance with all of the foregoing; cooperate with the IRS and other governmental authorities in connection therewith; and inform Owner of any such information which may subsequently become available, which may be material to the operation and management of the Development and/or Owner's investment therein. (b) Owner will provide Agent with copies of the following documents in a timely manner: (1) LIHC Program Placed in Service Application, (2) MHFA Compliance Manual, (3) Section 42 rent and income tables, (4) utility allowance schedules from the appropriate utility source, and (5) D:\MNN125k017\D0CS\TAX CREDIT MGT AGREE.DOC 13 MT FA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT MHFA Regulatory Agreement. Owner further agrees to provide Agent with amendments, changes, rulings and announcements to the aforementioned documents, as they occur. Agent agrees to provide copies of documents for Staff as defined in this Section 9.24. Current copies are to be maintained at the Development for the duration of the compliance period required by the LIHC Program. (c) Agent will provide MHFA with a copy of all Tenant file documentation for any and all Tenants that occupied a unit in the Development from the date the Development was placed in service through December 31 of the following year. Such documentation will be submitted to MHFA within thirty (30) days of said December 31 date. (d) Agent will immediately report to MHFA any and all noncompliance of which it becomes aware and will take prompt action to correct any noncompliance. Section 10. Other Acts. Everything done by the Agent under the provisions of this Agreement shall be done as agent of the Owner, and all obligations or expenses incurred thereunder shall be for the account of and on behalf of the Owner. Any payments to be made by the Agent hereunder shall be made out of such sums as are available in the Operating Receipts and Expense Account established pursuant to Section 11, below. The Agent shall not be obliged to make any advance to, or for the account of the Owner without assurance that the necessary funds for the discharge thereof will be provided. Section 11. Bank Account. 11.1. The Agent shall establish and maintain, in a bank whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC) in accordance with the provisions of the MHFA Regulatory Agreement, a separate bank account as Agent of the Owner for the deposit of the moneys of the Owner, with authority to draw thereon for any payments to be made by the Agent to discharge any liabilities or obligations of the Owner incurred in accordance with this Agreement_ This account shall be carried in the Agent's name and shall be designated of record "PPL -Bass Lake Court Development Operating Receipts and Expense Account". The Agent shall establish such other special bank accounts as may be required by the Owner, the MHFA or the MPHA Regulatory Agreement. Signatories entitled to make withdrawals from any and all of these accounts shall be persons covered by the Bond to be posted pursuant to Section 15 of this Agreement. 11.2. Security Deposit Account. The Agent shall collect, deposit, and disburse Tenant's security deposits in accordance with the terms of the respective Leases. Tenant's security deposits shall be deposited by the Agent in an interest bearing account, separate from all other accounts and funds, with a bank or other financial institution whose deposits are insured by the FDIC. The Agent shall be D:1M[NNI251017%DOCSITAX CREDIT MGT AGREE.DOC 14 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT responsible for any loss incurred by the Development for its failure to comply with refunding of security deposits with accrued interest to Tenants as required by Minnesota Laws, 1973, Chapter 561. This account shall be carried in the Agent's name and shall be designated of record "(Name of Development) Security Deposit Account". The Agent shall cause the amount of the Security Deposit Account to equal or exceed at all times the aggregate of all outstanding obligations by the Owner with respect to security deposits. Section 12. Office Development. The Owner shall furnish the Agent with suitable office space, office furniture and equipment (file, typewriter, adding machine, etc.) on the site of the Development and with electricity, heat, water, and janitorial service therein. The Agent shall be responsible for all other ongoing on-site expenses out of their management fee. These expenses include, but are not limited to postage, stationary, photo copying, office supplies and staff refreshments. Section 13. Compensation of Agent. The sole compensation which the Agent shall be entitled to receive for all services performed under this Agreement shall be a fee of forty Dollars ($40.00) per unit per month and reimbursement for payroll expenses as provided in Section 8. 1, above. The. Agent will not receive compensation for any rented apartment where the rent has not been paid. Such fees shall be computed and paid monthly based upon the preceding month's paid rented apartments. All supervisory, bookkeeping -accounting, clerical, along with all of the Agent's off-site overhead expenses (including but not limited to costs of office supplies, photocopying, the fidelity bond, staff training, postage, stationery, transportation, and telephone expenses, other than management -related long distance calls) will be borne by the Agent out of its own funds and will not be treated as an operating expense of the Development. Section 14. Non -Discrimination. 14.1. In the performance of its obligations under this Agreement, the Agent will comply with the provisions of any federal, state, or local law prohibiting discrimination in housing on the grounds of race, color, sex, creed, religion marital status, physical or mental disability, economic status, or national origin, including Title VI of the Civil Rights Act of 1964 (Public Law 88-352, 78 Stat. 241), all requirements imposed by or pursuant to the regulations issued pursuant to the regulations issued pursuant to Executive Order 11063, and Title VII of the 1968 Civil Rights Act. This Agreement may be terminated or suspended in whole or in part, by the Owner or the MHFA upon the basis of a finding by Owner or the MHFA that the Agent has not complied with non-discrimination provisions. 14.2. The Agent shall comply with the MHFA-approved "Affirmative Fair Housing Marketing Plan" for the Development (attached hereto as Exhibit E), and shall D:\MNN12MO171DOCSITAX CREDIT MGT AGREE.DOC 15 MHA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT utilize such measures as may be required by the Owner or MHFA to encourage affirmatively the occupancy of residential units by members of minority groups. 14.3. The Agent shall comply with the "Residential Selection Plan" for the Development (attached hereto as Exhibit F). Section 15. Fidelity Bond. The Agent shall furnish, at its own expense, a fidelity bond for $100,000.00 to protect the Owner and the MHFA against misapplication of funds of the Development by the Agent and its employees. The terms and conditions of the bond, and the surety thereon, shall also be subject to the approval of the Owner and MHFA, and shall be in an amount not less than two (2) times the total of the following: (a) The maximum possible monthly Rent collections based on 100% occupancy as set forth in the annual budget referred to in Section 9.19, herein; and, (b) Monthly Non -Housing Income as defined in Section 1.16; and (c) The maximum possible funds being held as security deposits based on 100% occupancy. Section 16. Expiration and Termination. 16.1. Exp. Unless sooner canceled pursuant to Sections 16.2, 16.3, 16.4, or 16.5 of this Section, this Agreement shall be in effect from the date of execution hereof until January 27, 2000. Execution shall not be deemed complete unless and until this Agreement has been approved in writing by the Public Agencies. 16.2. Termination by Mutual Consent. This Agreement may be terminated by the mutual written consent of the Owner and the Agent only with the prior written consent of the MHFA, the MPHA and the EDA. 16.3. Termination by Owner for Cause. In the event that the Agent shall fail to perform any of its duties hereunder or comply with any of the provisions hereof, the Owner may terminate this Agreement for cause a upon Owner's thirty (30) days written notice to the Agent. Termination of this Agreement by Owner for cause must have written approval of the MHFA. 16.4. Termination Because of Bankru tc . In the event that a petition in bankruptcy is filed by or against either the Owner or the Agent, or in the event that either shall make as assignment for the benefit of creditors to take advantage of any insolvency act, either party hereto may immediately terminate this Agreement without notice, but prompt advice of such action shall be given to the other party and to the MHFA. D:kMNN12n017\DOCS\TAX CREDIT MGT AGREE.DOC 16 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT 16.5. _Termination by MHFA. It is expressly understood and agreed by and between the Owner and the Agent that the MHFA shall have the right to terminate this Agreement, with or without cause, on ten (10) days' written notice to the Owner and the Agent; except that in the event of a default by the Owner under its mortgage to the MHFA or the MHFA Regulatory Agreement, the MHFA shall have the right to terminate this Agreement immediately without notice, but prompt advice of such action shall be given to the Owner and the Agent. It is further understood and agreed that no liability shall attach to the MHFA in the event of termination of this Agreement pursuant to this paragraph. Prior to termination by the MHFA pursuant to this Section 16.5, the MHFA shall consult with and provide written notice of intent to terminate to the MPHA. 16.6. Termination by MPHA. In the event the MPHA determines that the Agent has violated, breached, or failed to comply with a provision of, or obligation under, the Housing Covenants, it shall so notify the Owner in writing and the Owner shall immediately so notify the Agent and this Agreement shall terminate within thirty (30) days of receipt by theAgent of such notification. Prior to termination by the MPHA pursuant to this Section 16.6, the MPHA shall consult with and provide written notice of intent to terminate to the MHFA. 16.7. Accounting Upon Termination. Within 10 days after the termination of this Agreement, the Owner and Agent shall account to each other with respect to all matters outstanding as of the date of termination. The Owner shall famish the Agent security against any outstanding obligations or liabilities which the Agent may have incurred hereunder, and the Agent shall turn over to the Owner all Tenant files, records, documents or other instruments, waiting lists, and any and all other files and papers in its possession pertaining to the Agent's performance under this Agreement. Section 17. Assignments. This Agreement shall inure to the benefit of and constitute a binding obligation upon the Owner and Agent, and their respective successors and assigns, provided that the Agent cannot assign this Agreement or any of its duties hereunder without the prior written consent of the Owner and the MHFA. Section 18. Amendment. This Agreement constitutes the entire Agreement between the Owner and the Agent, and no amendment or modification thereof shall be valid and enforceable except by supplemental agreement in writing, executed, and approved in the same manner as this Agreement. Section 19. Execution of Counterparts. For the convenience of the parties, this Agreement has been executed in counterpart copies, which are in all respects similar and each of which shall be deemed to be complete in itself so that any one may be introduced in evidence or used for any other purpose without the production of the other counterparts. D:%M12510171DGC%TA,X CREDIT MGT AGREE.DOC 17 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT Section 20. Address for Notices. Whenever any approval or notice on behalf of the Owner, Agent or MHFA is required under this Agreement, said notice shall be deemed to have been given when mailed by certified mail at the following addresses: Owner: PPL -Bass Lake Court Limited Partnership 2516 Chicago Avenue South Minneapolis, Minnesota 55404 Attention: Steve Cramer Agent: Project for Pride in Living, Inc. 1925 Chicago Avenue South Minneapolis, Minnesota 55404 Attention: Shari Pleiss MHFA: Minnesota Housing Finance Agency 400 Sibley Street, Suite 300 Saint Paul, MN 55101-1998 Attention: Director of Multifamily Division MPHA: Minneapolis Public Housing Authority in and for the City of Minneapolis 1001 North Washington Avenue Minneapolis, Minnesota 55401 Attention: Executive Director EDA: Economic Development Authority in and for the City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428-4898 Attention: Executive Director D VAM125101700CS1TAX CREDIT MGT AGREE.DOC 18 MHFA LOW INCOME HOUSING TAX CREDrr PROGRAM MANAGEMENT AGREEMENT IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year immediately below their respective signatures. OWNER: PPL -BASS LAKE COURT LIMITED PARTNERSHIP BY: PROJECT FOR PRIDE IN LIVING, INC. ITS GENERAL PARTNER By Its DATE: AGENT: PROJECT FOR PRIDE IN LIVING, INC. on D.WNN12n0I7\DOCS\TAX CREDIT MGT AGREE.DOC NWA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT The Public Agencies hereby approve and consent to the foregoing Agreement and the Agent appointed therein. MHFA: MINNESOTA HOUSING FINANCE AGENCY By Its DATE: MPHA: MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS 10 Richard Brustad Its Chairman And by Cora McCorvey Its Executive Director DATE: D:1MNN1251D171DOCSITAX CREDIT MGT AGREE.DOC MIiFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT EDA: ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By Its By — its DATE: D:\MNNI CREDIT MGT AGREEMOC M HFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT EXHIBIT A Management Plan D:\MNN325\037\DOCSNTAXCREDITMGTAGREE.DOC A-1 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT Bass Lake Townhomes Management and Marketing Plan 3.01 Description of Development A. Name of Development: Bass Lake Twwnhomes B. Location: Approximately 15 miles from PPL's Central Housing and Development office at 1925 Chicago Avenue South, Minneapolis. C. Number of units: 3 bedroom 4 bedroom TOTAL UNITS # Units # Units MHOP 6 6 12 Market/tax credit 3 4 7 ARIF 11 4 15 Handicapped 1 1 2 TOTAL 20 14 34 D. Type of Construction: Twenty townhomes are wood -frame construction; fourteen rehab duplexes are wood -frame construction with brick veneer. E. Type of Development: Multi -family. Twelve (12) units are owned by PPL as MHOP units; 15 units are funded with ARIF 3.02 Management Company A. See organizational chart attached. (A5) 1. Name of Management Company: Project for Pride in Living, Inc. 2. Name of the Management Agent for the Development: N/A 3. Name of the key contact person for the management agent in the owner's organization: Shari Pleiss, Division Manager 4. Delegation is not needed as owner and property management are the same entity. Property Management General Policy Statement is attached. (Al) B. Job Descriptions: See attached job descriptions. (A2) 1. The only common area in this development is the courtyard. "There is direct visual surveillance of all areas within the courtyard by a minimum of four units. The sidewalk along the south edge of the courtyard is wide enough for vehicle access and the New Hope Police have indicated their willingness to monitor the courtyard using this means, if requested This wide sidewalk can also be used to provide access for emergency vehicles. 2. The communication network will be built upon the foundation created during the development process. Staff of the Thorsen Family Resource Room (source and referral for many social services, early childhood education and recreation) have attended project meetings. Development team meetings have included New Hope Community Development and Housing Program staff, Building Official, Police and Fire Chiefs and personnel, Public Works and City Attorney. At initial occupancy, the Resident Manager and Property Manager will hold a meeting with the staff listed and PPL Self -Sufficiency staff to explain roles, problem -resolution procedures and other issues of concern. Ongoing meetings will be scheduled as necessary. PPL Self -Sufficiency staff will also attend the initial meeting. 3. Method for control of keys: PPL stores keys for individual apartments off site at our Property Management office. Keys are stored in locked key boxes in a room outside of the view of the general public in a locked office. Keys are organized by a number bearing no resemblance to the building address or the apartment number. Apartment keys are not stamped with any information. PPL uses Medica keys for main entries and laundry rooms. Medico keys are custom made and can not be duplicated without the signed permission of PPL's maintenance manager. These keys are numbered and each key given to a resident is registered. Master keys are given to the maintenance technician, resident manager caretaker and division manager only. C. Job Descriptions 1. Job descriptions for property management staff are attached. (A2) 2. An organization chart is also attached. (A5) D. Compensation 1. PPL complies with the Fair Labor Standards Act. 2. Resident managers and on site caretakersare and caretakers are compensated with a rent reduction and an hourly salary. Maintenance is charged at a set hourly fee. 3.04 Marketing A. Identify the Market i] area, but only 31,200 housing units with rents affordable to this income level. Even for households with annual incomes below $30,000, housing costs more than 30% of income for 185,000 households. According to the Metropolitan Council, 50,000 suburban households earning less than .$20,000 per year pay more than 30% of their income for housing. If one assumes that the market area for this project is only 10% of the Metro Area, this would mean that 18,500 households are seeking housing at the rents provided in this project. 4. Ethnic Composition of New Hope (1990 Census figures): White 94.44% 20,637 Black 1.69% 369 American Indian 0.83% 181 Asian/Pacific Islander 2.87% 628 Other trace 0.17% 38 TOTAL 100.009/0 21,853 5. Present economic conditions in the New Hope area reflect the general prosperity of the regional economy. New Hope has a diverse employment base which includes a variety of industrial employers as well as office and service jobs. New Hope has good freeway access to all parts of the Metro area. 6. Future economic projections for the area again mirror projections for the regional economy. New Hope is fully developed so neither housing nor employment will experience significant increases. Housing stock and the commercial/industrial stock was generally built within the last twenty five years and some renovation and reuse is expected to occur. B. Tenant Selection Plan: 1. The tenant selection plan for this development is in conformance with all MHFA, Minnesota and Federal Guidelines. To the best of our knowledge, with the exception of the MHOP incentive units, there are no local housing guidelines. For market rate apartments please see attached PPL's Tenant Selection Plan. (A7) 2. Projected demographic distribution is as follows: M An ad, to be approved by MHFA, shall run in the following publications, until a waiting list of 50 eligible households has been established. Publications: Star Tribune, The Circle, Asian American Pages, La Prensa. b. Logo, signs and brochures The site sign is required for New Hope City approval and will be designed by 7110198. PPL staff will design a logo and brochure; brochure shall include project description, rents in a replaceable format, and information about PPL , neighborhood resources and transportation. c. Contacts A mailing will be prepared for a mailing list which includes PPL regular mailing list (see attached) but is expanded to include northwest suburban social service agencies. These include: Thorsen Family Resource Room, Family and Children Service Northwest Hennepin office, Interfaith Action and District 281 social work staff. 2. Site signage The site sign identifies the site by name and address for a driver on Bass Lake Road. Site office is located close to the signed entrance of the roadway. 3. Marketing will be done by the person hired and trained as resident manager. 4. Supplies assutne a total of up to 200 applications for 22 (non-MHOP) units. 5. Except during completion of construction, grounds will be carefully maintained to create a cared -for impression for vehicle and pedestrian traffic. b. A security deposit is to be collected for 22 (non -MI -IOP) tenants. 7. Fair Housing training for site staff. 7 file an Unlawful Detainer action against the resident. 4. All reasonable efforts are made to collect rent in full at the time it is due. However, PPL believes that if a resident is willing to make a written agreement to pay their outstanding rent within a specific amount of time, we will work with the resident in order that they may keep their housing. If at any point the resident falls behind on their agreement, PPL will immediately file an Unlawful Detainer. NOTE: MHOP units will be worked with in accordance with the rules developed for those units. 3.08 Budgeting 1. The budget team, including the Asset Manager, Division Manager and Resident Manager audit all utility bills and service contracts. Service contracts, including waste removal and snow plowing are sent out for bids by competing companies. 2. A comparison of past and current income and expenses of other properties with similar features and resident composition is performed. 3. Data is c and pIaCXFA appr bateproms eeef6wfflWih accompanying budget notes. 4. Budget is reviewed for final acceptance by the Asset Manager, Division Manager, Housing and Development Director, Chief Financial Officer and the Budget Review Committee of the PPL Board of Directors. 3.09 Energy Conservation 1. The manager of the maintenance department develops a preventive maintenance schedule for each building. This schedule includes but is not limited to the following: a. 'Twice yearly maintenance inspections to find unreported plumbing leaks and inappropriate use of ovens etc. for heating. b. Change filters if appropriate. C. Test appliances for good working order. 2. The site manager is required to enter each apartment at least twice yearly to meet with the residents and note any problem situations that may require maintenance or Self Sufficiency Program intervention. 3. At the time of development, the current thermostats will be replaced using thermostatic controls which have a built in high temperature setting. 9 Al PROPERTY MANAGEMENT Project for Pride in Living, Inc. provides professional management with the expertise needed to market and manage this development in the best interest of its residents and funders. Our mission is to assist low and moderate -income people to become self-sufficient by addressing their job, housing and neighborhood needs. We believe that all people should have the opportunity to live in decent, affordable housing in a safe, functioning community. GENERAL POLICY STATEMENT Properties managed by Project for Pride in Living are assumed to be operated efficiently and as a "service" to our residents. The function of Project for Pride in Living personnel, in view of this policy, is to act as facilitators and to provide necessary assistance so all residents can expect to be treated fairly and by uniformly applied standards. Project for Pride in Living personnel are expected to develop a high level of professionalism as they evaluate management problems and seek their solution. Good property managemen# also depends upon acting in accordance with sound financial and accounting principles, implementing a solid preventive and emergency maintenance program, and designing a comprehensive system of information dissemination. MANAGEMENT RESPONSIBILITIES Project for Pride in Living is responsible for planning and directing the fiscal and physical operation of Prosperity Village. The agent is to carry out the following major functions: Staffing. Marketing, Maintenance and Repairs. Financial Reporting Resident Relations Job Tide: Division Manager, Property Management Reports To: Director of Housing and Development Job Summary I. Manages the staff of the Property Management Division II. To initiate, maintain and/or strengthen PPL's relationships with other organizations of significance to community stability and growth in key neighborhoods: Chicago & Franklin, Bloomington & Lake as well as city-wide. Essential Job Functions 1. Personnel Management - Develop, implement and maintain ongoing training program for property management and maintenance staff. Goal setting for individuals and the management team. Performs yearly performance reviews. Recruitment and training of property management staff. 2. Development - Work with PPL Development to create management plans, perform initial marketing of new developments. 3. Community Development - Represents PPL in several important community groups including: • Chicago Franklin Block Club • Franklin Avenue Business Association • Bloomington -Lake Commercial Club • City of New Hope 4. Management - Report to PPL board of Directors as to the state of the division. Work with funding agencies to create and maintain positive relationships. Inspection of properties. �•�uIIIINMIw �•` alp V •t Olt.� Lw V F� •J �+ 114 r3 v �� • L �1 pz� Vr :J \ V rti a ` v J � v .� C1 � V n,J u 1 ria t Q One of the first steps in preparing these new employee's to assume their duties will be an official welcome to Bass Lake Townhomes, followed by a detailed job orientation. Each orientation meeting will be tailored to meet the specific job responsibilities of the individual(s). This meeting will be conducted at the site location and the property management office. The following information will be discussed in detail at the orientation meeting: 1. An introduction to the development and its community, the developments purpose, and the objectives of its Owners, including the community partners. 2. An introduction to Project for Pride in Living including information about its history, development and objectives, and a thorough understanding of property management's policies and procedures. 3. A complete understanding of PPL's general terms and conditions of employment as well as any disciplinary rules. 4. A summary of personnel policies detailing what the new employee can expect from the organization and what the organization will expect of him/her m return. 5. A description of benefits and services. 6. A tour of the home office and the development and an introduction to fellow workers. 7. A description of his/her immediate supervisors duties and the duties of co-worker or staff, where applicable. S. A detailed description of the employee's job including specific duties and responsibilities, hours, wage or salary and other pertinent information. 9. Information directly related to cultural sensitivities of the client community. A6 EMPLOYEE EVALUATION A. Scheduled Review and Property Inspections The Property Manager, with the Division Manager, will conduct a formal performance evaluation for all site employees annually. These evaluations will be the basis for annual salary reviews and/or other adjustments. The Division Manager will also do quarterly reviews of all full time employees to ensure they are meeting their goals and objectives. S. Unscheduled inspections Periodically, the progress of each employee will be reviewed through various scheduled and unscheduled property inspections to maintain a sound employee -employer relationship. The inspections will be scheduled by the Division Manager. The following areas are those which the Division Manager will be closely inspecting: 1. Resident relations. 2. Occupancy level and collection rate. 3. Residents files and documentation, etc. 41. interior building maintenance. 5. Exterior building maintenance. 6. Preventive maintenance. 7. Ability to implement the policies of PPL and the project. S. In addition to the preceding, all employees are required and expected to present themselves in a neat, clean, efficient and professional manner at all times. D. Household income. Income for all adult household members must be verified. To qualify, the household annual income must not exceed the income limits established for the apartments by the terms of the financing. The income criteria at the present time are as follows: Maximum income: at 30i& for a one person household $12,030 for a family of two $13,740 for a family of three $15,480 for a family of four $17,190 for a family of five $18,570 for a family of six $19,950 for a family of seven $21,330 for a family of eight $22,680 Maximum income: at 50% for a one person household $20,050 for a family of two $22,900 for a family of three $25,800 for a family of four $28,650 for a family of five $30,950 for a family of six $33,250 for a family of seven $35,550 for a family eight $37,800 Minimum income: Applicants must have verifiable and predictable income source to cover rent and household utility expense. Income equal to two (2) times the rent may be required. MHOP applicants must be within the most current HUD very low income limits applicable to family size. E. Occupancy Standard. We have developed maximum occupancy standards for Bass Lake Townhomes. These standards are as follows: Two Bedroom four people Three Bedroom six people F. Reasons For Rejection. • Number of potential occupants does not meet guidelines. • False or unverifiable information was supplied on application. Income does not meet eligibility requirements, Unsatisfactory rental reference. • Record of non-payment or late payment of rent, utility or other credit obligation. AS CRITERIA FOR LEASING AT PPL Effective July 1, 1999 Application Fee: $35 per application - non-refundable Money order or Cashier's check only Application fee is waived for MHOP applicants TWO YEARS OF GOOD RENTAL HISTORY * No Unlawful Detainers (evictions) unless you have verifiable documentation of landlord irresponsibility. However, a UD due to property damage by the resident will not be accepted under any circumstance. * No history of late payment. * No history of damage to the apartment. * VERIFIABLE GROSS INCOME * Minimum of twice the rent charged on the apartment. * Section 8 vouchers and certificates accepted. The resident must meet the same criteria as those seeking non -subsidized housing. * Food stamps are included in the calculation of gross income. Note: MHOP applicants do not need to have a verifiable income of twice the rent charged on an apartment. CRIMINAL BACKGROUND CHECK. * Residency may be denied due to criminal history. (See attached Criminal Background Criteria) * CREDIT HISTORY * Must show that the resident has paid bills on time and does not have a history of debt write-offs or accounts that have gone into collection. * Residency may be denied due to poor credit history. * MAXIMUM OCCUPANCY - Please note that these are the maximum number of people who may occupy apartments with the number of bedrooms noted. Situations may exist where the high concentration of people in a building and/or the ability of the mechanical equipment to operate efficiently requires us to adjust the number of occupants in a given apartment. * Efficiency 2 occupants * 1 Bedroom 2 occupants * 2 bedroom 4 occupants * 3 Bedroom 6 occupants * 4 bedroom 8 occupants A child less than two years of age is not considered when listing the number of people occupying an apartment. Once the child reaches two and is considered an occupant, the number of people occupying the unit must fall within the guidelines of that building. A9 MARKETING PLAN Plan to achieve early occupancy. A large site sign will give a number for more information. 'i'his number will connect the caller directly to the Leasing Office. The site manager will make an appointment to meet the caller on site and show the available apartments. Media As necessary, ads will be run in the following publications Star Tribune, Pioneer Press, The Circle, Asian American Pages, La Prensa. Logo, signs and brochures A logo design and brochure will be created and sent to agencies where referrals are possible. Contacts A mailing will be prepared for a mailing list which includes PPL regular mailing list and social service agencies. Site signage The site sign identifies the site by name and address for a passing drivers. 2. Marketing will be done by the person hired and trained as resident manager. 3. Except during major re-hab construction, grounds will be carefully maintained to create a positive curb appeal for vehicle and pedestrian traffic. EMERGENCIES How to Extinguish a Kitchen Fire Fire Emergency number: 911 Grease Fires: Electrical Fires Oven Fires Gas Leaks Do... 1. Turn oven OFF. 2. Cover burning container with lid or pan to smother fire. If smothering fails, call 911. DO NOT throw water on a grease fire. You may cause an explosion. Do... I. Unplug burning appliance or... 2. Turn circuit -breaker off, or 3. Unscrew fuse.. DO NOT throw water on fire or touch burning element. DO.. 1. Close oven door and leave closed. (This cuts off oxygen) 2. Turn oven OFF. DO... 1. Close doors to room and get out. 2. Call fire department from another location. DO NOT use telephone, turn on lights, use a Flashlight, or put key in lock with room with a gas leak. The slightest spark can cause an EXPLOSION. GOOD CAUSE CLAUSE You are hereby given notice as to what is termed "Good Cause" for termination of tenancy: 1. Possession of illegal drugs in your residence or anywhere on PPL property, and/or use of such drugs and/or purchase or sale of such drags from your residence or anywhere on PPL property. 2. Repeated police calls to any PPL property due to activities of you or your guests. 3. Non-payment of rent, late fees, utilities or maintenance service charges (tenant/guests destruction of property). 4. Causing repeated incidence that are disturbing to the peace of other residents and/or neighbors. S. Damage to property belonging to this organization and/or damage to other tenants property. 6. Keeping a pet. 7. Theft of PPL property or property belonging to other tenants. 8. Any act or threat or violence to employees or Board Members of PPL or any other person on this property. Permitting persons to occupy unit who are not registered on the lease without management approval. 10. Excessive traffic as determined by property management. 11. Consumption of alcoholic beverages in common areas inside or outside of any PPL building. 12. Smoldng in common areas of the building. 13. Sub -letting a unit. 14. Refusing to sign a lease. 15. Poor housekeeping. Including clutter or dirt in your home which: may affect the health or safety of any occupant of the building; is sufficient to attract rodents or pests; causes more than normal wear and tear on the apartment; violate the Minneapolis Housing Maintenance or other applicable Codes. 16. Wasting utilities through intentional means or by unreported problems.. 17. Any other violation of the terms of the lease. In the event that legal action is to be taken, the Property Manager is authorized to send out a termination notice and to act as plaintiff for Project for Pride in Living. ident Resident Date Resident Date Resident Date Date SELF-SUFFICIENCY PROGRAM SERVICES CAWER/EDUCATION COUNSELING Teach sldlls in resume writing and interviewing Assist in attaining educational goals- G.E.D., technical training, college Offer bi-monthly seminars on employment issues Make available transitional incentives for job seekers Referrals for employment resources and training programs Step -by -Step Job Hunt Program EDUCATIONAL/SUPPORT GROUPS Tuesday Topic Night: various informational & educational topics Men's Support Group- meets bi-monthly Children's activities FAIVMY NIGHTS Fun activities for family enjoyment Promote family togetherness and involvement Field trips include: Science Museum, roller skating, hayrides SELF-ESTEEM RETREATS Men's and women's retreats 1-112 days of self-esteem building, goal -setting, and workshops Evening social time V, -ON -ONE COUNSELING Discuss personal needs Creating a personal action plan Referrals Mental Health Therapy CHILDREN & YOUTH PROGRAM Advocacy Activity groups One -on -One Personal Development Programs & referrals for youth counseling FINANCIAL MANAGEMENT TRAINING Identify problem areas Assist in budget set-up Referral to available subsidies- FareShare, etc ANNUAL EVENTS Summer Picnic- food, games, entertainment Holiday Party- festive celebration of the season COMMUNITY INITIATIVE PROGRAM Resident Council Building/Neighborhaod Activities Safety & Crime Prevention FOR MORE INFORMATION CALL PPL SELF SUFFICIENCY AT: 874-8511 OR IN ST. PAUL: 225-8084 1 _41NNESOTA LAW CONCERNING DRUG AND CONTRABAND SEIZURES IN APARTMENT BUILDINGS All Minnesota landlords are required under the provisions of a state law (H.F. 159) to notify all residents (existing and future) of the following: "Under a new state law effective October 1, 1989 a seizure by a law officer of any illegal substance, including drugs, totaling at least $1,000 may cause you to be evicted. The management can be required by the State to start an eviction action within 15 days of notice of the seizure" 8 HOUSEKEEPING PPL will do everything in it's power to provide a unit of housing that is free from insect and rodent infestation. To ensure this commitment, PPL will pay all routine extermination costs. If however, professional exterminators diagnose a problem that is caused by the poor housekeeping of a resident, PPL may charge the resident for additional extermination to their and other apartments effected. In an effort to avoid these additional extermination costs, the tenant is required to maintain reasonable standards of housekeeping and cleanliness. A clean house is the best way to prevent infestation problems. PPL will conduct periodic home visits and inspections to ensure that reasonable housekeeping and cleanliness standards are maintained. In addition, PPL reserves the sole right to define these housekeeping and cleanliness standards. If violations occur, PPL will provide, in writing, specific guidelines for improving problem areas. PPL will allow for reasonable time (maximum of 72 hours) for the tenant to make the improvements necessary. If the tenant fails to maintain a clean house, PPL will initiate move out procedures with the problem tenant. 10 WATER DRIPS, LEAKS, FLOODS It is very important for you to notify us AS SOON AS POSSIBLE when any of your pipes are leaking or your toilet is running. We need your help maintaining your building in good condition. If we receive a higher than expected water bill due to an unreported leak or running toilet you will be charged the amount that the bill is over average (THIS CAN RUN AS HIGH AS $500 FOR A RUNNING TOILET). 12 NOTICE TO VACATE If you are planning on moving you must notify us immediately by giving a written notice no less, than 30 days before you are planning to move. Your move out day must be at the end of the month unless approved in writing by your property manager. Failure to do so can result in you not getting your deposit back, getting a poor rental reference, and not being able to re -rent from PPL housing again. All vacate notices must be in writing, signed, and dated by the resident. PPL provides a form to make the process easier for the resident. Proper notice is given as of the first of the month effective the last day of the month the lease expires. Pro -rated rent is not allowed for a vacating month. may show your apartment during your last month of occupancy for the purposes of rental. You will receive notice by phone or in writing two 48 hours before your apartment is shown. Your apartment should remain clean and orderly during this period. You are under no obligation to explain to PPL why you have decided to end your lease. Additionally, if PPL decides to end your lease, they are under no obligation to explain their decision. 14 MOVE-IN/OUT INSPECTION WL..n you move into your new home, everything in your home will be clean and in good working order. The first thing you will do upon moving in will be to inspect the unit with the manager. Together you will note the condition of every item in your home on a move -in inspection sheet. Both you and the manager will sign this form. Your home will be inspected again in 30 days to make sure everything is working properly and to answer any questions. At the time you move out, a Management staff person will again inspect your home with you and note its condition on a move out inspection sheet. You will be charged for any damages caused by you, your family, or your guests. It is expected that you will leave your home in the same condition as when you moved in, excluding normal wear and tear. (See Security Deposit Return) i[91 SNOW REMOVAL During the winter months, snow will be plowed from the parking lots. Cooperation from the residents in moving their cars is necessary and will be expected. The lot will be plowed on each snowfall that measures two or more inches. If you plan to be gone from your apartment any time during the winter months, please make proper arrangements with a friend, neighbor, or relative so your car will be moved when snow plowing is necessary. 18 NON -SUFFICIENT FUND CHECKS Any checks returned by the bank are regarded as non-payment of rent and are subject to late fee penalties. There will also be a $25.04 service fee added for all NSF checks. NSF checks will be returned to the resident only after the Management has received a money order in exchange. Non-payment on an NSF check will be grounds for eviction. If we receive an NSF check from you, all further rents and fees must be paid in the form of a cashiers check or money order. 20 TRANSFER POLICY it i- ooth costly and labor intensive for residents to move from one apartment to another. Apartments must be painted and shampooed, and there is sometime cleaning to be done. In order to be considered for a transfer, applicants must: 1. Have lived in current apartment for at least one year, 2. Have a record of prompt rental payment; 3. Keep cummt apartment in a clean, tidy manner. (Apartment will be inspected by manager prior to any written approval to transfer taking place.); 4. Be a resident in good standing of the site with no record of disturbances or other lease violations; S. Pay a $100.00 transfer fee prior to move -in; (waived if moving after one year). 6. Sign a new lease at the current rental rate for vacant apartment. Please note that the transfer fee does not apply to MHOP units due to change in family size or status. 22 FIRE SAFETY If a small fire should start in your home, use the fire extinguisher located in the hallways of your apartment building. Break the glass in the front of the case and remove the extinguisher. To use a fire extinguisher, simply squeeze the trigger handle, aim it at the base of the fire, not on top of the fire. DO NOT POUR WATER ON A GREASE FIRE. In case of stove or oven fire turn off the stove first then try to smother or put out the fire. If you can not quickly put out the fire dial 911. DO NOT re-enter your home. Read the procedure below very carefully. In the event of a fire, just one or more of these rules may save your life or the life of your neighbor. 1. Prior to leaving your apartment, feel your apartment door. If the door is hot or smoke is seeping through, DO NOT open. 2. Keep door closed and seal cracks with wet towel; open a window for air. Don't panic or jump. 3. If the door feels cool, open cautiously and leave your apartment. Walk quickly, keeping calm. HEAVY SMOKE REMAIN CALM- DO NOT PANIC. Dampen a towel or a rag and cover your mouth and nose. Stay close e floor, moving to the nearest window or exit. If the hallways are very smoky, crawl to the nearest exit, EL coke rises. NEVER GO INTO A ROOM THAT DOES NOT HAVE A WINDOW. ALWAYS PAY ATTENTION TO FIRE/SMOKE ALARMS. NEVER IGNORE AN ALARM. FALSE ALARMS BY YOUR CHILDREN OR YOUR CHILDREN'S GUESTS ARE AGAINST THE LAW AND CAN RESULT IN PROSECUTION AND/OR EVICTION. For police or medical emergencies dial 911. HEAT AND UTILITIES Your heat and water are included in your rent. Please do not be wasteful of those utilities. Remember that even though these utilities are included in your rent, the site must pay for them and the cost is reflected in the total cost of operation of the building. ENTRANCES Rugs, shoes, or other items on the floor outside your apartment door are not permitted by the Fire Marshal. Your unit door or the hallway doors may NOT be propped open at any time. - The apartment doors must remain closed by order of the Fire Department. 24 STANDARD REPAIR CHARGES I General Charges: These charges apply to both current residents and apartment turnovers. For current residents, travel time will be added to hours of labor. Repairs: $35 per hour labor $52.50 per hour after hours Materials: Cost + 15% Overhead Cleaning: $30 per hour Lock Replacement (Includes labor fee): Unit with one door: $80 for all locks (apartment and mailbox) Unit with two door: $100 for all locks (apartment and mailbox) $50 for any individual lock Building Entry Key: $75 Standard Key: $ 5 P-ynt(Wall Damage: Actual Cost I lure Hauling: $30 per piece 26 EXHIBIT B MHFA Regulatory Agreement D:1WN11510171DOCSITAX CREDIT MGT AGREE.DOC B-1 MHA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEWNT AGREEMENT FOR USE BY FILING OFFICER ONLY MINNESOTA HOUSING FINANCE AGENCY NEW CONSTRUCTION TAX CREDIT MORTGAGE LOAN PROGRAM REGULATORY AGREEMENT THIS NCTC REGULATORY AGREEMENT, is made and entered into on this 3rd day of February, 1999, by and between PPL -Bass Lake Court Limited Partnership, a Minnesota limited partnership, with its offices located at 2516 Chicago Avenue South, Minneapolis. MN 55404, (hereinafter referred to as the "Mortgagor"), and Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota, with its offices located at 400 Sibley Street, Suite 300, St. Paul, Minnesota 55101-1998, (hereinafter refereed to as the '% H A"). WITNESSETH: WHEREAS, Mortgagor is a qualified housing sponsor in accordance with the provisions of the Minnesota Housing Finance Agency Act of 1971, as amended (hereinafter referred to as the ..Act"); and WHEREAS, Mortgagor, as the owner in fee simple of the property described in Exhibit A attached hereto and by this reference made a part hereof (hereinafter referred to as the "Property"), has applied to MHFA for a mortgage loan in the amount of Three Hundred Forty - Eight 'Thousand Two Hundred Two and No/100 Dollars ($348,202.00), (herebmfter referred to as the "NCTC Mortgage Loan") to aid Mortgagor in the construction and financing on the Property of a housing development for persons and families of low and moderate income, pursuant to the provisions of the Act, identified as MHFA Development No. 98-NCTC-2558 (which housing development, including the Property and all assets of whatsoever nature situate, used in, or owned by the business conducted on the Property, is herein referred to as hereinafter referred to as the "Development"); and WHEREAS, the NCTC Mortgage Loan is evidenced by that certain Minnesota Housing Finance Agency New Construction Tax Credit Mortgage Loan Program Promissory Note (hereinafter referred to as the "NCTC Note") by and between the parties hereto and of even date herewith, and secured by that certain the Minnesota Housing Finance Agency New Construction Tax Credit Mortgage Loan Program Combination Mortgage, Security Agreement and Fixture Financing Statement (hereinafter referred to as the "NCTC Mortgage") by and between the parties hereto and of even date herewith; and PPL Bass tike Court, New Hope 1/11199 New Construction Tax Credit 1 98-NCTC-2558 Regulatory Agremnant NCTC Rgltry Agrmat B. Mortgagor shall submit a proposed schedule of rental rates and a proposed operating budget for the Development to MHFA at least once per year, and not less than sixty (60) days prior to the beginning of each fiscal year of Mortgagor. The proposed operating budget shall set forth the anticipated income of the Development and a detailed estimate of expenses in conformance with the Operating Receipts and Expense Account (as hereinafter defined), which shall include separate documentation of (i) administration expenses, (ii) operating expense, (iii) maintenance expense, (iv) utility expenses, (v) hazard insurance premiums; (vi) taxes and assessments, (vii) principal, interest and Annual Fee, if applicable, due under the NCTC Note, (viii) anticipated aggregate deposits to the Residual Receipts Account and Replaceanent Cost Reserve Account (as bereinafler defined), (ix) aggregate deposits to any other reserves required and approved by MHFA as established by MHFA or Mortgagor, and (x) to the extent permitted herein, a return on equity to Mortgagor. The proposed schedule of rental rates, together with any other sources of revenue or assistance supplied to Mortgagor, shall be sufficient to meet all items set fortis in the proposed operating budget. Upon approval by the MHFA, such proposed schedule of rental rates and proposed operating budget shall be effective for Mortgagofs next ensuing fiscal year MHFA approval of the proposed schedule of rental rates and operating budget shall not be unreasonably withheld, and MHFA shall review said nates and budget for approval in a timely manner. C. It is understood and agreed by Mortgagor that this NCTC Regulatory Agreement constitutes an assurance and undertaking by Mortgagor that the Development shall be operated in a proper and timely manner. and all Operating Expenses (as herein defined and which shall specifically exclude principal and interest payments due on any loan from any source) shall be paid by Mortgagor during the life of this NCTC Regulatory Agreement in the event an Operating Expense (as herein defined) deficit occurs; and that Mortgagor shall maintain the Development, accommodations, grounds and equipment appurtenant thereto, in good repair and condition. It is further mutually understood that it is the intention of MWA to approve rental increases for the purpose of providing additional income for Operating Expenses (as herein defined) to the extent MHFA, in its sole option and discretion, deans such rental increases to be justified because of Operating Expenses (as herein defused) beyond the control of Mortgagor. D. Unless otherwise directed or approved by MNFA, the initial rental rates for occupancy of the Development at the time of the initial closing of the NCTC Mortgage Loan shall be as set forth in the Financial Analysis attached hereto as Exhibit B, and by this reference made a part hereof. 2.A. FEDERAL REQUIREMENTS. Notwithstanding anything to the contrary contained in this NCTC Regulatory Agreement, for so long as this NCTC Regulatory Agreement is in force and effect, Mortgagor shall maintain rental rates for occupancy of the Development at levels which will cause the Development to qualify for and to obtain the benefits of low-income housing credits as provided in Section 42 of the United States Internal Revenue Code of 1986, as amended, and the regulations promulgated pursuant thereto, for at least thirty-four (34) rental units. PPL Base Lata Court, New Hope 1111199 New Construction Tax Cardin 3 98-NCTC-2358 Regulatory Ageement NCTC Rglay Agrmnt to the aggregate of all special funds required by Mortgagor and/or MHFA to be maintained by or with respect to the Development. C. Reserve Fund. The NWA shall establish the following accounts: (1) Residual Receipts Account. A Residual Receipts Account shall be established and maintained by NWA for the financial benefit of the Development. "Residual Receipts" are those sums remaining, if any, subsequent to all the required MHFA approved disbursements under Section 3.A. of this NCTC Regulatory Agm meat. Such Residual Receipts shall be remitted to MHFA, upon the request of NWA at such times as it shall designate to Mortgagor and in a timely manner, to be invested and reinvested by MHFA for the financial benefit of the Development, and to the extent authorized in Section 9 hereinbelow for distribution to Mortgagor. Prom time to time, in the sole discretion of the MHFA, said funds may be utilized for the payment of Operating Expenses and such other costs and expenses as are approved by the MHFA, and, if necessary, upon delinquency of the NCTC Note may be applied to the payment of the NCTC Mortgage Loan, first to Annual Fee, if applicable, then to interest, and thea to principal. It is the intention of MHFA, however, that in the event Operating Receipts are not sufficient from time to time to pay for Operating Expenses, the Residual Receipts Account, if funded, shall be fully exhausted prior to disbursing from other funds as established by this NCTC Regulatory Agreement, and prior to requiring Mortgagor to so pay the current deficit of said Opesaft Expenses. In the event there are no Operating Expense deficits nor NCTC Mortgage Loan delinquencies, then the MHFA may, in its sole option and discretion, apply such funds, if any, upon notice to and consultation with Mortgagor for the general benefit of the Development. Upon the payment in full of the NCTC Mortgage Loan, the balance of all monies, if any, contained in the Residual Receipts Account, shall be paid to Mortgagor. (2) Development Cost Escrow Account. At final closing of the NCTC Mortgage Loan, MHFA shall establish from the proceeds thereof, for the sole benefit of the Development, an account in the amount of 'Ibineen Thousand Three Hundred Ninety -Two and Na/100 Dollars ($13,392.00), which sum will constitute the Iota[ amount of the "Development Cost Escrow" as shown in the attached Exhibit B. The funds so deposited shall be invested and reinvested by MHFA, and the income derived therefrom shall be accumulated in a Development Cost Escrow Account, subject to the provision for distribution of said invesUnent income as provided in Section 9.C. hereinbelow. Funds contained m the Development Cost Escrow Account shall be expended by MHFA at such time, or times, as the MHFA shall deem appropriate for the benefit of the Development, including but not limited to the purposes set forth hereinbelow. While it is agreed between the parties hereto that the purposes for which, and the order in which, disbursement of such funds shall be made is at the sole option and discretion of MHFA after a request from or consultation with Mortgagor, MHFA contemplates that the priority of the application of such funds will be in the following order: (a) Amenities for and design modification to the Development which MHFA determines in its sole option and discretion; (i) are necessary or desirable for the marketing of the Development, (ii) are necessary or prudent to reduce maintenance or replacement costs over the term of the NCTC Mortgage Loan, (iii) PPL Bess Lake Court, New Hope 1111199 New Coastrwdon Tax Credit 5 99-NCTC-7558 Regulatory Agreement NCTC Rglay Agrtnot (4) Working Capital Reserve and Escrow Account. A Working Capital Reserve and Escrow Account, if established by MHFA in its sole option and discretion at the time of execution and delivery of this NCTC Regulatory Agreement, shall be for the purpose of depositing funds or unconditional letters of credit to be held, disbursed, or returned to Mortgagor pursuant to a separate Working Capital Reserve and Escrow Account Agreement between MI WA and Mortgagor, the terms and provisions of which we hereby incorporated into and form a part of this NCTC Regulatory Agreement. Upon the payment in full of the NCTC Mortgage Loan, the balance of all monies, if any, contained in the Working Capital Reserve and Escrow Account, shall be paid to Mortgagor. (5) Rent -Up Escrow Account. A Rent -Up Escrow Account, if established by MHFA in its sole option and discretion at the time of execution and delivery of this NCTC Regulatory Agreement, shall be for the purpose of depositing funds or unconditional letters of credit to be held, disbursed, or returned to Mortgagor pursuant to a separate Rent -Up Escrow Account Agreement between NWA and Mortgagor, the terms and provisions of which are Hereby incorporated into and form a part of this NCTC Regulatory Agreement. Upon payment in full of the NCTC Mortgage Loan, the balance of all monies, if any, contained in the Rent -Up Escrow Account shall be paid to Mortgagor. 4. TAXES AND INSURANCE ESCROW. Pursuant to the terms of the NCTC Mortgage, monthly payments by Mortgagor to pay for real estate taxes and insurance premiums when due as requited by such mortgage will be collected and held by MHFA, or its appointed agent, in escrow for the payment thereof. It is agreed, however, that the said escrow will be held in a segregated interest bearing account, the income therefrom to be paid, fust to any unanticipated taxes and insurance premiums. and then to be paid to Mortgagor to be placed in the Operating Receipts and Expense Account. 5. MANAGEMENT. Mortgagor shall provide for the management of the Development in a manner satisfactory to MHFA, and in accordance with that certain Management Agreement by and between the parties hereto and of even date herewith. Mortgagor shall not amend, modify or terminate said Management Agreement, or enter into any other management agreement, without the express, prior written consent of MHFA. It is specifically agreed that if MHFA allows, in writing. Mortgagor to manage the Development without utilizing a management agent, and if MHFA hereafter determines in its sole option and discretion that the retention of a management agent is required for the financial viability of the Development, Mortgagor will forthwith retain such an agent, acceptable to MHFA, utilizing a management agreement in the form described hereinbelow. Any management agreement hereinafter entered into by Mortgagor involving the Development shall contain a provision that it shall be subject to termination in the sole discretion of MHFA, without penalty and with or without cause, upon whiten request by MHFA addressed to Mortgagor. Upon receipt of such request, Mortgagor shall terminate the contract in the manner provided by its terms and conditions and make arrangements satisfactory to NWA for continuing management of the Development. b. TENANT QUALIFICATION. Mortgagor covenants and agrees that no person or family has been approved, or shall be approved, by Mortgagor for occupancy of any unit in the Development unless all of the following conditions shall have been met at the time of such approval: PPL Bass Late Couri. New trope 1111/99 New Construction Tax Credit 7 99-NCrC-2558 Rei; latory Agreamest NCTC Retry AV=t to the income, assets, liabilities, contracts, operation and condition of the Development, of residents of the Development, and of the status of the NCTC Mortgage Loan. I. That Mortgagor shall obtain and maintain in force, insurance of such types and in such amounts as MHFA may from time to time reasonably require. All such policies of insurance shall be endorsed with a standard mortgagee clause with loss payable to MHFA, or show MHFA as a named insured, as MHFA may direct, and shall be issued by companies qualified to do business in the State of Minnesota and not unacceptable to MHFA. shall provide that MHFA shall be given no less than ten (10) days advance written notice of the cancellation, expiration or termination of the policy or any material change m the coverage afforded thereunder, and the originals of such policies shall be deposited with MHFA. I. That all rents and other receipts of the Development shall be deposited in the Operating Receipts and Expense Account and in the name of Mortgagor in accordance with the terms provided herein. The person or entity receiving funds of the Development shall immediately deposit such funds in such Operating Receipts and Expense Account; and if such person or entity fails to do so in violation of this NCTC Regulatory Agreement, then said person or entity shall hold such funds in trust for the benefit of the Development and MHFA. Such funds deposited in the Operating Receipts and Expense Account shall be withdrawn only in accordance with the provisions of this NCTC Regulatory Agreement. In accordance with the above, those rents, if any, collected by Mortgagor prior to final closing or final disbursement of the proceeds of the NCTC Mortgage Loan, shall be deposited in the Operating Receipts and Expense Account for disbursement in the manner and for the purposes provided in Section 3.A. of this NCTC Regulatory Agreement, and for the additional purpose of payment of principal, interest and Annual Fee, if any, accruing subsequent to the date of Substantial Complexion of the Development, as established by the MHFA. K. That Mortgagor shall comply with all applicable provisions of the Act and of the Rules and Regulations promulgated pursuant thereto. L. That Mortgagor shall maintain the Development, accommodations, grounds and equipment appurtenant thereto in good repair and condition, and shall not cause waste thereof. 8_ NEGATIVE COVENANTS OF MORTGAGOR. Mortgagor covenants and agrees that it shall not, without the express prior written approval of MHFA: A. Sell, assign, convey, transfer, dispose of, lease or otherwise encumber, as such terns are used in the NCTC Mortgage, the Development or any portion thereof, or suffer or permit any such acts, involuntarily or by operation of law, except as provided in the NCTC Mort. B. Assign, transfer, dispose of, or encumber any personal property of the Development, including rents, or pay out any funds except for reasonable operating expenses and necessary repairs as provided herein. In addition, and not in limitation, Mortgagor will not remove from the Development any fixtures or personal property unless ibe same is immediately replaced with like property of at least equal value and utility which is subject to the lien and security interest of the NCTC Mortgage. C. Convey, assign, or transfer any intemst of any general partner in a partnership owning the Development, or any right to manage or receive the rents and profits therefrom. D. Remodel, add to, reconstruct, or demolish any part of the Development. PPL Sass rake Court, New Hope 1111199 New Construtdwr Tax C"t 9 98-NCTC-2558 Regulatory Agreement NCTC 116try Agrrant B. Poor to such distributions, Mortgagor shall obtain the written approval of hWA thereto, and, in addition, MICA must have been in receipt of Mortgagor's annual financial statement, as provided in Section 7.G. hereinabove, for not less than twenty (20) days preceding such distribution. C. All such distributions in any one fiscal year of Mortgagor from the Operating Receipts and Expense Account shall be limited to ten percent (10%) on the initial equity investment, as determined by NWA (initial equity investment being defined and illustrated in that certain Financial Analysis attached hereto as Exhibit B). For the purpose of determining the maximum return on equity for the Development, the Financial Analysis attached hereto w Exhibit B will be amended at the later of. (1) the date of the final closing or final disbursement of the proceeds of the NCTC Mortgage Loan, or (2) the date which is the earlier of the following; (i) twelve (12) months from Substantial Completion of the Development, as defined in the Construction Documents, or (ii) when 93% occupancy of the Development is achieved, at which time time shall be added to the Financial Analysis at the places provided on page b, thereof, the amounts, if any, of construction cost overruns and MWA-approved change orders, plus the amount, if any, of initial rent -rep marketing costs over budget through the date of said amendment; provided, however, that notwithstanding anything to the contrary contained herein, in the event final closing or final disbursement of the proceeds of the NCTC Mortgage Loan has not occurred on or before six (5) months after the date of Substantial Completion as defined in the Construction Documents, the said F mincial Analysis shall not be amended to include the amounts refereed to above, and the provisions of said Exhibit B shall apply for the term of the NCTC Mortgage Loan, In addition, the initial equity shown in said Financial Analysis shall be increased by the amount of any deferred payments which have been previously approved by the MHFA in writing, and paid for out of additional monies supplied by Mortgagor. Cumulative distributions we not permitted. It is hereby specifically agreed that in the event that at the time of distribution as provided in Section 9.A. hereinabove, all items to be paid by Mortgagor prior to distribution have been paid, as provided in Section 3.A. hereinabove, that MHFA shall make available for distribution to Mortgagor any available income that shall have accrued pursuant to investrrrertt and reinvestment of the funds in the Development Cost Escrow Account, only, prior to the date for distribution; provided, however, that the amount of income to be so released for distribution shall not exceed the amount, which, when added to the funds otherwise available for distribution in the Operating Receipts and Expense Account, equals ten percent (10%) of the initial equity investment as set forth in said Exhibit B. D. No such distribution shall be made from any funds prior to the final closing or final disbursement of the proceeds of the NCTC Mortgage Loan, or when there is any default under this NCTC Regulatory Agreement or tinder the NCTC Note or NCTC Mortgage. E. No such distributions shall be made for periods prior to Mortgagor's fiscal year in which final closing or final disbursement of the proceeds of the NCTC Mortgage Loan occurs. Distributions may be made for the fiscal year m which final closing or final disbursement of the proceeds of the NCTC Mortgage Loan occurs covering the period from the beginning of said fiscal year to such final closing or final disbursement, to the extent that funds are available for that purpose as provided in Section 3A. hereinabove. F. Mortgagor shall have complied with all outstanding notices of requirements for proper maintenance: of the Developmrent. Any such distribution of any funds of the PPL Baan Labe Court, New Hope 1111199 New Conawwtion Tax Credit 11 98-NCTC-2558 Regulatory Agement NCTC Rgltry Agrmnt partner thereof will have any further or additional personal liability for the principal and interest under the NCTC Mortgage Loan either under the NCTC Mortgage or under the NCTC Note evidencing the NCTC Mortgage Loan. However, notwithstanding such provision of the NCTC Mortgage, Mortgagor understands and agrees that MHFA must preserve fully its powers under the Act, to the end that the purposes of the Act shall be fulfilled; and further, it is expressly agreed that nothing contained in such provision of the NCTC Mortgage or any other provision of the NCTC Mortgage shall be, or be deemed to be, a release or impairment of any obligation of Mortgagor or any general partner thereof under the Act, the limited partnership agreement of Mortgagor, the NCTC Building Lore Agremeot or this NCTC Regulatory Agreement and neither MHFA's exercise of its rights under or pursuant to any of the foregoing, nor the specific enforceability of any such obligation, shall be deemed to be probibited or impaired hereby. It is further expressly agreed that nothing contained in the NCTC Mortgage or this NCTC Regulatory Agreement shall be, or be deemed to be, a release or irrrlrairmnent of the indebtedness secured by the NCTC Mortgage and the lien thereof, and MHFA shall not be precluded from foreclosing the NCTC Mortgage in the event of any default thereunder. It is further expressly agreed that the Mortgagor and any and all general partners thereof are specifically liable and accountable to the MHFA for all terms, covenants and conditions set forth herein or incorporated by reference, except for that liability in reference to the principal and interest under the NCTC Notre and NCTC Mortgage evidencing and securing the NCTC Mortgage Loan, and further, such liability and accountability of the Mortgagor and general partners shall survive and continue beyond the period of final closing on the NCTC Mortgage Loan and for the duration of this NCTC Regulatory Agreement. 12. MUTUAL COVENANTS AND AGREEMENTS. The parties covenant and agree with each other as follows: A. That in the event that any teen, covenant or condition of this NCTC Regulatory Agreement shall be finally determined by a court of competent jurisdiction to be invalid, those terms, covenants or conditions so determined to be invalid are hereby declared severable and shall not affect the validity of the remaining portions of this NCTC Regulatory Agreement. B. That no waiver by either party of any term, covenant, or conditions of this NCTC Regulatory Agreement shall be binding unless in writing and signed by both parties hereto. C. That no amendment, modification or termination of this NCTC Regulatory Agreement shall be effective unless in writing and signed by both parties hereto. D. That this NCTC Regulatory Agreement shall remain in effect so long as MHFA is the holder of the NCTC Mortgage Loan, or any ingest tberein. E. That, except as otherwise provided herein, whenever any approval or notice by MHFA is required under this NCTC Regulatory Agreement, or whenever any action by MHFA is required or permitted, the Commissioner of MHFA, his successor or his authorized delegate, shall have the power and right to approve, give notice or act on behalf of MWA, as the case may be. F. That this NCTC Regulatory Agreement shall be binding upon the parties hereto and their respective permitted successors and assigns. 13. FURTHER PROVISIONS APPLICABLE TO MORTGAGOR. A. No amendments will be made to Mortgagors Certificate of Limited Partnership and partnership Agreement if it is a Limited Partnership, or to its Partnership Agreement if it is a General Partnership, which would affect the MHFA's rights under any of the terms and conditions of this NCTC Regulatory Agreement, NCTC Building Loan Agreement, Contract PPI. Bess Lake Court, New Hope ill t199 NeW Construction Tax Credit 13 98-NCTC-2558 Regulatory Agreement NCTC Rgltry Agrmnl IN WITNESS WHEREOF, the parties have executed this NCTC Regulatory Agmemerit the day and year first above written. PPL -BASS LAKE COURT LIMITED PARTNERSHIP a Kinnesoft limited partnership By: PROJECT FOR PRIDE IN LIVING, INC. a Minnesota - fit corporation General By: , dent 'r•a ��r.� iY�-, rr i 1 ,i STATE OF MINNESOTA ) ss COUNTY OF RAMSEY ) The foregoing instnunent was w1mowledged before no this 3rd day of February, 1999, by Steve Cramer, President of Project For Pride In Living, Inc., a Minnesota non-profit corporation, which corporation is the general partner of PPL -Bass Lake Court Limited Partnership, a Minnesota limited partnership, on behalf of said corporation and partnership. MME A. JONES NOTARY PUBLIC-NINNESOTA STATE OF MINNESOTA ) mr cam^ t L. 3L an ) ss. to COUNTY OF RAMSEY ) The foregoing instrument was acknowledged before me this 3rd day of February, 1999, by Robert L. Odman, Director, Multifamily Division of the Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota, on behalf of the Agency. MARIE A. JONES NOTARY PUBLIC-NiNMIr80TA tw coNw. DNQ wa t{, atto THIS DOCUMENT IS FOR THE BENEFIT OF THE STATE OF MINNESOTA AND IS E)(EMPT FROM REGISTRATION TAX PURSUANT TO MINNESOTA STATUTES, SECTION 287.176 AND CHAPTER 462A.19. M Hast [alts Court, New Hope 1111/99 New Cmtruction Tax Credit 15 98-NCTC-2558 Regulatory Agreement NCTC Rgltry Agtmnt coma of said Lot 32; thence Past parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 5: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 282.17 feet of the following descirbed tract: That pact of the West Half of the Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast our= of the North 6 acnes of the West Half of said Lot 32 to actual point of beginning; thence at fight angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 179.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof, thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 6: The East 56 feet of the West 282.17 feet of the South 60.50 feet of the North 174.87 fed of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Coking at the Southeast corner of the West Half of Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South nine thereof; thence East parallel with the South I= of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 7: The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly from the South line of said Northeast Quarter of the Southwest Quarter as measured along said West line and its Southerly extension, to a point on the East line of Murray Lane 3fd Addition 444.66 feet NorthaIy from its intersection with said South line. Being registered land as is evidenced by Certificate of Title No. 820577. Parcel 8: The South 145.2 feet of the West 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 9: The South 80 feet of the East 166.76 feet of the West 296.76 feet of Lot 32, Auditor's Subdivision No. 226, Hennepin County, Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. Abstract Property. PPL Baas late Caen, New Hope 1111199 New Construction Tax Credit 17 98-NC1'C-2558 Regulatory Agreement NCrC Rgit y Agtmot Age Canmwbor: Tern Agant Name clIckwhere appropriate:_: 0 Application Q Itltti8l CIOSIIIp 0 Selection ' 0 Pre-O&X43.4noy 0 Commitment OKFeli U1o81NI DATE. i12611e99 Hoo Ted T HDU: Rhonda M As.uhltsd HanL Age Canmwbor: Tern Agant Name a Phone Lisa Kugler MPIS 612.827.2188 Bob Silverman MIs 812-340-2742 Bob Lunnhu St. Paul 651-2214MS Watson-Fosbe Mpla 612 544-7781 Shall Pleiss MPIS 612-874-3302 MHFA MuNamity Underwriting Form 6197 1 2!211099 10:06 AM rl. PROPERTY DESCRIPTION: CDning' . Is property In historic district or designated a historic bullding? 0 Yes No 'mud 7:oning0assillodon.' R3, B3 Max. unitslacre: Are there iradances, conditional use permits -or special use pemrlls;requireo Yea0 No Is.: the propertyr In compliance_ with current: zoning requireto. i ?- . - O• °.Yes .:.. Q. No .. N No. what is 6.¢reposed retdglnp dassitloa9m. - Rep at remainder to R3 Inusuel Site Foshima. , - Flooriplaln 0Yes © No ,Hlgirtenelonwires- ' _ OYas No - Steep ravines ar grades Rode F4rmatlons a Y". 9 No I Yeg No - Near Airport Q Yes _ Poor Drainage iwYes ONO - Creek., lake to. _ Fill Yes: Q No _ [).Yes.No -With 30D feet of railroad HIgh,WsterTable 0 Yea No ;Yee g NO Q - Unstable soil Q. Yes Q No Industrial'] Envlrcnmenlai JJJ�azard j Yes O No - - llanning and Development Is the property In compliance with the. Comprehensive Plan ? -- - to Yes ❑•No [ Not Apptlesble Is the elle part of a larger development program? , No 0 Yes (attach applicable plan and written eonflrfnation from dtyt ' Type of Program: ❑ Neighborhood Revllatlratlon Plan ❑ Planned Unit Development (PUD) ❑ Housing and RedevslopmeM Authority (HRA) ❑ Tax Int;r mil t Financing'(TIF) ❑ mar Spew or will the development be connected to the following: Munielpal Water O yes 0 No r Municipal Sewer O Y® O No • Gas (9) Yes 0 Mo CElectric - :QQ Yes ON. -Off-aIle public improvements necessary ? Q No Yes (state nature, amount and plan for construction) Its Control Does Applicant currently control the propertyAmliding? - - * Yes _ . O No _ Type of SHA Control:. Deed, Purchase Agreement, Condsminatlon by city If Ownership:, Purchase Price of the ProperWBulldiing: Date of Purchase: H Purdreae Is Proposed: Date of Purchesel)pifon Agreement Nov -199H Expiration Date of PurchasslOption Apeornaft ftp -19M Type of Existing Loan: ® Mortgage. ®CoMrad for Deed . m ❑ Other: � ❑ IQbrts , Currant Indabtsdnass oa thla Promulldl : For Exktlne Inane: 1st Lander :2nd I.endar MHFA Muitilamily Underwriting Form Br97 3 t'/211999 10:06 AM 98-NCTC-2566 m i PmA m CY ANreuAL urcnA inm rwwwF ata: 636 869 B. Debt CaverW Ratio Ia. " Advertising and Markdrig . 51,920 (Net Operating Intone (W il.K) divided by Debt Service Reserve (1X,81)) 1b. Management Fee Otter 3uboldlnated Debt 5 Per Un8 Per Month Fee, ' . $23 flats Term % of Toial Revenue less TIF. 64%. $10,660 2. Lender 10. Legal $647 Pdndpai 5 Annual Debi Service S "1d AudlUng. 51.294 £ Net Operating Income (NO{) less Tata) Annual Subordk%& d Debt Service" , As". Telaphorw 11 21 42 F. Estimated Maximum Mortgage Based on IrKwne Apploseh. " 1i On site"Management Payroll $7,765 Term: 20 Yearn pods. 5.90% - Yam 20 . �y:. ; " Odrer AdrrJNslredai51,320 b) Plus Annual Fee :GM% (W FA. .1h. 7oM1 Administration (Total Linea 1e thru 1p) $24.74B 20: Elevator Meln)erence hCcrltrect L Net Mortgage Loan Qftdmum Ifie rtgege dhilded W1.04) 1y1.04)(Applies 2b. ; ' Exterminating$2,M .$334,81 D 4.. Development Coat Escrow (DCE) 2c. - Rubbish Removal $2.310 . 2d Odler.Conllee#SWAMS 2.. e Jammer Supplies 5776 21.:. " Malritanam a Supplies' S4 465 2g Grounds Maintenance - $3,052 . 2h SrwW Removal - " 517 - 2L Haat & AIC Repay Services ' 2j..:, .. Qenerel Repair Services$7,318 2k s PakWDaporadng Materials 55.E 21. Malnlanerroe & Jail. PaiRm $9.139 Other Maintanafrpe and rating"_ 2n: "Other"' MitOP sp1C3f4He/lAhne. 545,147 ` 2* •i �TotslMaintenance -(TOW Lines 20thru2n)" $82.397 9e Electricity :. _ $1.747 - 3b Water & Sewer" - $13,688 80. Gas and ON E77G '111 3d Total Utilities (Total ones 3a thfu 8c) 1 Insurance F. n$4400 1L TOTAL'MANAGEMENT AND OPERATING EXPENSES 4ACICIUM0.1h,G.20,0.3d, andO.41 27.656 .1. Tout Mgrnt. and Operating Expenses Per Unit Per Mo. {Line H. / Total / Units 112 - 1319 1. RESERVES AND ESCROWS 1, Heal Estate Taxes - S Per Unit $1,011 :.... X"t Units°: -_ S343GG 2. Replacement Reserve - S Per Row $20 r 'X M Roomms= $4.350. _ 3. Painting A Decorating Reserve - $f Room VD: 'X / Racros. $6,540 4. Misce6aneow Reserves -$ Per Room . X I RoomBw 6.Totel Reserves & Escrows (Total Lines 4.1 thru IA) J. EFFECTIVE GROSS EXPENSES (Add L hos H and 1.6) - otw Millifft. and Owalfro Expenses Ous Reserves and Esi rows 172.922 A. Net Operating Income (Line VIILK) - It aero ($0) or minus, side this sedion.and go to Secllon X. 636 869 B. Debt CaverW Ratio 1.15 G, Net Operating Incoms Available for Debt Service (Net Operating Intone (W il.K) divided by Debt Service Reserve (1X,81)) 866 D. Annual Debt Service for proposed Subordinated Debt, if any: Otter 3uboldlnated Debt 1. lender - - - -Years flats Term Pdndpel $ Annual debt Service 5 2. Lender Hale Term- Years Pdndpai 5 Annual Debi Service S S. Total Annual Subordinated DM Service: £ Net Operating Income (NO{) less Tata) Annual Subordk%& d Debt Service" , (Una IX.0 minus Line IX.D 3) s33 886 F. Estimated Maximum Mortgage Based on IrKwne Apploseh. " 1. Fist Mortgage Term - WCTO Oplfcn _ ~ Term: 20 Yearn pods. 5.90% - Yam 20 a) DsWServlceFactor a9e231M8B ;Amortization b) Plus Annual Fee :GM% (W FA. c) Total Debt Service Factor::-0.09781GM 2. Maximum Mortgage $30,202 (Nat Operating Income ( IX.E) divided byTbtsl Debt Swvkma Fpclor ( KF.i.c) L Net Mortgage Loan Qftdmum Ifie rtgege dhilded W1.04) 1y1.04)(Applies (Appliesto MHFA 1 st Mortgags berm only) .$334,81 D 4.. Development Coat Escrow (DCE) 319 3g2 MHFA MultRamNy Underwriting Form 6197 5 2MM999 10:06 AM KI. EQUITY REQUIREMENTS: S.New HWeEDA 50 yrs 1.00%6 A. Gross TDC (from XE above] (NOTE: MHFA First -Mo r�age only) ", - f . $177 25B ":. $6:026.780 OR Total Development Coat PCD) {Nan-MFIFA First Mortgage Per.UnK , B.MHFA ARIF 30 yrs 1.00% $130.000 - . 4; ' B. Maximum Mortgage Us," (MHFA) (L ine.IX.F.2) or'.:- " 11O.Farrilly Hsu Fund 30 VfS 1.00% $200.000 $15m, Non -Agency 1st Mortgage ' ^. $10,241 $348 202 Par" . 4. Insurance Escrow (MHFA detemllnss_$) for. A41HFA tat MoMW `C: Adcllonel Fundng Needed (XIA: mhtus Xl B) -$T 167.017 $5,676,578 6, Other - List: Per Unit E. U.: Addbh mel F.Widnlx .... F. Maximum Allowable Remm an Equity (10% el owner cash .Lire XI.D.1, plus 10%6 of ayndioadon proceeds tire' XI.D.2, Corrlmlllsd . 5228.504 Name of SourceTerm . - .: Aaie . Amount Par IInK 1:Ownar Cash REHABILITATION INCENME LOAN WORK MEET- f MHFA nnst Mod"pa Rehab Only} Yes TOTAL DEVELOPMENT COST (Etna X.D) $8.018.388 2. 2.ftmd.4 Procasds" $1 712.098 `5934.810 You 3. TOTAL EQUITY REQUIREMENT (Line XV.1 minus Line XV2) 3.mHFA IncerlKve Loan 4. TOTAL ADDITIONAL FUNDING ON LINES M.D.5 THRU XI -0.8 Yes S. EQUITY REQUIREMENT LESS ADDITIONAL FUNDING LIVES XI.DS THRU XI.D.8 (Una XV.3 minus Line XVI$1,712.096 S. 4.MHFA Briclas Loan.-'. {501 7. ,Yes B. L S.New HWeEDA 50 yrs 1.00%6 SlAW.000 1178 Yea. " We Yes yes ' Yes 6.Henn. Home 20 1.0046 $680,000 _ 000 7.MHOPGrant" Grant 0% $1258 B.MHFA ARIF 30 yrs 1.00% $130.000 - . 4; ' 9.Mal Council LHIA Grant 0% $200 000 -e `' :; i8B2, 11O.Farrilly Hsu Fund 30 VfS 1.00% $200.000 $15m, .MHFA lst irbrDgage only Wth pnoccupiad building -- - MHFA Muillfamily Underwriting Form 8(97 7 =M999 10:06 AM ..TOT 678.578 $167,017 E. -Other R6qulF8fr0 to 1: Walking 03018E Escrow 13%.61 Line IXIF2 - IMHFA Net Mortgage]' MHFA lsl n0gage onl9 - $10.044 2: Rent Up Escrow:(3% of Line IX.F.S - MHFA Ne1.ModMs)• .MHFA lst irbrDgage only Wth pnoccupiad building -- - .;10.044 3. Completion Aesurence Escroww ( MHFA detennlrre3 $) • . 4. Insurance Escrow (MHFA detemllnss_$) for. A41HFA tat MoMW S. Other"LM:. 6, Other - List: 'Can be Cash or Lefler of CTed t. . F. Maximum Allowable Remm an Equity (10% el owner cash .Lire XI.D.1, plus 10%6 of ayndioadon proceeds tire' XI.D.2, plus1% ol (TDC, Lim XD., minus Developer Fee. Line X.C.S J.)) 5228.504 G. Other CandlNona: Xv. REHABILITATION INCENME LOAN WORK MEET- f MHFA nnst Mod"pa Rehab Only} I. TOTAL DEVELOPMENT COST (Etna X.D) $8.018.388 2. AGENCY NET MORTGAGE LOAN (Lina 1".3) `5934.810 3. TOTAL EQUITY REQUIREMENT (Line XV.1 minus Line XV2) $5,078,578 4. TOTAL ADDITIONAL FUNDING ON LINES M.D.5 THRU XI -0.8 : $3.086,480 S. EQUITY REQUIREMENT LESS ADDITIONAL FUNDING LIVES XI.DS THRU XI.D.8 (Una XV.3 minus Line XVI$1,712.096 S. EQUITY REQUIREMENT LESS SYNDICATION PROCEEDS (LINE XV.5 Wnus ADA {501 7. EQUITY ATTRIBUTED TO REHAB UNITS ¢Ins X.B-2.m I (Lines X.B.2.m +X B;i,j }) Off=' Una XV.6 B. MINIMUM REQUIRED OWNER EQUITY ($1,000 Ilmes NUMBER OF REHAB UNITS) ' 9. OWNER EQUITY THAT WILL BE MATCHED (Line 7 minus Llrte 8) 10. TO CALCULATE R40ENTIVE LOAN. THE FOLLOWING QUESTIONS MUST . . BE ANSWERED 'YES' a- Owner's cash equity Ise $1.000 x number of rehab units - b. The Gross Rehabilitation Cost ()(.3.2.m) exceeds $1,000 x number of rehab u►Yk. a Mortgage to ma imum based on Income approach. ' 11, INCENTIVE LOAN IS EQUAL TO THE LEAST OF LINES I i a b, or. ! a. Gross Rehabilitation Cast less $1.000 Imes numberrah wtlta. ' . ((X.B.2.m) minus ($1,000 x # of rehab urMs)] I). Loan cannot exceed $3,000 x number of rehab Lwft. s M Loan cannot exceed 80% at. Una 9 I2. REHABILITATION INCENTIVE LOAN: LEAST OF LiNE6 1Q a, t+, or'r; MHFA Muillfamily Underwriting Form 8(97 7 =M999 10:06 AM EXHIBIT C Lease D:1MNN12510MOCSITAX CREDIT MGT AGREE.DOC C-1 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT 11 September 30, 1998 Number of Bedrooms: Annual Recertification Date: LEASE for LOW RENT PUBLIC HOUSING I. PARTIES AND DWELLING UNIT: (a) Premises: Project Name Address Unit 2. (b) Owner: Address (c) Merger Address (d) Tenant: Head(s) of household Family members LEASE TERM AND RENT PAYMENT: (a) Term. This Lease shall begin on provided by this Lease, the term shall (check one): 0:1NNN12SWt7WWS%,EASE.000 1 Unless terminated as LEASE FOR LOW RENT PUBLIC HOUSING the last month's rent, and further, all subsequent penalties described in this statute will apply. 4. OCCUPANCY: (a) Purpose. The Tenant has the right to exclusive use and occupancy of the dwelling unit, which includes use by those named in Section 1 of this Lease, minor children born into the household during this tenancy and reasonable accommodation of the Tenant's guests, visitors and, with the consent of the Manager, foster children and the live-in care giver of the Tenant's family. The Tenant must live in the dwelling unit and the dwelling unit must be the only place of residence. (b) Commercial Activities. With Manager consent, members of the household may engage in legal profitmaking activities in the dwelling unit, where the Manager determines that such activities are incidental to primary use of the leased unit for residence by members of the household. (c) Prohibited Activities. The Tenant shall not: (i) permit any persons other than those listed above and minor children which are born into the household during this tenancy, to reside in the dwelling unit without obtaining the prior written approval of the Manager; (ii) sublet or assign the unit, or any part of the unit; (iii) engage in or permit unlawful activities in the unit, in the common areas, or on the project grounds; . (iv) have pets or animals of any kind in the dwelling unit; (v) act and cause household members or guests to act in a manner that will disturb the rights or comfort of neighbors. The Tenant agrees to keep the volume of any radio, phonograph, television, or musical instrument at a level which will not disturb the neighbors; (vi) permit any member of the household, a guest, or another person under the Tenant's control to engage in any criminal activity that threatens the health, safety, or right to peaceful enjoyment of the premises by other residents or employees; or any drug related criminal activity on or near the pra►ises; ri:11 MI2S1Q17MOCK.EASE.0OC 3 LEASE FOIL LOW RENT PUBLIC HOUSING (b) Utility Allowance and Excess Utility Surcharges Schedules. The Utility Allowance Schedule for Tenant Paid Utilities and the Schedule of Excess Utility Surcharges is posted in the Manager's Office and is Attachment #3 of this Lease. (c) Schedule Revisions. The Manager shall provide the Tenant with no less than 60 days notice prior to the proposed effective date of scheduled revisions to the Utility Allowance Schedule or the Schedule of Excess Utility Surcharges. Such notice shall: (i) describe the basis for the allowance or revision; (ii) include a statement of specific items included in determining the utility consumption and dollar amounts in the allowance or revision;. (iii) advise Tenants where they may review the Managets records which document the basis for the allowance or revision; and (iv) provide Tenants an opportunity to submit written continents within a 30 day period. This comment period will expire no less than 30 days prior to the proposed effective date of the allowance or revision. 8. ANNUAL RENT RECERTMCATIONS: (a) Information Required. Each year by the date specified by the Manager, the Tenant shall provide accurate statements regarding income, assets, expenses, and family composition. The Manager shall verify the information supplied by the Tenant and use the verified information to establish the amount of the Tenants rent. (b) Interim Rent Reviews. In cases where annual income cannot be projected for a twelve-month period, the Manager shall preschedule special interim rent reviews between the annual rent recertification. The Tenant may meet with the Manager to discuss any change in rent resulting firm the recertification process, and if the tenant does not agree with determination of tenant rent, the tenant may request a hearing in accordance with the grievance procedures of the Economic Development Authority in and for the City of New Hope (the "Authority"). 9. INTERIM RENT ADJUSTMENTS: The Tenant should promptly report to the Manager any of the following changes in household circumstances when they occur between annual rent recertifications: D:V M125*17WOCSu.BASE.DOC 5 LEASE FOR LOW RENT XMLIc musim 12 Tenant is not required to reimburse the Manager for undercharges caused solely by the Manager's failure to follow United States Department of Housing and Urban Development ("HUD") procedures for computing rent. MAINTENANCE: (a) Tenant Obligations. Tenant Agrees To: (i) beep the dwelling unit and any other areas assigned for the Tenant's exclusive use in a clean and safe condition; (ii) use all appliances, fixtures and equipment in a safe manner and only for the purposes for which they are intended; (iii) not litter the grounds or common areas of the project; (iv) not undertake, or permit his or her family or guests to undertake any hazardous acts or do anything that will damage the property; (v) not destroy, deface, damage or remove any part of the dwelling unit, common areas, or project grounds; (vi) give the Manager prompt notice of any defects in the plumbing, fixtures, appliances, heating and cooling equipment or any other part of the unit or related facilities; (vii) remove garbage and other waste from the dwelling unit in a clean and safe manner; (viii) pay reasonable charges (other than for normal wear and tear) for the repair of damages to the premises, project buildings, facilities or common areas caused by the Tenant, his or her household or guests, and to do so within 30 days after the receipt of the Manager's itemized statement of the repair charges. The Damage and Service Charge Schedule is posted in the Manager's office; (ix) Other_ (b) Manager Obligations. The Manager agrees to: (i) maintain the premises and the project in decent, safe and sanitary condition; D:11INN12N17WOMNLEASEDOC 7 LEASE FOR LOW RW PUBLIC HOUSING 13. RESTRICTION ON ALTERATIONS: The Tenant shall not do any of the following without first obtaining the Manager's written permission: (a) dismantle, change or remove any part of the appliances, fixtures or equipment it the dwelling unit; (b) paint or install wallpaper or contact paper in the dwelling unit; (c) attach awnings or window guards in the dwelling unit; (d) attach or place any fixtures, signs, or fences on the buildings), the common areas, or the project grounds; (e) attach any shelves, screen doors, or other permanent improvements in the dwelling unit (f) install or alter carpeting, resurface floors or alter woodwork; (g) install washing machines, dryers, fans, heaters, or air conditioners in the dwelling unit; (h) place any aerials, antennas or other electrical connections on the dwelling unit; or (i) install additional or different locks or gates on any doors or windows of the dwelling unit. (j) Other: 14, ACCESS BY MANAGER (a) Notice. The Manager shall provide two days written advance notice to the Tenant of his or her intent to enter the dwelling unit for the purpose of performing routine inspections and maintenance, for making improvements or repairs, or to show the dwelling unit for re -renting. The notice shall specify the date, time, and purpose for the entry. The Tenant shall permit the Manager, his or her agents, or other persons, when accompanied by the Manager, to enter the dwelling unit for these purposes. In the event that the Tenant and all adult members of the household are absent from the dwelling unit at the time of entry, the Manager shall leave a card stating the date, time and name of the person entering the dwelling unit and the purpose of the visit. (b) Emergencies. The Manager may enter the dwelling unit at any time without advance notice when there is reasonable cause to believe an emergency exists aUNN12Doinoocs LEAS&noc 9 masa FOR yaw RENT Quark HOUSING (v) failure to abide by necessary and reasonable rules made by the Manager for the benefit and well being of the housing project and the Tenants; (vi) failure to abide by applicable building and housing codes materially affecting. health or safety; (vii) failure to dispose of garbage, waste and rubbish in a safe and sanitary manner; (viii) failure to use electrical, plumbing, sanitary, heating, ventilating, air conditioning and other equipment, including elevators, in a safe manner; (ix) acts of destruction, defacement or removal of any part of the premises, or failure to cause guests to refrain from such acts; (x) failure to pay reasonable charges (other than for normal wear and tear) for the repair of damage. to the premises, project buildings, facilities or common areas. (xi) any activity not just criminal activity that threatens the health, safety, or right to peaceful enjoyment of the premises by other tenants or employees of the Owner or Manager, (xii) any drug-related criminal activity on or off the premises, not just on or near the premise; (xiii) alcohol abuse that the Manager determines interferes with the health, safety, or right to peaceful enjoyment of the premises by other residents or (xiv) other good cause. (c) Reduction in Operating Subsidy. (i) It is understood by the parties hereto that the operating expenses of the dwelling unit are being paid, in part, by certain subsidies to be received by the Owner from the Minneapolis Public Housing Authority in and for the City of Minneapolis (the "MPHR"). Such operating subsidies are, in turn, to be received by the MPHR from HUD and are subject to appropriation by the United States Congress. Pursuant to a Regulatory and Operating Agreement between the Owner, the MPHA and the Authority, in the event that, for any reason, the Owner does not receive sufficient operating subsidy to make up the difference between (i) the cost of operating the dwelling unit, and (ii) the rent paid by the Tenant (taking into account certain reserve funds), the Manager shall have the right, subject to the D NAM12510I MMSILEASE DW l I WASE FOR LOW RENT PUBLIC HOUSING The notice to vacate required by State or local law may be combined with or run concurrently with a notice of Lease termination (b) Service of Notice. The notice of Lease termination from the Manager shall be either personally delivered to the Tenant or to an adult member of the Tenant's family residing in the dwelling unit, or sent to the Tenant by First Class Mail, property addressed, postage prepaid. (c) Content of Notice. The notice of Lease termination shall: (i) specify the date the Lease shall be terminated; (ii) state the grounds for termination in sufficient detail for the Tenant to prepare a defense. The Manager shall rely solely on the grounds stated the Notice of lease Termination in the event eviction action is initiated; (iii) advise the Tenant of the right to reply as he or she may wish, to examine the Manager's documents directly relevant to the termination or eviction, and to request an Informal Hearing (as described in Section 17(c)(iv), below) in accordance with the Authority's Grievance Policy, and/or to defend the action in court; (iv). advise the Tenant of the right to request an Informal Grievance Hearing within ten (10) working days. The notice period shall begin on the earlier of the date the notice was hand -delivered or the day after the notice was mailed. The purpose of the informal hearing is to attempt to resolve the issue(s) without resorting to the Formal Grievance Hearing and/or Court Eviction; (v) state to the Tenant they are not entitled to a grievance hearing on the termination, and the judicial eviction procedure provides the opportunity for a hearing in court that contains the basic element of due process as defined in HUD regulations; and (vi) advise the Tenant of any proposed adverse actions by the Manager. 18. LEASE TERMINATION BY TENANT: The Tenant shall give the Manager one month plus one day written notice before moving from the dwelling unit. If the Tenant does not give the full notice, -the Tenant shall be liable for rent to the end of the notice period or to the date the dwelling unit is re -rented, whichever date comes first. 14. TERMINATION OF LEASE UPON DEATH OF TENANT: Upon the death of the Tenant, or if there is more than one Tenant, upon the death of all Tenants, either the D.WNN12M I71DOCS1 AMEMOC 13 LEASE FOR LOW EENT ]PUBLIC HGUSING 22 GRIEVANCES: (a) [grievance Policy. All individual grievances or appeals, with the exception of those cases concerning eviction or termination of tenancy which are based upon a Tenant's creation or maintenance of a threat to health or safety of other Tenants or Manager employees, shall be processed under the grievance policy established and maintained by the Authority. This policy is posted in the management office where copies are available upon request. (b) Grievance Hem= for N2nAarnent of Rent. Before the Authority shall schedule a Grievance hearing for any grievance concerning the amount of rent the Manager claims is due, the Tenant must first bring his or her rent account current by paying to the Manager an amount equal to the amount of rent due and payable as of the first of the month preceding the month in which the act or failure to act took place. Aller the hearing is scheduled, the Tenant shall continue to deposit this same monthly rent amount into the Manager's escrow account until the complaint is resolved by the decision of the hearing officer or panel. (c) Grievance Hearing for Lease Termination. When the Authority is required to afford the Tenant the opportunity for a hearing concerning the Lease termination, the tenancy shall not terminate (even if any notice to vacate under State or local law has expired) until the time for the tenant to request a grievance hearing has expired, and (if a hearing was timely requested by the Tenant) the grievance process has been completed. 23. CHANGE IN LEASE AGREEMENT: (a) Notice of Proposed Change. The Manager may change the provisions of this Lease. The Manager shall provide the Tenant with at least 60 days advance written Notice before the Lease change bmarnes effective. (b) Notice Content and Tenant Input. The Manager's notice shall: (i) advise the Tenant of the proposed change to the Lease; and (ii) provide the Tenant with the opportunity to submit written comments within a 30 day period. (c) Notice of Change. If, after considering the Tenant's continents, the Lease is to be modified, the Manager shall notify the Tenant and offer the Tenant a new Lease or an addendum to the existing Lease. The Tenant may accept the changed provisions by signing the new Lease and returning it to the Manager, or the DIM12AOIrMOCHAASLDOC is LEASE FOR LOW REM' PUBLIC NOusiNG Signatures: z) (Date Signed) (Date signed) (Date Signed) D:IMWI ZA0 17W OM EASE.DOC 17 LEASE FOR LOW RENT PUBLIC HOUSING EXHIBIT D Marketing Agreement D:%NgN1251017\DOCS\TAX CREDrr MGT AGREEDOC D-1 NWA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT MHFA MARKETING AGREEMENT THIS AGREEMENT Is made this day of 19 __ between (the Owner) and (the Agent) In consideration of the terms, conditions and covenants hereinafter set forth, the Owner and Agent mutually agree as follows: As used in this Agreement 101.1 "MHFA" shall mean the Minnesota Housing Finance Agency as established under the provisions of the Minnesota Housing Finance Agency Act, Minnesota Laws, 1971,Chapter 702, as amended. 101.2 "Development" shall mean the real property and the improvemenis, buildings, appurtenances and equipment thereon, of the Owner known as (MHFA 0 f. located In the City of County of State of Minnesota, and consisting of dwelling units, garage spaces to be rented, and square feet of commercial area. 101.3 "Lease" shall mean the form of agreement between the Owner and a Resident under the terms of which said Resident is entitled to enjoy possession of a dwelling unit. 101.4 "Rent" shall mean that monthly amount which a Resident is obligated to pay the Owner pursuant to the terms of a Lease. 101.5 "Resident' shall mean a person occupying a dwelling unit In the Development pursuant to a Lease. Section 201 • The Owner hereby appoints the Agent, and the Agent hereby accepts appointment, on the terms•and conditions hereinafter provided, a$ exclusive marketing agent for the Development. �Ctlnrs .w`w�11bUWljMUn hk iMpIr mei Agiv it iUiiy 104 16 in6 iaii(J ilial il;i Owner is a limitedd-profs or non-profit housing entity receiving a mortgage ban from the MHFA, and Is required to comply with the Act and riles and regulations of the MHFA. 1 Revised 4/90 The Agent further fully understands that the operation of the Development is subject to a Regulatory Agreement (attached as Exhibit "A") and that approximately % of the dwelling units in the Development will receive the benefit of subsidy payments under Section of the National Housing Act from the United States'Department of Housing and Urban Development pursuant to the attached agreement(s) (Exhibit 'B" among the Owner, MHFA and the United States Department of Housing and Urban Development (HUD). In the performance of its duties hereunder, the Agent agrees to become conversant with and comply with the provisions of the Act, the policies, procedures, rules and regulations of the MHFA, the Regulatory Agreement, and the agreement(s) which will provide federal subsidy assistance as set forth in Exhibit "8". all as amended from time to time and receipt of which is hereby acknowledged by the Agent. Sgglian 401. Confer mfth QW= MHFA and fAftnaomant Agent, The Agent agrees to keep itself informed on the policies of the MHFA, and, notwithstanding the authority given to the Agent in this Agreement, to confer fully and freely with the Owner, the MHFA, and the Management Agent In the performance of its duties hereunder. Sectionr and Manag@MantA&qa The Agent agrees to cause an officer of the Agent to attend meetings with the Owner and Management Agent at any time or times requested by the Owner, Management Agent, or MHFA. Section Bill. The Agent agrees that matters relating to the marketing of the Development, including but not limited to (a) advertising, (b) promotion. and (c) staffing, are subject to prior review and approval of the Owner; and at the option of the MHFA, to the prior review and approval of the MHFA. X41• GAneral Functions ofAgent The general functions of the Agent shall include: 701 i Frupwaflun slid irnpiainwilalion.of file j"rKwft riang. n'K:iuGryj a Resident Selection Plan, and an Affirmative Marketing Plan In a form and manner acceptable to the Owner and MHFA, which plans are attached as t:xhffifts "C' and ED-. and made a part hereof. 701.2 participation in pre -occupancy conferences and training sessions on MHFA requirements with the MHFA, 2 Revised 4180 701.3 Participation In final construction inspections and acceptance of dwellings by Owner. 701.4 Processing of initial applications for rentals; selection of and securing executed leases by initial Residents, including collection of the Security Deposit and, in some cases, the rent for the first month of occupancy; inspection of dwelling Units prior to Initial occupancy: Coordination of move -ins; and orientation of the initial Residents. The Marketing Agent shall closely coordinate its activities with the Management Agent. jBiZion 891. F311013is 801.1 The Agent shall use its best efforts to Cause the dwelling units to be promptly rented to the Initial Residents of the Development, and if appropriate and so agreed. shall similarly lease parking spaces, commercial areas, and other facilities and concessions in the Development. In the event that Residents who enter the Development under leases prepared by the Agent should, during the term of this Agreement, for any reason vacate the leased premises pilar to the end of their initial lease term, Agent shall re -lease said premises In accordance with the provisions of Section 1801.2 below. 801.2 The Agent shall hire in its own name and have physically present Qt the Development. all marketing personnel necessary for the full and efficient performance of its duties under this Agreement, including the physW presence of a responsible person at such time as may reasonably be requested by the Owner and MHFA. In any event, not less than responsible marketing person(s) of the Agent shall be physically present at the Development not less than - hours per day. _ days per week. Compensation for the services of such personnel shall be the responsibility of the Agent with the reimbursement therefore as provided in Section 1601 below. 801.3 The Agent shall determine rent levels in accordance with MHFA and Federal guidelines and standards. go- Tl�e Agm,ii agrboa ti pro-rais the firs[ Moign',s-taid 006W-iad iron the Resident should the Resident move -in on any other day than the 1st olthe month. 801.6 -The Agent shell not make rent concessions unless the concessions are specifically authorized by the Owner and MHFA. 3 Revised 4190 Section 9d1 Resident Selectins Pology 9131.1 The Agent shall show the premises to prospective Residents and shall follow the Resident Selection Policies of the MHFA, ' 901.2 Admission to the Development shall be limited to persons whose incomes do not exceed the limits prescribed by MHFA, with the exception of those persons not subject to income limits, in accordance with the MHFA approved "Resident Selection Plan' (asset forth In Exhibit *CJ. 901.3 Except for occupancy limits due to the size of the apartment or design of the Development or for dwellings designed for elderly persons, occupancy shall not be restricted on the basis of children. Section 1001. ApplicillinnA The Agent shall receive and process applications for occupancy. If an application is rejected, the applicant shall be notified in writing of the reason for rejection (and shall have the right to review the decision with a representative of the. Owner, oMor than the Agent), The application (with the reason for rejection noted thereon) shall be kept on file for a period of not less than throe years. The Agent shall maintain a current list of PmapectNe Residents. $action 11131. Lease Formn, 1101.1 The Agent shall complete for execution by initial Residents during the term of this Agreement (and for any replacement Residents as provided In Section 1841,2 heroin) all leases for dwelling units (an, if appropriate, leases for commercial facilities, parking spaces, and licenses or other agreements with concessionaires) on forms approved by MHFA, and,shall, at the option of the Owner, either execute such documents in its name, identified as Agent of the Owner. or forward the leases to the Owner for execution by the Owner. 1101.2 The Agent shall loo that all initial Residents are Informed with respect to such rules, regulations. and notices as may be promulgated by the Owner or Management Agent. 1101.3 The Agent shall lease dwelling units for the term of one (1) year, unless specifically authorized to do otherwise by the Owner and MHFA. n 12Q1. Rent Sched'uMg_ 1201.1 The Owner shall furnish the Agent during the term of this Agreement with rent schedules, showing market rents and, if applicable, Section a rents for dwelling units, and other charges for facilities and services. 4 Revised 4190 1201.2 The Agent shall advise all prospective Residents regarding eligibility (pursuant to MHFA and Federal crlterla) for rents less than market rents. 1201.3 The Agent shalt prepare and verify eligibility certifications (and recertifications which occur during the term of this Agreement) on the basis specified by MHFA. The Agent shall obtain written evidence substantiating information given on Residents' certifications of income. Such information shall be retained by Agent and delivered to Owner at the expiration of the term of this Agreement 1201.4 If applicable, the Agent shall negotiate commercial leases and concession agreements, and shall execute the same in he name, Identified thereon as Agent for the Owner. $action 1301. Rent and Becuft DepardtZollection. _ 1301.1 The Agent shall Collect security deposits and the first month's rent from initial Residents. Deposits and rent shall not be accepted in cash by the Agent. Thereafter, the Management Agent will be responsible for all rent collections and lease enforcement in accordance with the Terms of the Developments' Management Agreement affixed hereto as Exhibit "E'. 1301.2 Such receipts shall be forwarded forthwith by the Agent to the Management Agent for recordng and deposit. Sectinn 1401.1401. t 1401.1 The Agent shall furnish, at its own expense, a fidelity bond for to protect the Owner and MHFA against misapplication of funds of the Development by the Agent and Its employees. The terms and conditions of the bond, and the surety thereon, shall also be subject to the approval of the Owner and MHFA. b%9JM n 15n1 The Agent agrees to prepare and submit in a manner saysfactary to the Owner and the MHFA all forms and reports required by the Owner and the MHFA. These reports and forms will include, but are not limited to, the following: (1) monthly marketing and afhrmativo marketing report, (2) a monthly statement outlining the expenditures In the previous month on the items Eft. r_..�s _ .....:.:��i.= .~.��:::'� fwd �N,y�—n f .., r;lisss_ r a ��:�rr�,ly basis of all Agent approved aPPIICMions and related documents to the MHFA for review in accordance with the Regulatory Agreement. The Agent agrees that representatives of the Owner and the MHFA shall have full and free access during working hours and on reasonable notice, to all of Agent's relevant records and books relating to the Development. 5 Revised 4190 1601.1 The Agent shall pay for the costs of its supervisory personnel and all expenses incidental to the operation of the rental office, including postage for routine mailings, non -marketing related telephone expenses, office supplies and stationery; save and except for heat, electricity, water, sewer end maintenance (which costs will be borne by the Owner). It is expressly agreed that the fee provided in Section 1601.1 hereof shall be deemed to include full compensation for the expenses provided in this Section 1601.1. 1601.2 In accordance with the approved Marketing Pian, including the marketing budget, the Agent agrees to arrange for and pay all costs of (a) on -she sales personnel, (b) credit reports, (c) graphics and signs, (d) public relations and newsletters, (e) the design and furnishing of model apartments and the rental office, m brochures and printed materials, (g) advertising, and (h) postage on such mass mailings as the Owner shall authorize. 1601.3 Owner agrees to reimburse Agent for all expenditures set forth in Section 1601.2 above, on a monthly basis. to the extent of the agreed budgeted amounts for each expense category, provided all such expendtures aro made in accordance with this Agreement. Agent will consult with the Owner and MHFA regarding the timing of such expenditures. The Owner shad furnish the Agent with a suitable office and, it required by the attached iMaftdng Plan, model space on the site of the development. 1601.1 The sole compensation which the Agent shall be entitled to receive for all services performed under this Agreement On addition to reimbursements as provided In Section 1601, above) shall be a fee of S per market rate (unsubsidized) apartment rented and $ per subsidized (federally -assisted) apartment rented during the term of this Agreement. These fees shall be due and payable only in the event and only upon the execution of an app—"Gd i__dGaQ a... Y�' aft Oa�flQ "Y�NlUra{'�yN HAY ariwiiii'v� till: :i'a�.:. it moi: •--•••:i =ra= the rental payment due the Owner at the inception of occupancy. Such fees shad be payable at the and of each month on the basis of tees earned during that month; provided, however, that up to 20% 01 the total fee anticipated for the development may 6 Revised 4190 be advanced to the Agent when the marketing campaign is formally Initiated (subject to approval by the MHFA). Fees earned prior to the date of termination, as provided in Section 2001, below, shall be payable at the end of the month %flowing the date of termination. It Is expressly agreed by the Agent not to solicit or receive directly or indirectly any commission, bonus, gratuity, fee or any other payment from any person interested in the tiling of an application or in the obtaining of a lease for property in the Development. 1801.2 The Agent Is responsible for selecting acceptable Residents who will fulfill their lease requirements. In the event that any Resident whom the Agent shall place in the Development pursuant to this Agreement, shag, during the term of the Agreement, terminate, abandon, or otherwise vacate the leased premises prior to the expiration of the initial term of said Resident's lease, Agent agrees, for no additional fee or compensation, to re -lease said apaMrnent to an eligible Resident Section 1 sn1 _ . in the performance of its obligations under this Agreement, the Agent will comply with the provisions of any federal, state or local law prohibiting discrimination in housing on the grounds of race, color. sex, creed or national origin, Including Tale VI of the Civil Rights Act of 1964 (Public Law 88.352, 78 Stat, 241). all requirements imposed by or pursuant to the Regulations of the Secretary of HUD (24 CFR. Subtitle A, Part 1) issued pursuant to that Title; regulations issued pursuant to Executive Order 11063, and Title Vill of the 1968 Civil Bights Act. 1901.1 This Agreement may be terminated or suspended, In whole or in Part. by the Owner or MHFA upon the basis of a finding by the Owner or MHFA that the Agent has not complied with this non-discrimination provision. $ectien01,Term pi AnMgMilnt And -G0100011 2001.1 Unless sooner terminated as herein provided, this Agreement shall be in effect from the date set lonh above until 95% occupancy has been achieved, as determined in the Owners sole discrtition. However, this Agreement shall not be deemed binding on the parties until approved in writing by MHFA. Th -Lrrr 1.,, •Iqa IYVI/•dl/, IIY' Y� •til •1 .,=..J Jr ,..y v•i:.ri ..ri �.�. 'r�:: Owners 30 days written notice to the Agent. Termination of this Agreement by Owner for cause must have prior written approval of MHFA. 7 Revised AIM 2001.3 In the event Owner Is in default under the Regulatory Agreement or Mortgage, this Agreement may also be terminated by MHFA effective upon the mailing of notice thereof to the Owner and Agent. In the event the Owner is not in default under the Regulatory Agreement or Mortgage, this Agreement may also be terminated by MHFA for just cause, as determined by MHFA, on ten days written notice to the Owner and the Agent. MHFA shall not be subject to liability for any loss, expense, or damage caused by termination by It of this Agreement 2001.4 Upon termination of the Agreement for any reason, the Agent shall: (i) remit to the Management Agent (or if the Agent and Development Management Agent are one and the same, to the Owner} within twenty-four hours after such terminations, all monies due the Owner, and pi) submit to the Owner any financial statements and marketing records required by the Owner. After the Parties have accounted to each other with respect to all matters outstanding as of the date of termination, the Owner shall furnish the Agent with adequate assurance of payment of any outstanding obligations or liabilities which the Agent may properly have incurred on behalf of the Owner, 5ecria 21111 _ tg, This Agreement shall Inure to the benefit of and constitute a binding obligation upon the Owner and Agent, and their respective successors and assigns; provided that the Agent cannot assign this Agreement or any of its duties hereunder without the prior written consent of the Owner and the MHFA. Section 2201, Amendrnanntt, This Amendment constitutes that the entire Agreement between the Owner and the Agent, and no amendment or modification thereof shall be valid and enforceable except by supplemental agreement in writing, executed and approved in the same manner as this Agreement. Scala" 2303, . For the convenience of the Parties, this Agreement has been executed In counterpart copies; which are in all respects similar and each of which shall be deemed to be Complete in itself ao that any one may be Introduced in evidence or used for any other purpose without the P re dusCV" of rhe MheF c0Ur! 9T -_-!w_ e Revised 4/90 Section 2901, Irsbiriry of Aaent_ Everything done by the Agent under the provisions of this Agreement shall be done as Agent of the Owner, and all obligations or expenses incurred thereunder shall be for the account, on behalf and at the expense of the Owner, provided that the Owner shall not be obligated to pay the costs incidental to the operation of the rental office except as provided in Section 1501.2 or any other costs to the extent that they exceed those described In the marketing plan budget unless that budget has been amended by the MHFA and the Owner in writing. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and first above written. WITNESS: By-. )tI9: By: Title: (Owner) (Agent) The Minnesota Housing Finance Agency hereby approves and consents to the foregoing Marketing Agreement and the Agent appointed therein. MINNESOTA HOUSING FINANCE AGENCY ... By: Date: _ Title: 9 Revised 4190 EXHIBIT E Affirmative Fair Housing Marketing Plan D.-\KNN12%I711)OCS%TAX CREDIT MGT AGREEMOC E-1 WWA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT COMPLETE FORM AND SUBMIT TO: FAIR HOUSING AND EQUAL OPPORTUNITY DIVISION (612) 286-8765 OR (1312) 296-8625 I MINNESOTA HOUSING FINANCE AGENCY 1 AFFIRMATIVE FAIR HOUSING MARKETINO PIAN k 1. WMMUCTION Stab end Fedand slfirmatiw Wr housing martsting regulations rajune that each applicant subjad to these Rsgutatlans carry out an affirmative marketing program to attract prospefive buyers or tananb of AN minority land narminaray groups to the housing that the applicant Is providing. These groups include Whits (Non -Hispanic) and mambers of minority groups: Blacks I Non-Hlepaletc), Anwducm IndiansfAlaskaa Native. Hlapwdcs and AslardPaollfc Islanders in On S%ndard Metropolitan Statistical Areas (SM&A) or houaing roaket area who may be subject to housing discrimination on the bay of race, cola, creed. rd &n, set, nabomd origin, marital status, status with regard to race" of public assistance, disability, or Winilfal states. I 4. APPLICATION AND PROJECT IDENTIFICATION j NAME fttr Pride In LMng for Bass Lake Townhame I.lnritsd AdcRES"s (include City, Stab end Zip Code) . 2615 Chicago Avenue S. Mpls, ON Dad TELEPHONE E NUMBER (612) 8744511 _ C- PROJECT NAME PPLI Bassi Latta Twm*omw PROJECT OR APPLICATION NUMBER az7et A 2791 SLUMBER OF UNITS (Indicate family.etdsrly,ate.) 34lfaln8yr PRICE OR RENTAL RAWGE OF UNITS:r !OM i TO Ij�aQ FOR MULTIFAMILY HOUSING ONLY: f 1 ELDERLY 1744-ELOERLY APPROXIMATE STARTING DATES ADVERTISING__JillM OCCUPANCY_yiig_ NAME OF MANAGiNGMALES AGENT - ShM Wakes LOCATION ADDRESS (Intek Chy,State and zip Code) IAODRESs (include City,stete and Zip coda) YSMTM Bass Latta Road x516 Ckkq p AVsnw Booth, Mpla MN s;sa04 COUNTY Flennepid Q LWA PROGRAM (q USED TO FINANCE NIC1C Montage, Affordable Rental Inwapnent Fund J. TYPE OF AFFIRMATIVE MARKEnwG PLAN ® Project Plan DAnnual Plan lfcw single family scattered sits until NOTE: A separate Annual Plan must be developed for each arae in r4** the houshkg Is to be but! O M IWftAres I (White (nen-minority) Area 0Mb-d Arse (vft %minority nmidgnts) 4. DIRECTION OF MARKETING ACTIVITY -- Indleata below which o ) h aelra housing market area ora least likely to apply for the horning because of Its loemtlmt and other factors without speciall outreach efforts. White 0 Afican American AnWcan Indian or fJ ispank c Aslan or (Non-Hap"c) - (Non4lispaniel Alaskan Native Pacdfc Islander 4. MARKETING PROGRAM _ A. COMMERCIAL MEDIA Check the media to be used to advertise the availability, of the housing. (sl pVewwspeper(s) Publicallons(s) NAME OF NEWSPAPER, RADIO OR TV STATION iiall, Tribune The Circle Asian American Pages U Radio - CITV —a Bllbmrd(a) U Omer fSpecify) RACIAMTHNIC WEN71FICATION OF READERSIPAJOIENCE — Whim and all other Amadcan Indian — Asian Hispanic SIZE I DURATION OF ADVERTISING N" ad, rweek(y during fnIm occtlppsncy I% Pelle. rnoaft during Ir"w occupancy /it page, Mandlly during Inflict occupancy M page, montitfy during InNW B. BROCHURES, SIGNS AND HUG'S FAIR HOUSING POSTER: III WIN broGrures,knaers or handouts be used to ation"w7 m was kiln tI V". attach a euprr a srdyrllt Mraar GWW*, 171 Far pmAct oda sign. Indicate srgn site q x ii . Logotype size 131 HUU's Fair Housing Poster must be cancplticusly displayed wherever saieslrentals and showings take place. Fair Housing Posters will be displayed in the I ISONSIRental Office (at ❑ Real Estate Orate 96); O Model Unit(s) I (Other (Specify) 'Failur18 >o complete each seelhtn Will detav annm%—1 .# so.- , �..... C. COMMUNITY CONTACTS _ To further inform the group(s) hxost likely to apply about the availability of the housing, the applicant !glees to establish and maintain conlad with the groupslorganizations Illsted below that are located in the housing market area or SMSA if more span is needed, attach an additional sheat. Notify MHFA at any changes in this list, Attach a copy of earfespondenee to be mailed to these groupsforganizations, 1Provlda ail requested intormotioni. NAME OF {3RQUPrOHGJW12AliON RACIAUETIINK �TAPPRakIMATE DATF OF- PFR IDCNTIFICATION Thorsrn FmRy Resource Center �AfficanAmeriean.Whih Centro Cultural Chkano Hlapal Southeast Asian community Cnc[L Asian ADOREsS AND TELEPHONE NUMBER METHOD OF CONTACT(S) T323 511 Av N. New Hope 633-3749 phoneAelter 1313 Chlcapo. Mpis 674_-1412 phoneltetbsr /2,1 13rp Ave N. Mpla 3774778 phoneAedw SON CONTACT OR PROPOSED CONTACTFIJ CONTACT CONTACTED ongoing Director lies I�iroctor 1119 Director INDICATE THE SPECIFIC FUNCTION GROUPJORG/Nl7ATION will UNDERTAKE IN IMPLEMENTING THE MARKETING PROGRAM nwke relanals _ malas nTerrals. translate make raferrats, translaw k 6. FUTURE MARKETING ACTIVITIES lRental Unlis Onlyi rcktheblaokia) that best describe future markatlgg activities to fill vacancies ea they occur ager thepro)od has beentriballyupred D NirwspapamiPublimAnns 0 Podia l7TV I IBrochwerno*fieterherxiouts I15ite Signs pCorrimunity Contaris p Other lsp.dly) 7. EXPERIENCE AND STAFF INSTRUCTIONS A. Indica!* any expenance in markoiing hauling la the gfoupls) idaMMod as teast jWy to apply. '. PPL has extensive experience marketing to communities of color. Ineladi j Ahkan American Hispanic and Asian. This Is reneelod In PPL's rental housing and ownership sales dentopraphIC& B. Indicate training to be provided to staff on federal, stats and locsl fair housing laws and regulations, as Well as this AFHM Plan. Attach a copy of the instructions to staff regarding fat housing. Training is provided to each stair person tattler individually or through attendance at an appropriate class; issues and now developments are discutssad at weakly propeAy management slats' meetings. 6. ADumaNAL COhI$IDEnATkM 9. ANTICIPATED OR ACTUOL RESIDENT DEMOGRAPNICS Please list the number of parsons, use NO numbers not percentages, Nat you snbclpats wilt occupy or presently occupy the units as a result of your affirmative marketing efforts. Whits _L—Biocks _9 -Asians Indians 5—Ilspanlas _2— disabled [single -Headed Households 42 ,,persons OR Public Assistance _.. 10. Signatures signing this fomi, the applicant agrees, an appropriate con wwon wtlh MHFA, to change any part of the plan covering a )ad to asswe continued compliance with afllmiative fair housing maiketatig regrdagons, ;NATURE OF PERSON SUBMITTING PIJW NAME (TYPE OR PRINT) $Ilan PIS ANO COMPANY _ Orly Manager. Project for Pride in Living FAIR HOUSING D ISIDN USE ONLY AL BY DISAPPROYAL Ely - NAME ITYPE Y NAME;TYPE OR PRINT) 7irLF I7ATk SIGNATURE NAME (TYPE OR PRINT) EXHIBIT F Residential Selection Plan (See Exhibit A7) D.WWN 1251017VDOCMTAX CREDIT MGT AGREE.DOC F-1 MSA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEbEENT AMENDED AND RESTATED ADDENDUM TO PROPERTY MANAGEMENT AGREEMENT This Addendum is attached to and made a part of the Property Management Agreement of similarly titled contract between the parties hereto (the "Agreement") dated as described in Semon A of the information schedule attached hereto and by this reference made a part hereof (the "Information Schedule") relating tot he Building described in Section B of the iifornation Schedule. This Amended and Restated Addendum replaces the prior three (3) Addenda in their entirely. In consideration of Ten and No/ 00 Dollars ($10.00) and other good,arid valuable consideration, the receipt and sufficiency of which is acknowledged, and the prior verbal rrnderstandirrgs of the parties as to the matters covered herein, and the undersigned Owner's continued reliance on the undersigned Agent to lease and manage the Building under the Ag[eement, and to induce Ownees Limited Partner, as described below, to contribute equity capital to Owner for the development and operation of the Building, the parties fim#her agree as follows A Management and Lon Agent shall, unless otherwise agreed by Owner and Agent in writing. (a) comply with applicable provisions of the Management Plan for the Building, prepared and approved by Owner, a copy of which is attached hereto as Exhibit A and by this reference made a part hereof, b) comply with the leasing guidelines attached hereto as Exhibit 2 and by this reference made a part hereof; and c) use for each lease the form of lease agreement attached hereto as Exhibit 3 and by this reference made a part hereof except for the MHOP units which shall use the form of lease agreement attached to the Management Agreement. Low -Income Housing Tax Credit RetMMM s. ent acknowledges that Owner is required under its limited partnership agreement to to lease rite percentage of the apartment space in the Building set forth in Section C of the hnfortm hon Schedule (based on number of apartments or floor area, whichever is lis) the "Credit Units" to tenants whose income and rent levels qualify such apartments for inclusion in dderm mug federal low-income housing tax credits (the "Credits-) for the Binding, and that the Credits will have substantial economic value to Owner and its partners. Agent shall also lease any other qualified space if and as indicated in Section C of the Information Schedule. Owner shall furnish Agent with written descriptions of such requirements as they relate to Agent's leasing and management duties hereunder 2. Tenant Certification. For all Credit Units, prior to approving each rental application and prior to allowing each prospective tenant to take occupancy, Agent shall (i) require the recertification of tenants, the certification and recertification of tenants shall be the responsibility of Agent. 7. Local code cmpliance. Agent shall cow the Project to be maintained in compliance with an local health, safety, and building codes to the extent of available funds, and shall promptly give written notice to Owner and to ownees Limited Partner if Agent receives notice of any such code violation relating to the Building. 9. Lead Hazard Information if the Project is a rehabilitation of a pre -1978 built building and remains rental units with one bedroom or more that are cipectod to be available to remains other than the elderly Or disabled, the Agent mug provide each prospective tenant a copy of the Government Printing Office published informational pamphlet entitled Lead Based Paint Protect Your Family and a Copy of the Lead Hazard Evaluation report an the building prepared by the Owner's environmental consultant. . Furthermore, the Agent agrees; to indemnify and hold harmless the Owner for any damages and attorneys fees incurred by the Owner or Agent for failure to properly implement this Paragraph. 1. Record SMM Agent " establish and maintain a comptchensive system of records, books, and accounts, including compuU=:ed systems, in accordance with the Plan and in a manner satisfactory to Owner. All records, books, and accounts shall be subject to examination at reasonable hours and by any authorized representative of Owner, or of Owner's Limited Partner. 2. Mon flft BoggL Agent shall prepare a monthly report, in form satisfactory to Owner, C0111amug Rod including at Icaa the following (a) a statement of income and expenses and amounts receivable and payable for the preceding month, including an itemized list of all delinquent rents as of the tenth (10th) day of the carseat monk as well as a report on action taken thereon by Agent; (b) a rest roll/cash receipts form for the previous monk (c) a disbursements summary for the previous morith, (d) Current bank statements with reconciliation of accounts; (e) copies of paid bills and invoices for the previous month, and M a narrative of any unusual actions taken or emergencies responded to, and a full report of any accidents, claims, and potential claims, for the previous month. Agent shall submit each such MW to Owner on or before the fifteenth (15th) day of each month, and shall concurrently nuffl a copy of the statement of income and expenses (on both a cash and accrual basis) to Owner's Limited Partner. Additional information. Agent shall promptly fimmish such additional information (including mondfly occupancy rq)wu) as may be requested from time to time by Owner or Ownees Limited Partner with respect to the renting and financial physical, or operational condition of the Building Agent shall promptly investigate and make a fall written report to Owner of all accidents or Claims, as defined below, relating to the ownership, operation, and maintenance of the Premises and shall cooperate and make any and all reports required by an insurance company in connection therewith. 4. Ndft Bond. Intentionally Omitted. 5. -Insurance. Agent shall at all times keep its employees and contractors insured for stawtory workers' compeasadion and other employee benefits required by all applicable laws, and Agent shall maintain employees liability insurance for an amount not less than $1,000,000.00 covering claims and suits by or on behalf of employees and odors, not otherwise covered by statutory workers' compensation insurance. Owner and its partners shall be protected in all such insurance by specific inchision, of Owner under an additional insured or alternate employer rider. Agent shall provide Owner with a certificate of insurance evidencing that workers! compensation and employees liability insurance is in form and providing not less than ten (10) days' notice to Owner prior to cancellation. 6. Indemnity. To the extent permitted by law, Agent agrees to defend, Agreement shall not affect the validity of the remaining portions thereof Owner's remedies under the Agreement Shall be cumulative, and the exercise of one remedy shall not be deemed an election of remedies nor foreclose the exercise of Owner's other remedies. No waiver by Owner of any breach of the Agreement shall be deemed to be waiver of any other or subsequent breach. Owner or Agent mai' apply to any court, state or federal, for specific performance of the Agreement, for an injunction against any violation of the Agreements or for such other relief as may be appropriate, since the injury arising from a default under any of the terms of the Agreernent would be irreparable and the ammmt of damage would be dd&ult to ascertain. 6. Remrlatory provisions. Notwithstanding anything to the contrary in this Addendum, any provision hereof that is or whose performance would be in violation of (a) any agreement between the Owner or the Agent and HUD, —b) any HUD or any state or local housing or other regulatory authority requirements concerning the building, or (c) any applicable HUD or state or local regulatory authority regulations, shmu be void and have no force or effect The foregoing shall not, however, affect the enforceability of any other provisions of this Addendum. 7. Conflicts. Except as pw ided in paragraph S above, those provisions which impose more stringent obligations upon the Agent or provide greater benefits to the owner or Owner's Limited Partner shall prevail and control S. Successors and Assigns. The Agreement shall mum to the benefit of and constitute a binding obligation upon Owner and Agent and their eve successors and assigns; provided, however, that Agent shall not assign the Agreenmit., or any of its duties thereunder, without the prior written consent of Owner. In the event Ownees General Partner described below or any general partner of Owner is removed as general partner in accordance with Owner's partnership agreement) any successor general partner selected in accordance with such partnership agreement shall have authority to act hereunder on behalf of Owner, and until such successor is selected Owner's Limited Partner shall have temporary authority to act hereunder on behalf of Owner. IN WITNESS WiMREOF, the parties have executed this Addendum as of the �day of February, 1999. OWNER'S GENERAL PARTNER OWNER PPL,Bass Lake 'ted Partnership Project for Pride in Living, Inc. 2516 Chi S 2516 Chicago Avenue S� Vlze Mi Minneapolis, MN 55404 OWNER'S LIMITED PARTNER Title: National Equity Fund 1997 Limited Partnership AGENT do National Equity Fund, Inc. PPL, at Corporation 547 West Jackson Boulevard, 6th Floor Chicago, Illinois 60661 BY. - - Its: Fib—uc—�� 'I3rc Public ckm benby appwu1° an4 foradoing Amended and Rcsltdod Addundmil to the pMpefr MjwLv4pumt AVW=b a[. MHFA-, MpM&wD A HOUSING FINANCIi AC&-NCY TIS MINNFApC)LIS PUl3LIC HMSING AXMIOtJTY IN AND KM TIaF CITY OF MINNEAPOL) S By d Bcttet4 its Cl�airmaa BY Coni Md'art+eY, lls FRa=wdkv0 Olmaw LDA - NOM C: L)Lsy +�,p!'MI.:I T AUl'HOiU'l'Y 1N AND FORTNE OFNEW EXEaBITS TO 4T)D7Tk'MW,f TO Exhibit 1: Management plan (as attached by Owner and Agent) Exhibit 2: Leasing Guidelines (as attached to this form Addendum) Exhibit 3: Form of Lease (as attached by Owner and Agent) Exhibit 4: Form of Low -Income Lease Rider (as attached to this form Addendum, must be attached to each individual tenant lease), with attachments: a. Managing Agent's Low --Income Eligibility Worksheet and Certification of Qualified Occupant b. Employment/Income Verification(s) Exhibit 5: Managing Agent's Low -Income Leasing Certification (as attached to this form Addendum), with attachments: a• Qualified Income Levels b. Rent Roll 10 Bass Lake Townhomes Management and Marketing Plan 3.01 Description of Development A. Name of Development: Bass Lake Townhomes B. Location: Approximately 15 miles from PPL's Central Housing and Development office at 1925 Chicago Avenue South, Minneapolis. C. Number of units: D. Type of Construction: Twenty townhomes are wood -frame construction; fourteen ! rehab duplexes are wood -frame construction with brick veneer. E. Type of Development: Multi -family. Twelve (12) units are owned by PPL as MHOP units; 15 units are fnaded with ARIF 3.02 Management Company A. See organizational chart attached. (A5) 1. Name of Management Company: Project for Pride in Living, Inc. 2. Name of the Management Agent for the Development: N/A 3. Name of the key contact person for the management agent in the owner's organization: Shari Pleiss, Division Manager 4. Delegation is not needed as owner and property management are the same entity. Property Management General Policy Statement is attached. (Al) B. Job Descriptions: See attached job descriptions. (A2) 3 bedroom 4 bedroom TOTAL UNITS - # Units # Units MHOP 6 6 12 Market/tax credit 3 4 7 ARiF 11 4 15 I!M d 1 1 2 TOTAL 20 14 34 D. Type of Construction: Twenty townhomes are wood -frame construction; fourteen ! rehab duplexes are wood -frame construction with brick veneer. E. Type of Development: Multi -family. Twelve (12) units are owned by PPL as MHOP units; 15 units are fnaded with ARIF 3.02 Management Company A. See organizational chart attached. (A5) 1. Name of Management Company: Project for Pride in Living, Inc. 2. Name of the Management Agent for the Development: N/A 3. Name of the key contact person for the management agent in the owner's organization: Shari Pleiss, Division Manager 4. Delegation is not needed as owner and property management are the same entity. Property Management General Policy Statement is attached. (Al) B. Job Descriptions: See attached job descriptions. (A2) 1. The only common area in this development is the courtyard. There is direct visual surveillance of all areas within the courtyard by a minimum of four units. The sidewalk along the south edge of the courtyard is wide enough for vehicle access and the New Hope Police have indicated their willingness to monitor the courtyard using this means, if requested. This wide sidewalk can also be used to provide access for emergency vehicles. 2. The communication network will be built upon the foundation created during the development process. Staff of the Thorsen Family Resource Room (source and referral for many social services, early childhood education and recreation) have attended project meetings. Development team meetings have included New Hope Community Development and Housing Program staffs Building Official, Police and Fire Chiefs and personnel, Public Works and City Attorney. At initial occupancy, the Resident Manager and Property Manager will hold a meeting with the staff listed and PPL Self -Sufficiency staff to explain roles, problem -resolution procedures and other issues of concern Ongoing meetings will be scheduled as necessary. PPL Self -Sufficiency staff will also attend the initial meeting. 3. Method for control of keys: PPL stores keys for individual apartments off site at our Property Management office. Keys are stored in locked key boxes in a mom outside of the view of the general public in a locked office. Keys are organized by a number bearing no resemblance to the building address or the apartment number. Apartment keys are not stamped with any information. PPL uses Medico keys for main entries and laundry rooms. Medico keys are custom made and can not be duplicated without the signed permission of PPL's maintenance manager. These keys are numbered and each key given to a resident is ] registered. Master keys are given to the maintenance technician, resident manager aaretakerand-divisioner only. C. Job Descriptions 1. Job descriptions for property management staff are attached. (A2) 2. An organizationchart is also attached. (A5) D. Compensation 1. PPL complies with the Fair Labor Standards Act. 2. Resident managers and on site caretakersare and caretakers are compensated with a rent reduction and an hourly salary. Maintenance is charged at a set hourly fee. 3.04 Marketing A. Identify the Market K area, but only 31,200 housing units with rents affordable to this income level. Even for households with annual incomes below $30,000, housing costs more than 30% of income for 185,000 households. According to the Metropolitan Council, 50,000 suburban households earning less than $20,000 per year pay more than 30% of their income for housing. If one assumes that the market area for this project is only 10% of the Metro Area, this would mean that 18,500 households are seeldng housing at the rents provided in this project. 4. Ethnic Composition of New Hope (1990 Census figures): 5. Present economic conditions in the New Hope area reflect the general pmgmity of the regional economy. New Hope has a diverse employment base which includes a variety of industrial employers as well as office and service jobs. New Hope has good freeway access to all parts of the Metro area- 6. rea 6. Future economic projections for the area again mirror projections for the regional economy. New Hope is fully developed so neither housing nor employment will experience significant increases. Housing stock and the commercial/industrial stock was generally built within the last twenty five years and some renovation and reuse is expected to occur. B. Tenant Selection Plan: 1. The tenant selection plan for this development is in conformance with all MHFA, Minnesota and Federal Guidelines. To the best of our knowledge, with the exception of the MHOP incentive units, there are no local housing guidelines. For market rate apartments please see attached PPL's Tenant Selection Plan. (A7) 2. Projected demographic distribution is as follows: 5 An ad, to be approved by NWA, shall run in the following publication, until a waiting list of 50 eligible households has been established. Publications: Star Tribune, The Circle, Asian American Pages, La Prensa. b. Logo, signs and brochures The site sign is required for New Hope City approval and will be designed by 7110/48. PPL staff will design a logo and brochure; brochure shall include project description, rents in a replaceable format, and information about PPL , neighborhood resources and transportation. c. Contacts AA. mailing will be prepared for a mailing list which includes PPL regular mailing list (see attached) but is expanded to include northwest suburban social service -agencies. These include: Thorsen Family Resource Room, Family and Children Service Northwest Hennepin office, Interfaith Action and District 281 social work staff. 2. Site signage The site sign identifies the site by name and address for a driver on Bass Lake Road. Site office is located close to the signed entrance of the roadway. 3. Marketing will be done by the person hired and trained as resident manager. 4. Supplies assume a total of up to 200 applications for 22 (non-MHOP) units. 5. Except during completion of construction, grounds -will be carefully maintained to create a cared -for impression for vehicle and pedestrian traffic. 6. A security deposit is to be collected for 22 (non -MHDP) tenants. 7. Fair Housing training for site staff. rr file an Unlawful Detainer action against the resident. 4. All reasonable efforts are made to collect rent in full at the time it is due. However, PPL believes that if a resident is willing to make a written agreement to pay their outstanding rent within a specific amount of time, we will work with the resident in order that they may keep their housing. If at any point the resident falls behind on their agreement, PPL will immediately file an Unlawful Detainer. NOTE: MHOP units will be worked with in accordance with the rules developed for those units. 3.08 Budgeting 1. The budget team, including the Asset Manager, Division Manager and Resident Manager audit all utility bills and service contracts. Service contracts, including waste removal and mow plowing are sent out for bids by competing companies. 2. A comparison of past and current income and expenses of other properties with similar features and resident composition is performed. 3. Dst$ is OtmWiftm_ per' ate` eek t Vn� accompmy#ng budget notes. 4. Budget is reviewed for final acceptance by the Asset Manager, Division Manager, Housing and Development Director, Chief Financial Officer and the Budget Review Committee of the PPL Board of Directors. 3.09 Energy Conservation The manager of the maintenance department develops a preventive maintenance schedule for each building. This schedule includes but is not limited to the following: a. Twice yearly maintenance inspections to find unreported plumbing leaks and inappropriate use of ovens etc. for heating. b. Change filters if appropriate. C. Test appliances for good working order. 2. The site manager is required to enter each apartment at least twice yearly to meet with the residents and note any problem situations that may require maintenance or Self Sufficiency Program intervention. 3. At the time of development, the current thermostats will be replaced using thermostatic controls which have a built in high temperature setting. 0 Al PROPERTY MANAGEMENT Project for Pride in Living, Inc. provides professional management with the expertise needed to market and manage this development in the best interest of its residents and funders. Our mission is to assist low and moderate -income people to become self-sufficient by addressing their job, housing and neighborhood needs. We believe that all people should have the opportunity to live in decent, affordable housing in a safe, functioning community. GENERAL POLICY STATEMENT Properties managed by Project for Pride m Living are assumed to be operated efficiently and as a "service" to our residents. The function of Project for Pride in Living personnel, in view of this policy, is to act as facilitators and to provide necessary assistance so all residents can expect to be treated fairly and by uni&mdy applied standards. Project for Pride in Living personnel are expected to develop a high level of professionalism as they evaluate management problems and seek their solution- Good olution Good property management also depends upen acting in accordance with sound financial and accounting principles, implementing a solid preventive and emergency maintenance program, and designing a comprehensive system of information dissemination. MANAGEMENT RESPONSIBILITIES Project for Pride in Living is responsible for planning and directing the fiscal and physical operation of Prosperity Village. The agent is to cagy out the following major functions: Staffing. Marketing; Maintenance and Repairs. Financial Reporting Resident Relations Job Title: Division Manager, Property Management Reports To: Director of Housing and Development Job Summary I. Manages the staff of the Property Management Division- 11. ivision II. To initiate, maintain and/or strengthen PPL's relationships with other organizations of significance to community stability and growth in key neighborhoods: Chicago & Franklin, Bloomington & Lake as well as city-wide. Essential Job ftnetions 1. Personnel Management - Develop, implement and maintain ongoing training program for property management and maintenance staff. Goal setting for individuals and the management team. Performs yearly performance reviews. Recruitment and training of pmperiy management staff. 2. Development - Work with PPL Development to create management plans, perform initial marketing of new developments. 3. Community Development - Represents PPL in several important community groups including: • Chicago Franklin Block Club • Franklin Avenue Business Association s • Bloomington Lake Commercial Club • City of New Hope 4. Management - Report to PPL board of Directors as to the state of the division. Work with funding agencies to create and maintain positive relationships. Inspection of properties. 362 rl a c as PC P4 k J �rr C-4 One of the first steps in preparing these new employee's to assume their duties will be an official welcome to Bass Lake Townhomes, followed by a detailed job orientation. Each orientation meeting will be tailored to meet the specific job responsibilities of the individual(s). This meeting will be conducted at the site location and the property management office. The following information will be discussed in detail at the orientation meeting: I. An introduction to the development and its community, the developments purpose, and the objectives of its Owners, including the community partners. 2. An introduction to Project for Pride in Living including information about its history, development and objectives, and a thorough undmtanding of property managemenfs policies and procedures. 3. A complete understanding of PPL's general teras and conditions of employment as well as any disciplinary rules. 4. A summary of personnel policies detailing what the new employee can expect from the organization and what the organization will expect of him/her in return. S. A description of benefits and services. 6. A tour of the home office and the development and an introduction to fellow workers. 7. A description of hiis/her immediate supervisors duties and the duties of co-worker or staff, where applicable. S. A detailed description of the employee's job including specific duties and responsibilities, hours, wage or salary and other pertinent information. 9. Information directly related to cultural sensitivities of the client community. A6 EMPLOYEE EVALUATION A. Scheduled Review and Property Inspections The Property Manager, with the Division Manager, will conduct a formal performance evaluation for all site employees annually. These evaluations will be the basis for annual salary reviews and/or other adjustments. The Division Manager will also do quarterly reviews of all full time employees to ensure they are meeting their goals and objectives. B. Unscheduled Inspections Periodically, the progress of each employee will be reviewed through various scheduled and unscheduled property inspections to maintain a sound employee -employer relationship. The inspections will be scheduled by the Division Manager. The following areas are those which the Division Manager will be closely inspecting: 1. Resident relations. 2. Occupancy level and collection rate. 3. Residents- files and documentation, etc. 4. Interior building maintenance. I 5. Exterior building maintenance. 6. Preventive maintenance. 7. Ability to implement the policies of PPL and the project. S. In addition to the preceding, all employees are required and expected to present themselves in a neat, clean, efficient and professional manner at all times. D. Household income. Income for all adult household members must be verified. To qualify, the household annual income must not exceed the income limits established for the apartments by the terms of the financing. The income criteria at the present time are as follows: Modmm inronw: at 30% for a one person household $12,030 for a family of two $13,740 for a family of three $15,480 for- a family of four $17,190 for a family of five $18,570 for a family of six $19,950 for a family of seven $21,330 for a family of eight $22,680 Maemum income: at 50% far a one person household $20,050 for a family of two $22,900 for a family of three $25,800 for a family of four $28,650 for a family of five $30,950 for a family of six $33,250 for a family of seven $35,550 for a family eight $37,800 Minimum income: Applicants must have verifiable and predictable income source to cover rent and household utility expense. Income equal to two (2) times the rent may be required. MHOP applicants must be within the most current HUD very low income limits applicable to family size. E. Occupancy Standard. We have developed maximum occupancy standards for Bass Lake Townhomes. These standards are as follows: Two Bedroom four people Three Bedroom six people F. Reasons For Rejection. • Number of potential occupants does not meet guidelines. • False or unverifiable information was supplied on application. Income does not meet eligibility requirements, • Unsatisfactory rental reference. • Record of non-payment or late payment of rent, utility or other credit obligation. AS CRITERIA FOR LEASING AT PPL Effective July 1,199$ Application Fee: $35 per application - non-refundable Money order or Cashier's check only Application fee is waived for MHOP applicants * TWO YEARS OF GOOD RENTAL HISTORY * No Unlawful Detainers (evictions) unless you have verifiable documentation of landlord irresponsibility. However, a UD due to property damage by the resident will not be accepted under any circumstance. * No history of late payment. * No history of damage to the apartment. * VERIFIABLE GROSS INCOME * Minimum of twice the rent charged on the apartment. * Section 8 vouchers and certificates accepted. The resident must meet the same criteria as those seeking non -subsidized housing. * Food stamps are included in the calculation of gross income. Note: MHOP applicants do not need to have a verifiable income of twice the rent charged on an apartment. * CRIMINAL BACKGROUND CHECK. * Residency may be denied due to criminal history. (See attached Criminal Background Criteria) CREDIT HISTORY * Must show that the resident has paid bills on time and does not have a history of debt write-offs or accounts that have gone into collection. * Residency may be denied due to poor credit history. *MAXIMUM OCCUPANCY - Please note that these are the maximum number of people who may occupy apartments with the number of bedrooms noted. Situations may exist where the high concentration of people in a building and/or the ability of the mechanical equipment to operate efficiently requires us to adjust the number of occupants in a given apartment. * Efficiency 2 occupants * k Bedroom 2 occupants * 2 bedroom 4 occupants * 3 Bedroom 6 occupants * 4 bedroom 8 occupants A child less than two years of age is not considered when listing the number of people occupying an apartment. Once the child reaches two and is considered an occupant, the number of people occupying the unit must fall within the guidelines of that building. A9 MARKETING PLAN 1. Plan to achieve early occupancy. A large site sign will give a number for more information. This number will connect the caller directly to the Leasing Office. The site manager will make an appointment to meet the caller on site and show the available apartments. Media As necessary, ads will be run in the following publications Star Tribune, Pioneer Press, The Circle, Asian American Pages, La Prensa. Logo, signs and brochures A logo design and brochure will be created and sent to agencies where referrals are possible. Contacts A mailing will be prepared for a mailing list which includes PPL regular mailing list and social service agencies. Site signage The site sign identifies the site by name and address for a passing drivers. 2. Marketing will be done by the person hired and trained as resident manager. 3. Except during major rehab construction, grounds will be carefully maintained to create a positive curb appeal for vehicle and pedestrian traffic. EMERGENCIES How to Extinguish a Kitchen Fire Fire Emergency number: 911 Grease Fires: Electrical Fires Oven. Fires Gas Leaks Do... 1. Turn oven OFF. 2. Cover burning Container with lid or pan to smother fire. If smothering fails, call 911. DO NOT throw water on a grease fire. You may cause an explosion. Do... 1. Unplug burning appliance or... 2. Turn circuit -breaker off, or 3. Unscrew fuse.. DO NOT throw water on fire or touch burning element. DO.. 1. Close oven door and leave closed. (This cuts off oxygen) 2. Turn oven OFF. DO... 1. Close doors to room and get out 2. Call fire department from another location. DO NOT use telephone, turn on lights, use a Flashlight, or put key in lock with room with a gas leak. The slightest spark can cause an EXPLOSION. GOOD CAUSE CLAUSE 're hereby given notice as to what is termed "Good Cause' for termination of tenancy: 1. Possession of illegal drugs in your residence or anywhere on PPL property, and/or use of such drugs and/or purchase or sale of such drugs from your residence or anywhere on PPL property. 2. Repeated police calls to any PPL property due to activities of you or your guests. 3. Nan -payment of rent, late fees, utilities or maintenance service charges (tenant/guests destruction of property). 4. Causing repeated incidence that are disturbing to the peace of other residents and/or neighbors. 5. Damage to property belonging to this organization and/or damage to other tenants property. 6. Keeping a pet. 7. Theft of PPL property or property belonging to other tenants. S. Any act or threat or violence to employees or Board Members of PPL or any other person on this property. It Permitting persons to occupy unit who are not registered on the lease without management approval. -1 Excessive traffic as determined by property management. 11. Consumption of alcoholic beverages in common areas inside or outside of any PPL building. 12. Smoldog in common areas of the building. 13. Sub -letting a unit. 14. Refusing to sign a lease. 15. Poor housekeeping. Including clutter or dirt in your home which: may affect the health or safety of any occupant of the building; is sufficient to attract rodents or pests; causes more than normal wear and tear on the apartment; violate the Minneapolis Housing Maintenance or other applicable Codes. 16. Wasting utilities through intentional means or by unreported problems.. 17. Any other violation of the terms of the lease. In the event that legal action is to be taken, the Property Manager is authorized to send out a termination notice and to act as plaintiff for Project for Pride in Living. •ident i Date Resident Date Resident Date Resident Date SELF-SUFFICIENCY PROGRAM SERVICES ►ER/EDUCATION COUNSELING Teach shills in resume writing and interviewing Assist in attaining educational goals- G.E.D., technical training, college Offer bi-monthly seminars on empiayment issues Make available transitional incentives for job seekers Referrals for employment resources and training programs Step -by -Step Job Hunt Program EDUCATIONALISUPPORT GROUPS Tuesday Topic Night: various informational & educational topics Men's SWort.Group- meets bi-monthly Childres's activities FAMILY NIGHTS Fun activities for family enjoyment Promote family togetherness and involvement Field trips include: Science Museum, roller skating, hayrides SELF-ESTEEM RETREATS Mens and women's retreats 1-1/2 days of self-esteem building, goal -setting, and workshops Evening social time r '-ON-ONE COUNSELING Discuss personal needs ! Creating a petsonal action plan Referrals Mental Health Therapy CHILDREN & YOUTH PROGRAM Advocacy Activity groups One -on -One Personal Development Programs & referrals for youth counseling FINANCIAL MANAGEMENT TRAINING identify problem areas Assist is budget set-up Referral to available subsidies- FareShare, etc ANNUAL EVENTS Summer Picnic- food, games, entertainment Holiday Party- festive celebration of the season COMMUNITY INITIATIVE PROGRAM Resident Council Building/Neighborhood Activities Safety & Crime Prevention FOR MORE INFORMATION CALL PPL SELF SUFFICIENCY AT: 874-8511 OR IN ST. PAUL: 225-8084 6 4INNESOTA LAW CONCERNING DRUG AND CONTRABAND SEIZURES IN APARTMENT BUILDINGS All Minnesota landlords are required under the provisions of a state law (HY. 159) to notify all residents (exi sting and future) of the following: `Under a new state law effective October 1, 1989 a seizure by a law officer of any illegal substance, including drugs, totaling at least $1,000 may cause you to be evicted. The management can be required by the State to start an eviction action within 15 days of notice of the seizure." 8 HOUSEKEEPING PPL will do everything in it's power to provide a unit of housing that is free tram insect and rodent infestation. To ensure this commitment, PPL will pay all routine extermination costs. If however, professional exterminators diagnose a problem that is caused by the poor housekeeping of a resident, PPL may charge the resident for additional extermination to their and other apartments effected. In an effort to avoid these additional extermination costs, the tenant is required to maintain reasonable standards of housekeeping and cleanliness. A clean house is the best way to prevent infestation problems. PPL will conduct periodic home visits and inspections to ensure that reasonable housekeeping and cle"iness standards are maintained. In addition, PPL reserves the sole right to define these housekeeping and cleanliness standards. If violations occur, PPL will provide, in writing, specific guidelines for improving problem areas. PPL will allow for reasonable time (maximum of 72 hours) for the tenant to make the improvements necessary. If the tenant fails to maintain a clean house, PPL will initiate move out procedures with the problem tenant 10 WATER DRIPS, LEAKS, FLOODS It is very important for you to notify us AS SOON AS POSSIBLE when any of your pipes are leaking or your toilet is running. We need your help maintaining your building in good condition. If we receive a higher than expected water bill due to an unreported leek or running toilet you wHI be charged the amount that the bill is over average (THIS CAN RUN AS HIGH AS $600 FOR A RUMING TOILET). 12 NO'T'ICE TO VACATE If you are.planning on moving you must notify us immediately by giving a written notice no less -than 30 days before you are planning to move. Your move out day must be at the end of the month unless approved in writing by your property manager. Failure to do so can result in you not getting your deposit back, getting a poor rental reference, and not being able to from PPL housing again. All vacate notices must be in writing, signed, and dated by the resident. PPL provides a form to make the process easier for the resident. Proper notice is given as of the first of the month effective the last day of the month the lease expires. Pro -rated rent is not allowed for a vacating month. may show your apartment during your last month of occupancy for the ;- �oses of rental. You will receive notice by phone or m writing two 48 hours before your apartment is shown. Your apartment should remain clean and orderly during this period. You are under no obligation to explain to PPL why you have decided to end your lease. Additionally, if PPL decides to end your lease, they are under no obligation to explain their decision. 14 MOVE-IN/OUT INSPECTION T you move into your new home, everything in your home will be clean and in good working order. Tu .ast thing you will do upon moving in will be to inspect the unit with the manager- Together you will note the condition of every item in your home on a move -in inspection sheet. Both you and the manager will sign this form. Your home will be inspected again in 30 days to make sure everything is working properly and to answer any questions. At the time yoo move out, a Management staff person will again inspect your home with you and note its condition on amove out inspection sheet. You will be charged for any damages caused by you, your family, or your guests. It is expected that you will leave your home in the same condition as when you moved in, excluding normal wear and tear. (See Security Deposit Return) 16 SNOW REMOVAL Dur ing the winter months, snow will be plowed from the parking lots. Cooperation from the residents in moving their cars is necessary and will be expected. The lot will be plowed on each snowfall that measures two or more inches. If you plan to be gone from your apartment any time during the winter months, please make proper arrangements with a friend, neighbor, or relative so your car will be moved when snow plowing is necessary. 18 NON -SUFFICIENT FUND CHECKS Any, checks returned by the bank are regarded as non-payment of rent and are subject to late fee penalties. There will also be a $25.00 service fee added for all NSF checks. NSF checks will be returned to the resident only after the Management has received a money order in exchange. Non-payment on an NSF check will be grounds for eviction. If we receive an NSF check from you, all further rents and fees must be paid in the form of a cashiers check or money order. 20 TRANSFER POLICY I pth costly and labor intensive for residents to move from one apartment to another. Apartments must ht . Anted and shampooed, and there is sometime cleaning to be done. In order to be considered for a imsfer, applicants must; 1. Have lived in current apartment for at least one year, 2. Have a record of prompt rental payment; 3. Keep current apartment in a clean, tidy manner. (Apartment will be inspected by manager prior to any written approval to transfer taking place.); 4. Be a resident in good standing of the site with no record of disturbances or other lease violations; 5. Pay a $100.00 transfer fee prior to move -in; (waived if moving after one year). b. Sign a new lease at the current rental rate for vacant apartment Please note that the transfer fee does not apply to MHOP units due to change in family size or status. 0*) FIRE SAFETY ] nail fire should start in your home, use the fire extinguisher located in the hallways of your apartment bei dng. Break the glass in the front of the case and remove the extinguisher. To use a fire extinguisher, simply squeeze the trigger handle, aim it at the base of the fire, not on top of the fire. DO NOT POUR WATER ON A GREASE FIRE. In case of stove or oven fire turn off the stove first then try to smother or put out the fire. If you can not quicldy put out the fire dial 911. DO NOT re-enter your home. Read the procedure below very carefully. In the event of afire, just one or more of these rules may save you= life or the -life of your neighbor. I. Prior to leaving your apartment, feel your apartment door. If the door is hot or smoke is seeping through, DO NOT open. 2. Keep door closed and seal cracks with wet towel; open a window for air. Don't panic or jump. 3. If the door feels cool, open cautiously and leave your apartment. Walk quickly, keeping calm. HEAVY SMOKE REMAIN CALM- DO NOT PANIC. Dampen a towel or a rag and cover your mouth and nose. Stay close �e floor, moving to the nearest window or exit. If the hallways are very smoky, crawl to the nearest exit, ?ke rises. NEVER GO INTO A ROOM THAT DOES NOT HAVE A WINDOW. ALWAYS PAY ATTENTION TO FIRE/SMOKE ALARMS. NEVER IGNORE AN ALARM. FALSE ALARMS BY YOUR CHILDREN OR YOUR CHILDREN'S GUESTS ARE AGAINST THE LAW AND CAN RESULT IN PROSECUTION AND/OR EVICTION. For police or medical emergencies dial 911. HEAT AND UTILITIES Your heat and water are included in your rent. Please do not be wasteful of those utilities. Remember that even though these utilities are included in your rent, the site must pay for them and the cost is reflected in the total cost of operation of the building. ENTRANCES Rugs, shoes, or other items on the floor outside your apartment door are not permitted by the Fire Marshal. Your unit door or the hallway doors may NOT be propped open at any time. The apartment doors must remain closed by order of the Fire Department. 24 STANDARD REPAIR CHARGES ral Charges: 1i.mse charges apply to both current residents and apartment turnovers. For current residents, travel time will be added to hours of labor. Repairs: $35 per hour labor $52.50 per hour after hours Materials: Cost + 15% Overhead Cleaning: $30 per hour Lock Replacement (Includes labor fee): Unit with one door: $80 for all locks (apartment and mailbox) Unit with two door. $100 for all locks (apartment and mailbox) $50 for any individual lock Building Entry Key: $75 Standard Key: $ 5 Paint/Wall Damage: Actual Cost ' ure Hauling: $30 per piece PV A. Screen 4,gq r ceee I. 1F2'cati2U, Each prospective Tenant must complete and sign a written application for lease, containing detailed personal information, previous residences and landlords for several years, information on employment, income, assets, and credit, proposed occupants (including ages) and pets, and references, and containing such other information and statements as will enable Agent to screen the prospective Tenant or as is otherwise proper and advisable for the management of the Building in accordance with professional standards. In conjunction with the lease applications, each prospective Tenant must complete and sign Employment/Income Certifications) in the form(s) attached herewith as Part of Exhibit 4, where required under Section B, Paragraph 1 of the foregoing Addendum. 2 • znt XMiMz- Agent shall interview each Proposed adult occupant of the dwelling unit to be leased in order to help determine the character of such persons. 3. Agent shall verify the employment and income information given by the prospective Tenant, using the form of Employment Verification attached herewith as part of Exhibit 4, where required under Section B, Paragraph 1 of the foregoing Addendum. 4. CX-edil, Agent shall have conducted a responsible credit agency check of the prospective Tenant, and shall personally check with one or more of the Tenant's previous landlords with respect to past rent payment history. 5• Agent shall check with one -or more previous landlords of the proposed Tenant and other occupants with respect to their ability to maintain an apartment in good condition and to abide by building rules. If verbal information is vague or questionable, Agent shall visit the proposed occupants' present residence(s). 6. Ota If advisable, Agent shall check other references and perform other screening of the proposed Tenant. 7- Agent shall approve the proposed Tenant's lease application only if, in Agent's best professionalud Tenant is qualified to pay rent when due and all iudgm ed Propoed,otcupanthe p soare likely to maintain properly the dwelling unit, abide by reasonable rules, and otherwise be suitable occupants of the Building. Also, without Owner's prior written consent, Agent shall not approve any lease application unless the Tenant and other proposed occupants constitute a U b. nefault Charges. Tenant's liability for the following default charges: late rent payment charges; returned check charges; lost keys; damage to the dwelling unit or the Building not caused by ordinary wear and tear; missing property, fixtures, or equipment; and costs of rent collection and eviction. C. Security—gpos;� procedures concerning deductions from and return of security deposit, with interest to the extent required by law, and any key deposit. d. ChaXaea,Tenant's responsibilities concerning utility services to the dwelling unit, other services to the dwelling unit, other services provided by Owner or Agent, and any parking or other charges. e• WaintguanCe. Maintenance duties of Tenant and of Owner, respectively, separately listed. f. aerations_ Requirement of Owner's or Agent's consent to alterations of the dwelling unit, listing examples, and to charges of keys and locks. 5 • U142 Re—at dwelling units, .7�ct:ins . Restrictions on Tenant' s use of the including hazards, noise, nuisance, etc. h. manges. Tenant's obligation to report changes in Tenant's household or employment status. i. Rules, Tenant's and all other occupants' obligation to comply with any rules and regulations issued by Owner or Agent. A copy of any such rules shall be attached to the Lease. ?- Other. Other provisions customarily included in apartment leases or advisable for the Building. k• Attacbmentg, Acknowledgment by Tenant of any attachments to the Lease. I. Execution. Agent shall execute each Lease as agent for Owner 9. L2ad Hazard Tnfa=atim,Each prospective tenant shall receive a copy of the Government printing Office published informational pamphlet entitled Lead -Aa, t • P=t- the rt Your Family and a copy of Owner's environmental report on the building prepared by the consultant. 3 A. RENT TERMS OF THIS LEASE I. PAYMENT: RESIDENT will pay MANAGEMENT the full monthly rent before midnight of the first dayof each month while this Lease is in effect and during any extensions or renewals of lhis Lease. Rent will be paid as required by MANAGEMENT. 2. WHO JS RESPONSIBLE FOR RENT: Each RESIDENT is individually responsible fur paying the full amount of rent and any other money owed to MANAGEMENT. 3. DUTY TO PAY RENT AFTER EVICTION: If Resident is evicted because RESIDENT violated a term of this Lease, RESIDENT must still pay the full monthly rent until: ])[he Apartment is re -rented; 2)the DATE THIS LEASE ENDS; or 3)if the Lease is month-to-month, the next notice period ends. If the Apartment is re -rented for less than the rent due under this Lease. RESIDENT will be responsible for the difference until the DATE THIS LEASE ENDS or, if the Lease is month-to-month, until the end of the next notice period. 4. LATE RENT SERVICE CHARGE AND RETURNED CHECK FEE: RESIDENT will pay the SERVICE CIIARGE listed above if RESIDENT does not pay the monthly rent by the fifth of the month. RESIDENT also will pay a fee of S15.00 for each returned check. B. USE OF APARTMENT S. OCCUPANCY AND USE: Only the persons listed above as RESIDENTS may live in the AparnnenL Persons not listed as RESIDENTS may live in the Apartment only with the prior written consent of MANAGEMENT. RESIDENTS may use the Apartment and utilities for normal residential purposes. 6. SUBLETTING: RESIDENT may not lease the Apartment to other persons (sublet), assign this Lease or sell this Lease without the prior written consent of MANAGEIVIENT. 7_ RES [DENT PROMISES: 1) Not to act in a loud, boisterous, unruly or thoughtless manner or disturb the rights of the other residents to peace and quiet, or to allow hisrier guests to do so; 2) la use the Apartment only as a private residence, and not in any way that is illegal or dangerous or which would cause a cancellation, restriction or increase in premium in MANAGEMENTS insurance; 3) uut to use or store on or near the Apartment any flammable or explosive substance; a) not to interfere in the management and operation of the apartment building; 5) that the Apartment, common areas, or area surrounding the building will not be used by the RESIDENT or by anyone acting under hisiher control to a) manufacture, sell, give away, barter, deliver, exchange, distribute, or b) possess with the intent to manufacture, sell, give away, barter, exchange, or distribute any illegal drugs. 8, WATERBEDS: RESIDENTS may not keep a waterbed or other water -filled furniture in the Apartment without prior written consent of MANAGEhr1ENT. 9. PETS: RESIDENTS may not keep animals or pets of any kind in the Apartment without written ootrseat of MANAGEMENT. C. CONDITION OF APARTMENT 10. MANAGEMENT PROMISES: 1) That the Apartment and all common areas are ft for use as a residential premises; 2) to keep the Apartment in the reasonable repair and make necessary repairs within a reasonable time after written notice by RESIDENT except when damage is caused by the intentional or negligent conduct o the RESIDENT or his/her guests, 3) to maintain the Apartment incompliance with applica6h health and safety codes except when a violation of the health and safety codes has been caused by the intentional le negligent conduct of the RESIDENT of his/her guests; 4) to keep the common areas clean and in good condition. 11. RESIDENT PROMISES: 1) Nato damage or misuse the Apartment or waste the utilities provided by MANAGEMENT or allow his/her guests to do so; 2) not to point or wallpaper the Apartment, or make any structural in the Apartment without Me prior written consent of MANAGEMENT; 3) to keep the apartment clean; 4) to give written notice to MANAGEMENT of any necessary repairs to be made; 5) to notify MANAGEMENT immediately of any conditions in the Apartment that are dangerous to human health or safety, or which mu} Jamage the Apartment or waste utilities provided by MANAGEMENT; 6) that when the RESIDENT moves out, the Apartment will be Ie8 in good condition, except for ordinary wear and tear, 7) not to remove any Fxtures or furnishings supplied by MANAGEMENT without the prior consent of MANAGEMENT; 8) Do cooperate with MANAGEMENT'S efforts at pest control. This may include, among other things, nt RESIDENT'S emptying and cleaning cabinets, drawers and closets pulling furniture away from walls and allowing exterminators to enter the ttt at the Apartme Resident initials Agent initials :— Paye 2 of 41 lease form revised 1/21/99 25. ACTS OFTHIRD PARTIES; MANAGEMENT is not responsible for any damage or injury or harm caused by third parties (such as other residents, guests, intruders or trespassers) who are not under MANAGEMENT'S control. 26. RESIDENTS SHALL REIMBURSE MANAGEMENT FOR I) Any loss, property damage, or cost of repair or service (including plumbing problems) caused by negligence or improper use by RESIDENT, his/her agents, family or guests; 2) any loss or damage caused by doors or windows being left open; 3) all costs MANAGEMENT has because of abandonment of due Apartment or other violation of the Lease by RESIDENT, such as costs for advertising the Apartment; 4) all court costs and attorney's fees MANAGEMENT has in suit for eviction, unpaid rent, or any other debt or charge. 27. WHEN PAYMENTS ARE DUE: Any amount owed by RESIDENT is due when MANAGEMENT asks for iL MANAGEMENT does not give up its right to any money owed by RESIDENT because of MANAGEMENT'S failure or delay in asking for nay payment. MANAGEMENT can ask for any money owed by RESIDENT before or after RESIDENT moves out of the Apartment. G. MISCELLANEOUS 28. FALSE OR MISLEADING RENTAL APPLICATION: If MANAGEMENTdetermbded that any oral or written statements made by RESIDENTS in the rental application or otherwise are not true or complete in any way, then RESIDENT has violated this Lease and may be evicted. 29. BUILDING RULES AND ATTACHMENTS ARE PART OF LEASE; NO ORAL AGREEMENTS: Any attachments to this Lease are a part of this Lease. Ifa term of any attachment conflicts with any turn of this Lease, the attachment term will be controlling. MANAGEMENT'S building roles area i of this Lease, and MANAGEMENT may make reasonable changes in these AG at any time by giving RESIDENT written notice. No oral agreements have been made. This Lease and its attachments and any other written agreements are the entire agreement between RESIDENT and MANAGEMENT. 30. NOTICES: All RESIDENTS agree that notices and demands delivered by MANAGEMENT to the Apartment arc proper notice to all RESIDENTS, and are effective as soon as delivered to the Apartment. Agent Date pate 4 of 4/ Revised 1/21199 Resident Resident Resident Date [Attacbment tO bchl it 4 of Property MarLagemeat Agreement] AGING AGENT'S LOW-INCCHE ELIGIBILITY WORKSM= AND CSRTIFYCATION OF QMLLIFIED OCCUPANT $wilding Name Initial Certification assigned Unit No. Bedroom Size Annual Recertification Member I Tenant's name No.* (Last Name, First Name) Head 2 3 4 5 Head 2 3 4 5 RelationshipFull-Time Student, to Head Age Occupation Disabled, Handicapped.? Retirmt, Dnemp Alimony, Pension, Social Disabi- Child Annuity Security lity Welfare Support other Camp COMBINED TOTAL INCOME FOR ALL HOUSEHOLD MEMBERS : $ I. Combined Total Household income (from Tenant Income Certification) $ 2. H[]D Area Median Income for Household Size $ Owner's Set -Aside Election: 503t or 60t 3. Is Tenant a Qualified Occupant? Yes or NO SART 3 - N&X&21= n[_+MI S C==CATION I certify that the information contained herein is true and correct to the best of my knowledge and belief and that all verifications of Tenant's income required by Agent under its Property Management Agreement with the Owner of the Building identified above have been obtained. Managing Agent Rental Gross Self- Income, Member Salary EV Interest, No.* or Income Stock Wages Div. Head 2 3 4 5 RelationshipFull-Time Student, to Head Age Occupation Disabled, Handicapped.? Retirmt, Dnemp Alimony, Pension, Social Disabi- Child Annuity Security lity Welfare Support other Camp COMBINED TOTAL INCOME FOR ALL HOUSEHOLD MEMBERS : $ I. Combined Total Household income (from Tenant Income Certification) $ 2. H[]D Area Median Income for Household Size $ Owner's Set -Aside Election: 503t or 60t 3. Is Tenant a Qualified Occupant? Yes or NO SART 3 - N&X&21= n[_+MI S C==CATION I certify that the information contained herein is true and correct to the best of my knowledge and belief and that all verifications of Tenant's income required by Agent under its Property Management Agreement with the Owner of the Building identified above have been obtained. Managing Agent ASSET VERIFICATION NAME SOCIAL SECURITY NO. PERMISSION FOR RELEASE OF INFORMATION authorize you to furnish the information requested below to: La stamped/addressed envelope has been enclosed) for the purpose of determining my eligibility for participation in the Low Income Housing Tax Credit Program (LIETC). I understand that the information is confidential and will -be used only in determining program eligibility and that I have the right to rescind this authorization in writing, at any time, but that to do so may affect my eligibility for program participation. Address: Signature City/State: Zip; Date "Rank you for your cooperation. If you have any questions, please contact: at ( ) _ SAVINGS ACCOUNT: Acct#: Current Balance $ Current %- Rate CHECKING ACCOUNT-. Avera a Bal SAVINGS ACCOUNT: Acct#: Current Balance $ Current %- Rate g once for the Past Six Months: $ Rate of Interest: %_ Current Balance. Please list other asset accounts below (Certificates of Funds, Trust, IRA's. etc.) Account Type of Number Balance Account *NOTE: CASH VALUE IS THE CURRENT VALUE MINUS Date Tel.# Deposit, Money Market Rate of Interest Cash Value* PENALTIES FOR EARLY WITSDFUM4AL. Bank Name Print Your Name Signature Asset Verification (VBRIF.FRH1) P=SI0N/AW=Tr VMIFICATION NAME SOCIAL SECORM No. PERMISSION FOR RELEASE OF INFORMATION I, authorize you to furnish the information requested below to: (a stamped/addressed envelope has been enclosed) for the purpose of determining my eligibility for participation in the Low Income Housing Tax Credit Program (LIHTC). I understand that the informatioa is confidential and will be used only in determining have the right to rescind this authorization in writiinng,�ate ig time, but and that I do so may affect my eligibility for program participation. Signature Date Address: _ city/State: Zip: ,Thank you for your cooperation. If you have any questions, please contact: at ( )- Type of Pension: Current Gross Income: $ or $ Week Moath Medical Deductions: $ or $ Week Month Date of Initial Award: Effective Date of Current Amount: Total Gross Pension Income expected for next 12 months: $ Date Print Your Name Tel.; { ) - Signature Title Penia/A=dty verification (VZUF.F4M) SELF MdPLOYbMT Vl=lr:CCRTION SOCIAL 5ECURITy No. PERMISSION FOR RELEASE; OF IMMRMATION I' authorize you to furnish the information requested below to: (a stamped/addressed envelope has been enclosed) for Housing Purpose of determining my eligibility for participation in the Low Income Tax Credit Program (LIETC). I understand that the information is confidential and will be used only in determining program eligibility and that I have the right to rescind this authorization in writing at any time, but that to do so may affect my eligibility for program participation. Address: Signature City/State: Zip: Date Thank you for your cooperation. if you have any questions 3 , please contact: at ( ) _ —acwe zusaness opened: Type of Business: The following statement of income is based upon the business The following statement of income is period from based upon the business transacted during the to 3.9-- 1. Gross Income: 2. Eamenses : a. Interest on Loan(s) b. Cost of Goods/Materials C- Rent d. Utilities e. Wages and Salaries f- Employee Withholding Tax g- Federal withholding Tax h- State withholding Tax i- FICA Self &Ployment Verification (V$RIF.FRM) MMOL073OWT COMPENSATION VSRIFYCATION ireunz SOCIAL SECURITY NO. PERMISSION FOR RELEASE OF INFORMATION I' authorize you to furnish the information requested below to: (a stamped/addressed envelope has been enclosed) for the purpose of determining my eligibility for participation in the Loco Income Housing Tax Credit Program (LIgTC). I und confidential and will be used only in determining program d that the information is have the right to rescind this authorization in wrieligibility and at thI do so may affect my eligibility for pr �' at any time, but that to ogram participation. Address: Signature City/State: Zip: Date _Thank you for your cooperation. If you have any questions, please contact: at ( _ %+ivss weexiy Payment: $ Date of Initial Payment: $ Ending Date, if ]mown Is the client entitled to an extension of benefits? Yes No If yes, for how long? If no, what is the termination date of benefits? Date Tel. # Print Your Name Signature Title 10nemp"J'0'—t Compensaticm Verification (V=UF.FRM) [Attachment to Exhibit 5 of Property Management g meat Agreement] QUALIFIED INCOME LEVELS (To be attached to Rent Roll) Name of Project: Address of Project: Name of Sponsor: Tax Credit Election. for Project: Units reserved for families at 50$ or less of Median Income Units reserved for families at 60t or less of Median Income HUD PUBLISH AREA =IAN INCOME LIMITS BY HOUSEHOLD SIZE Check appropriate blank: at 50% of median at 60%- of median HOUSEHOLD SIZE 1 PERSON 1.5 PERSONS 2 PERSONS 3 PERSONS 4 PERSONS 4.5 PERSONS 5 PERSONS 6 PERSONS 7 PERSONS EFFECTIVE DATE EFFECTIVE DATE EFFECTIVE DATE ------------- EXECUTION COPY: February 2,1999 COMBINED MINNESOTA HOUSING FINANCE AGENCY AND MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS MANAGEMENT AGREEMENT THIS AGREEMENT is effective this 3rd day of February, 1999, between PPL -BASS LAKE COURT LIMITED PARTNERSHIP, a Minnesota limited partnership, with its principal place of business located at 2516 Chicago Avenue South, Minneapolis, Minnesota 55404 (hereafter referred to as "Owner") and PROJECT FOR PRIDE IN LIVING, INC., a Minnesota corporation, with its principal place of business located at 2516 Chicago Avenue South, Minneapolis, Minnesota 55404 (hereinafter referred to as "Agent"). WITNESSETH: In consideration of the terms, conditions and covenants hereinafter set forth, Owner and Agent mutually agree as follows: Section 1. Definitions. As used in this Agreement: I.I. "ACC" shall mean the amended annual contributions contract dated February 3, 1999 between the MPHA and HUD. 1.2. "Author!Units" shall mean the twelve (12) low income public housing units to be located within the Development pursuant to the Housing Agreement and for which the MPHR is obligated under the MPHA Regulatory Agreement to provide certain operating subsidies. 1.3. "Consent Decree" shall mean the consent decree entered in the case of Hollman et al. v. Cisneros et al., U.S.D.C. (Minn. Dist., 4th Div.) Civil No. 4-92-712. 1.4. "Development" shall mean the real property and the improvements, buildings, appurtenances and equipment thereon, of the owner known as PPL -Bass Lake Court, located in the City of New Hope, County of Hennepin, State of Minnesota, and consisting of thirty-four (34) dwelling units and no commercial or other non - dwelling spaces (MWA Development No. NCTC-2558). 1.5. "EDA" shall mean the Economic Development Authority in and for the City of New Hope. D.%1NN125\017\DOCSNTAX CREDIT MGT AGREE.DOC 1 NWA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT 1.6. "HUD" shall mean the United States Department of Housing and Urban Development. 1.7. "Housing Agreement" shall mean the Housing Development Agreement dated December 31, 1998 between the MPHA, EDA and the Owner. 1.8. "Housing Covenants" shall mean the MPHA Act, the ACC, the Consent Decree, the Housing Agreement and the MPHA Regulatory Agreement. 1.9. "Lease" shall mean the form of agreement between the Owner and a Tenant under the terms of which said Tenant is entitled to enjoy possession of a dwelling unit. 1.10. "Low Income Housing Tax Credit Program" or LIHC Program" shall mean the provisions of Section 42, as described below, and the requirements set forth in the Low Income Housing Tax Credit Program Procedural Manual and Compliance Manual issued by MHFA. 1.11. "MHFA" shall mean the Minnesota Housing Finance Agency as established under the Provisions of the MHFA Act. 1.12. "MHFA Act" shall mean Laws of Minnesota, 1971, Chapter 702, as amended. 1.13. "MPHA" shall mean the Minneapolis Public Housing Authority in and for the City of Minneapolis. 1.14. "MPHA Act" means Section 5 of the United States Housing Act of 1937. 1.15. "MPHA Regulatory Agreement" shall mean the Regulatory and Operating Agreement dated February 3, 1999 between the MPHA, the EDA and the Owner. 1.16. "Non -Housing Income" shall mean all amounts actually collected by the Agent, other than as provided in Section 1.18 below, including, but not limited to (1) vending and laundry machine income, (2) income received from rental of parking spaces, garage spaces and commercial space. 1.17. "Public Agencies" shall mean the MHFA, MPHA and EDA, collectively. 1.18. "Rent" shall mean that monthly amount which a Tenant is obligated to pay the Owner pursuant to the terms of a Lease. 1.19. "Section 42" shall mean and refer to Section 42 of the Internal Revenue Code and any regulations and ruling issued thereunder, as it may be amended from time to time. D:1MNN12n0171DOCSITAX CREDIT MGT AGREE.DOC 2 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREF.N"T 1.20. "Tenant" shall mean a person occupying a dwelling unit in the Development pursuant to a Lease. Section 2. Appointment of Agent. The Owner hereby appoints the Agent, and the Agent hereby accepts appointment, on the terms and conditions hereinafter provided, as exclusive management agent for the Development. The Agent shall carry out the obligations of the Owner as set forth in the Housing Covenants and as they relate to the management and operation of the Development; provided, however, that assumption of such obligations by the Agent shall not relieve the Owner of the responsibility therefor. Section 3. Management Plan. Attached to this Agreement as "Exhibit A" and incorporated herein by reference is a copy of a Management Plan (the "Management Plan") for the Development, which contains a detailed description of the policies and procedures to be followed in the management of the Development. In many of its provisions, this Agreement briefly defines the nature of the Agent's obligations, with the intention that reference is made to the Management Plan for more detailed policies and procedures. Accordingly, the Agent and the Owner will comply with applicable provisions of the Management Plan, regardless of whether specific reference is made thereto in any particular provision of this Agreement. To the extent the Management Plan and this Agreement are inconsistent, this Agreement shall control. Section 4. Regulation by MHFA. The Agent fully understands that the Owner is a limited -profit or non-profit housing entity receiving a mortgage loan from the MHFA and an allocation of tax credits from the Low Income Housing Tax Credit Program, and is required to comply with the MHFA Act and rules and regulations of the MHFA and the LIHC Program. The Agent further fully understands that the operation of the Development is subject to that certain Minnesota Housing Finance Agency New Construction Tax Credit Program Regulatory Agreement (hereinafter referred to as the "MHFA Regulatory Agreement", and attached hereto as Exhibit B) between the Owner and MHFA. In the performance of its duties hereunder, the Agent agrees to become conversant with and comply with the provisions of the MHFA Act, the policies, procedures, rules and regulations of the MHFA, the MHFA Regulatory Agreement, the LIHC Program and Section 42, all as may be amended from time to time. Section 5. Authority Units. 5.1. The Agent hereby agrees to perform for and on behalf of the Owner all rights, powers, authorities and obligations of the Owner under and pursuant to the Management Plan and any relevant portions of the Housing Covenants pertaining to the day-to-day operation and maintenance of the Development and the Authority Units; it being acknowledged and agreed that the agency relationship hereby created is for the benefit and security of HUD, MPHA and EDA under the Housing Covenants and that this Agreement cannot be modified or terminated or the obligations of the Agent hereunder modified in any material way or terminated without the express prior written consent of the MPHA and EDA. D,'\MNN 32510 T 71DOCSITAX CREDIT MGT AGREE.DOC 3 AUTA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT 5.2. All parties hereto acknowledge that the goal of achieving long-term sustainability of the Development as a mixed -income community will be enhanced by administrative procedures and terms and conditions of occupancy which reduce discernible distinctions in maintenance and operation, and conditions of continued occupancy, between the Authority Units and other units in the Development to the greatest extent feasible while assuring that the Authority Units are available to house families who meet the occupancy objectives of the MPHR. This Agreement enumerates certain respects in which operating procedures and other requirements as to the Authority Units will differ from those in effect with respect to public housing units owned by the MPHA. The parties agree that, if experience demonstrates a need for or the desirability of further departures from standard procedures applicable to MPHA-owned public housing, they will consult with each other regarding such further modifications and will take such further implementing steps as they agree to be advisable, including, as appropriate, requests to HUD for revision or waiver of regulations necessary to permit the MPHA and EDA to undertake measures that enhance the long-term viability of the Development, or requests to implement statutory revisions made by Congress from time to time affecting either public housing in general or public housing located within privately -owned mixed -income communities in particular. 5.3. Tenant Selection. (a) The Agent will follow the resident selection policy described in the Management Plan. (b) With respect to the Authority Units, the EDA shall create, maintain and manage one or more waiting lists in accordance with the Housing Covenants. When a vacancy will occur in an Authority Unit, the Agent shall request and the EDA shall supply to the Agent the names of potentially eligible tenants for the Authority Units. Screening criteria and procedures employed by the Agent with respect to applicants for Authority Units shall, to the extent permissible under the Housing Covenants, be consistent with those utilized by the Agent with respect to other units in the Development; provided that at all times such procedures shall be fair and evenhanded and shall not be more stringent as they relate to other waiting list applicants. The MPHA shall have the right to monitor the procedures and results of the Agent's activities in this regard. The EDA shall establish procedures for formal and informal review of eligibility or suitability determinations for applicants for admission to the Authority Units, consistent with HUD regulations. (c) Leases for the Authority Units will be on the form attached hereto as Exhibit C, subject to such changes as shall be approved in writing by the MPHA. D: N1NN125W17\DOCSkTAX CREDIT MGT AGREE.DOC 4 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT (d) The Agent shall provide training for key management personnel, including attendance at conferences and seminars on housing management. The Agent will cooperate with the EDA to facilitate resident awareness of and access to available social services. Such cooperation shall include keeping and displaying, on site or in the rental office, information concerning such services as is from time to time provided to the Agent by the EDA. Training on public housing will be made available as needed by MPHA. 5.4. It is agreed that payments of Development Operating Subsidy from the MPHA shall be made directly to the Agent. In the event that the MPHA does not provide the Agent with the Development Operating Subsidy Requirement or the Development Operating Subsidy Requirement is inadequate to pay the difference between Authority Unit Income and Authority Unit Expenses, all as defined in Article IV of the MPHA Regulatory Agreement, the Agent shall utilize funds in the Development Operating Subsidy Reserve as described in Section 5.6 of the MPHA Regulatory Agreement. In the event the Development Operating Subsidy Reserve reaches the levels described in Sections 6.3 and 6.4 of the MPHA Regulatory Agreement, the Agent may exercise the remedies provided therein. 5.5. Taxes. (a) The parties hereto acknowledge that property taxes shall be paid by the Owner according to law. The Agent shall obtain statements for ad valorem property taxes and assessments against the Development and transmit copies thereof to the Owner promptly upon receipt thereof by the Agent. (b) Pursuant to Minnesota Statutes, §469.040, the Authority Units are exempt from property taxation and instead the Owner will be obligated to forward payments in lieu of taxes equal to five percent (5%) of "shelter rents," as defined therein. It shall be the duty of EDA to annually certify to the appropriate assessing officials the number of Authority Units in the Development and the obligation of the Agent to calculate and provide to the Owner the amount of such payments in such a manner as to permit the timely payment thereof. (c) Notwithstanding anything in the preceding paragraphs of this Section 5.5 to the contrary, the Owner or Agent shall have the right at any time during the term of this Agreement to contest the amount of or assessment pertaining to real estate taxes, assessments, or any other imposition levied or imposed by any governmental authority concerning the Development. Section 6. Confer with Owner and the TMHFA. Agent agrees to keep itself informed on the policies of the MHFA, and, notwithstanding the authority given to the Agent in this D:IMNN12510171DOCSITAX CREDIT MGT AGREE.DOC 5 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT Agreement, to confer fully and freely with the Owner, the marketing agent, if any, and the MHFA in the performance of its duties hereunder. Section 7. Meetings with Owner and Marketing Agent. The Agent agrees to cause an officer of the Agent to attend meetings with the Owner and marketing agent, if any, at any time or times requested by the Owner, marketing agent, or the MHFA. Section 8. Personnel Agent. 8.1. Employees of Agent. On the basis of wage rates previously approved by the Owner and MHFA, the Agent shall investigate, hire, pay, supervise, and discharge all manageril and non -managerial personnel as follows: NO. POSITION TITLE ANNUAL PAYROLL INCLUDING WITHHOLDING Manager $12,000 Caretaker $14,124 Such personnel shall in every instance be in the employment of the Management Agent. Compensation for the services of such employees (as evidenced by certified payrolls) shall be considered an operating expense of the Development. The Agent shall hire in its own name, and have physically present at the Development, all managerial and non -managerial personnel necessary for the full and efficient performance of its duties under this agreement, including the physical presence of responsible personnel at such times as may reasonably be requested by the Owner. In any event, no less than one (1) responsible managerial or nonmanagerial person(s) of the Agent shall be physically present at the Development not less than eight (8) hours per day, five (5) days per week. 8.2. Employment of Tenants and Contractors. To the greatest extent possible, opportunities for training and employment will be given to lower income Tenants residing in the Development, and contracts for work in connection with the Development will be awarded to business concerns which are located in or owned in substantial part by persons residing in the area of the Development. Notwithstanding the above, these opportunities shall not compromise the quality of maintenance and management services or the financial condition of the Development. 8.3. On -Site Management. The Owner will provide and the Agent shall maintain an employee of the Agent to reside in the Development, which shall include such furniture, telephonic and other equipment, utilities and janitorial supplies as are reasonably necessary for the operation of the Development. D:\NM1251017MOCS1TAX CREDIT MGT AGREE.DOC 6 MHFA IOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT Section 9. Services of Agent, 9.1. Review of Architectural Plans and Specifications. The Agent shall advise the Owner with respect to design and construction of the Development throughout the planning and design period at each state of design (schematic, preliminary, and final working drawings and specifications) and shall recommend such changes as deemed necessary based upon the experience of the Agent, particularly with regard to items which may reduce operating expenses and create a more maintenance -free Development. 9.2. Services Prior to Construction. Prior to the initial closing and the initiation of construction of the Development, the Agent shall (i) furnish to the Owner and to the Public Agencies, detailed estimates and supporting material regarding a maintenance and operating expenses for the Development and (ii) review the MHFA Pre -Commitment Marketing Plan prepared by the marketing agent. 9.3. Services During Construction. Prior to completion of construction and prior to occupancy of the Development, the Agent shall (i) furnish to the Owner and the Public Agencies in a format acceptable to each of them, and no later than 60 days prior to occupancy of the Development, revised estimates of maintenance and operating expenses accompanied by documentation in the form of bids, contracts or comparable for any and all items so requested by the MHFA; (ii) establish and maintain a close working relationship with the marketing agent, if any (iii) review the "Pre -Occupancy Marketing Plan" prepared by the marketing agent; (iv) retain such management and maintenance personnel as necessary for the Development no later than 60 days prior to occupancy; (v) provide training for on-site management and maintenance personnel, including attendance at conferences and seminars on housing management and compliance with Section 42; (vi) establish "Rules and Regulations" for the Development as required in the MHFA Lease (vii) establish a book-keeping and accounting system in accordance with the MHFA and HUD requirements (refer to 9.18 herein); (viii) provide for insurance coverage in accordance with MHFA requirements (refer to 9.10 herein); (ix) secure all necessary equipment and supplies; (x)participate in pre -occupancy conferences and training sessions as required by the MHFA and/or the MPHA; and (xi) provide an accounting for all expenses to be paid from interim income in accordance with the MHFA standards and requirements for cost certification. 9.4. Structure and Warranties. The Agent shall obtain from the Owner a complete set of plans and specifications as approved by the MHFA and copies of all guarantees pertinent to construction, fixtures, and equipment. With the aid of this information and inspection by competent personnel, the Agent shall thoroughly familiarize itself with the character, location, construction, layout, plan, and operation of the Development and especially of the electrical, heating, plumbing, air conditioning, and ventilating systems, and all other mechanical equipment. D:IMNTN 12510171DOCSITAX CREDIT MGT AGREE.DOC % WWA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMEMC AGREEMENT 9.5. Inspection of Development. The Agent shall participate in the final inspection(s) to certify the readiness of the units for occupancy and shall (i) inform the Owner, the Architect, the Contractor, and the Public Agencies of all defects in material and workmanship discovered within the construction warranty period; (ii) monitor the action taken by the contractor to correct the defects; and (iii) participate in any formal inspection held for the purpose of identifying construction defects. 9.6. Inspection Prior to Occupancy. The Owner or Agent shall certify on a move -in inspection form, prior to occupancy of any unit by a Tenant, that they have inspected the unit, and have determined it to be decent, safe, and sanitary. Copies of the move -in inspection forms shall be kept by the Owner for at least three years. 9.7. Annual Inspection. As part of a continuing program to secure full performance by the Tenants of all obligations and maintenance for which they are responsible, Agent shall make an annual inspection of all dwelling units and report its findings in writing to the Owner and the Public Agencies. 9.8. Maintenance and Repairs. Agent shall cause the buildings, appurtenances, equipment and grounds of the Development to be maintained and repaired according to standards acceptable to the Owner and the MHFA. 9.9. Preventive Maintenance. The Agent shall develop a preventive maintenance schedule including, but not limited to, periodic inspections of the units; residency commencement and termination checklists; inventory control; common area main-tenance; equipment maintenance; exterior maintenance on a seasonal basis; and painting, decorating, and replacement timetables, as necessary. 9.10. Property Insurance. In accordance with 9.3(viii), herein, the Agent shall obtain recommendations for, and cause to be placed in force, all forms of insurance needed to adequately protect the Owner and the Development (or as required by law), including, where appropriate, public liability insurance, boiler insurance, fire and extended coverage and burglary and theft insurance. All of the various types of insurance coverage required for the benefit of the Owner and the Development shall be placed with such companies, in such amounts, and with such beneficial interest appearing therein as shall be acceptable to the Owner and MHFA. The Agent shall promptly investigate and make a full written report to the Owner and MHFA as to all accidents or claims for damage relating to the ownership, operation, and maintenance of the Development, the estimated cost of repair, and shall cooperate and make any and all reports required by any insurance company in connection therewith. 9.11. Notice of Authority. The Agent, in accordance with Minnesota Statutes § 504.22, shall place in conspicuous place on the premises a notice that the Agent is D:1MNN12A0171DOCSITAX CREDIT MGT AGRER DOC 8 MHFA LOW INCOME HOUSING TAX CREDrr PROGRAM MANAGEMENT AGREEMENT authorized to manage the premises and is authorized by the Owner to accept service of process and to receive and give receipt for notices and demands. 9.12. Service R uests of Tenants. The Agent shall maintain business -like relations with Tenants whose service requests shall be received, considered and recorded on a systematic, written basis in order to show the action taken with respect to each. Complaints of a serious nature and all written complaints shall, after thorough investigation, be reported to the Owner with appropriate recommendations. 9.13. Review of Operation. The Agent shall permit the Public Agencies to conduct on- site evaluations of the performance of any or all management services which the Agent has agreed to provide as stipulated in this Agreement, and the Management Plan, if required. An authorized representative of the Agent shall be available during on-site evaluations. The Public Agencies may render to the Owner and Agent written reports based on such evaluations. The Agent shall correct any deficiencies noted in these evaluations within 30 days of the receipt of the report from MHFA. In the event such correction cannot be made within 30 days, the Agent shall provide the Public Agencies with a written plan for such correction, including a timetable of proposed actions. 9.14. Collections and Delinquencies. The Agent shall collect and deposit in the account established pursuant to Section I k hereof- of ail Kents and other charges due from Tenants and all Rents or other payments due the Owner from users of garage spaces and from users or lessees of other non -dwelling facilities in the Development. All payments of Operating Subsidy made to the Development pursuant to the MPHA Regulatory Agreement shall be deposited by the Agent into such account. The Initial Deposit to the Authority Reserve shall be segregated and invested as set forth in Section 5.1 of the MPHA Regulatory Agreement. The Agent agrees, and the Owner hereby authorizes the Agent, to request, demand, collect, receive, and give receipts for any and all charges or rents which may at any time be or become payable to the Owner. Rents and other charges shall not be accepted in cash by the Agent. The Agent agrees to take such action, including legal action, with respect to delinquencies in payments due the Owner as the Owner may from time to time authorize. The Agent shall furnish the Owner an itemized list of all Tenants with a delinquent account immediately following the fifteenth day of each month. 9.15. Payments and Expenses. From the fiends collected and deposited in the account established pursuant to Section 11 hereof, the Agent shall cause to be disbursed regularly and punctually in accordance with the provisions of the MHFA Regulatory Agreement in the order and priority as set forth in the MHFA Regulatory Agreement. DAN1NN125%0171DOCSkTAX CREDIT MGT AGREE.DOC 9 NWA LOW INCOME HOUSING TAX CRmyr PROGRAM MANAGEMENT AGREEMENT With the exception of payments provided for in the iVIHFA Regulatory Agreement, the Agent shall not make any disbursement in excess of $2,000.00 unless specifically authorized by the Owner and approved by the MHFA; provided that emergency repairs, involving manifest danger to life and property, or immediately necessary for the preservation and safety of the Development, or for the safety of Tenants, or required to avoid the suspension of any necessary services to the Development, may be made by the Agent without regard to the cost limitation imposed by this paragraph with the understanding that the Agent will, if at all possible, confer immediately with the Owner regarding every such expenditure, and will submit the request for the required MHFA approval promptly following the emergency. The Agent shall not incur liabilities of the Owner (direct or contingent) which, in the aggregate will exceed at any time $2,000.00 unless specifically authorized by the Owner and approved by the MHFA. In addition, the Agent shall not incur liabilities of the Owner (direct or contingent) which require payment more than one year from the creation thereof, unless specifically authorized by the Owner and approved by the MHFA. 9.16. Government Orders. The Agent shall take such action as may be necessary to comply promptly with any and all orders or requirements affecting the Development which may be placed thereon by any federal, state, county, or municipal authority having jurisdiction hereover, and orders of the Board of Fire Underwriters or other similar bodies. The Agent shall not take any action under this paragraph unless the MHFA so directs so long as the Owner is contesting or has affirmed its intention to contest any such order or requirement. The Agent shall promptly, and in no event later than forty-eight (48) hours from the time of their receipt, notify the Owner and the MHFA in writing of all such orders and notices of requirements. 9.17. Utility Service and Purchases. Subject to the approval of the Owner and in accordance with the rules and regulations of the MHFA, the Agent shall make contracts for garbage and trash removal, fuel, oil, extermination, snow removal, elevator maintenance, and other necessary services. Further, the Agent shall place orders for such equipment, tools, appliances, materials, and supplies as are necessary to maintain and repair the Development properly. When taking bids or issuing purchase orders, the Agent shall act at all times in the best interests of the Owner and shall be under a duty to secure for and credit to the Owner any discounts, commissions or rebates obtainable as a result of such purchases. 9.18. Records and Reports. (a) The Agent shall establish and maintain a comprehensive system of records, books, and accounts in a manner satisfactory to the Owner and the Public Agencies. All records, books, and accounts will be subject to examination at reasonable hours by any authorized representative of the Owner or the MHFA. D:1NLNN12510170XSITAX CREDIT MGT AGREE.DOC 10 MIIFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT (b) With respect to each fiscal year ending during the term of this Agreement, the Agent will have an annual financial report prepared by a Certified Public Accountant based upon the preparer's examination of the books and records of the Owner and the Agent. The report will be prepared in accordance with the requirements of the Public Agencies, will be certified by the preparer and the Agent, and will be submitted to the Owner within sixty (60) days after the end of the fiscal year, for the Owner's further certification and submission to the Public Agencies. Compensation for the preparer's services will be considered an operating expense of the Development. (c) The Agent will prepare a Monthly Operating Report which compares actual and budgeted income and expenses for the month and for the "year- to-date". The Agent will prepare a monthly aged schedule of accounts receivable and accounts payable and a monthly occupancy report. The Agent will prepare a monthly analysis of security deposits and monthly cash reconciliation, and will submit each statement to the Owner and the Housing Management Division of the MHFA within fifteen (15) days after the end of the month covered. (d) The Agent will furnish such information as may be requested by the Owner or the MHFA from time to time with respect to the financial, physical, or operational condition of the Development. (e) By the fifteenth (15th) day of each month, the Agent will furnish the Owner with an itemized list of all rent delinquencies as of the tenth (10th) day of the same month. (f) The Agent shall prepare, execute, and file for the Owner all forms, reports, and returns required by law in connection with the employment of personnel, including unemployment insurance, worker's compensation insurance, disability benefits, social security, and other similar insurance benefits or taxes now in effect or hereafter imposed. (g) All records, books, and accounts will be subject to examination at reasonable hours by any authorized representative of the MPHA, HUD and EDA. The Agent shall be responsible for providing the budgets and reports described in Article IV of the MPHA Regulatory Agreement. The Agent must submit periodic occupancy data as required by HUD on HUD forms 50058 and 51234. 9.19. Operating Budget. At least 60 days before the beginning of each new fiscal year for the Development, the Agent shall prepare and submit to the Owner, the MPHR, the EDA and the MHFA an Operating Budget, in such form as may be D:IMNN12510171DOCSITAX CREDIT MGT AGREE.DOC 11 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT prescribed by the MHFA, setting forth an itemized statement of the anticipated receipts and disbursements for the Development. In addition, the Agent shall prepare and submit to the MPHA and EDA the initial estimated and subsequent operating budgets for the Authority Units pursuant to Article IV of the MPHA Regulatory Agreement and shall provide such other information and reports as required by the Owner, the MPHA or the EDA. 9.20. Assumption of Marketing_ Duties. Upon expiration or termination of the Marketing Agreement (attached hereto as Exhibit D), the Agent shall immediately assume responsibility for all functions and services of the marketing agent as set forth in the agreement. 9.21. Compliance of Tenants. (a) The Agent shall at all times during the term of this Agreement operate and maintain the Development according to the provisions of Section 42 and any regulations thereunder, and by the Owner's covenants to the MHFA relating to the Low Income Housing Tax Credit Program. The Agent shall secure full compliance by the Tenants with the terms and conditions of their respective Leases and with the provisions of the LIHC Program. (b) Voluntary compliance shall be emphasized, and the Agent shall counsel Tenants and make referrals to social service agencies in cases of financial hardship or under other circumstances deemed appropriate by the Agent, so that involuntary termination of tenancies may be avoided to the maximum extent consistent with sound management of the Development. The Agent will not, however tolerate willful evasion of payment of rent. (c) The Agent may lawfully terminate any tenancy when, in the Agent's judgement, sufficient cause occurs under the terms of the Tenant's Lease. Documentation of eviction for reasons other than non-payment of Rent will be on file with the Owner. (d) The Agent is authorized to consult with legal counsel designated by the Owner to bring actions for eviction and to execute notices to vacate and to commence appropriate judicial proceedings; provided, however, that the Agent shall keep the Owner informed of such actions and shall follow such instructions as the Owner and the MHFA have prescribed. (e) Subject to the Owner's approval, costs incurred in connection with such actions shall be considered as operating expenses. (f) With regard to the Authority Units, the EDA, with the cooperation of the MPHA, will establish a tenant grievance procedure for residents of the Authority Units in compliance with the requirements of Section 6(k) of the I)MM vN125 I7%DOCSITAX CREDIT MGT AGREE,DOC 12 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT MPHA Act and consistent, to the maximum extent feasible, with the intent stated in Section 5.2, above. Such procedures will provide for informal discussion and settlement of grievances by the Agent and hearing before a formal hearing panel appointed in accordance with such grievance procedures. The MPHA and EDA will seek HUD approval, to the extent required, of variations from the requirements of 24 CFR Part 966, Subpart B, as amended or replaced from time to time. 9.22. Certification and Recertification Income. Prior to move -in and at least annually thereafter, the Agent shall certify/recertify incomes of Tenants, as required by the Housing Covenants and the LIHC Program and the MHFA. Tenant incomes must be in compliance with Section 42 and the MPHR Act, any subsidy contract for the Development, and/or as required by any federal or state law relating to the use of proceeds for the funding of the Development's mortgage loan by the MHFA. 9.23. Gross Rent. For purposes of the LIHC Program, gross rent is determined by adding Rent plus the applicable utility allowance. Agent shall ensure that gross rent is in compliance with the LIHC Program and, with respect to the Authority Units, the Housing Covenants. Rents for the non Authority Units shall initially be established according to the Schedule set forth in the MHFA Regulatory Agreement. All requests for increases in rents shall be submitted in writing, to MHFA for approval. 9.24. Compliance with Section 42. (a) Agent, property managers/supervisors and on-site office staff appointed or assigned to the Development and all site personnel shall carefully review and become familiar with all regulatory requirements promulgated under the LIHC Program. The aforementioned personnel (hereinafter referred to as "Staff') shall attend LIHC compliance training as soon as is practicable. At least once every 2 years thereafter, Staff must attend seminars, conference and/or workshops on the LIHC Program to ensure continued knowledge of and compliance with Section 42, as may be periodically amended by the Treasury Department or Internal Revenue Service (IRS). Agent shall ensure that the Development is operated and managed in compliance with all of the foregoing; cooperate with the IRS and other governmental authorities in connection therewith; and inform Owner of any such information which may subsequently become available, which may be material to the operation and management of the Development and/or Owner's investment therein. (b) Owner will provide Agent with copies of the following documents in a timely manner: (1) LIHC Program Placed in Service Application, (2) MHFA Compliance Manual, (3) Section 42 rent and income tables, (4) utility allowance schedules from the appropriate utility source, and (5) D:IMNN12550171DOCSITAX CREDIT MGT AGREE.DOC 13 W FA IOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT MHFA Regulatory Agreement. Owner further agrees to provide Agent with amendments, changes, rulings and announcements to the aforementioned documents, as they occur. Agent agrees to provide copies of documents for Staff as defined in this Section 9.24. Current copies are to be maintained at the Development for the duration of the compliance period required by the LIHC Program. (c) Agent will provide MHFA with a copy of all Tenant file documentation for any and all Tenants that occupied a unit in the Development from the date the Development was placed in service through December 31 of the following year. Such documentation will be submitted to MHFA within thirty (30) days of said December 31 date. (d) Agent will immediately report to MHFA any and all noncompliance of which it becomes aware and will take prompt action to correct any noncompliance. Section 10. Other Acts. Everything done by the Agent under the provisions of this Agreement shall be done as agent of the Owner, and all obligations or expenses incurred thereunder shall be for the account of and on behalf of the Owner. Any payments to be made by the Agent hereunder shall be made out of such sums as are available in the Operating Receipts and Expense Account established pursuant to Section 11, below. The Agent shall not be obliged to make any advance to, or for the account of the Owner without assurance that the necessary funds for the discharge thereof will be provided. Section 11. Bank Account. 11.1. The Agent shall establish and maintain, in a bank whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC) in accordance with the provisions of the MHFA Regulatory Agreement, a separate bank account as Agent of the Owner for the deposit of the moneys of the Owner, with authority to draw thereon for any payments to be made by the Agent to discharge any liabilities or obligations of the Owner incurred in accordance with this Agreement. This account shall be carried in the Agent's name and shall be designated of record "PPL -Bass Lake Court Development Operating Receipts and Expense Account". The Agent shall establish such other special bank accounts as may be required by the Owner, the MHFA or the MPHA Regulatory Agreement. Signatories entitled to make withdrawals from any and all of these accounts shall be persons covered by the Bond to be posted pursuant to Section 15 of this Agreement. 11.2. Security Deposit Account. The Agent shall collect, deposit, and disburse Tenant's security deposits in accordance with the terms of the respective Leases. Tenant's security deposits shall be deposited by the Agent in an interest bearing account, separate from all other accounts and funds, with a bank or other financial institution whose deposits are insured by the FDIC. The Agent shall be D:IMNN125%GI'ADOCSITAX CREDrr MGT AGREE.DOC 14 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT responsible for any loss incurred by the Development for its failure to comply with refunding of security deposits with accrued interest to Tenants as required by Minnesota Laws, 1973, Chapter 561. This account shall be carried in the Agent's name and shall be designated of record "(Name of Development) Security Deposit Account". The Agent shall cause the amount of the Security Deposit Account to equal or exceed at all times the aggregate of all outstanding obligations by the Owner with respect to security deposits. Section 12. Office Development. The Owner shall furnish the Agent with suitable office space, office furniture and equipment (file, typewriter, adding machine, etc.) on the site of the Development and with electricity, heat, water, and janitorial service therein. The Agent shall be responsible for all other ongoing on-site expenses out of their management fee. These expenses include, but are not limited to postage, stationary, photo copying, office supplies and staff refreshments. Section 13. Compensation of Agent. The sole compensation which the Agent shall be entitled to receive for all services performed under this Agreement shall be a fee of forty Dollars ($40.00) per unit per month and reimbursement for payroll expenses as provided in Section 8. 1, above. The Agent will not receive compensation for any rented apartment where the rent has not been paid_ Such fees shall be computed and paid monthly based upon the preceding month's paid rented apartments. All supervisory, bookkeeping -accounting, clerical, along with all of the Agent's off-site overhead expenses (including but not limited to costs of office supplies, photocopying, the fidelity bond, staff training, postage, stationery, transportation, and telephone expenses, other than management -related long distance calls) will be borne by the Agent out of its own funds and will not be treated as an operating expense of the Development. Section 14. Non -Discrimination. 14.1. In the performance of its obligations under this Agreement, the Agent will comply with the provisions of any federal, state, or local law prohibiting discrimination in housing on the grounds of race, color, sex, creed, religion marital status, physical or mental disability, economic status, or national origin, including Title VI of the Civil Rights Act of 1964 (Public Law 88-352, 78 Stat. 241), all requirements imposed by or pursuant to the regulations issued pursuant to the regulations issued pursuant to Executive Order 11063, and Title VII of the 1968 Civil Rights Act. This Agreement may be terminated or suspended in whole or in part, by the Owner or the MHFA upon the basis of a finding by Owner or the MHFA that the Agent has not complied with non-discrimination provisions. 14.2. The Agent shall comply with the MHFA-approved "Affirmative Fair Housing Marketing Plan" for the Development (attached hereto as Exhibit E), and shall D:NMM12510171D0051TAX CREDIT MGT AGREEBOC 15 MHFA IOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT utilize such measures as may be required by the Owner or MHFA to encourage affirmatively the occupancy of residential units by members of minority groups. 14.3. The Agent shall comply with the "Residential Selection Plan" for the Development (attached hereto as Exhibit F). Section 15. Fidelity Bond. The Agent shall furnish, at its own expense, a fidelity bond for $100,000.00 to protect the Owner and the MHFA against misapplication of funds of the Development by the Agent and its employees. The terms and conditions of the bond, and the surety thereon, shall also be subject to the approval of the Owner and MHFA, and shall be in an amount not less than two (2) times the total of the following: (a) The maximum possible monthly Rent collections based on 100% occupancy as set forth in the annual budget referred to in Section 9.19, herein; and, (b) Monthly Non -Housing Income as defined in Section 1.16; and (c) The maximum possible funds being held as security deposits based on 100% occupancy. Section 16. Expiration and Termination. 16.1. Expiration. Unless sooner canceled pursuant to Sections 16.2, 16.3, 16.4, or 16.5 of this Section, this Agreement shall be in effect from the date of execution hereof until January 27, 2000. Execution shall not be deemed complete unless and until this Agreement has been approved in writing by the Public Agencies. 16.2. Termination by Mutual Consent. This Agreement may be terminated by the mutual written consent of the Owner and the Agent only with the prior written consent of the MHFA, the MPHA and the EDA. 16.3. Termination by Owner for Cause. In the event that the Agent shall fail to perform any of its duties hereunder or comply with any of the provisions hereof, the Owner may terminate this Agreement for cause upon Owner's thirty (30) days written notice to the Agent. Termination of this Agreement by Owner for cause must have written approval of the MHFA. 16.4. Termination Because of Bankruptcy. In the event that a petition in bankruptcy is filed by or against either the Owner or the Agent, or in the event that either shall make as assignment for the benefit of creditors to take advantage of any insolvency act, either party hereto may immediately terminate this Agreement without notice, but prompt advice of such action shall be given to the other party and to the MHFA. DAMNN1251017WOCSITAX CREDIT MGT AGREEBOC 16 MIIFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT 16.5. Termination by MHFA. It is expressly understood and agreed by and between the Owner and the Agent that the MHFA shall have the right to terminate this Agreement, with or without cause, on ten (10) days' written notice to the Owner and the Agent; except that in the event of a default by the Owner under its mortgage to the MHFA or the MHFA Regulatory Agreement, the MHFA shall have the right to terminate this Agreement immediately without notice, but prompt advice of such action shall be given to the Owner and the Agent. It is further understood and agreed that no liability shall attach to the MHFA in the event of termination of this Agreement pursuant to this paragraph. Prior to termination by the MHFA pursuant to this Section 16.5, the MHFA shall consult with and provide written notice of intent to terminate to the MPHR. 16.6. Termination by MPHR. In the event the MPHA determines that the Agent has violated, breached, or failed to comply with a provision of, or obligation under, the Housing Covenants, it shall so notify the Owner in writing and the Owner shall immediately so notify the Agent and this Agreement shall terminate within thirty (30) days of receipt by the Agent of such notification. Prior to termination by the MPHA pursuant to this Section 16.6, the MPHR shall consult with and provide written notice of intent to terminate to the MHFA. 16.7. Accounting Upon Termination. Within 10 days after the termination of this Agreement, the Owner and Agent shall account to each other with respect to all matters outstanding as of the date of termination. The Owner shall furnish the Agent security against any outstanding obligations or liabilities which the Agent may have incurred hereunder, and the Agent shall turn over to the Owner all Tenant files, records, documents or other instruments, waiting lists, and any and all other files and papers in its possession pertaining to the Agent's performance under this Agreement. Section 17. Assignments. This Agreement shall inure to the benefit of and constitute a binding obligation upon the Owner and Agent, and their respective successors and assigns, provided that the Agent cannot assign this Agreement or any of its duties hereunder without the prior written consent of the Owner and the MHFA. Section 18. Amendment. This Agreement constitutes the entire Agreement between the Owner and the Agent, and no amendment or modification thereof shall be valid and enforceable except by supplemental agreement in writing, executed, and approved in the same manner as this Agreement. Section 19. Execution of Counterparts. For the convenience of the parties, this Agreement has been executed in counterpart copies, which are in all respects similar and each of which shall be deemed to be complete in itself so that any one may be introduced in evidence or used for any other purpose without the production of the other counterparts. D:1MNN1 Z5161700051TAX CREDrr MGT AGREE.DOC 17 MHFA LOW INCOME HOUSING TAX CREDrr PROGRAM MANAGEMENT AGREEMENT Section 20. Address for Notices. Whenever any approval or notice on behalf of the Owner, Agent or MHFA is required under this Agreement, said notice shall be deemed to have been given when mailed by certified mail at the following addresses: Owner: PPL -Bass Lake Court Limited Partnership 2516 Chicago Avenue South Minneapolis, Minnesota 55404 Attention: Steve Cramer Agent: Project for Pride in Living, Inc. 1925 Chicago Avenue South Minneapolis, Minnesota 55404 Attention: Shari Pleiss MHFA: Minnesota Housing Finance Agency 400 Sibley Street, Suite 300 Saint Paul, MN 55101-1998 Attention: Director of Multifamily Division MPHA: Minneapolis Public Housing Authority in and for the City of Minneapolis 1001 North Washington Avenue Minneapolis, Minnesota 55401 Attention: Executive Director EDA: Economic Development Authority in and for the City of New Hope 4401 Xylan Avenue North New Hope, Minnesota 55428-4898 Attention: Executive Director D.-WNN12514171DOCSITAX CREDIT MGT AGREE.DOC 18 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year immediately below their respective signatures. OWNER: FPL -BASS LAKE COURT LIMITED PARTNERSHIP BY: PROJECT FOR PRIDE IN LIVING, INC. DATE: � J �� AGENT: PROJECT FOR PRIDE IN LIVING, INC. A Its DATE: I)MVINN I2510171DOCS1TAx CREDIT MGT AGREE.DOC MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT The Public Agencies hereby approve and consent to the foregoing Agreement and the Agent appointed therein. �r:r• N MNESOTA HOUSING FINANCE AGENCY �M.1-0 01-00- - 1, -71MAG v � r r � • DATE: -Z AIq MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS Richard Brustad Its Chairman And byL c Cora McCorvey Its Executive Director DATE: -� .1 D:%M12510171D0CSITAX CREDrr MGT AMM DOC MHFA LOW INCOME HOUSING TAX CREDIT PROGRAMMANAGELIWr AGREMONr EDA: ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By W. Peter Enck Its President By Daniel J. Donahue Its Executive Director DATE: January 25, 1999 D:1NINN1251417U)OCS1TAX CREDIT MGT AGREE.DOC MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT Management Plan D:\MNN12nO171DOCSITAX CREDIT MGT AGREE.DOC A.-1 WWA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT EXHIBIT B '.vIHFA Regulatory Agreement D:\MNN12510171D0CSITAX CREDIT MGT AGREE.DOC B-1 MHFA LOW INCOME HOUSING TAX CREDrr PROGRAM MANAGEMENT AGREEMENT Bass Lake Townhomes Management and Marketing Plan 3.01 Description of Development A. Name of Development: Bass Lake Townhomes B. Location: Approximately 15 miles from PPL's Central Housing and Development office at 1925 Chicago Avenue South, Minneapolis. C. Number of units: 3 bedroom 4 bedroom TOTAL UNITS # Units # Units MHOP 6 6 12 Market/tax credit 3 4 7 ARIF 11 4 15 Handicapped 1 1 2 TOTAL 20 14 34 D. Type of Construction: Twenty townhomes are wood -frame construction; fourteen rehab duplexes are wood -frame constriction with brick veneer. E. Type of Development: Multi -family. Twelve (12) units are owned by PPL as MHOP units; 15 units are funded with ARIF 3.02 Management Company A. See organizational chart attached. (A5) 1. Name of Management Company: Project for Pride in Living, Inc. 2. Name of the Management Agent for the Development: NIA 3. Name of the key contact person for the management agent in the owner's organization: Shari Pleiss, Division Manager 4. Delegation is not needed as owner and property management are the same entity. Property Management General Policy Statement is attached. (Al) B. Job Descriptions: See attached job descriptions. (A2) 1. The only common area in this development is the courtyard. There is direct visual surveillance of all areas within the courtyard by a minimum of four units. The sidewalk along the south edge of the courtyard is wide enough for vehicle access and the New Hope Police have indicated their willingness to monitor the courtyard using this means, if requested. This wide sidewalk can also be used to provide access for emergency vehicles. 2. The communication network will be built upon the foundation created during the development process. Staff of the Thorsen Family Resource Room (source and referral for many social services, early childhood education and recreation) have attended project meetings. Development team meetings have included New Hope Community Development and Housing Program staff, Building Official, Police and Fire Chiefs and personnel, Public Works and City Attorney. At initial occupancy, the Resident Manager and Property Manager will hold a meeting with the staff listed and PPL Self -Sufficiency staff to explain roles, problem -resolution procedures and other issues of concern. Ongoing meetings will be scheduled as necessary. PPL Self -Sufficiency staff will also attend the initial meeting. 3. Method for control of keys: PPL stores keys for individual apartments off site at our Property Management office. Keys are stored in locked key boxes in a room outside of the view of the general public in a locked office. Keys are organized by a number bearing no resemblance to the building address or the apartment number. Apartment keys are not stamped with any information. PPL uses Medico keys for main entries and laundry rooms. Medico keys are custom made and can not be duplicated without the signed permission of PPL's maintenance manager. These keys are numbered and each key given to a resident is registered. Master keys are given to the maintenance technician, resident manager caretaker and division manager only. C. Job Descriptions Job descriptions for property management staff are attached. (A2) 2. An organization chart is also attached. (A5) D. Compensation 1. PPL complies with the Fair Labor Standards Act. 2. Resident managers and on site caretakersare and caretakers are compensated with a rent reduction and an hourly salary. Maintenance is charged at a set hourly fee. 3.04 Marketing A. Identify the Market 3 area, but only 31.,200 housing units with rents ati-ordable to flus income level. Even for households with annual incomes below $30,000, housing costs more than 30% of income for 185,000 households. According to the Metropolitan Council, 50,000 suburban households earning less than .$20,000 per year pay more than 301/6 of their income for housing. If one assumes that the market area for this project is only 10% of the Metro Area, this would mean that 18,500 households are seeking housing at the rents provided in this project. 4. Ethnic Composition of New Hope (1990 Census figures): White 94.44% 20,637 Black 1.69% 369 American Indian 0.83% 181 Asian/Pacific Islander 2.87% 628 Other Race 0.17% 38 TOTAL 100.00% 21,853 5. Present economic conditions in the New Hope area reflect the general prosperity of the regional economy. New Hope has a diverse employment base which includes a variety of industrial employers as well as office and service jobs. New Hope has good freeway access to all parts of the Metro area. 6. Future economic projections for the area again mirror projections for the regional economy. New Hope is fully developed so neither housing nor employment will experience significant increases. Housing stock and the commercial/industrial stock was generally built within the last twenty five years and some renovation and reuse is expected to occur. B. Tenant Selection Plan: 1. The tenant selection plan for this development is in conformance with all MHFA, Minnesota and Federal Guidelines. To the best of our knowledge, with the exception of the MHOP incentive units, there are no local housing guidelines. For market rate apartments please see attached PPL's Tenant Selection Plan. (A7) 2. Projected demographic distribution is as follows: 5 An ad, to be approved by MHFA, shall run in the following publications, until a waiting list of 50 eligible households has been established. Publications: Star Tribune, The Circle, Asian American Pages, La Prensa_ b. Logo, signs and brochures The site sign is required for New Hope City approval and will be designed by 7110198. PPL staff will design a logo and brochure; brochure shall include project description, rents in a replaceable format, and information about PPL , neighborhood resources and transportation. c. Contacts A mailing will be prepared for a mailing list which includes PPL regular mailing list (see attached) but is expanded to include northwest suburban social service agencies. These include: Thorsen Family Resource Room, Family and Childrens Service Northwest Hennepin office, Interfaith Action and District 281 social work staff. 2. Site signage The site sign identifies the site by name and address for a driver on Bass Lake Road. Site office is located close to the signed entrance of the roadway. 3. Marketing will be done by the person hired and trained as resident manager. 4. Supplies assume a total of up to 200 applications for 22 (non-MHOP) units. 5. Except during completion of construction, grounds will be carefully maintained to create a cared -for impression for vehicle and pedestrian traffic. 6. A security deposit is to be collected for 22 (non-MHOP) tenants. 7. Fair Housing training for site staff. 'ri file an Unlawful Detainer action against the resident. 4. All reasonable efforts are made to collect rent in full at the time it is due. However, PPL believes that if a resident is willing to make a written agreement to pay their outstanding rent within a specific amount of time, we will work with the resident in order that they may keep their housing. If at any point the resident falls behind on their agreement, PPL will immediately file an Unlawfiil Detainer. NOTE: MHDP units will be worked with in accordance with the rules developed for those units. 3.88 Budgeting 1. The budget team, including the Asset Manager, Division Manager and Resident Manager audit all utility bills and service contracts. Service contracts, including waste removal and snow plowing are sent out for bids by competing companies. 2. A comparison of past and current income and expenses of other properties with similar features and resident composition is performed. 3. D= is compi plwc_ed -drop 'atee�eezi 16ormat iaccompanyi g budget notes. 4. Budget is reviewed for final acceptance by the Asset Manager, Division Manager, Housing and Development Director, Chief Financial Officer and the Budget Review Committee of the PPL Board of Directors. 3.09 Energy Conservation 1. The manager of the maintenance department develops a preventive maintenance schedule for each building. This schedule includes but is not limited to the following: a. Twice yearly maintenance inspections to find unreported plumbing leaks and inappropriate use of ovens etc. for heating. b. Change filters if appropriate. C. Test appliances for good working order. , 2. The site manager is required to enter each apartment at least twice yearly to meet with the residents and note any problem situations that may require maintenance or Self Sufficiency Program intervention. 3. At the time of development, the current thermostats will be replaced using thermostatic controls which have a built in high temperature setting. 2 Al PROPERTY MANAGEMENT Project for Pride in Living, Inc. provides professional management with the expertise needed to market and manage this development in the best interest of its residents and funders. Our mission is to assist low and moderate -income people to become self-sufficient by addressing their job, housing and neighborhood needs. We believe that all people should have the opportunity to live in decent, affordable housing in a safe, functioning community. GENERAL POLICY STATEMENT Properties managed by Project for Pride in Living are assumed to be operated emciently and as a "service" to our residents. The function of Project for Pride in Living personnel, in view of this policy, is to act as facilitators and to provide necessary assistance so all residents can expect to be treated fairly and by uniformly applied standards. Project for Pride in Living personnel are expected to develop a high level of professionalism as they evaluate management problems and seek their solution Good property management also depends upon acting in accordance with sound financial and accounting principles, implementing a solid preventive and emergency maintenance program, and designing a comprehensive system of information dissemination. MANAGEMENT RESPONSIBILITIES Project for Pride in Living is responsible for planning and directing the fiscal and physical operation of Prosperity Village. The agent is to carry out the following major functions: Staffing. Marketing, Maintenance and Repairs. Financial Reporting Resident Relations Job Title: Division Manager, Property Management Reports To: Director of Housing and Development Job Summary I. Manages the staff of the Property Management Division. II. To initiate, maintain and/or strengthen PPL's relationships with other organizations of significance to community stability and growth in key neighborhoods: Chicago & Franklin, Bloomington & Lake as well as city-wide. Essential Job Functions 1. Personnel Management - Develop, implement and maintain ongoing training program for property management and maintenance staff. Goal setting for individuals and the management team. Performs yearly performance reviews. Recruitment and training of property management staff. 2. Development - Work with PPL Development to create management plans, perform initial marketing of new developments. 3. Community Development - Represents PPL in several important community groups including: Chicago Franklin Block Club • Franklin Avenue Business Association Bloomington -Lake Commercial Club City of New Hope 4. Management - Report to PPL board of Directors as to the state of the division. Work with funding agencies to create and maintain positive relationships. Inspection of properties. m I I— �xlMnlwuwmjP••`�r' i= 'wVllu�lN"T li� j...! oil ...nnnniP'. w u H a �O `I V H 54 H ch ill r+i r wy +_i ZLI _J V ti .1-n y 'y Fy A .ti v t.i F� \a r..i, m Q One of the first steps in preparing these new employee's to assume their duties will be an official welcome to Bass Lake Townhomes, followed by a detailed job orientation. Each orientation meeting will be tailored to meet the specific job responsibilities of the individual(s). This meeting will be conducted at the site location and the property management office. The following information will be discussed in detail at the orientation meeting: 1. An introduction to the development and its community, the developments purpose, and the objectives of its Owners, including the community partners. 2. An introduction to Project for Pride in Living including information about its history, development and objectives, and a thorough understanding of property management's policies and procedures. 3. A complete understanding of PPL's general terms and conditions of employment as well as any disciplinary rules. 4. A summary of personnel policies detailing what the new employee can expect from the organization and what the organization will expect of him/her in return. S. A description of benefits and services. 6. A tour of the home office and the development and an introduction to fellow workers. 7. A description of his/her immediate supervisors duties and the duties of co-worker or staff, where applicable. 8. A detailed description of the employee's job including specific duties and responsibilities, hours, wage or salary and other pertinent information. 9. Information directly related to cultural sensitivities of the client community. A6 EMPLOYEE EVALUATION A. Scheduled Review and Property Inspections The Property Manager, with the Division Manager, will conduct a formal performance evaluation for all site employees annually. These evaluations will be the basis for annual salary reviews and/or other adjustments. The Division Manager will also do quarterly reviews of all full time employees to ensure they are meeting their goals and objectives. B. Unscheduled Inspections Periodically, the progress of each employee will be reviewed through various scheduled and unscheduled property inspections to maintain a sound employee -employer relationship. The inspections will be scheduled by the Division Manager. The following areas are those which the Division Manager will be closely inspecting: I. Resident relations. 2. Occupancy level and collection rate. 3. Residents files and documentation, etc. 4. Interior building maintenance. 5. Exterior building maintenance. 6. Preventive maintenance. 7. Ability to implement the policies of PPL and the project.. S. In addition to the preceding, all employees are required and expected to present themselves in a neat, clean, efficient and professional manner at all times. D. Household income. Income for all adult household members must be verified. To qualify, the household annual income must not exceed the income limits established for the apartments by the terms of the financing. The income criteria at the present time are as follows: Miarimum income: at 30% for a one person household $12,030 for a family of two $13,740 for a family of three $15,480 for a fancily of four $17,190 for a family of five $18,570 for a family of six $19,950 for a family of seven $21,330 for a family of eight $22,680 Mo mum income: at 50% for a one person household $20,050 for a family of two $22,900 for a family of three $25,800 for a family of four $28,650 for a family of five $30,950 for a family of six $33,250 for a family of seven $35,550 for a family eight $37,800 Minimum income: Applicants must have verifiable and predictable income source to cover rent and household utility expense. Income equal to two (2) times the rent may be required. MHOP applicants must be within the most current HUD very low income limits applicable to family size. E. Occupancy Standard. We have developed maximum occupancy standards for Bass Lake Townhomes. These standards are as follows: Two Bedroom four people Three Bedroom six people F. Reasons For Rejection. • Number of potential occupants does not meet guidelines. False or unverifiable information was supplied on application. Income does not meet eligibility requirements, • Unsatisfactory rental reference. • Record of non-payment or late payment of rent, utility or other credit obligation. FA -11 CRITERIA FOR LEASING AT PPL Effective July 1, 1998 Application Fee: $35 per application - non-refundable Money order or Cashier's check only Application fee is waived for MHOP applicants TWO YEARS OF GOOD RENTAL HISTORY * No Unlawful Detainers (evictions) unless you have verifiable documentation of landlord irresponsibility. However, a UD due to property damage by the resident will not be accepted under any circumstance. * No history of late payment. * No history of damage to the apartment. * VERIFIABLE GROSS INCOME * Minimum of twice the rent charged on the apartment. * Section 8 vouchers and certificates accepted. The resident must meet the same criteria as those seeking non -subsidized housing. * Food stamps are included in the calculation of gross income. Note: MHOP applicants do not need to have a verifiable income of twice the rent charged on an apartment. * CRINIINAL BACKGROUND CHECK. * Residency may be denied due to criminal history. (See attached Criminal Background Criteria) * CREDIT HISTORY * Must show that the resident has paid bills on time and does not have a history of debt write-offs or accounts that have gone into collection. * Residency may be denied due to poor credit history. *MAXIMUM OCCUPANCY - Please note that these are the maximum number of people who may occupy apartments with the number of bedrooms noted. Situations may exist where the high concentration of people in a building and/or the ability of the mechanical equipment to operate efficiently requires us to adjust the number of occupants in a given apartment. * Efficiency 2 occupants * l Bedroom 2 occupants * 2 bedroom 4 occupants * 3 Bedroom 6 occupants * 4 bedroom 8 occupants A child less than two years of age is not considered when listing the number of people occupying an apartment. Once the child reaches two and is considered an occupant, the number of people occupying the unit must fall within the guidelines of that building. l MARKETING PLAN Plan to achieve early occupancy. A large site sign will give a number for more information. This number will connect the caller directly to the Leasing Office. The site manager will make an appointment to meet the caller on site and show the available apartments. Media As necessary, ads will be run in the following publications Star Tribune, Pioneer Press, The Circle, Asian American Pages, La Prensa. Logo, signs and brochures A logo design and brochure will be created and sent to agencies where referrals are possible. Contacts A mailing will be prepared for a mailing list which includes PPL regular mailing list and social service agencies. Site signage The site sign identifies the site by name and address for a passing drivers. 2. Marketing will be done by the person hired and trained as resident manager. I Except during major,re-hab construction, grounds will be carefully maintained to create a positive curb appeal for vehicle and pedestrian traffic. EMERGENCIES How to Extinguish a Kitchen Fire Fire Emergency number: 911 Grease Fires: Electrical Fires Oven Fires Gas Leaks Do... 1. Turn oven OFF. 2. Cover burning container with lid or pan to smother fire. If smothering fails, call 411. DO NOT throw water on a grease fire. You may cause an explosion. Do... 1. Unplug burning appliance or... 2. Turn circuit -breaker off, or 3. Unscrew fuse.. DO NOT throw water on fire or touch burning element. DO.. 1. Close oven door and leave closed. (This cuts off oxygen) 2. Turn oven OFF. DO... 1. Close doors to room and get out. 2. Call fire department from another location. DO NOT use telephone, turn on lights, use a Flashlight, or put key in lock with room with a gas leak. The slightest spark can cause an EXPLOSION. GOOD CAUSE CLAUSE Yom are hereby given notice as to what is termed "Good Cause" for termination of tenancy: 1. Possession of illegal drugs in your residence or anywhere on PPL property, and/or use of such drugs and/or purchase or sale of such drugs from your residence or anywhere on PPL property. 2. Repeated police calls to any.PPL property due to activities of you or your guests. 3. Non-payment of rent, late fees, utilities or maintenance service charges (tenant/guests destruction of property). 4. Causing repeated incidence that are disturbing to the peace of other residents and/or neighbors. 5. Damage to property belonging to this organization and/or damage to other tenants property. 6. Keeping a pet. 7. Theft of PPL property or property belonging to other tenants. 8. Any act or threat or violence to employees or Board Members of PPL or any other person on this property. Permitting persons to occupy unit who are not registered on the lease without management approval. 10. Excessive traffic as determined by property management. 11. Consumption of alcoholic beverages in common areas inside or outside of any PPL building. 12. Smoking in common areas of the building. 13. Sub -letting a unit. 14. Refusing to sign a lease. 1s. Poor housekeeping. Including clutter or dirt in your home which: may affect the health or safety of any occupant of the building; is sufficient to attract rodents or pests; causes more than normal wear and tear on the apartment; violate the Minneapolis Housing Maintenance or other applicable Codes. 16. Wasting utilities through intentional means or by unreported problems.. 17. Any other violation of the terms of the lease. In the event that legal action is to be taken, the Property Manager is authorized to send out a termination notice and to act as plaintiff for Project for Pride in Living. r .ident Date Resident Date Resident Date Resident Date SELF-SUFFICIENCY PROGRAM SERVICES CAMEWEDUCATION COUNSELING Teach skills in resume writing and interviewing Assist in attaining educational goals- G.E.D., technical training, college Offer bi-monthly seminars on employment issues Make available transitional incentives for job seekers Referrals for employment resources and training programs Step-by-step Job Hunt Program EDUCATIONAL/SUPPORT GROUPS Tuesday Topic Night: various informational & educational topics Men's Support Group- meets bi-monthly Children's activities FAMILY NIGHTS Fun activities for family enjoyment Promote family togetherness and involvement Field trips include: Science Museum, roller skating, hayrides SELF-ESTEEM RETREATS Men's and Women's retreats 1-112 days of self-esteem building, goal -setting, and workshops Evening social time V. -ON -ONE COUNSELING Discuss personal needs Creating a personal action plan Referrals Mental Health 'Therapy CHILDREN & YOUTH PROGRAM Advocacy Activity groups One -on -One Personal Development Programs & referrals for youth counseling FINANCIAL MANAGEMENT TRAINING Identify problem areas Assist in budget set-up Referral to available subsidies- FareShare, etc ANNUAL EVENTS Summer Picnic- food, games, entertainment Holiday Party- festive celebration of the season COMMUNITY INITIATIVE PROGRAM Resident Council BuildinglNeighborheod Activities Safety & Crime Prevention FOR MORE INFORMATION CALL PPL SELF SUFFICIENCY AT: 874-8511 OR IN ST. PAUL: 225-8084 2 _MINNESOTA LAW CONCERNING DRUG AND CONTRABAND SEIZURES IN APARTMENT BUILDINGS All Minnesota landlords are required under the provisions of a state law (H.F. 159) to notify all residents (existing and future) of the following: "Under a new state law effective October 1, 1989 a seizure by a law officer of any illegal substance, including drugs, totaling at least $1,000 may cause you to be evicted. The management can be required by the State to start an eviction action within 15 days of notice of the seizure." HOUSEKEEPING PPL will do everything in it,s power to provide a unit of housing that is free from insect and rodent infestation. To ensure this commitment, PPL will pay all routine extermination costs. If however, professional exterminators diagnose a problem that is caused by the poor housekeeping of a resident, PPL may charge the resident for additional extermination to their and other apartments effected. In an effort to avoid these additional extermination costs, the tenant is required to maintain reasonable standards of housekeeping and cleanliness. A clean house is the best way to prevent infestation problems. PPL will conduct periodic home visits and inspections to ensure that reasonable housekeeping and cleanliness standards are maintained. In addition, PPL reserves the sole right to define these housekeeping and cleanliness standards. If violations occur, PPL will provide, in writing, specific guidelines for improving problem areas. PPL will allow for reasonable time (maximum of 72 hours) for the tenant to make the improvements necessary. If the tenant fails to maintain a clean house, PPL will initiate move out procedures with the problem tenant. 10 WAFER DRIPS, LEAKS, FLOODS It is very important for you to notify us AS SOON AS POSSIBLE when any of your pipes are leaking or your toilet is running. We need your help maintaining your building in good condition. If we receive a higher than expected water bill due to an unreported leak or running toilet you will be charged the amount that the bill is over average (THIS CAN RUN AS HIGH AS $600 FOR A RUNNING TOILET). 12 NOTICE TO VACATE If you are planning on moving you must notify us immediately by giving a written notice no less, than 30 days before you are planning to move. Your move out day must be at the end of the month unless approved in writing by your property manager. Failure to do so can result in you not getting your deposit back, getting a poor rental reference, and not being able to re -rent from PPL housing again. All vacate notices must be in writing, signed, and dated by the resident. PPL provides a form to make the process easier for the resident. Proper notice is given as of the first of the month effective the last day of the month the lease expires. Pro -rated rent is not allowed for a vacating month. r may show your apartment during your last month of occupancy for the purposes of rental. You will receive notice by phone or in writing two 48 hours before your apartment is shown. Your apartment should remain clean and orderly during this period. You are under no obligation to explain to PPL why you have decided to end your lease. Additionally, if PPL decides to end your lease, they are under no obligation to explain their decision. 14 MOVE-IN/OUT INSPECTION Whc.,i you move into your new home, everything in your home will be clean and in good working order. The first thing you will do upon moving in will be to inspect the unit with the manager. Together you will note the condition of every item in your home on a move -in inspection sheet. Both you and the manager will sign this form. Your home will be inspected again in 30 days to make sure everything is working properly and to answer any questions. At the time you move out, a Management staff person will again inspect your home with you and note its condition on a move out inspection sheet. You will be charged for any damages caused by you, your family, or your guests. It is expected that you will leave your home in the same condition as when you moved in, excluding normal wear and tear. (See Security Deposit Return) 16 SNOW REMOVAL During the winter months, snow will be plowed from the parking lots. Cooperation from the residents in moving their cars is necessary and will be expected. The lot will be plowed on each snowfall that measures two or more inches. If you plan to be gone from your apartment any time during the winter months, please make proper arrangements with a friend, neighbor, or relative so your car will be moved when snow plowing is necessary. 18 NON -SUFFICIENT FUND CHECKS Any checks returned by the bank are regarded as non-payment of rent and are subject to late fee penalties. There will also be a $25.00 service fee added for all NSF checks. NSF checks will be returned to the resident only after the Management has received a money order in exchange. Non-payment on an NSF check will be grounds for eviction. If we receive an NSF check from you, all further rents and fees must be paid in the form of a cashiers check or money order. Pz+, TRANSFER POLICY It is uoth costly and labor intensive for residents to move from one apartment to another. Apartments must be painted and shampooed, and there is sometime cleaning to be done. In order to be considered for a transfer, applicants most: 1. Have lived in current apartment for at least one year; 2. Have a record of prompt rental payment; 3. Keep current apartment in a clean, tidy manner. (Apartment will be inspected by manager prior to any written approval to transfer taking place.); 4. Be a resident in good standing of the site with no record of disturbances or other lease violations; 5. Pay a $100.00 transfer fee prior to move -in; (waived if moving after one year). 6. Sign a new lease at the current rental rate for vacant apartment. Please note that the transfer fee does not apply to MHOP units due to change in family size or status. 22 FIRE SAFETY If a samall fire should start in your home, use the fire extinguisher located in the hallways of your apartment building. Break the glass in the front of the case and remove the extinguisher. To use a fire extinguisher, simply squeeze the trigger handle, aim it at the base of the fire, not on top of the fire. DO NOT POUR WATER ON A GREASE FIRE. In case of stove or oven fire turn off the stove first then try to smother or put out the fire. If you can not quicldy put out the fire dial 911. DO NOT re-enter your home. Read the procedure below very carefully. In the event of a fire, just one or more of these rules may save your life or the life of your neighbor. 1. Prior to leaving your apartment, feel your apartment door. If the door is hot or smoke'is seeping through, DO NOT open. 2. Keep door closed and seal cracks with wet towel; open a window for air. Don't panic or jump. 3. If the door feels cool, open cautiously and leave your apartment. Walk quickly, keeping calm. HEAVY SMOKE REMAIN CALM- DO NOT PANIC. Dampen a towel or a rag and cover your mouth and nose. Stay close floor, moving to the nearest window or exit. If the hallways are very smoky, crawl to the nearest exit, h- .coke rises. NEVER GO INTO A ROOM THAT DOES NOT HAVE A WINDOW. ALWAYS PAY ATTENTION TO FIRE/SMOKE ALARMS. NEVER IGNORE AN ALARM. FALSE ALARMS BY YOUR CHILDREN OR YOUR CHILDREN'S GUESTS ARE AGAINST THE LAW AND CAN RESULT IN PROSECUTION AND/OR EVICTION. For police or medical emergencies dial 911. HEAT AND UTILITIES Your heat and water are included in your rent. Please do not be wasteful of those utilities. Remember that even though these utilities are included in your rent, the site must pay for them and the cost is reflected in the total cost of operation of the building. ENTRANCES Rugs, shoes, or other items on the floor outside your apartment door are not permitted by the Fire Marshal. Your unit door or the hallway doors may NOT be propped open at any time. The apartment doors must remain closed by order of the Fire Department. 24 STANDARD REPAIR CHARGES General Charges: These charges apply to both current residents and apartment turnovers. For current residents, travel time will be added to hours of labor. Repairs: $35 per hour labor $52.50 per hour after hours Materials: Cost + 15% Overhead Cleaning: $30 per hour Lock Replacement (Includes labor fee): Unit with one door: $80 for all locks (apartment and mailbox) Unit with two door: $100 for all locks (apartment and mailbox) $50 for any individual lock Building Entry Key: $75 Standard Key: $ 5 Paint/Wall Damage Actual Cost r, .iture Hauling: $30 per piece 26 EXHIBIT B MHFA Regulatory Agreement D:1[VM125101'AD0051TAX CREDIT MGT AGREE.DOC B-1 MHA I.C1W INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT WHEREAS, the Development is to be constructed in accordance'with the Drawings and Specifications forming a part of that certain Construction Contract and General Conditions (herein referred to as "Construction Documents"), which are hereby incorporated herein by reference, relating to the Development; and WHEREAS, MHFA is willing to snake the NCTC Mortgage Loan in accordance with that certain Minnesota Housing Finance Agency New Construction Tax Credit Mortgage Loan Program Building Loan Agreement (hereinafter referred to as the "NCTC Building Loarl Agreement") by and between the parties hereto and of even date herewith, but only on condition that Mortgagor fulfill the terms of this NCTC Regulatory Agreement; and WHEREAS, Mortgagor is willing to execute and abide by this NCTC Regulatory Agreement as a condition of obtaining the NCTC Mortgage Loan and receiving continuing benefits under the Act_ NOW, THEREFORE, it is hereby agreed by and between the parties hereto, and their respective permitted successors and assigns, as follows: 1. MORTGAGE PAYMENTS. Mortgagor shall promptly rrrake, or cause to be made, all payments due under the NCTC Note and NCTC Mortgage. I.A. LOW INCOME HOUSING CREDITS: A. Mortgagor acknowledges that MHFA has made the NCTC Mortgage Loan so as to assist Mortgagor in obtaining the benefits of the low-income housing credits provided for in Section 42 of the United States Internal Revenue Code of 1986, as amended. Mortgagor agrees to apply for and maintain and operate the Development during the term of the NCTC Mortgage Loan so as to secure the benefits of said low-income housing credits, and to exercise all of its rights and perform all obligations and observe all terms, provisions and covenants on its part to be performed and observed under said Section 42, and the regulations promulgated pursuant thereto, so as at all times to be and remain eligible to receive benefits under the low-income housing credit provisions of said Section 42, and the regulations promulgated pursuant thereto, for thirty-four (34) rental units. it is expressly agreed that the Mortgagor's failure to comply with the requirements of said Section 44 and the regulations promulgated pursuant thereto, except for technical noncompliance with provisions which do not affect Mortgagor's entitlement to the tax credit, shall be a defauh under this NCTC Regulatory Agreement. It is further agreed that in the event of a conflict between the terms and provisions relating to occupancy contained in this NCTC Regulatory Agreement and the provisions of the said Section 42, and the regulations promulgated pursuant thereto, that the terms of said federal law and regulations shall govem and control. B. MNFA represents, covenants and agrees that the funds constituting of the NCTC Mortgage loan were not derived from sources which would cause the Development to be deemed "federally subsidized" within the context of subsection (b)(1) of Section 42 of the United States Internal Revenue Code of 1986, as amended. 2. RENTAL RATES AND OPERATING EXPENSES. Subject to the provisions contained in Section 2.A. hereinbelow entitled "Federal Requirements": A. Mortgagor agrees to establish and maintain such rental rates for the dwelling units in the Development as are from time to time directed by MHFA in writing, or which are approved by MI -IFA in writing upon application by Mortgagor. PPL Baso Ldw Court, New hope 1111199 New C ntruction Tax Crt Ut 99-NCTC-2558 Regulatm Agreement N= Rgltry Agrumt 3. ACCOUNTS AND FUNDS. A. Operating Receipts and Expense Account. Mortgagor shall establish and maintain, or cause to be established or maintained, an Operating Receipts and Expense Account with MHFA or a depository approved by MHFA, pursuant to that certain Minnesota Housing Finance Agency Management Agreement (hereinafter referred to as the "Management Agreement") by and between the parties hereto and of even date herewith. Such Operating Receipts and Expense Account shall be established in Mortgagor's own name. Mortgagor shall, upon collection of all receipts from the operation of the Development (which such receipts shall not include the proceeds from the sale of limited partnership interests in Mortgagor) and from whatever source derived (hereinafter referred to as the "Operating Receipts") forthwith deposit such receipts into the Opmvting Receipts and Expense Account. Thereafter, on a monthly basis Mortgagor shall pay, or cause to be paid, in a timely manner and out of Operating Receipts of the Development, the following items in the order and priority as set forth hereinbelow: (1) First, the fee of the Development's managing agent as set forth in the Management Agreement; and then (2) All of the real estate tax and insurance premium escrow payments required of Mortgagor, which payments shall be deemed to be part of the Operating Expenses of the Development for the purpose of this NCTC Regulatory Agreement; and then (3) All remaining Operating Expenses of the Development (which specifically exclude payments of principal, interest and Annual Fee, if applicable, under the NCTC Note and NCTC Mortgage, or any other loan from any source), including but not limited to, taxes other than those for which an escrow payment is required under the NCTC Mortgage, maintenance, fuel, management, water and sewage, administration, electricity, legal, audit fees (subject to such limitations as MHFA may establish from time to tune), and all other current expenses approved by MHFA, unless other funds for payment are set aside or deferment of payment bas been approved by MHFA in writing; and then (4) All of the amortized principal, interest and Annual Fee, if applicable, required to be paid to MHFA under the NCTC Note and NCTC Mortgage; and then (5) All amounts required to be deposited with MHFA, or its designated depository, in the Replacement Cost Reserve Account as hereinafter defined; and then (b) Pursuant to the terms of Section 9 hereinbelow, the limited dividend payments. In the event the Operating Receipts are inadequate from time to time to pay the Operating Expenses, it is understood and agreed that notwithstanding the obligation of Mortgagor to pay all Operating Expenses as herein provided, the NWA shall permit a disbursement from the Residual Receipts Account (as provided for herein) and/or a disbursement from or exhaustion of the Working Capital Reserve and Escrow Account (as provided for herein) and if any, to pay said expenses before requiring Mortgagor to so pay pursuant to the provisions of this NCTC Regulatory Agreement. B. Security Deposit Account. Mortgagor is further required to segregate, or cause to be segregated all occupant security deposits held, in an interest bearing depository account (hereinafter referred to as the "Security Depository Account"), and an amount equal PPL Bass lake Court, New Hope 1/11199 New Construction Tax Credit 4 98-NCTC-2538 Regulatory Agreement NCTC Rgltry Agrmnt will benefit a substantial portion of the residents of the Development by providing necessary or desirable social services that will improve the health, education, security or general well-being or welfare of such residents, or (iv) will make an important contribution to the livability of the Development; or (b) Payment of the Annual Fee, if applicable, principal, and interest of the NCTC Note in the event such note shall become delinquent, in an amount sufficient to make said note payments current; or (c) Payment of the Development's current or delinquent Operating Expenses, provided that such payment be made only in the sole option and discretion of MHFA, and upon the occurrence of the following conditions and events; (i) exhaustion of the Operating Receipts Account, (i) exhaustion of the Residual Receipts Account, (iii) exhaustion of the Working Capital Reserve and Escrow Account, if in existence, (iv) exhaustion of the Rent -Up Escrow Account, if in existence, and (v) evidence satisfactory to MHFA of Mortgagor's financial inability to pay such expenses. Upon the payment in full of the NCTC Mortgage Loan, the balance of all monies, if any, contained in the Development Cost Escrow Account, shall be paid by MHFA to Mortgagor. (3) Replacement Cost Reserve Account. A Replacement Cost Reserve Account shall be established concurrently with substantial completion, as approved by NWA, of the Development unless occupancy is scheduled in stages, in which event such account shall be established upon completion of the fust stage and funded on a pro -rata basis for the units in each stage effective upon the date of completion of that stage. The Replacement Reserve Cost Reserve Account shall, at the sole option and disce on of the MHFA, be held and maintained by either the MHFA or a depository designated by the MHFA. Monthly deposits into the Replacement Cost Reserve Account shall be at an amount determined in MHFA's discretion to be sufficient to meet the Development's projected requirements, and shall include a reserve for painting and decorating in addition to a reserve for replacement costs. The original monthly deposit into the Replacement Cost Reserve Account shall be in an amount of Nine Huadmd Eight and 331100 Dollars (1;908.33) per month. The Replacement Cost Reserve Account, whether in the form of a cash deposit or reinvestment in obligations of, or fully guaranteed as to principal by, the United States of America, shall at all times be under the control of MHFA, and earnings on deposits in such account shall be accumulated therein for reinvestment pending disbursement in the manner provided herein. Disbursements from the Replacement Cost Reserve Account shall be for the purpose of effecting replacement of structural ciements and mechanical equipment of the Development, or for painting and decorating, or for any other purpose for the benefit of the Development which the MHFA shall direct, in its sole option and discretion. In the event of a default in the terms of the NCTC Mortgage, pursuant to which the NCTC Mortgage Loan has been accelerated, MIIEA may apply or authorize the application of the balance in the Replacement Cost Reserve Account to the amount due on the NCTC Mortgage Loan as accelerated. Upon payment in frill of the NCTC Mortgage Loan, the balance of all monies, if any, contained in the Replacement Cost Reserve Account, shall be paid to Mortgagor. AFL Hass Late Corot, New Hope 1111199 New Construction Tax CwAt 6 98-NCTC-2558 Regulatory Agreement NCTC Rgltry Agrmnt A. The person or family is a low or moderate income person or family as defined by the Act and MHFA's Rules and Regulations promulgated pursuant thereto, or otherwise approved by MHFA in accordance with the MHFA Act, Rules and Regulations; and B. Such person or family shall have executed and delivened to Mortgagor, on forms prescribed or approved by MHFA, and, where applicable, in accordance with regulations promulgated pursuant to Section 42 of the United States Internal Revenue Code of 1986, a certification of such person's or family's income; and C. Mortgagor shall have delivered to WWA true and correct copies of such persons' or family's application for occupancy and certification of income; and D. Mortgagor shall hold for occupancy in the Development such number of units for individuals of low income as is required by the provisions contained in Section 2.A hereinabove. 7. AFFIRMATIVE COVENANTS OF MORTGAGOR. Mortgagor covenants and agrees: A. That, without discrimination as to race, color, creed, religion, national origin, sex, marital status, age or status with regard to public assistance or disability, occupancy of the Development shall be open to all persons, and all contractors and subcontractors engaged in the construction of the Development shall be required by contract to provide an equal opportunity for employment to all persons. B. That in accordance with Sections I and 2.A hereinabove, Mortgagor shall hold for occupancy low-income units within the Development at rental levels necessary to qualify the Development for receipt of low-income housing credits for at least the number of rental units specified therein. C. That Mortgagor shall require all occupants of a unit in the Development to execute a lease in a form prescribed or approved by MHFA, and shall not rent any unit in the Development for a leased term of less than thirty (30) days, nor for more than one year, provided that such leased terms may be renewed by Mortgagor for qualified occupants. D. That commercial facilities located in the Development, if any, will be rented at not less than the rental prescribed or approved by WWA. E. That payment for services, supplies or materials for the Development shall not exceed the amount ordinarily paid for such services, supplies or materials in the area where the services are rendered or the supplies or materials are furnished. F. That Mortgagor shall at all times maintain books, contracts, records, documents, and other papers relating to the Development in reasonable condition for proper audit. The Development and all such books, contracts, records, documents and other papers shall be subject to inspection and examination at any reasonable time by MHFA or its authorized agents. G. That within sixty (60) days following the end of each fiscal year, Mortgagor shall furnish to NWA a completed financial statement, based upon an examination of the books, records, and accounts of Mortgagor, prepared and reviewed by an independent certified public accountant acceptable to MHFA, setting forth the financial condawn of Mortgagor as of the end of such fiscal year, the results of operation of the Development for such fiscal year, and such other financial information as MHFA may reasonably request H. That, at the request of MHFA at any time, and from time to time, Mortgagor shall furnish to MHFA monthly occupancy reports, and shall provide specific information relating PPL EWm Labe Court, New Hope 1111199 New Construction Tax Credit 8 98-NCTC-2538 Regulatory Agrmsmmt NCPC Rgltry Agtmnt E. Effect changes in the rental rates for dwelling units in the Development established pursuant to the provisions of Section 2 hereinabove, except as provided for herein. F. Require. as a condition of the occupancy or leasing of any unit in the Development, any consideration or deposit other than the prepayment of the first month's rent plus a security deposit in compliance with applicable law to guarantee the performance of the covenants of the lease. Any fund collected as security shall be kept separate and apart from all other funds, in an escrow account, the amount of which at all times shall equal or exceed the aggregate of ami outstanding obligations under this account. G. PeQnit the use of the dwelling accommodations of the Development for any purpose except the use which was originally approved by MI -IFA. H. Pay any compensation, including wages or salaries, or incur any obligations, to any of Mortgagor's officers, directors, stockholders, members, trustees, partners, beneficiaries under a trust, or to any of their nominees, except for any management fees payable to a partner pursuant to a management agreement approved by the MHFA and as provided in Section 9 hereinbelow. I. Enter into any contract or contracts for supervisory or managerial services not approved, in writing, by MHFA (which contracts shaft comply with Revenue Procedure 82- 14 unless waived, in writing, by MHFA). ] . Transfer, assign or pledge any right to, interest in or title to any funds deposited by Mortgagor with MIFA, or reserved by MHFA for Mortgagor. K. Except for natural persons, engage in any other business activity, including the operation of any other rental housing development, or incur any liability or obligation not in connection with the Development. L. Divulge "private data on individuals" obtained from tenants in the Development to persons other than the subjects of such data, except as provided and in accordance with the Minnesota Government Data Practices Act (Chapter 13 of Minnesota Statutes (1997)), and any amendments thereto. "Private data on individuals" includes the names of tenants receiving Section ti rent subsidy payments, or similar housing benefits from programs administered by state agencies, political subdivisions or state systems, and further includes financial infomuttic n, including but not limited to credit reports, financial statements and net worth calculations relating to tenants incident to their applications for occupancy, applications for rental subsidies, or certifications required for continued occupancy or subsidies. Release of such information to persons other than the subjects of the data requires either the informed, written consent of the subjects of the data, or the party requesting such data must have specific legal authorization in state, local or federal law to obtain it, or be engaged in the implementation of the program involved, or be in the course of a criminal or cavil investigation relating to the program 9. DISTRIBUTION OF INCOME AND ASSETS. Mortgagor shall not make, nor shall those having a beneficial interest in Mortgagor, make, receive or retain any distribution of any assets or any income of any kind of the Development, except from the Operating Receipts and Expense Account. and subject to the following conditions: A. All, such distributions shall be made only as of or after the end of Mortgagor's annual fiscal period, and only as permitted by the laws of the State of Minnesota. PPL Baas Lake Court, New Hope 1111199 New Construction Tan Credit 10 99-NCtr-2558 Regulatory Agreement NC[C Rgltry Agrmnt Development which the patty so receiving the funds is not entitled to retain hereunder, shall be deemed to be held in trust for the benefit of the Development and/or MMA. 10, RIGHTS AND REMEDIES. Upon violation of any provision of this NCTC Regulatory Agreement by Mortgagor, MHFA may give written notice thereof to Mortgagor, by registered or certified mail, addressed to the address stated in this NCTC Regulatory Agreement, or such other address as may subsequently, upon appropriate written notice thereof to MHFA, be designated by Mortgagor as its legal business address. If such violation is not corrected to the satisfaction of MHFA within thirty (30) days after the date such notice is mailed or within such further time as MHFA reasonably determines is necessary to coma the violation, MHFA may, without further notice, declare a default under this NCTC Regulatory Agreement, effective on the date of such declaration, and thereupon UWA may (in addition to those actions permitted under the NCTC Mortgage in the event of a default) apply to any court, State or Federal, for specific performance of the covenants and agreement contained herein, for an injunction against any violation of such covenants and agreements, for the appointment of a receiver to take over and operate the Development, or for such other relief as may be appropriate, since the injury to WWA arising from a default under any of the terms of this NCTC Regulatory Agreement would be irreparable and the amount of damage would be difficult to ascertain_ 1VIHFA's election to pursue any one or more of the above remedies shall not be construed to preclude or to be a waiver of MHFA's right to pursue any other remedy. MHFA may take possession of the Development, bring any action necessary to enforce the rights of Mortgagor growing out of the Development operation, and collect the rents and operate the Development until such time as MHFA, in its sole option and discretion, determines that Mortgagor is again in a position to operate the Development in accordance with the terms of this NCTC Regulatory Agreement, and in compliance with the requirements of the NCTC Note and NCTC Mortgage. It is expressly understood and agreed that the provision for thirty (30) day notice to Mortgagor for violation of this NCTC Regulatory Agreement, as contained in this Section 10, is inapplicable to the provisions for disbursement by MWA from the funds referred to in Section 3.B. hereinabove; and that said disbursement may be made by MHFA from said funds in its discretion and without notice, save and except for any notice required in the Working Capital Reserve and Escrow Agreement, if any, the Rent -Up Escrow Account Agreement, if any, the Development Cost Escrow; and the Residual Receipts Account referred to in said Section 3.B. It is further expressly agreed that in the event W- FA, during the life of this NCTC Regulatory Agreement, takes possession of and/or operates this Development pursuant to the terns of this NCTC Regulatory Agreement, the NCTC Mortgage or the NCTC Building Loan Agreement, MHFA will apply the Development's Operating Receipts to the payment of Operating Expenses in the manner set forth in Section 3.A. hereinabove, to the extent that Opaating Expenses will be paid by MHFA from available Operating Receipts prior to the application of Operating Receipts to the payment of principal and interest under the NCTC Mortgage and NCTC Note. ll. LIABILITY OF THE MORTGAGOR. Nothing contained in this NCTC Regulatory Agreement shall operate to alter, amend or otherwise affect the provisions of the NCTC Mortgage, pursuant to which in the event of a default in the payment of the indebtedness secured thereby MEIIrA's recovery for the principal and interest under the NCTC Mortgage Loan will be limited to the Property and all buildings, improvements, fixtures and equipment located thereon or used or usable in connection with the operation of the Development; and neither Mortgagor nor any PPL liana Lake Court, New Elope 1111199 New Comatcuction Tax Credit 12 98-NCTC-2558 Regulatory Agre ment NCTC Rgitry Agrmmt Documents, or any other agreement, made between MHFA and Mortgagor, without the prior written approval of MHFA. B. In the event of retirement, death, insanity, incapacity, withdrawal, dissolution, liquidation, bankruptcy, or assignment for benefit of creditors of a. general partner of the Mortgagor, the business may be continued by the remaining general partners pursuant to a right set forth in Mortgagor's Certificate of Limited Partnership and Partnership Agreement if it is a Limited Partnership, or in its Partnership Agreement if it is a General Partnership. In the event of Mortgagor's dissolution, no title or right to possession and control of the Development, and no right to collect the vents therefrom, shall pass to any person who is not bound by this NCTC Regulatory int in a manner satisfactory to NWA. in addition, the fowler general partners, other than the general partner who ceased being a general partner as a result of events contemplated by this Section 13.B, shall continue to operate the Development. C. No general partner shall voluntarily withdraw from or be substituted by Mortgagor without the prior written approval of MHFA. Following completion of the Development, said approval will not be unreasonably withheld if there are one or more remaining or substitute general partners who, in the MHFA's opinion and sole discretion, are financially capable and competent to cause Mortgagor to have the capacity to effectively own and operate the Development, subject to the terms and provisions of this NCTC Regulatory Agreement. D. If one or more of the general partners of Mortgagor is a corporation incorporated for the sole or principal purpose of managing the business affairs of this Development, then MHFA may, at any time and from time to time, remove any or all of the existing directors or officers of said corporate general partner of Mortgagor and appoint such person or persons as MHFA in its sole discretion deems advisable as new directors or officers, in the event that MHFA at any time deem itself to be insecure with respect to the NCTC Mortgage Loan by reason of the violation by Mortgagor of any provision of the NCTC Mortgage Loan, or of any term of this NCTC Regulatory Agreement or any other agreement between it and MHFA, or of any provision of the Act or the Rules and Regulations prornulgated pursuant thereto, or of the terms of any agreement with a third party respecting the Development. Any such directors or officers so appointed by MHFA shall serve only until such violation is cured and until MHFA has signified in writing that it has received assurances satisfactory to it against further violations of a similar nature. 14. COUNTERPARTS. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. (TM REMAP41NG PORTION OF THIS PAGE IS INTENTIONALLY = BLANK.) PPL Base La1ce Coot, New Hope 1/11/99 New Coosvwdon Tax Credit 14 99-NCTC-2558 Re8ulatu5' Agm went NCTC ltgltry AV -1 EXHIBIT A LEGAL DESCRIPTION Parcel 1: The South 56 feet of the North 101 feet of the East 62.59 feet of the West 226.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at tight angles West to the West line of said Lot 32; dx= South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest comer of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the Fast line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 2: The South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 101 fleet of the following described tract: That part of the West Half of I.ot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast earner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West fine of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 fed North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof. thence East parallel with the South line of said Lot 32 to its intersection with the East Eine of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 3: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence Fast parallel with the South line of said Lot 32 a distance of 100 feet; =C15 hence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 4: That South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acnes of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 fort North of the Southwest PPL Hass L dw Court, New Hope 1111199 New ConsUwtion lax Credit 16 98-NCTC-2558 Regulatory Agreement NCrC Rgltry Agrmot Parcel 10: The North 100 feet of that part of the West Half of Lot 32, lying South of the North 6 acres thereof, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 11: That part of the Nordreast Quartet of the Southwest Quarter of Section 5, Township 118, Range 21, described as beginning at the intersection of the South line of said Northeast Quarter of the Southwest Quarte with the Sauthedy extension of the West line of Murray Lane 4th Addition; thence Northerly along said Southerly extension and alor►g said West line a distance of 444.49 feet; thence Westerly in a slrasght line to a paint on the Pest hne of Murray Lane 3rd Addition distant 444.66 feet Northerly from its iateon whir said Soarh line; thence Southerly along said East line to the North line of the South 178.2 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line to a line drawn parallel with and 100 h3d Hast from said Fast line of Murray Lane 3rd Addition; thence Southerly along said parallel line to said South line of the Northeast Quarter of the Southwest Quarte, thence Easterly along said South line to a line drawn parallel with and 196.76 feet West from said West line of Murray lane 4th Addition; thence Northerly parallel with said West lice to the North line of the South 113 feet of said Northeast Quarter of the Southwest Quarter, thence Easterly along said North fine of the South 113 feet to a line drawn parallel with and 30 feet West from said West line of Murray Lane 4th Addition; thence Southerly parallel with said West line and its Southerly extension to said South line of the Northeast Quarter of the Southwest Quarter; thence Easterly along said South line to the point of beginning. Except those portions of the above-described property described as follows: The East 56 feet of the West 101 feet of the South 182.37 feet of the North 227.37 feet; The East 62.59 feet of the West 226.17 feet of the South 56 feet of the North 101 feet; The East 62.58 feet of the West 163.58 feet of the South 56 fee of the North 101 feet; The East 56 feet of the West 282.17 feet of the South 182.37 feet of the North 227.37 feet, according to the United States Government Survey thereof and situate in Hennepin County, Minnesota. Being registered land as is evidenced by Certificate of Title No. 820576. PPI. Bus Ldm Court, New Hope 1111/99 New Cansu wn Tex Credit 18 98 -NCM -2558 Rep Mary Agmmmt NCTC agltry AF—t 98-NOTC•2656 r Type or Appucanvurganization: f ® Nonprofit Agency/Corporation ❑ Housing`Authmlry/Communlry, development Agency ❑ Limited P16111 Entity ❑ For Pro11t Organlzatlon/Corporatlon ❑ Unit of Govemment E] Communlly-Basad Organtzation ❑ Olhar (Specify). ,❑ Individual ` Q Commuplity Housing developmerd Organlzetlon-(CHdO) — Proposed Ownership Entity: ❑General Partnershlp ® Limited Partnership ❑ Individual(s) .Corporation ❑ Other (Spedfy smaa of Proposed General Partnere: Name of Geis" UmW Partnership rolect for Pride In lJvirllf v - PPL -Bass Lake Court tJmited PwWwrshlo .. rnureur rnrunrearrun: Type of Activity (check `all lhat apply): ® Aoquts'Ilion ® New Construction ® Rehabilitation ® demolition 7. Total Site Area In Sq. FC 148,215 Type of Construction: Year Bulk: 1960 Wood Frame 7 If ExIst r4l QQ Oa�vpied. Q Vacant Types of Structures PO of Bu dl 9(1) Numberof Numberof Buildings (2) Stories Number of Square Dwelling Units Fe�3) New Construction Reha6illta6on Other. TOTALS TH 5 2 20 24,000 OP 7 .2 14 23,800 Garw 4 40D 12 34 6 ti) warnup twuj, r owrinouse ( i h), tievator (E), Nroa )array (up). oupiax (LP). (2) Total number of residential structures, excluding detached gauges. (3) CouM Basements and Balconies at IN sq, footage. L. Number of Parking Speaes: M of surface # of covered Check alt that apply and Indicate number of units Type of Housing y of units:) Population Targellnw. M of unite). ® Permanent Ftentai 34 ❑ General Occupancy ❑ Perm. Rental with Services ® Families wRi Children 34 ❑ HIVIAICS Housing ❑ Youth ., . ❑ Emergency Shelter ❑ Singte Adults .. ❑ Tranehional(up to 24 moa.) ❑ Single Men , ❑ Single Women . ❑ Pubildy Owned Housing ❑ Hwnalesehraer hametaee .; ❑ Homeownership ®(71har ❑ Houssholds w/epecial need: ' , (Speclly) Hollmon:• 12un8S ❑ Peoplepamllles wllh HIVIAM JDElderlyim _. .Other'(specillij: Pub Hsu List Low-income Targeting: (Indl ate the number and percent of units for each hoome leved•pnpnsad) 34 . {;) ' or 100 (96) of the tofu Irlcrxtle unite W11I de`ve fsehoWa of - 50 % or M or (96) of the low a me units.vA serve ho%6ehdda at ottha arse medi%a ar . of the area median loconiai (a) nr :.. (%) of the kwinco6i units will some hatmeholdei at % or less of the area median Income MHFA Multifamily Underwriting Form W97 2 2WI999 10.06 AM VIII. ESTIMATED ANNUAL INCOME AND EXPENSES: A. "HOUSING INCOME _ UrYt $ of DU Apprw� Size Proposed Tatal Annual Es9matid "it y-Grm Rental RoomsTotal Rcama (1f Type (Net Ram" Mor". =; Conine& Rent C6AgI Reid Per Intl' ` of Unita x NOR, Sq. FL) of Contract Rent (ff x rent x 12) Monthly .... (Proposed . Rooms Per 111111 _. Inks Per lMltUtilltlea'Paid. Coni act Rent, Unit) 2BR :' " : by Occupant' +Utllltlee) _ eta.) HOME UNITS 4BR 4 1700 $780 $37,440. $101 Sul 7 38R 3 1200 $709 S25 524 681 47.80 ' 6 1B sBR 3 1200 $592 .$21.312 $81 =$573 6 18.:.. ARIF UNITS 38R a 1200 $592 $5611132 .; $811 3676 6 4B 48R 4 1700 $650 $31.2w 101 MIr' 7 28 ' MHOP UNITS + 98R 6 1200 $104 $7,488 $61 $185 6 9s 4BR 6 1700 $84 $6.048 $101 . :. $165 7 42 TOTAL 34 TOT i11f5,844 TOTAL 216= UNITS: HOUSING INCOME: ROOM& Utilities to be paid by Occupant (Excluding Telephone): ® Heat -Type: rooroonrs . I e OR 8 6ma ® Hol Water ❑ Air Conditioning 2 OR .4.5 rooms ® Household Electric Other -S e ❑ P �1'= 9 8R = 6.0 roams' ' 4 OR : 7.0 rooms t B. GROSS POTENTIAL RENT 1. Rental Housing Polendal $185,944, 2. ParkinglGarage Rent Potentlal 4 of surface parking MonlNyiee 0 at covered parking 34 Mor" fee 3. Cormrerdal Rent Potential 4. Miscellaneous Rent Potential L Gross Potential Rent (Total Linea B.1 thru 8.4) . $155,80 C. RENTAL LOSS: 1. Rental Housing Vacancy Vacancy Factor 7.0%: x Line 111 r $13,009 " 2. Parking/Garage Vacancy Vacancy Factor 7.0% x Lire 92 3. Corrrmercial Vacancy Vacancy Factor x Lira 83 q , 4. Miscellaneous Unrealized Income 5. Employee Rent Credits 6. Out of Service Units 7. Rental Concession Aclustments B. Bad Debt B. Total Rental Lose (Total Lines CA thru C.e) $19 008 D. NET RENTAL COLLECTIONS: (Lina 8.6 minas C 14) '` 1 B35 E. OTHER INCOME 1. Ter" Face $100 _ 2. Other Income laundry Equipment $IDU Nein AMUM Tax Increment Finan ft(TIF).Rece(pts; " Other (Specify) : MHOP ACC Subsidy+ Vacancy Inpgnre: Orelim Maint. Fees $900 : s Forfeited Security Deposita . $790 4. Interest Income r . - $243 S. Total Other Income (Total Lines E:1 thmE.4) 1r'T. 8 056 F. :TOTAL REVENUE (Linea D plus E.Q...... !A11,891 MHFA Multifamily Undwwrl0ng Form 8197 4 2/211999 10:06 AM IL ESTIMATIM DEVELOPMENT -COST: A. AoquleRlcm or Refinance Exlstlng Debt Coat:.; 1. Acquidtion/Mmince 559A29 SIDU "i4 -planes S832,000- W. -8peciel Assessments 3. 17thsr OfRae Bldg 'F235k Gas S1sLbn Y?SOlC d Soh land ;f04k $989,400 4. „ ,. i TOTAL $1A21,4t10 — B. N Now Conitnu0tion, eompleteSection N7 baron.: If Rehabilitation, complete Secdon 52 below: 1: New Constr4co n.'.. a) Resldentlal .$67 Signors sq It. :; '= , 51,375 791 b} .daragee $19a M.8 j.- - $75,000 o) Appliances86 S/grm sQ f{ _ 527,155 •• aj Sitewdrk� 592.000 497 o} Nef.Foniiraction 575.`S1DU . ST 1.509 946 (Total Unes$.ts Ih14.p;I,d) f} Gas nerel,Requiremerus < 7:7%%ofWe'B.1:e.. _ $115,840 pj Bulldeea Generalbverhead 2.(576.% of ikm'B.1.e : 538,241 , `- hYauldera Pmlg 4 6%'76 W Line B.i-e =" 569,326 - Jj Qroas Conotruddon (Contract AmounQ (%)al UneaB:l.a that 6.11) 588.656 r$.KXJ *r TOTAL 51733:153• q Com Coetinganey`(Mlnlmum 4%,`tg MHFA)evlaxi) X000 2.'FI (if avallable attach a mora detalbd scope; otlrerwtee, cgnpleb this aeralan} '.; a) ON work: WMdng, P -ft dam. GBPe: utl86ai; ett } - $426,755 eio b} Exterior. (htcludei r_W,' alding aria irker, windows qnd doors, .) - 5420 948 Q Interior,'(lndudss eabh"siepplianeea. MrBS. and wall, _ 5345 501 c�lOng; and floo►fadshgar tib.) CO Maeherdco Systems.1(includaq heatlng, elr oondldaiing, 4159,695 plumbing. and lbduresr oto.) r e) Marks! Symons.. (Ytpludes ssrvloe.:wMng, Af►d `.n Spa* 0111er. Concreta - allowance 578,948 .0)Sp-cwother; Inl $30.859 . h) Net Rehabilhadon {Total Line 02.o thru 6.2:9), ,: ' 41,635.176 ' P.Oeneral 6.9% (% of Una 13.21}- . 5105,427 ,Regolremerb J) BLdk 1's General 2.1% - (96 of Ura 101:2.h) $32,826 .: Overhead q Builders Profit 2195 ('re of Une. 62.h) $32,825 i I) Otirer - Spsclfy: Asbestos removal costo M) Gross Rehabllftdon (Contract' Amount) (Total Lina B.2.h thru B.Zq $124,375 .JDII TOTAL S1�741 n) Conspuctlon Contingency (Minimum 7.4 subject to MHFA ravlew) : ; ' $122,763 C. Soil Crib 1 Davelcpmana eapeneas e) ArchVAcCs Fee - Design ( 7S% of Total) 4121,517 b) Arehltect'e Fee- 5upenrlsion (26% of Total ) $40,506_, Total Architeere Fee - 5162.022 10.7% of Una B:1 a or B.2 is - ..525,027 c} Legal d) Processing Agent I X000 _ a) Ma*atlng $5,000 R Surveys and 8011 Borings $6,921 g) Bond Premium t1) BuNng Pem41(s) I) Sower -Waller Access Charge 1! Devekgeea Fee 4.696 % of Una XD': 5275.000 -" k) Appralsai Fee$5,354 1) Coal CerdficaWnlAud{t (MHFA 1st mortgage) f' : $5.000 m} Energy Audit n) Environmental Assessment 47,771 o) Fumlaldngs and Equipment $3.000 p) Tide and Recording $10,ole . q) Other Fees - Specity: Taxa Ilse 6 mise 420 .99 _ rj TOTAL 4557A11 .'2. Flnandng and Canying Charges a) Construction lnterast at %: I mQirtlrs $19058 b) Tangs During Constructlon C} Insurance During ConsVucdon 49,000 d) Agency Inspection Fee (MHFA First Morfpaga Orly) G5% of gross conshwilon Casal' -$17.3n . 4) Apercy Financing Fee (2% of Nat.Modpe_ ge). (MHFA Rust MoAgage =1J.Agency Bridge Loan Fee 0! other Fees- S1pedly: .- Rekxadon Cost 518 000 - h) Ogen Fees - Spedty' RepWred Raserrea 132 280 +• $132,m- q -: TOTAL 5402.406 Bulrbtal C.t.s and C2.1 Per UMC, D. Total Dawlopmenl Cos( (TOC)' $174.264. , TOTAL 56.1113.388 (T -M Unes A.4. 6.1 S k or ".m'R n. C.1:r and C 2 Per DU E Qroes 7pC (MC +'DCE) 46.026.7a0 INDiEd erNPA First Mertaeea only , Chas ILD oiue IX.F.41 .. MHFA MuNtamty Underwrldrrg Form 8197 6 2/2!1999 10:06 AM ND7ES UGUMENTE ffftM '• IS YnpYa W. Lhm 2 Comments..-._ VrlE.2: MMP AO& subway= $36SY35 , and MHDP Veoarrcy praame $847.52: Vlh2: EwhWes MMP tadfs vr►r2n:'Y6tNDP.Expenrsesof;4:),67YIessSsnR.�raxandSB,tYizRepdeceomentReservss '_ :- :. - . Vld.1 . $W TKtexas Os R 9 689.taxee kr on' wner Nolknsn unlfm xal a :O! cbnt sQw w!d issfaf owner m punhese app!lencas, X82J `ownerdab�� forrrahedule the.wnrk �r,211;srontract'sund SY$7t18Cakr8ngency :_ XC1 f _5096 awllabii oiYiwab*4lo% O 1ao%aons9�Q�odhffSdnl t�wlCj and x076, a isf yr Tinting efts rQueMed OecyoarKy. XC1:q,-�'�i�0007�.Cre�tlSaead�5�298c .1X62 a 41NOW er!44.0!�sgon fees Pn a um "A�e Uelm Bank. Xt:2g �1Ba000re)o�adon:cosls .:.-:` . X.2, h ,S7T.280 Al11OP� S�Jr000:NEFOp,,&W(3 mm M>iDP Ntor!►hl kmme) A $17,ODO NFF R*Woment XIVD.2 SY.5T4.598 8v Cb ft ft ($1.437.On Syrid _f 50X dbv. Abe 0'$137,500). MHFA Muleifemily Undereritlng Form &W a 212/1990 10:08 AM September 30, 1998 Number of Bedrooms: Annual Recertification Date: LEASE for LOW RENT PUBLIC HOUSING 1. PARTIES AND DWELLING UNIT: (a) Premises: Project Name Address _ Unit (b) Owner: Address (c) Manager. ..__ Address (d) Tenant: Head(s) of household Family members 2. LEASE TERM AND RENT PAYMENT: (a) Term. This Lease shall begin on provided by this Lease, the term shad (check one): Unless terminated as aNW4N12A0l7WWSVYASE-DOC 1 LEASE FOR LOW RENT RMLIC HOUSING the last month's rent, and further, all subsequent penalties described in this statute will apply. 4. OCCUPANCY: (a) Purpose. The Tenant has the right to exclusive use and occupancy of the dwelling unit, which includes use by those named in Section 1 of this Lease, minor children born into the household during this tenancy and reasonable accommodation of the Tenant's guests, visitors and, with the consent of the Manager, foster children and the live-in care giver of the Tenant's family. The Tenant must live in the dwelling unit and the dwelling unit must be the only place of residence. (b) Commercial Activities. With Manager consent, members of the household may engage in legal profibnaking activities in the dwelling unit, where the Manager determines that such activities are incidental to primary use of the leased unit for residence by members of the household. (c) Prohibited Activities. The Tenant shall not (i) permit any persons other than those listed above and minor children which are born into the household during this tenancy, to reside in the dwelling unit without obtaining the prior written approval of the Manager; (ii) sublet or assign the unit, or any part of the unit; (iii) engage in or permit unlawful activities in the unit, in the common areas, or on the project grounds; (iv) have pets or animals of any kind in the dwelling unit; (v) act and cause household members or guests to act in a manner that will disturb the rights or comfort of neighbors. The Tenant agrees to keep the volume of any radio, phonograph, television, or musical instrument at a level which will not disturb the neighbors; (vi) permit any member of the household, a guest, or another person under the Tenant's control to engage in any criminal activity that threatens the health, safety, or right to peaceful enjoyment of the premises by other residents or employees; or any drug related criminal activity on or near the premises; >):11OIN125101700CMEAMDOC 3 LEASE FOR LOW RENT PUBLIC HOUSING (b) Utility Allowance and Excess Utility Surcharges Schedules. The Utility Allowance Schedule for Tenant Paid Utilities and the Schedule of Excess Utility Surcharges is posted in the Manager's Office and is Attachment #3 of this Lease. (c) Schedule Revisions. The Manager shall provide the Tenant with no less than 60 days notice prior to the proposed effective date of scheduled revisions to the Utility Allowance Schedule or the Schedule of Excess Utility Surcharges. Such notice shall: (i) describe the basis for the allowance or revision; (ii) include a statement of specific items included in determining the utility consumption and dollar amounts in the allowance or revision; - (iii) advise Tenants where they may review the Manager's records which document the basis for the allowance or revision; and (iv) provide Tenants an opportunity to submit written comments within a 30 day period. This comment period will expire no less than 30 days prior to the proposed effective date of the allowance or revision. 8. ANNUAL RENT RECERTMCATIONS: (a) Information Lkauired. Each year by the date specified by the Manager, the Tenant shall provide accurate statements regarding income, assets, expenses, and family composition. The Manager shall verify the information supplied by the Tenant and use the verified information to establish the amount of the Tenant's rent. (b) Interim Rent Reviews. in cases where annual income cannot be projected for a twelve-month period, the Manager shall preschedule special interim rent reviews between the annual rent recertification. The Tenant may meet with the Manager to discuss any change in rent resulting from the recertification process, and if the tenant does not agree with determination of tenant rent, the tenant may request a hearing in accordance with the grievance procedures of the Economic Development Authority in and for the City of New Hope (the "Authority"). 9. INTERIM RENT ADJUSTMENTS: The Tenant should promptly report to the Manager any of the following changes in household circumstances when they occur between annual rent recertification: D,WM12ftI' IDOCS EA DOC 5 LEASE FOR LOW RENT PUBLIC HOUSING 12. Tenant is not required to reimburse the Manager for undercharges caused solely by the Manager's failure to follow United States Department of Housing and Urban Development ("HUD") procedures for computing rent. MAINTENANCE: (a) Tenant Obligations. Tenant Agrees To: (i) keep the dwelling unit and any other areas assigned for the Tenant's exclusive use in a clean and safe condition; (ii) use all appliances, fixtures and equipment in a safe manner and only for the purposes for which they are intended; (iii) not litter the grounds or common areas of the project; (iv) not undertake, or permit his or her family or guests to undertake any hazardous acts or do anything that will damage the property; (v) not destroy, deface, damage or remove any part of the dwelling unit, common areas, or project grounds; (vi) give the Manager prompt notice of any defects in the plumbing, fixtures, appliances, heating and cooling equipment or any other part of the unit or related facilities; (vii) remove garbage and other waste from the dwelling unit in a clean and safe manner, (viii) pay reasonable charges (other than for normal wear and tear) for the repair of damages to the premises, project buildings, facilities or common areas caused by the Tenant, his or her household or guests, and to do so within 30 days after the receipt of the Manager`s itemized statement of the repair charges. The Damage and Service Charge Schedule is posted in the Manager's office; (ix) Other: (b) Manager Obligations. The Manager agrees to: (i) maintain the premises and the project in decent, safe and sanitary condition; D.VM12M 171DOCSVJLASE.DOC 7 LEASE FOB LOW R04 PUBLIC HOUSING 13. RESTRICTION ON ALTERATIONS: The Tenant shall not do any of the following without first obtaining the Manager's written permission: (a) dismantle, change or remove any part of the appliances, fixtures or equipment if the dwelling unit; (b) paint or install wallpaper or contact paper in the dwelling unit; (c) attach awnings or window guards in the dwelling unit; (d) attach or place any fixtures, signs, or fences on the buildings), the common areas, or the project grounds; (e) attach any shelves, screen doors, or other permanent improvements in the dwelling unit (f) install or alter carpeting, resurface floors or alter woodwork, (g) install washing machines, dryers, fans, heaters, or air conditioners in the dwelling unit; (h) place any aerials, antennas or other electrical connections on the dwelling unit; or (i) install additional or different locks or gates on any doors or windows of the dwelling unit 6) Other: 14. ACCESS BY MANAGER. - (a) Notice. The Manager shall provide two days written advance notice to the Tenant of his or her intent to enter the dwelling unit for the purpose of performing routine inspections and maintenance, for making improvements or repairs, or to show the dwelling unit for re -renting. The notice shall specify the date, time, and purpose for the entry. The Tenant shall permit the Manager, his or her agents, or other persons, when accompanied by the Manager, to enter the dwelling unit for these purposes. In the event that the Tenant and all adult members of the household are absent from the dwelling unit at the time of entry, the Manager shall leave a card stating the date, time and name of the person entering the dwelling unit and the purpose of the visit. (b) Emergencies. The Manager may enter the dwelling unit at any time without advance notice when there is reasonable cause to believe an emergency exists D:IM12YAMDOMLEASE.DOC 9 L£ANFMLOW RENT PUBLICt=SINO (c) (v) failure to abide by necessary and reasonable rules made by the Manager for the benefit and well being of the housing project and the Tenants; (vi) failure to abide by applicable building and housing codes materially affecting. health or safety; (vii) failure to dispose of garbage, waste and rubbish in a safe and sanitary manner; (viii) failure to use electrical, plumbing, sanitary, heating, ventilating, air conditioning and other equipment, including elevators, in a safe manner; (ix) acts of destruction, defacement or removal of any part of the premises, or failure to cause guests to refrain from such acts; (x) failure to pay reasonable charges (other than for normal wear and tear) for the repair of damage. to the premises. project buildings, facilities or common areas. (xi) any activity not just criminal activity that threatens the health, safety, or right to peaceful enjoyment of the premises by other tenants or employees of the Owner or Manager; (xii) any drug-related criminal activity on or off the premises, not just on or near the premise; (xiii) alcohol abuse that the Manager determines interferes with the health, safety, or right to peaceful enjoyment of the premises by other residents or (xiv) other good cause. Reduction in Operating Subsidy. (i) It is understood by the parties hereto that the operating expenses of the dwelling unit are being paid, in part, by certain subsidies to be received by the Owner from the Minneapolis Public Housing Authority in and for the City of Minneapolis (the "MPHR"). Such operating subsidies are, in turn, to be received by the MPHA from HUD and are subject to appropriation by the United States Congress. Pursuant to a Regulatory and Operating Agreement between the Owner, the MPHA and the Authority, in the event that, for any reason, the Owner does not receive sufficient operating subsidy to make up the difference between (i) the cost of operating the dwelling unit, and (ii) the rent paid by the Tenant (taking into account certain reserve funds), the Manager shall have the right, subject to the o:VMI asci naocsv.EAss.1= I 1 LEASE FOR [AW RM4T ruRuc WUSlNc The notice to vacate required by State or local law may be combined with or run concurrently with a notice of Lease termination (b) Service of Notice. The notice of Lease termination from the Manager shall be either personally delivered to the Tenant or to an adult member of the Tenant's family residing in the dwelling unit, or sent to the Tenant by First Class Mail, properly addressed, postage pre -paid. (c) Content of Notice. The notice of Lease termination shall: (i) specify the date the Lease shall be terminated; (ii) state the grounds for termination in sufficient detail for the Tenant to prepare a defense. The Manager shall rely solely on the grounds stated the Notice of lease Termination in the event eviction action is initiated; (iii) advise the Tenant of the right to reply as he or she may wish, to examine the Manager's documents directly relevant to the termination or eviction, and to request an Informal Hearing (as described in Section 17(c)(iv), below) in accordance with the Authority's Grievance Policy, and/or to defend the action in court; (iv) advise the Tenant of the right to request an Informal Grievance Hearing within ten (10) working days. The notice period shall begin on the earlier of the date the notice was hand -delivered or the day after the notice was mailed. The purpose of the informal hearing is to attempt to resolve the. issues) without resorting to the Formal Grievance. Hearing and/or Court Eviction; (v) state to the Tenant they are not entitled to a grievance hearing on the termination, and the judicial eviction procedure provides the opportunity for a hearing in court that contains the basic element of due process as defined in HUD regulations; and (vi) advise the Tenant of any proposed adverse actions by the Manager. 18. LEASE TERMINATION BY TENANT: The Tenant s=1 give .the Manager one month plus one day written notice before moving from the dwelling unit. If the Tenant does not give the full notice, -the Tenant shall be liable for rent to the end of the notice period or to the date the dwelling unit is rye -rented, whichever date comes first. 19. TERMINATION OF LEASE UPON DEATH OF TENANT: Upon the death of the Tenant, or if there is more than one Tenant, upon the death of all Tenants, either the D:YM12510I71DOC99"SEAOC 13 L"M FOR LOW RENT PUBLIC HOUSING 22. GRIEVANCES: (a) Grievance_Palicy. All individual grievances or appeals, with the exception of those cases concerning eviction or termination of tenancy which are based upon a Tenant's creation or maintenance of a threat to health or safety of other Tenants or Manager employees, shall be processed under the grievance policy established and maintained by the Authority. This policy is posted in the management office where copies are available upon request. (b) Grievance Hearing for Nonpayment of Rent. Before the Authority shall schedule a Grievance hearing for any grievance concerning the amount of rent the Manager claims is due, the Tenant must first bring his or her rent account current by paying to the Manager an amount equal to the amount of rent due and payable as of the first of the month preceding the month in which the act or failure to act took Place. After the hearing is scheduled, the Tenant shall continue to deposit this same monthly rent amount into the Manager's escrow account until the complaint is resolved by the decision of the hearing officer or panel. (c) Grievance Hearing for Lease Termination. When the Authority is required to afford the Tenant the opportunity for a hearing concerning the Less termination, the tenancy shall not terminate (even if any notice to vacate under State or local law has expired) until the time for the tenant to request a grievance hearing has expired, and (if a hearing was timely requested by the Tenant) the grievance process has been completed. 23. CHANGE IN LEASE AGREEMENT: (a) Notice of Proposed Change. The Manager may change the provisions of this Lease_ The Manager shall provide the Tenant with at least 60 days advance written Notice before the Lease change becomes effective. (b) Notice Content and Tenant Input. The Manager's notice shall: (i) advise the Tenant of the proposed change to the Lease; and (ii) provide the Tenant with the opportunity to submit written comments within a 30 day period. (c) Notice of Change. If, after considering the Tenant's comments, the Lease is to be modified, the Manager shall notify the Tenant and offer the Tenant a new Lease or an addendum to the existing Lease. The Tenant may accept the changed provisions by signing the new Lease and returning it to the Manager, or the D-WM 12AO11=CSU.FAsr&.DOc 15 LUSR FDA LOW RENT PUUX HMSING Signatures: TENANT: 1) 2) MANAGER: 1) (Date Signed) (Date Signed) (Date Signed) D:11 ml2ADl7wcllCSIIx".DOC 17 LEASE FOR LOW RENT PUBLIC HOusm EXHIBIT D Marketing Agreement D:\MMl25k0l7\DOCS\TAX CREDIT MGT AGREE.DOC D-1 MHFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT The Agent further fully understands that the operation of the Development Is subject to a Regulatory Agreement (attached as Exhibit "A") and that approximately % of the dwelling units in the Development will receive the benefit of subsidy payments under Section of the National Housing Act from the United States'Department of Housing and Urban Development pursuant io the attached agreement(s) (Exhibit 'B" among the Owner, MHFA and the United States Department of Housing and Urban Development (HUD). In the performance of its duties hereunder, the Agent agrees to become conversant with and comply with the provisions of the Act, the policies, procedures, rules and regulations of the MHFA, the Regulatory Agreement, and the agreement(s) which will provide federal subsidy assistance as set forth in Exhibit 'B", all as amended from time to time and receipt of which is hereby acknowledged by the Agent. Section 4ot . Confer with Owngy- MHFA and MaAanernool Anent, Thg Agent agrees to keep itself informed on the policies of the MHFA, and, notwithstanding the authority given to the Agent in this Agreement, to confer fully and freely with the Owner, the MHFA, and the Management Agent In the performance of its duties hereunder. Sept The Agent agrees to cause an officer of the Agent to attend meetings with the Owner and Management Agent at any time or times requested by the Owner, Management Agent, or MHFA. AftctWn sot, The Agent agrees that matters relating to the marketing of the Development, including but not limited to (a) advertising, (b) promotion, and (c) staffing, are subject to prior review and approval of the Owner; and at the option of the MHFA, to the prior review and approval of the MHFA. Swtign 701. raneral Functions ref Agent The general functions of the Agent shall include: 701 i FrtlF!$iOWn a"d impivihca amion-oi ais MkrKerirV ri►irr , iik:iui i'�y� a Resident Selection Plan, and an Affirmative Marketing Pian in a form and manner acceptable to the Owner and MHFA. which plans are attached as Exhibits 'C" and ■D", and made a part hereof. 701.2 Participation in pro -occupancy conferences and training sessions on MHFA requirements with the MHFA, 2 Revised 4190 901.1 The Agent shall show the premises to prospective Residents and shall follow the Resident Selection Policies of the MHFA. ' 901.2 Admission to the Development shall be limited to persons whose Incomes do not exceed the limits prescribed by MHFA, with the exception of those persons not subject to Income limits, in accordance with the MHFA approved "Resident Selection Plan" (as set forth In Exhibit T"). 901.3 Except for occupancy limits due to the size of the apartment or design of the Development or for dwellings designed for elderly persons, occupancy shall not be restricted on the basis of children. sectInn . AoelicarionA The Agent shall receive and process applicatjans for occupancy. If an appAcation is rejected, the applicant shall be notified in writing of the reason for rejection (and shall have the right to review the decision with a representative of the Owner, other than the Agent), The application (with the reason for rejection noted thereon) shall be kept on Elie tar ■ period of not less than throe years. The Agent shall maintain a current list of prospective Residents. 510m=. Lease Form& - 1101.1 The Agent shall complete for execution by initial Residents during the term of this Agreement (and for any replacement Residents as provided in Section 1801.2 herein) all leases for dwelling units (an, if appropriate, leases for commercial facilities, parking spaces, and licenses or other agreements with concessionaires) on forms approved by MHFA, and shall, at the option of tl;e Owrrlgr, either execute such documents in its name, identified as Agent of the Owner, or forward the leases to the Owner for execution by the Owner. 9101.2 The Agent shall see that all initial Residents are Informed with respect to such rules, regulations, and notices as may be promulgated by the Owner or Management Agent. 1101.3 The Agent shall lease dwelling units for the term of one (1) year, unless specifically authorized to do otherwise by the Owner and MHFA. BAdMI =- 8201 &'chad6les. 1201.1 The Owner shall fumish the Agent during the term of this Agreement with rent schedules, showing market rents and, If applicable, Section S rents for dwelling units, and other charges for facilities and services. 4 Revised 4190 1601.1 The Agent shall pay for the costs of its supervisory personnel and all expenses incidental to the operation of the rental office, including postage for routine mailings, non -marketing related telephone expenses, office supplies and stationery; save and except for heat, electricity, water, sewer and maintenance (which costs will be borne by the Owner). it is expressly agreed that the fee provided in Section 1801.1 hereof shall be deemed to include full compensation for the expenses provided in this Section 1601.1. 1601.2 In accordance with the approved Marketing Plan. including the marketing budget, the Agent agrees to arrange for and pay all costs of (a) on-site sales personnel, (b) credit reports, (c) graphics and signs, (d) public relations and newsletters, (e) the design and famishing of model apartments and the rental office, (f) brochures and printed materials, (g) advertising, and (h) postage on such mass mailings as the Owner shall authorize. 1601.3 Owner agrees to reimburse Agent for all expenditures set forth in Section 1601.2 above, on a monthly basis, to the extent of the agreed budgeted amounts for each expense category, provided all such expenditures are made in accordance with this Agreement. Agent will consult with the Owner and MHFA regarding the timing of such expenditures. Section 1701 _ The Owner shall furnish the Agent with a suitable office and, if required by the attached Marketing Pian, model space on the site of the development. 1801.1 The $ole compensation which the Agent shall be entitled to receive for all services performed under this Agreement On addition to reimbursements as provided In Section 1601, above) shall be a fee of $ per market rate (unsubsidized) apartment rented and S _ per subsidized (federally-asalsted) apartment rented during the terra of this Agreement. These fees shall be due and payable only in the event and only upon the execution of an oarrviad ,j&zz a%lw W;%-! aU. _• •,�Yt?�Yw s.1 t1u1 t. , �ww;rj.ar�.ff....:7 ..e! the rental payment due the Owner at the inception of occupancy. Such fees shall be payable at the and of each month on the basis of fees earned during that month; provided, however, that up to 20% of the total fee anticipated for the development may 6 Revised 4/90 2001.3 in the event Owner is in default under the Regulatory Agreement or Mortgage, this Agreement may also be terminated by MHFA effective upon the mailing of notice thereof to the Owner and Agent. In the event the Owner is not In default under the Regulatory Agreement or Mortgage, this Agreement may also be terminated by MHFA for just cause, as determined by MHFA, on ten days written notice to the Owner and the Agent. MHFA shall not be subject to llabllity for any loss, expense, or damage caused by terminalion by it of this Agreement. 2001.4 Upon termination of the Agreement for any reason, the Agent shall: (i) remit to the Management Agent (or If the Agent and Development Management Agent are one and the same, tQ the Owner) within twenty-four flours after such termination, all monies due the Owner; and pi) submit to the Owner any financial statements and marketing records required by the Owner. After the Parties have accounted to each other with respect to all matters outstanding as of the date of termination, the Owner shall furnish the Agent with adequate assurance of payment of any outstanding obligations or liabilities which the Agent may property have incurred on behalf of the Owner. ISW14n2101. Assam. This Agreement shall Inure to the benefit of and constitute a binding obligation upon the Owner and Agent, and their respective sucosssom and assigns, provided that the Agent cannot assign this Agreement or any of its duties hereunder without the prior written consent of the Owner and the MHFA Sedion2201. ftendrognt, This Amendment constitutes that the aroma Agreement between the Owner and the Agent, and no amendment or modification thereof shall be valid and enforceable except by supplemental agreement in wrfting, executed and approved In the same [manner as this Agreement. Sectio2301, . For the convenience of the Parties, this Agreement has been executed in counterpart copies; which an in all respects similar and each of which shall be deemed to be complete in itself so that any one may be introduced in evidence or used for any other purpose without the �n_v_li u+finn of the Mher countarpaaf tl. B 'Revised 4190 EXHIBIT E Affirmative Fair Housing Marketing Plan D-.\bFKN125\017VOCMTAX CREDIT MGT AGREE -DOC E-1 MSFA LOW INCOME HOUSING TAX CREDIT PROGRAM MANAGEMENT AGREEMENT C. COMMUNITY CONTACTS - - — further infofrn the groups) least likely to opply about the avaltabiity of the housing, the applicant aghees to establish and intain contact with the groupwarganlzations Ilisled below that are located In the housing market aim or SMSA if more space Is .ded, attach an additional shwA Notify MHFA of any changes In this lis[ Attach a copy of correspondence to be moiled to these upslorgan"lons. (Provide all isquestad information). NAME OF GROUPIORGANi2mioN NAGIAUFTtINIC r�—APPRQXIMAtE t]ATE OF PFR50 n Family Resource Center Cultural Chicano ask Asian Community CnclL ADDRESS AND TELEPHONE NUMBER 7923 55 Ar N, Now !lops 6334740 1975 Chicago, PApis 674-1412 421 Bryant AV* N. Mpls 377-0778 IDENTIFICATION Africa mmei ican,White OF CONTACT{S) N CONTACT om PROPOSED CONTACTED CONTACT CONTACTED 011111;ig Dirtctor 119! _ Dinctar 1199 Director INDICATE THE SPECIFIC FUNCTION GROUPIORGMIZ,ATION WILL UNMRTAKE IN IMPLEMENTING THE MARKETING PROGRAM make referrels _ brake rOre., l s, transiati.- Irrdte rohrrals, translate .. — ___ 0. FUTURE MARKETING ACTIVITIES (Raatal units Only) Check the bteck(s) that best deswiba Future eft ukeling activities to rill vacancies as they occur after the projed has been hn%MIV accvphad R Newspapers/Publications C Radio M 119roehuremoalletafteldow% I-Sile Signe OCornmunity Contacts p Other (SPE") - — 7. EXPERIENCE AND STAFF INSTRUCTIONS A. Indicate any experience in marketing housing to the groups) identified as least Nluly to apply. PPF. has erttansive experience marketing to communitles or color. including AMcan American. Ffispanic and Asian. This Is re/lectaad in PPL's rental housing and ownership sales demographics. B. Indicate training to be provided Io aleft on ledwal, state and local fair housing bws and rsghllationa, as well as this AFHM Plan. Attach a copy of the instrunpons to staff regarding fair housing. Training is provided b each BUR parson either individually or through aMandance at an appropriate etas: - issues and new developments are discussed at weekly property management stalt, tn"Mngs. B. ADDITIONAL CONSWERATIONS . . — I . = __. E -, F s. ANTICIPATED OR ACTUAL RESIDENT pEMOrMRAPMCS Please het the number of persons use tall numbers not percentam That you anticipate will "Mpy or presently occupy the units as a result of yaw affirmative marketing efforts. wliite Tacks "Sians 3 _Indians 5 IiiepsMcs _7_, Disab}ed 1j_Single•Hsaded Households ,__12 --- Persons on Public Assistance SlgnsturesBY sigrdng this form, the applicant agrees, allar appropriate consusation *Nh MNFA, to change any part of tho plan covafing a project to asahae continued compliance wah affirmative lair housing malkeM9 regulations. SIGPU►TURE OF PERSON SUBMITTING PIAN NAME (TYPE OR PRINT) g pis TITLE AND COMPANY Property Wriager. Project for Pride in Living DATE �/ APPROVAL BY - SIGNATURE NAME (TYPE OR PRINT l I VLF FAIR HOUSING DIVISION USE ONLY 4 ��OISAPPROVAL e SIGNATURE NAME (TYPE OR PRINT) GATE•--- AMENDED AND RESTATED ADDENDUM TO PROPERTY MANAGEMENT AGREEMENT This Addendum is attached to and made a part of the Property Management Agreement of similarly titled contract between the parties hereto (the "Agreement") dated as described in Section A of the information schedule attached hereto and by this reference made a part hereof (the "Information Schedule") relating tot he Building described in Section B of the iifor,nation Schedule. This Amended and Restated Addendum replaces the prior three (3) Addenda in their entirety - In consideration of Ten and No/ 00 ]Dollars ($10.00) and other good acid valuable consideration, the receipt and sufficiency of which is acknowledged, and the prior verbal understandings of the parties as to the matters covered herein, and the undersigned Owner's continued reliance on the undersigned Agent to lease and manage the Building under the Agreement, and to induce Owner's Limited Partner, as described below, to oontribute equity capital to Owner for the development and operation of the Building, the parties further agree as follows A. ManaMMot and Leasi Agent shall, unless otherwise agreed by Owner and Agent in writing. (a) comply with applicable provisions of the Management Plan for the Building, prepared and approved by Owner, a copy of which is attached hereto as Exhibit A and by this reference made a part hereof, b) comply with the leasing guidelines attached hereto as Exhibit 2 and by this reference made a part hereof, and c) use for each lease the form of lease agreement attached hereto as Exhibit 3 and by this reference made a part hereof, except for the MHOP units which shall use the form of lease agreement attached to the Management Agreement - Low -Income H 1. Tax Credit Re uirements. A&W acknowledges that Owner is required under its limited partnership agreement to useest efforts to lease rite percentage of the apartment space in the Building set forth in Section C of the Information Schedule (based on number of apartments or floor area, whichever is less) the "Credit Units" to tenants whose income and rent levels qualify such apartments for inclusion in determining federal low-income housing tax credits (the "Credits") for the Building, and that the Credits will have substantial economic value to Owner and its partners. Agent shall also lease any other qualified space if and as indicated in Section C of the Information Schedule. Owner shall firr:nish Agent with written descriptions of such requirements as they relate to Agent's leasing and management duties hereunder 2. Tenant Certification. For all Credit Units, prior to approving each rental application and prior to allowing each prospective tenant to take occupancy, Agent shall (i) require the recertification of tenants, the certification and recertification of tenants shall be the responsMity of Agent. 7. Local Code Compliance. Agent shall cause the Project to be maintained in compliance with all local health, safety, and building codes to the extent of available funds, and shall promptly give written notice to Owner and to Ownees Limited partner if Agent receives notice of any such code violation relating to the Building. S. Lead Hazard Information If the project is a rehabilitation of a pre- 1978 built building and remains rental units with one bedroom or more that are expected to be available to remains other than the elderly or disabled, the Agent must provide each prospective tenant a copy of the Government Printing Office published informational pamphlet entitled Lead Based Paint: Protect Your Family and a Copy of the Lead Hazard Evaluation report on the building prepared by the Owner's environmental. consultant. . Furthermore, the Agent agrees to indemnify and hold harmless the Owner for any damages and attorneys fees incurred by the Owner or Agent for failure to properly implement this paragraph. C. Other Provisions Record System. Agent shall establish and maintain a comprehensive system of records, books, and accounts, including computerized systems, in accordance with the Plan and in a manner satisfactory to Owner. All records, books, and accounts shall be subject to examination at reasonable hours and by any authorized representative of Owner, or of Ownees Limited Partner. 2. Monthly orfs. Agent shall prepare a monthly report, in form satisfactory to Owner, containing and including at least the following: (a) a statement of income and expenses and accounts receivable and payable for the preceding month, including an itemized list of all delinquent reins as of the tenth (10th) day of the current month, as well as a report on action taken thereon by Agent; (b) a vent roll/cash receipts form for the previous month; (c) a disbursements summary for the previous month; (d) current bank statements with reconciliation of accounts; (e) copies of paid bulls and invoices for the previous month; and (f) a narrative of any unusual actions taken or emergencies responded to, and a full report of any accidents, claims, and potential claims, for the previous month. Agent shall submit each such report to Owner on or before the fifteenth (15th) day of each month, and shall concurrently mail a copy of the statement of income and expenses (on both a cash and accrual basis) to Owner's Limited Partner. 3. Additional information. Agent shall promptly firmish such additional information (including monthly occupancy reports) as may be requested from time to time by Owner or Owner's Limited Partner with respect to the renting and financial physical, or operational condition of the Building Agent shall promptly investigate and make a full written report to Owner of all accidents or Claims, as defined below, relating to the ownership, operation, and maintenance of the Premises and shall cooperate and make any and all reports required by an insurance company in connection therewith. 4. Fidelity Bond. Intentionally Omitted. 5. Insurance. Agent shall at all times keep its employees and contractors insured for statutory workers' compensation and other employee benefits required by all applicable laws, and Agent shall maintain employer's liability insurance for an amount not less than $1,000,000.00 covering claims and suits by or on behalf of employees and others, not otherwise covered by statutory workers' compensation insurance. Owner and its partners shall be protected in all such insumuce by specific inclusion of Owner under an additional insured or alternate employer rider. Agent shall provide Owner with a certificate of insurance evidencing that workers' compensation and employer's liability insurance is in force and providing not less than ten (10) days' notice to Owner prior to cancellation. 6. b&mnft. To the extent permitted by law, Agent agrees to defend, Agreement shall not affect the validity of the remaining portions thereof. Ownees remedies under the Agreement shall be cumulative, and the exercise of one remedy shall not be deemed an election of remedies nor foreclose the exercise of Ownees other remedies. No waiver by Owner of any breach of the Agreement shall be deemed to be waiver of any other or subsequent breach. Owner or Agent may apply to any court, state or federal, for specific performance of the Agreement., for an injunction against any violation of the Agreements or for such other relief as may be appropriate, since the injury arising from a default under any of the tams of the Agreement would be irreparable and the amount of damage would be difficult to ascertain. ReaWatory Provisions_ Notwithstanding anything to the contrary in this Addendum, any provision hereof that is or whose performance would be in violation of (a) any agreement between the Owner or the Agent and HUD, —b) any HUD or any state or local housing or other regulatory authority requirements concerning the building, or (c) any applicable HUD or state or local regulatory authority regulations, shall be void and have no force or effect. The foregoing shall not, however, affect the enforceability of any other provisions of this Addendum. 7. Conflicts. Except as provided in paragraph S above, those provisions which impose more stringent obligations upon the Agent or provide greater benefits to the Owner or Owner's Limited Partner shall prevail and control S. Successors and Assigns. The Agreement shall inure to the benefit of and constitute a binding obligation upon Owner and Agent and their respective successors and assigns; provided, however, that Agent shall not assign the Agreement, or any of its duties thereunder, without the prior written consent of Ownerin the event Owner's General Partner described below or any general partner of Owner is removed as general partner in accordance with Ownees partnership agreement) any successor general partner selected in accordance with such parhiership agreement shall have authority to act hereunder on behalf of Owner, and until such successor is selected Owner's Limited Partner shall have temporary authority to act hereunder on behalf of Owner. IN WITNESS V4WMEOF, the parties have executed this Addendum as of the Lday of February, 1999. OWNER'S GENERAL PARTNER OWNER PPL -Bass Lake' 'ted Partnership Project for Pride in Living, Inc. 2516 Chicag S 2516 Chicago Avenue S Mi 554044 Minneapolis, MN 55404 If OWNER'S LIMITED PARTNER National Equity Fund 1997 Limited Partnership AGENT c/o National Equity Fund, Inc. PPL, a on t corporation 547 West Jackson Boulevard, 6th Floor Chicago, Illinois 60661 BY• Its: .v r hU 11' 1.1 YI- N L� W Q uYc Y Hn iiu .JJI,r—Q ++- v+'�� -•+� �- Flab-U-trJ'7 JL 1,0 the Inn Pnbliv Agouties bCM-bY nPPnyft and omgoing Amended surd RC5IW4A AIId+:ndsm� to Pru" Mast Avemaml. MHFA. MINNSSMA HOUSINCCI, FINANCu AC&NCY Its DATE:.�- MIWNEAPOLIS PU13LIC HOUSING Al3Z 101 T1'Y IN AND FOR THF CITY OF MINNEAPOLIS BY ....__ ._._ �- RichsiM t1 tai Its Chainmn BY Goan McCohMY• Itf; Exwwlvc Dirocx RDA: M.ONOMIC AL+YI'.1�OPHU:Nl AU'!'HMUl'Y IN AND Fop, -MEPY -MEOF NEW BY _ cif: • r r �a,►r rJv • • ; • • = + +� Y : t : �:�4t:,+�M :.= �1„t�ttiM Exhibit 1: Management Plan (as attached by Owner and Agent) Exhibit 2: Leasing Guidelines (as attached to this form Addendum) Exhibit 3: Form of Lease (as attached by Owner and Agent) Exhibit 4: Form of Low -Income Lease Rider (as attached to this form Addendum, must be attached to each individual tenant lease), with attachments: a. Managing Agent's Low --Income Eligibility Worksheet and Certification of Qualified Occupant b. Employment/Income Verifications) Exhibit 5: Managing Agent's Low -Income Leasing Certification (as attached to this form Addendum), with attachments: a. Qualified Income Levels b. Rent Roll 10 Bass Lake Townhomes Management and Marketing Plan 3.01 Description of Development A. Name of Development: Bass Lake Townhomes B. Location: Approximately 15 miles from PPL's Central Housing and Development office at 1925 Chicago Avenue South, Minneapolis. C. Number of units: 3 bedroom 4 bedroom TOTAL UNITS C # Units # Units MHOP 6 6 12 Market/tax credit 3 4 7 ARIF 11 4 15 Handica ed 1 1 2 TOTAL 20 14 34 D. Type of Construction: Twenty townhomes are wood -frame constriction; fourteen rehab duplexes are wood -frame construction with brick veneer. E. Type of Development: Multi -family. Twelve (12) units are owned by PPL as MHOP units; 15 units are funded with ARIF 3.02 Management Company A. See organizational chart attached. (A5) 1. Name of Management Company: Project for Pride in Living, Inc. 2. Name of the Management Agent for the Development: N/A 3. Name of the key contact person for the management agent in the owner's organization: Shari Pleiss, Division Manager 4. Delegation is not needed as owner and property management are the same entity. Property Management General Policy Statement is attached. (A1) B. Job Descriptions: See attached job descriptions. (A2) 1. The only common area in this development is the courtyard. There is direct visual surveillance of all areas within the courtyard by a minimum of four units. The sidewalk along the south edge of the courtyard is wide enough for vehicle access and the New Hope Police have indicated their willingness to monitor the courtyard using this means, if requested. This wide sidewalk can also be used to provide access for emergency vehicles. 2. The communication network will be built upon the foundation created during the development process. Staff of the Thorsen Family Resource Room (source and referral for many social services, early childhood education and recreation) have attended project meetings. Development team meetings have included New Hope Community Development and Housing Program staff, Building Official, Police and Fire Chiefs and personnel, Public Works and City Attorney. At initial occupancy, the Resident Manager and Property Manager will hold a meeting with the staff listed and FPL Self -Sufficiency staff to explain roles, problem -resolution procedures and other issues of concern. Ongoing meetings will be scheduled as necessary. PPL Self -Sufficiency staff will also attend the initial meeting. 3. Method for control of keys: PPL stores keys for individual apartments off site at our Property Management office. Keys are stored in locked key boxes in a room Outside of the view of the general public in a locked office. Keys are organized by a number bearing no resemblance to the building address or the apartment number. Apartment keys are not stamped with any information. PPL uses Medica keys for main entries and laundry moms. Medico keys are custom made and can not be duplicated without the signed permission of PPL's maintenance manager. These keys are numbered and each key given to a resident is registered. Master keys are given to the maintenance technician, resident manager caretaker and division manager only. C. Job Descriptions 1. Job descriptions for property management staff are attached. (A2) 2. An organization chart is also attached. (A5) D. Compensation 1. PPL complies with the Fair Labor Standards Act. 2. Resident managers and on site caretakersare and caretakers are compensated with a rent reduction and an hourly salary. Maintenance is charged at a set hourly fee. 3.04 Marketing A. Identify the Market 3 area, but only 31,200 housing units with rents affordable to this income level. Even for households with annual incomes below $30,000, housing costs more than 30% of income for 185,000 households. According to the Metropolitan Council, 50,000 suburban households earning less than .$20,000 per year pay more than 30% of their income for housing. If one assumes that the market area for this project is only 101/6 of the Metro Area, this would mean that 18,500 households are seeking housing at the rents provided in this project. 4. Ethnic Composition of New Hope (1990 Census figures): White 94.44% 20,637 Black 1.69% 369 American Indian 0.83% 181 Asian/Pacific Islander 1 2.87% 628 Other Race 0.17% 38 TOTAL 100.000/0 21,853 5. Present economic conditions in the New Hope area reflect the general prosperity of the regional economy. New Hope has a diverse employment base which includes a variety of industrial employers as well as office and service jobs. New Hope has good freeway access to all parts of the Metro area. 6. Future economic projections for the area again mirror projections for the regional economy. New Hope is fully developed so neither housing nor employment will experience significant increases. Housing stock and the commercial/industrial stock was generally built within the last twenty five years and some renovation and reuse is expected to occur. B. Tenant Selection Plan: 1. The tenant selection plan for this development is in conformance with all MHFA, Minnesota and Federal Guidelines. To the best of our knowledge, with the exception of the MHOP incentive units, there are no local housing guidelines. For market rate apartments please see attached PPL's Tenant Selection Plan. (A7) 2. Projected demographic distribution is as follows: 5 An ad, to be approved by META, shall run in the following publications, until a waiting list of 5 0 eligible households has been established. Publications: Star Tribune, The Circle, Asian American Pages, La Prensa. b. Logo, signs and brochures The site sign is required for New Hope City approval and will be designed by 7110198. PPL staff will design a logo and brochure; brochure shall include project description, rents in a replaceable format, and information about PPL , neighborhood resources and transportation. c. Contacts A mailing will be prepared for a mailing list which includes PPL regular mailing list (see attached) but is expanded to include northtwest suburban social service -agencies. These include: Thorsen Family Resource Room, Family and Childrens Service Northwest Hennepin office, Interfaith Action and District 281 social work staff 2. Site signage The site sign identifies the site by name and address for a driver on Bass Lake Road_ Site office is located close to the signed entrance of the roadway. 3. Marketing will be done by the person hired and trained as resident manager. 4. Supplies assume a total of up to 200 applications for 22 (non-MHOP) units. 5. Except during completion of construction, grounds will be carefully maintained to create a cared -for impression for vehicle and pedestrian traffic. 6. A security deposit is to be collected for 22 (non-MHOP) tenants. 7. Fair Housing training for site staff. V1 file an Unlawful Detainer action against the resident. 4. All reasonable efforts are made to collect rent in full at the time it is due. However, PPL believes that if a resident is willing to make a written agreement to pay their outstanding rent within a specific amount of time, we will work with the resident in order that they may keep their housing. If at any point the resident falls behind on their agreement, PPL will immediately file an Unlawful Detainer. NOTE: MHOP units will be worked with in accordance with the rules developed for those units. 3.08 Budgeting 1. The budget team, including the Asset Manager, Division Manager and Resident Manager audit all utility bills and service contracts. Service contracts, including waste removal and snow plowing are sent out for bids by competing companies. 2. A comparison of past and current income and expenses of other properties with similar features and resident composition is performed. 3. Dsta is comptlaTm4p1me-dim appropm Med -f r�ai -w1't1!accompanying budget notes. 4. Budget is reviewed for final acceptance by the Asset Manager, Division Manager, Housing and Development Director, Chief Financial Officer and the Budget Review Committee of the PPL Board of Directors. 3.09 Energy Conservation 1. The manager of the maintenance department develops a preventive maintenance schedule for each building. This schedule includes but is not limited to the following: a. Twice yearly maintenance inspections to find unreported plumbing leaks and inappropriate use of ovens etc. for heating. b. Change filters if appropriate. C. Test appliances for good working order. 2. The site manager is required to enter each apartment at least twice yearly to meet with the residents and note any problem situations that may require maintenance or Self Sufficiency Program intervention. 3. At the time of development, the current thermostats will be replaced using thermostatic controls which have a built in high temperature setting. 9 Al PROPERTY MANAGEMENT Project for Pride in Living, Inc. provides professional management with the expertise needed to market and manage this development in the best interest of its residents and funders. Our mission is to assist low and moderate -income people to become self-sufficient by addressing their job, housing and neighborhood needs. We believe that all people should have the opportunity to live in decent, affordable housing in a safe, functioning community. GENERAL POLICY STATEMENT Properties managed by Project for Pride in Living are assumed to be operated efficiently and as a "service" to our residents. The function of Project for Pride in Living personnel, in view of this policy, is to act as facilitators and to provide necessary assistance so all residents can expect to be treated fairly and by uniformly applied standards. Project for Pride in Living personnel are expected to develop a high level of professionalism as they evaluate management problems and seek their solution. Good property management also depends upon acting in accordance with sound financial and accounting principles, implementing a solid preventive and emergency maintenance program, and designing a comprehensive system of information dissemination. MANAGEMENT RESPONSIBILITIES Project for Pride in Living is responsible for planning and directing the fiscal and physical operation of Prosperity Village. The agent is to carry out the following major functions: Staffing. Marketing Maintenance and Repairs. Financial Reporting Resident Relations Job Title: Division Manager, Property Management Reports To: Director of Housing and Development Job Summaxy I. Manages the staff of the Property Management Division. II. To initiate, maintain and/or strengthen PPL's relationships with other organizations of significance to community stability and growth in key neighborhoods: Chicago & Franklin, Bloomington & Lake as well as city-wide. Essential Job Functions 1. Personnel Management - Develop, implement and maintain ongoing paining program for property management and maintenance staff. Goal setting for individuals and the management team Performs yearly performance reviews. Recruitment and paining of property management staff. 2. Development - Work with PPL Development to create management plans, perform initial marketing of new developments. 3. Community Development - Represents PPL in several important community groups including: • Chicago Franklin Block Club • Franklin Avenue Business Association • Bloomington -Lake Commercial Club • City of New Hope 4. Management - Report to PPL board of Directors as to the state of the division. Work with funding agencies to create and maintain positive relationships. Inspection of properties. k L/ 12 J i� .r11��NW1Y• �M' I.+ ti DIY« ^I' iJ k L/ 12 J 1i ti �r w � �r TV\i «ice LSA T ' ^� tiri L 1� y rti 1 ti 1'� 1 � J V 1 «ti ry ry �r •ti ti •� 4r t P'.i � ti.� Zw H � v .,a � J w One of the first steps in preparing these new employee's to assume their duties will be an official welcome to Bass Lake Townhomes, followed by a detailed job orientation. Each orientation meeting will be tailored to meet the specific job responsibilities of the individual(s). This meeting will be conducted at the site location and the property management office. The following information will be discussed in detail at the orientation meeting: 1. An introduction to the development and its community, the developments purpose, and the objectives of its Owners, including the community partners. 2. An introduction to Project for Pride in Living including information about its history, development and objectives, and a thorough understanding of property management's policies and procedures. 3. A complete understanding of PPL's general terms and conditions of employment as well as any disciplinary rules. 4. A summary of personnel policies detailing what the new employee can expect from the organization and what the organization will expect of him/her in return. 5. A description of benefits and services. 6. A tour of the home office and the development and an introduction to fellow workers. 7. A description of his/her immediate supervisors duties and the duties of co-worker or staff, where applicable. S. A detailed description of the employee's job including specific duties and responsibilities, hours, wage or salary and other pertinent information. 9. Information directly related to cultural sensitivities of the client community. W EMPLOYEE EVALUATION A. Scheduled Review and Property Inspections The Property Manager, with the Division Manager, will conduct a formal performance evaluation for all site employees annually. These evaluations will be the basis for annual salary reviews andlor other adjustments. The Division Manager will also do quarterly reviews of all fun time employees to ensure they are meeting their goals and objectives. B. Unscheduled Inspections Periodically, the progress of each employee will be reviewed through various scheduled and unscheduled property inspections to maintain a sound employee -employer relationship. The inspections will be scheduled by the Division Manager. The following areas are those which the Division Manager will be closely inspecting: 1. Resident relations. 2. Occupancy level and collection rate. 3. Residents files and documentation, etc. 4. Interior building maintenance. S. Exterior building maintenance. 6. Preventive maintenance. 7. Ability to implement the policies of PPL and the project. S. In addition to the preceding, all employees are required and expected to present themselves in a neat, clean, efficient and professional manner at all times. D. Household income. Income for all adult household members must be verified. To qualify, the household annual income must not exceed the income limits established for the apartments by the terms of the financing. The income criteria at the present time are as follows: Maximum income. at 30% for a one person household $12,030 for a family of two $13,740 for a family of three $15,480 for a family of four $17,190 for a family of five $18,570 for a family of six $19,950 for a family of seven $21,330 for a family of eight $22,680 Maximum income. at 50% for a one person household $20,050 for a family of two $22,900 for a family of three $25,800 for a family of four $28,650 for a family of five $30,950 for a family of six $33,250 for a family of seven $35,550 for a family eight $37,800 Minimum income: Applicants must have verifiable and predictable income source to cover rent and household utility expense. Income equal to two (2) times the rent may be required. MHOP applicants must be within the most current HUD very low income limits applicable to family size. E. Occupancy Standard. We have developed maximum occupancy standards for Bass Lake Townhomes. These standards are as follows: Two Bedroom four people Three Bedroom six people F. Reasons For Rejection. • Number of potential occupants does not meet guidelines. • False or unverifiable information was supplied on application. • Income does not meet eligibility requirements, • Unsatisfactory rental reference. 4 Record of non-payment or late payment of rent, utility or other credit obligation. A8 CRITERIA FOR LEASING AT PPL Effective July 1, 1998 Application Fee: $35 per application - non-refundable Money order or Cashier's check only Application fee is waived for MHOP applicants TWO YEARS OF GOOD RENTAL HISTORY * No Unlawful Detainers (evictions) unless you have verifiable documentation of landlord irresponsibility. However, a UD due to property damage by the resident will not be accepted under any circumstance. * No history of late payment. * No history of damage to the apartment. * VERIFIABLE GROSS INCOME * Minimum of twice the rent charged on the apartment. * Section 8 vouchers and certificates accepted. The resident must meet the same criteria as those seeking non -subsidized housing. * Food stamps are included in the calculation of gross income. Note: MHOP applicants do not need to have a .verifiable income of twice the rent charged on an apartment. * CRIMINAL BACKGROUND CHECK. * Residency may be denied due to criminal history. (See attached Criminal Background Criteria) CREDIT HISTORY Must show that the resident has paid bills on time and does not have a history of debt write-offs or accounts that have gone into collection. Residency may be denied due to poor credit history. * MAXIMUM OCCUPANCY - Please note that these are the maximum number of people who may occupy apartments with the number of bedrooms noted. Situations may exist where the high concentration of people in a building and/or the ability of the mechanical equipment to operate efficiently requires us to adjust the number of occupants in a given apartment. * Efficiency 2 occupants * 1 Bedroom 2 occupants * 2 bedroom 4 occupants * 3 Bedroom 6 occupants * 4 bedroom 8 occupants A child less than two years of age is not considered when listing the number of people occupying an apartment. Once the child reaches two and is considered an occupant, the number of people occupying the unit must fall within the guidelines of that building. A9 MARKETING PLAN 1. Plan to achieve early occupancy. A large site sign will give a number for more information. This number will connect the caller directly to the Leasing Office. The site manager will make an appointment to meet the caller on site and show the available apartments. Media As necessary, ads will be run in the following publications Star Tribune, Pioneer Press, The Circle, Asian American Pages, La Prensa. Logo, signs and brochures A logo design and brochure will be created and sent to agencies where referrals are possible. Contacts A mailing will be prepared for a mailing list which includes PPL regular mailing list and social service agencies. Site signage The site sign identifies the site by name and address for a passing drivers. 2. Marketing will be done by the person hired and trained as resident manager. I Except during major rehab construction, grounds will be carefully maintained to create a positive curb appeal for vehicle and pedestrian traffic. EMERGENCIES How to Extinguish a Kitchen Fire Fire Emergency number: 911 Grease Fires: Electrical Fires Oven Fires Gas Leaks Do... 1. Turn oven OFF. 2. Cover burning container with lid or pan to smother fire. If smothering fails, call 911. DO NOT throw water on a grease fire. You may cause an explosion. Do... 1. Unplug burning appliance or... 2. Turn circuit -breaker off, or 3. Unscrew fuse.. DO NOT throw water on fire or touch burning element. DO.. 1. Close oven door and leave closed. (This cuts off oxygen) 2. Tum oven OFF. DO... 1. Close doors to room and get out. 2. Cali fire department from another location. DO NOT use telephone, turn on lights, use a Flashlight, or put key in lock with room with a gas leak. The slightest spark can cause an EXPLOSION. GOOD CAUSE CLAUSE are hereby given notice as to what is termed "Good Cause" for termination of tenancy: 1. Possession of illegal drugs in your residence or anywhere on PPL property, and/or use of such drugs and/or purchase or sale of such drags from your residence or anywhere on PPL property. 2. Repeated police calls to any PPL property due to activities of you or your guests. Non-payment of rent, late fees, utilities or maintenance service charges (tenant/guests destruction of prop"). 4. Causing repeated incidence that are disturbing to the peace of other residents and/or neighbors. Damage to property belonging to this organization and/or damage to other tenants property. 6. Keeping a pet. 7. Theft of PPL property or property belonging to other tenants. S. Any act or threat or violence to. employees or Board Members of PPL or any other person on this Property Permitting persons to occupy unit who are not registered on the lease without management approval. Excessive traffic as determined by property management. 11. Consumption of alcoholic beverages in common areas inside or outside of any PPL building. 12. Smoking in common areas of the building. 13. Sub -letting a unit. 14. Refusing to sign a lease. 15. Poor housekeeping. Including clutter or dirt in your home which: may att-ect the health or safety of any occupant of the building; is sufficient to attract rodents or pests; causes more than normal wear and tear on the apartment; violate the Minneapolis Housing Maintenance or other applicable Codes. 16. Wasting utilities through intentional means or by unreported problems.. 17. Any other violation of the terms of the lease. In the event that legal action is to be taken, the Property Manager is authorized to send out a termination notice and to act as plaintiff for Project for Pride in Living. •ident Date Resident Date Resident Date Resident Date SELF-SUFFICIENCY PROGRAM SERVICES U ;ER/EDUCATION COUNSELING Teach sldlis in resume writing and interviewing Assist in attaining educational goals- G.E.D., technical training, college Offer bi-monthly seminars on employment issues Make available transitionals incentives for job sackers Referrals for employment resources and training programs Step -by -Step Job Hunt Program EDUCATIONAL/SUPPORT GROUPS Tuesday Topic Night: various informational & educational topics Men's Support.Group- meets bi-monthly Children's activities FAAHLY NIGHTS Fun activities for family enjoyment Promote family togetherness and involvement Field trips include: Science Museum, roller skating, hayrides SELF-ESTEEM RETREATS Men's and women's retreats 1-1/2 days of self-esteem building, goal -setting, and workshops Evening social time ON -ONE COUNSELING Discuss personal needs Creating a personal action plan Referrals Mental Health Therapy CHILDREN & YOUTH PROGRAM Advocacy Activity groups One -on -One Personal Development Programs & referrals for youth counseling FINANCIAL MANAGEMENT TRAINING Identify problem areas Assist in budget set-up Referral to available subsidies- FamShare, etc ANNUAL EVENTS Sumner Picnic- food, games, entertainment Holiday Party- festive celebration of the season COMMUNITY INITIATIVE PROGRAM Resident Council Building/Neighborhood Activities Safety & Crime Prevention FOR MORE INFORMATION CALL PPL SELF SUFFICIENCY AT: 5748511 OR IN ST. PAUL: 225-8084 6 MINNESOTA LAW CONCERNING DRUG AND CONTRABAND SEIZURES IN APARTMENT BUILDINGS All Minnesota landlords are required under the provisions of a state law (HY- 159) to notify all residents (existing and future) of the following: "Under a new state law effective October 1, 1989 a seizure by a law officer of any illegal substance, including drugs, totaling at least $1,000 may cause you to be evicted. The management can be required by the State to start an eviction action within 15 days of notice of the seizure." 8 HOUSEKEEPING PPL will do everything in it's power to provide a unit of housing that is free from insect and rodent infestation. To ensure this commitment, PPL will pay all routine extermination costs. If however, professional exterminators diagnose a problem that is caused by the poor housekeeping of a resident, PPL may charge the resident for additional extermination to their and other apartments effected. In an effort to avoid these additional extermination costs, the tenant is required to maintain reasonable standards of housekeeping and cleanliness. A clean house is the best way to prevent infestation problems. PPL will conduct periodic home visits and inspections to ensure that reasonable housekeeping and cleanliness standards are maintained. In addition, PPL reserves the sole right to define these housekeeping and cleanliness standards. If violations occur, PPL will provide, in writing, specific guidelines for improving problem areas. PPL will allow for reasonable time (maximum of 72 hours) for the tenant to make the improvements necessary. If the tenant fails to maintain a clean house, PPL will initiate move out procedures with the problem tenant. 10 WATER DRIPS, LEAKS, FLOODS It is very important for you to notify us AS SOON AS POSSIBLE when any of your pipes are leaking or your toilet is running. We need your help maintaining your building in good condition. If we receive a higher than expected water bill due to an unreported leak or running toilet you will be charged the amount that the bill is over average {PHIS CAN RUN AS HIGH AS $600 FOR A RUNNING TOILET}. 12 NOTICE TO VACATE If you are.planning on moving you must notify us immediately by giving a written notice no less than 30 days before you are planning to move. Your move out day must be at the end of the month unless approved in writing by your property manager. Failure to do so can result in you not getting your deposit back, getting a poor rental reference, and not being able to - re -rent from PPL housing again. All vacate notices must be in writing, signed, and dated by the resident. PPL provides a form to make the process easier for the resident. Proper notice is given as of the first of the month effective the last day of the month the lease expires. Pro -rated rent is not allowed for a vacating month. may show your apartment during your last month of occupancy for the x poses of rental. You will receive notice by phone or in writing two 48 hours before your apartment is shown. Your apartment should remain clean and orderly during this period. You are under no obligation to explain to PPL why you have decided to end your lease. Additionally, if PPL decides to end your lease, they are under no obligation to explain their decision. 14 MOVE-IN/OUT INSPECTION you move into your new home, everything in your home will be clean and in good working order. Tu4 xst thing you will do upon moving in will be to inspect the unit with the manager. Together you will note the condition of every item in your home on a move -in inspection sheet. Both you and the manager will sign this form. Your home will be inspected again in 30 days to make sure everything is working properly and to answer any questions. At the time you move out, a Management staff person will again inspect your home with you and note its condition on a move out inspection sheet. You will be charged for any damages caused by you, your family, or your guests. It is expected that you will leave your home in the same condition as when you moved in, excluding normal wear and tear. (See Security Deposit Return) SNOW REMOVAL Ek, lag the winter months, snow will be plowed from the parking lots. Cooperation from the residents in moving their cars is necessary and will be expected. The lot will be plowed on each snowfall that measures two or more inches. If you plan to be gone from your apartment any time during the winter months, please make proper arrangements with a friend, neighbor, or relative so your car will be moved when snow plowing is necessary. 18 NON -SUFFICIENT FUND CHECKS Any checks rewmed by the bank are regarded as non-payment of rent and are subject to late fee penalties. There will also be a $25.00 service fee added for all NSF checks. NSF checks will be returned to the resident only after the Management has received a money order in exchange. Non-payment on an NSF check will be grounds for eviction. If we receive an NSF check from you, all further rents and fees must be paid in the form of a cashiers check or money order. 20 TRANSFER POLICY I nth costly and labor intensive for residents to move from one apartment to another. Apartments must & r.dinted and shampooed, and there is sometime cleaning to be done. In order to be considered for a tw fer, applicants must: 1. Have lived in current apartment for at least one year; 2. Have a record of prompt rental payment; 3. Keep current apartment in a clean, tidy manner. (Apartment will be inspected by manager prior to any written approval to transfer taking place.); 4. Be a resident in good standing of the site with no record of disturbances or other lease violations; 5. Pay a $100.00 transfer fee prior to move -in; (waived if moving after one year). b. Sign a new lease at the current rental rate for vacant apartment. Please note that the transfer fee does not apply to MHOP emits due to change in family size or status. OxA FIRE SAFETY I gall fire should start in your home, use the fire extinguisher located in the hallways of your apartment bauaing. Break the glass in the front of the case and remove the extinguisher. To use a fire extinguisher, simply squeeze the trigger handle, aim it at the base of the fire, not on top of the fire. DO NOT POUR WATER ON A GREASE FIRE. In case of stove or oven fire turn off the stove first then try to smother or put out the fire. If you can not quickly put out the fire dial 911. DO NOT re-enter your home. Read the procedure below very carefWly. In the event of a fire, just one or more of these rules may save your life or the.life of your neighbor. I. Prior to leaving your apartment, feel your apartment door. If the door is hot or smoke is seeping through, DO NOT open. 2. Keep door closed and seal cracks with wet towel; open a window for air. Don't panic or jump. 3. If the door feels cool, open cautiously and leave your aparment. Walk quickly, keeping calm. HEAVY SMOKE REMAIN CALM- DO NOT PANIC. Dampen a towel or a rag and cover your mouth and nose. Stay close -e floor, moving to the nearest window or exit. If the hallways are very smoky, crawl to the nearest exit, eke rises. NEVER GO INTO A ROOM THAT DOES NOT HAVE A WINDOW. ALWAYS PAY ATTENTION TO FIRE/SMOKE ALARMS. NEVER IGNORE AN ALARM. FALSE ALARMS BY YOUR CHILDREN OR YOUR CHILDREN'S GUESTS ARE AGAINST THE LAW AND CAN RESULT IN PROSECUTION AND/OR EVICTION. For police or medical emergencies dial 911. HEAT AND UTILITIES Your heat and water are included in your rent. Please do not be wasteful of those utilities. Remember that even though these utilities are included in your rent, the site must pay for them and the cost is reflected in the total cost of operation of the building. ENTRANCES Rugs, shoes, or other items on the floor outside your apartment door are not permitted by the Fire Marshal. Your unit door or the hallway doors may NOT be propped open at any time. The apartment doors must remain closed by order of the Fire Department. 24 STANDARD REPAIR CHARGES ral Charges: 1 n«se charges apply to both current residents and apartment turnovers. For current residents, travel time will be added to hours of labor. Repairs: $35 per hour labor $52.50 per hour after hours Materials: Cost + 15% Overhead Cleaning: $30 per hour Lock Replacement (Includes labor fee): Unit with one door: $80 for all locks (apartment and mailbox) Unit with two door: $100 for all locks (apartment and mailbox) $50 for any individual lock Building Entry Key: $75 Standard Key: $ 5 Paint/Wall Damage: Actual Cost lure Hauling: $30 per piece 26 1. 8,ppcatian. Each prospective Tenant must complete and sign a written application for lease, containing detailed personal information, previous residences and landlords for several years, information on employment, income, assets, and credit, proposed occupants (including ages) and pets, and references, and containing such other information and statements as will enable Agent to screen the prospective Tenant or as is otherwise proper and advisable for the management of the Building in accordance with professional standards. In conjunction with the lease applications, each prospective Tenant must complete and sign Employment/Income Certifications) in the form(s) attached herewith as part of Exhibit 4, where required under Section B, Paragraph 1 of the foregoing Addendum. 2. Interview. Agent shall interview each proposed adult occupant of the dwelling unit to be leased in order to help determine the character of such persons. 3. Agent shall verify the employment mp yment and income information given by the prospective Tenant, using the form of Employment Verification attached herewith as part of Exhibit 4, where required under Section B, Paragraph 1 of the foregoing Addendum. 4. Agent shall have conducted a responsible credit agency check of the prospective Tenant, and shall personally check with one or more of the Tenant's previous landlords with respect to past rent Payment history. 5. Souse,.na Agent shall check with one or more previous landlords of the proposed Tenant and other occupants with respect to their ability to maintain an apartment in good condition and to abide by building rules. If verbal information is vague or questionable, Agent shall visit the proposed occupants, present residence(s). 6. Othex. If advisable, Agent shall check other references and Perform other screening of the proposed Tenant. 7• Agent shall approve ther • application only if, in Agent's best p °Posed Tenants lease professional judgment, the proposed Tenant is qualified to pay rent when due and all proposed occupants are likely to maintain properly the dwelling unit, abide by reasonable rules, and otherwise be suitable occupants of the Building. Also, without Owner's prior written consent, Agent shall not approve any lease application unless the Tenant and other proposed occupants constitute a b- n tilt mea Tenant's liability for the following default charges: late rent payment charges; returned check charges; lost keys; damage to the dwelling unit or the Building not caused by ordinary wear and tear; missing property, fixtures, or equipment; and costs of rent collection and eviction. C. Security_�post}. Procedures concerning deductions from and return of security deposit, with interest to the extent required by law, and any key deposit. d.Char-q0-6,Tenant's re es concerning utility services to the dwelling unit, other serviceslto the dwelling unit, other services provided by Owner or Agent, and any parking or other charges. e.Maintenance duties of Tenant and of Owner, respectively, separately listed. f - Requirement of Owner's or Agent's consent to alterations of the dwelling unit, listing examples, and to charges of keys and locks. g. Use Restrictlismi Restrictions on Tenant's use of the dwelling units, including hazards, noise, nuisance, etc. h. 014nS & Tenant's obligation to report changes in Tenant's household or employment status. i- es. Tenant's and all other occupants' obligation to comply with any rules and regulations issued by Owner or Agent. A copy of any such rules shall be attached to the Lease. ]• = er, Other provisions customarily included in apartment leases or advisable for the Building. k. Acknowledgment by Tenant of any attachments to the Lease. 1`Fmcution Agent shall execute each Lease as agent for Owner. 9. Lead Hazard info± - a ig Each prospective tenant shall receive a copy of the Government Printing Office published informational Pamphlet entitled La -named Pain- • Protp,.t yo ,r ami i,d a C the d Evac„ar;,,,, report on the building copy of Owner's environmental consultant. Prepared by the 3 A. RENT TERMS OF THIS LEASE 1. PAYMENT: RESIDENT will pay MANAGEMENT the fullmonthly rent before midnight of the fust day of each month while this Lease is in effect and during any extensions or renewals of this Lease. Rent will he paid as required by MANAGEMENT. ?. WHO IS RESPONSIBLE FOR RENT: Each RESIDENT is individuaily responsible for paying the full amount of rent and any other money owed to MANAGEMENT. 3. DUTY TO PAY RENT AFTER EVICTION: If Resident is evicted because RESIDENT violated a term of this Lease, RESIDENT must still pay the full monthly rent until I )the Apartment is re -rented; 2)the DATE THIS LEASE ENDS; or 3)if the Lease is month-to-month, the next notice period ends. If the Apartment is re -rented for less than the rent due under this Lease, RESIDENT will be responsible for the difference until the DATE THIS LEASE ENDS or, if the Lease is month-to-month, until the end of the next notice period. 4, LATE RENT SERVICE CI4ARGE AND RETURNED CHECK FEE: RESIDENT will pay the SERVICE CHARGE listed above ifRES[DENTdoes not pay the monthly rent by the fifth ofthe month_ RESIDENT also will pay a fee of S 15.00 for each returned check. B. USE OF APARTMENT A. OCCUPANCY AND USE: Only the persons listed above as RESIDENTS may live in the Apartment. Persons not listed as RESIDENTS may live in the Apartment only %with tite prior written consent of MANAGEMENT. RESIDENTS may use the Apartment and utilities for normal residential purposes. 6. SUBLETTING: RESIDENT may not lease the Apartment to other persons (sublet), assign thi or sell this Lease without the prior written consent of MANAGEMENT. s Lease 7. RESIDENT PROMISES: 1) Not to act in a loud, boisterous, unruly or thoughtless manner or disturb the rights ofthe other residents to peace and quiet, or to allaw hisher guests to do so; 2) to use tilt Apartment only as a private residence, and not in any way that is illegal or dangerous or which would cause a cancellation, restriction or increase in premium in MANAGEMENT'S insurance; 3) 11(i(to use or story on or near the Apartment any flammable Of explosive substance; 4) not to interfere in the management and operation of the apartment building; 5) that the Apartment, common areas, or area surrounding the building will not be used by the RESIDENT or by anyone acting under his/her control to a) manufacture, sell, give away, barter, deliver, exchange, distribute, or b) possess with the intent to manufacture, sell, give away, barter, exchange, or distribute any illegal drugs. 8. WATERBEDS: RESIDENTS may not keep a waterbed or other water -filled furniture in the Apartment Without prior written consent of MANAGEMENT. 9. PETS: RESIDENTS may not keep animals or pets of any kind in the Apartment without written consent of MANAGEMENT. C. CONDITION OF APARTMENT 10, MANAGEMENT PROMISES: 1) That the Apartment and all common areas are fit foruse as a residential premises; 2) to keep the Apartment in the reasonable repair and make necessary repairs within a reasonable time after written notice by RESIDENT except when damage is caused by the intentional or negligent conduct a the RESIDENT or his/her guests; 3) to maintain the Apartment in compliance with applicable health and safety codes except when a violation ofthe health and safety codes has been caused by the intentional or negligent conduct of the RESIDENT or his/her guests; 4) to keep the common areas clean and in good condition. 11. RESIDENT PROMISES: 1) Not to damage or misuse the Apartment or waste the utilities provided by MANAGEMENT or al low his/her guests to do so; 2) not to paint or wailpaper the Apartment, or make any structural changes in the Apartment without the prior written consent of MANAGEMENT; 3) to keep the apartment clean; 4) to give written notice to MANAGEMENT of any necessary repairs to be made; 5) to notify MANAGEMENT immediately of any conditions in the Apartment that are dangerous to human health or safety, or which ntay damage the Apartment or waste utilities provided by MANAGEMENT; 6) that when the RESIDENT moves out, the Apartment will be left in good condition, except for ordinary wear and tear; 7) not to remove any fixtures or furnishings supplied by MANAGEMENT without the prior consent of MANAGEMENT; 8) to cooperate With MANAGEMENT'S efforts at pest control_ This may include, among other things, RESIDENT'S emptying and cleaning cabinets, drawers and closets pulling furniture away from walls and allowing exterminators to enter the treat the Apartment. Resident initials Agent initials Page 2 of 4/ lease form revised 1121/99 25. ACTS OF THIRD PARTIES: MANAGEMENT is not responsible for any damage or injury or harm caused by third parties (such as other residents, guests, intruders or trespassers) who are not under MANAGEMENT'S control. 26. RESIDENTS SHALL REIMBURSE MANAGEMENT FOR 1) Any loss, property damage, orcost of repair or service (including plumbing problems) caused by negligence or improper use by RESIDENT, hisllter agents, family or guests; 2) any loss or damage caused by doors or windows being left open; 3) all costs MANAGEMENT has because of abandonment of the Apartment or other violation of the Lease such as costs for advertising; the Apartment; 4) all court costs and attorney's fees MANAGEMEby RESIDENT, NT has in shit far eviction, unpaid rent, or any other debt or charge. 27. WHEN PAYMENTS ARE DUE: Any amount owed by RESIDENT is due when MANAGEMENT asks for it. MANAGEMENT does not give up its right to any money owed by RESIDENT because of MANAGEMENT'S failure or delay in asking for any payment. MANAGEMENT can ask for any money owed by RESIDENT before or after RESIDENT moves out of the Apartment. G. MISCELLANEOUS 28. FALSE OR MISLEADING RENTAL APPLICATION: If MANAGEMENT determined thatany oral or written statements made by RESIDENTS in the rental application or otherwise are not tnte or complete in any way, then RESIDENT has violated this Lease and may be evicted. 29. BUILDING RULES AND ATTACHMENTS ARE PART OF LEASE; NO ORAL AGREEMENTS: Any attachments to this Lease area part of this Lease, If a term OF any attachment conflicts with any 1erm of this Lease, the attachment term will be controlling. MANAGEMENT'S building rules are a part of this Lease, and MANAGEMENT may make reasonable changes in these rules at any time by giving RESIDENT written notice. -No oral agreements have been trade. This Lease and its attachments and a the entire agreement between RESIDENT and MANAGEMENT, ny other written agreements are 30. NOTICES: All RESIDENTS agree that notices and demands delivered by MANAGEMENT to the Apartment are proper notice to all RESIDENTS, and are effective as soon as delivered to the Apartment. Agent ti \ \ Date Page 4 of 4/ Revised 1121/99 Resident Resident Resident Date [Attachment to Exhibit 4 of Property Management Agreem t] HMMGIrNG AGENT'S LOW-INCOME ELIGIBILITY WORESFSET AND CERTIFICATION OF QUALIFIED OCCUPANT Building Name Initial Certification Assigned Unit No. Bedroom size Annual Recertification MemberTenant's name INo.* (Last Name, First Name) Head 2 3 4 5 Relationship Full -Time Student, to Head Age Occupation Disabled, Handicapped? Head 2 3 4 5 COMBINED TOTAL INCOME FOR ALL HOUSEHOLD MEMBERS:$ jmm_TUTY 1. Combined Total Household Income (from Tenant Income Certification) $ 2. HUD Area Median Income for Household Size $ Owner's Set -Aside Election: sot or 60%- 3. Is Tenant a Qualified Occupant? Yes or No PART 3 - MW AGMT• S ==FICATION I certify that the information contained herein is true and correct to the best of my Jmowledge and belief and that all verifications of Tenant's income required by Agent undex its Property Management Agreement with the Owner of the Building identified above have been obtained. Managing Agent VEATFTED Rental RMEHor INCOME Gross Member Salary Self- Income, Emp Retirmt, Unemp Alimony, No.* Interest, Pension, social Disabi- Child or Wages Income Stock Annuity Securitylit i Y Welfare Support Other Div, Comp Head 2 3 4 5 COMBINED TOTAL INCOME FOR ALL HOUSEHOLD MEMBERS:$ jmm_TUTY 1. Combined Total Household Income (from Tenant Income Certification) $ 2. HUD Area Median Income for Household Size $ Owner's Set -Aside Election: sot or 60%- 3. Is Tenant a Qualified Occupant? Yes or No PART 3 - MW AGMT• S ==FICATION I certify that the information contained herein is true and correct to the best of my Jmowledge and belief and that all verifications of Tenant's income required by Agent undex its Property Management Agreement with the Owner of the Building identified above have been obtained. Managing Agent ASSET VERIFICATION SOCIAL SECURITY NO. PERMISSION FOR RELEASE pg INFORMATION I' , authorize you to furnish the information requested below to: (a stasnped/addressed envelope has been enclosed) for the purpose of determining my eligibility for participation in the Low Income Housing Tax Credit Program (LIHTC). I understand that the information is confidential and will -be used only in determining program eligibility and that I have the right to rescind this authorization in writing, at any time, but that to do so may affect my eligibility for program participation. Address: Signature City/State: Zip: Date lank you for your cooperation. If you have any questions, please contact: at ( ) - SAVINGS ACCOUNT: Acct#: Current Balance $ Current * Rate CHECKING ACCOUNT: Average Balance f SAVINGS ACCOUNT: Acct#: Current Balance $ Current * Rate or the Past Sax Months: $ Rate of Interest:_ Current Balance: $ Please list other asset accounts below (Certificates of Deposit, Money Market Funds, Trust, IRA's, etc.) Account Type of Rate of Number Balance Account Interest Cash Value* *NOTE: CASH VALUE IS TEE CURRENT VALUE MINUS PENALTIES FOR EARLY WITbIDRAWAL Date Tel.# ( ) Bank Name Print Your Name Signature Asset verification (VERIF.pRM) PEZgSION/ANN=Ty VERIFICATION NAME SOCIAL SECORITy NO. PERMISSION FOR RELEASE OF INFORMATION I, —1authorize you to furnish the information requested below to: (a stamped/addressed envelope has been enclosed) for the purpose of determining my eligibility for participation in the Low Income Housing Tax Credit Program (LIETC), I understand that the information is confidential and will be used only in determining program eligibility andt I thariting, at any time, but that to have the right to rescind this authorization in w do so may affect my eligibility for program participation. Address: _ Signature City/State: Zip: Date Thank you for your cooperation. If you have any questions, please contact: at ( )_ Type of Pension: current Gross Income: $ or $ Week Month Medical Deductions: $ or $ Week nth Date of Initial Award: Effective Date of Current Amount: Total Gross Pension Income expected for next 12 months: Date Print Your Name Tel.# ( ) - Signature Title pension/Annuity Verification (VEnF.FRM) SELF EWLOYMBNT VMUPICATION SOCIAL SECURITY NO. PERMISSION FOR RELEASE Og INFORMATION I' authorize You to furnish the information requested below to: (a stamped/addressed envelope has been enclosed) for the purpose of determining my eligibility for participation in the Low Income Housing Tax Credit Program (LIHTC). I understand that the information is confidential and will be used only in determining program eligibility and that I have the right to rescind this authorization in writing, at any time, but that to do so may affect my eligibility for program participation. Address: Signature City/State: Zip: Date Thank you for your cooperation. If you have any questions, please contact: at ( ) Type of Business: The following statement of income is based upon the business The following statement of income is based u period from Pan the business . 19 , to 19 transacted during the 1. Gross Income: 2. Expenses.- xpenses:a. a. Interest or, Loan (s) b. Cost of Goods/Materials C. Rent d. Utilities e. Wages and Salaries f. Employee Withholding Tax S. Federal Withholding Tax h. State Withholding Tax i- FICA Self STRI Immt verification (vMjp.P'RM) 131�LOYWXNT CCNPENSATION Vj=jpICATIQN 1%&WLc SOCIAL SECURITY NO. PERMISSION FOR RELEASE OF INFORMATION I' authorize You to furnish the information requested below to: (a stamped/addressed envelope has been enclosed) for the purpose of determining my eligibility for participation in the Low Income Housing Tax Credit Program (LIHTC). I understand that the information is confidential and will be used only in determining program eligibility and that I have the right to rescind this authorization in writing, at any time, but that to do so may affect my eligibility for program participation. Address: Signatuxe City/State: Zip: Date Thank you for your cooperation- If u have an p Y° y questions, please contact: at ( ) -- vivax weexly Payment: $ Date of Initial Payment: $ Farling Date, if known Is the client entitled to an extension of benefits? Yes - � No If yes, for how long? ~� If no, what is the terMi_nation date of benefits? REMARKS: Date Tel.# Print Your Name Signature Title U'aemPlcy-ent Compensation verification (VMF.MK) [Attachment to Exhibit 5 of Property Management Agreement] QUALIFIED INCOME LEVELS (To be attached to Rent Roll) Name of Project: Address of Project: Name of Sponsor: ------------ Tax Credit Election for Project: 4� Units reserved for families at 50* or less of Median Income Units reserved for families at 60� or less of Median Income SVD PUBLISHED AREA MEDIAN SOME LIMITS SY HOUSEHOLD SIZE Check appropriate blank; at 50.1 of median �- at 60!k of median HOUSEHOLD SIZE 1 PERSON 1.5 PERSONS 2 PERSONS 3 PERSONS 4 PERSONS 4.5 PERSONS 5 PERSONS 6 PERSONS 7 PERSONS EFFECTIVE DATE EFFECTIVE DATE EFFECTIVE DATE ALTA COMMITMENT - 1982 REV. SCHEDULE A APPLICATION NO. H OR949677 C (Supplemental No. 1) 1. EFFECTIVE DATE:jxx)&Kxj=xjKxfW JK Q�Xxxx���xcx� 1ae,.r�Yr�txx�x1 To Change to Date of Recording 2. POLICY OR POLICIES TO BE ISSUED: 'ALTA' RESIDENTIAL OWNERS POLICY REV 1987 X 'ALTA' OWNER'S POLICY 10-17-92 PROPOSED INSURED: PPL -Hass Lake Court Limited Partnership X 'ALTA' LOAN POLICY 10-17-92 PROPOSED INSURED: Minnesota Housing Finance Agency 1 X ALTA' LOAN POLICY 10-17-92 PROPOSED INSURED: County of -Hennepin X ALTA' LOAN POLICY 10-17-92 PROPOSED INSURED: $m=" 5,970,000.00 $XgZpawMX= 348,202.00 (1st Mortgage) $gg]Mpx)= 130,000.00 (2nd Mortgage) $2iXM2XM 680,000.00 (3rd Mortgage) $200,000.00 (4th Mortgage) Family Housing Fund, its successors and/or assigns 3. THE ESTATE OR INTEREST IN THE LAND DESCRIBED OR REFERRED TO IN THIS COMMITMENT AND COVERED HEREIN IS A FEE SIMPLE AND TITLE THERETO IS AT THE EFFECTIVE DATE HEREOF VESTED IN: PPL -Bass Lake Court Limited Partnership, (a Minnesota limited partnership)EXX$?�X}�XXXxX1�xxiXxKXXR&xxR7xX Rim �x 4. THE LAND REFERRED TO IN THIS COMMITMENT IS DESCRIBED AS FOLLOWS: Parcel 1: ALTA Loan Policy 10-17-92 $ 1,400,000.00 Proposed Insured: (5th Mortgage) New Hope EDA H OR949677 C (Supplemental No. 1) Page: 3 Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178,2 feet North of the Southwest corner of said Lot '32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 4: That South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 282.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of West Half of said Lot 32 -to actual point of beginning; thence at right angles Went to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 5 The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 282.17 feet of the following descirbed tract: That part of the West Half of the Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: H OR949677 C (Supplemental No. 1) Page: 5 Southerly extension, to a point on the East line of Murray Lane 3rd Addition 444.66 feet Northerly from its intersection with said South line. Being registered land as is evidenced by Certificate of Title No. 820577. INFORMATION NOTE: The office of the Registrar of Titles advises that the Owner's Duplicate Certificate is at the Torrens Office. Parcel 8: The South 145.2 feet of the West 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 9; The South 80 feet of the East 166-76 feet of the West 296.76 feet of Lot 32, Auditor's Subdivision No. 226, Hennepin County, Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. Abstract Property - Parcel 10: The North 100 feet of that part lying South of the North Subdivision Number 226, Hennepi Abstract Property. Parcel 11: nof the West Half of Lot 32, 6 acres thereof, Auditor's County, Minnesota. That part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, described as beginning at the intersection of the South line of said Northeast Quarter of the Southwest Quarter with the Southerly extension of the West line of Murray Lane 4th Addition; thence Northerly along said Southerly extension and along said West line a distance of 444.49 feet; thence Westerly in a straight line to a point on the East line of Murray Lane 3rd Addition distant 444.66 feet Northerly from its intersection with said South line; thence Southerly along said East line to the North line of the South 178.2 feet of said Northeast Quarter of the Southwest Quarter; thence Easterly along said North line to a line drawn H OR949677 C (Supplemental No. 1) Page: 7 SCHEDULE B - SECTION 1 REQUIREMENTS The following are the requirements to be complied with: delete 1• We have been advised that Parcel 9 has been transferred to The Economic Development Authority in and for the City of New Hope, Minnesota, (a Minnesota Municipal Corporation) by condemnation in District Court File No. CD -2504. Recording of an order transferring title and possession containing the legal description for Parcel 9 is required., delete 2• Warranty Deed from The Economic Development Authority in and for the City of New Hope, Minnesota, (a Minnesota Municipal Corporation) to PPL -Bass Lake Court Limited Partnerhsip (a Minnesota limited partnership). (as to Parcel 9) 3• Warranty Deed from Independent School District No. 281 to limited elnlete PPL -Bass Lake Court Limited Partnership, (a Minnesota partnership). (as to Parcel 10) 4. We have been advised that the premises and other land are to be approved by the delete be platted as PPL Addition. The plat must Titles Office, the County Recorders City, the Registrar of Office, the County Surveyors and the County Tax Department. in addition, taxes for the current year must be paid in full. Recordation is required after approvals. 5. A properly executed mortgage from PPL -Hass -Lake Court Limited delete Partnership to Minnesota Housing Finance Agency. (I mortgage for $373,000.00 and 1 mortgage for $530,000.00) 6. A properly executed mortgage from PPL -Hass Lake Court Limited delete partnership to County of Hennepin. 7. A properly executed mortgage from PPL -Bass Lake Court Limited delete Partnership to Family Housing Fund. 8. Mortgage, Security Agreement and Fixture Financing Statement delete executed by PPL -Bass Lake Court Limited Partnership, a non-profit limited partnership in favor of Marquette Bank, H OR949677 C (Supplemental No. 1) Page: 9 The date of the special assessment search is August 26, 1998. show ** 2• Taxes for the year 1998 in the amount of $4,469.22 are paid. (Base tax amount $4,448.98) (Tax No. 05-118-21-31-0104.) NOTE: Hennepin County tax records indicate property is non -homestead for taxes payable in the year 1998. (as to Parcel 1) Taxes for the year 1998 in the amount of $4,469,22 are paid. (Base tax amount $4,448.98) (Tax No. 05-118-21-31-0106.) NOTE: Hennepin County tax records indicate property is non -homestead for taxes payable in the year 1998 - (as to Parcel 2) Taxes for the year 1998 ,in the amount of $2,394.88 are paid. (Base tax amount $2,374.64) (Tax No. 05-118-21-31-0108.) NOTE: Hennepin County tax records indicate property is homestead for taxes payable in the year 1998. (as to Parcel 3) Taxes for the year 1998 in the amount of $2,394.88 are paid. (Base tax amount $2,374.64) (Tax No. 05-118-21-31-0103.) NOTE: Hennepin County tax records indicate property is homestead for taxes payable in the year 1998. (as to Parcel 4) Taxes for the year 1998 in the amount of $4,469.22 are paid. (Base tax amount $4,448.98) (Tax No. 05-118-21-31-0101.) NOTE: Hennepin County tax records indicate property is non -homestead for taxes payable in the year 1998. (as to Parcel 5) Taxes for 1998 in the amount of $4,469.22 are paid. (Base tax amount $4,448.98) (Tax No. 05-118-21-31-0102.) NOTE: Hennepin County tax records indicate property is non -homestead for taxes payable in the year 1998. (as to'Parcel 6) ** All taxes for all prior years are paid in full for all parcels included in this commitment. H OR949677 C (Supplemental No. 1) Page: 11 lines along the west line of the North line of Parcel 11 as determined in Torrens Case No. 19861. show 6. Subject to the right of Northern States Power Company to maintain, repair and replace electric transmission lines over and across Parcel 11 as determined in Torrens Case No. 19861. show 7. Road easement over the most Southerly 33 feet of Parcel 11 as recited on the Certificate of Title. show 8. Utility and drainage easements as shown on, the unrecorded plat of PPL Addition. NOTE: if there are any questions concerning the exceptions delete shown on this commitment, please call Mary A. Edgeton at 371-1111, Ext. 284 OR Karen Butler at 371-1178. O d Republic nstinnnl Tide Tnsarance CompaDy f ry Wendy B. Ethen, Commercial Closer Dedv*�o7t 0-7r C-Afiiq ot4hd --3J PAS e'; 1.4at e Ae re- /L )(e � H OR949677 C (Supplemental No. 1) Page: 2 Signed on this 26th day of January, 1999 Old Republic National Title Insurance Company By: Agent or Validating Officer if * r (** OLD REPUBLIC I I I III* * * ** Nallond 7ltle In�urence Oompalry ORT Form 3120 January 27, 1999 To be added to the Policy for: PPL Bass Lake Court Limited Ptn. our file no. OR 949677 Survey coverage is granted as to any matters disclosed on Survey of Lot Surveys Company, Inc. dated October 7, 1998 revised November 2, 1998, December 22, 1998 and January 2, 1999, Job No. 779-75. At such time as a survey is provided showing the location of the footings on all buildings to be constructed on the property, the final policy to be issued is subject to endorsement so as to reflect any matters affecting the title or use of the property as reflected thereon. Old Republic National Title Insurance Company BY: Wendy B. Ethen, Commercial Closer ff jlN**W QLD REPUBLIC •rt ORT Form 3120 Old R c N I Titie Insurance Company Validating cer Illllllllilillll���*�* otrv�wtrB�c ORT Form 3120 3.. Damage to existing improvements, including lawns, shrubbery or trees: a. which are located on or encroach upon that portion of the land subject to any easement excepted in Schedule B, which damage results from the exercise of the right to maintain the easement For the purpose for which it was granted or reserved; b. resulting from the future exercise of any right to use the surface of the land for the extraction or development of minerals excepted from the description of the land or excepted in Schedule B. 4. Any final court order or judgment requiring the removal from any land adjoining the land of any encroachment excepted in Schedule B. 5. Any final court order or judgment denying the right to maintain any existing improvements on. the land because of any violation of covenants, conditions or restrictions or building. -setback lines shown on a plat of subdivision recorded or filed in the public records. Wherever in this endorsement the words "covenants, conditions or restrictions" appear,.they shall not be deemed to refer to or include the terms, covenants, conditions or limitations contained in an instrument creating a lease. This endorsement is.made a part of the policy and is subject to all of the terms and provisions thereof and any prior endorsements thereto. Except to the extent expressly stated, it neither modifies any of the terms and provisions of the policy and any prior endorsements, nor does it extend the effective date of the policy and any prior endorsements, nor does it increase the face amount thereof. Old Republic National Title Insurance Company Authorized Signatory ALTA9 IJ * ( * OLD REPUBLIC 1 II III+► *' a.uMvTim. w.r,m.crown fi* ORT Form 3120 File No. H OR949677 C (Supplemental No. 1) Re: PPL -Bass Lake Court Limited Partnership O L D R E P U B L I C N A T I O N A L T I T L E I N S U R A N C E C O M P A N Y ENDORSEMENT To be attached to and become a part of Policy No. SAMPLE of Old Republic National Title Insurance Company. The Company assures the above named Insured that access exists from the insured premises to publicly dedicated and opened street(s), namely Bass Lake Road. The Company hereby insures said Insured against loss which said Insured shall sustain in the event that the assurance herein shall prove to be incorrect. The total liability of the Company under said policy and any endorsement thereto shall not exceed, in the aggregate, the face amount of said policy and costs which the Company is obligated under the Conditions and Stipulations thereof to pay. This endorsement, when signed by an authorized officer or agent, is made a part of said policy as of the policy date thereof and is subject to the Schedules, Conditions and Stipulations and Exclusions from Coverage therein contained, except as modified by the provisions hereof. Old Republic National Title Insurance Company By: Agent or Validating Officer # * OLD NO�el�Rlnsu REPUBLIC "e1"` ORT Form 3120 February 3, 1999 Minneapolis Public Housing Authority in and for the City of Minneapolis 1001 North Washington Avenue Minneapolis, Minnesota 55401 Economic Development Authority in and for the City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428-4898 Re: Housing Development Agreement dated December 31, 1998 (the "Agreement") by, between and among the Minneapolis Public Housing Authority in and for the City of Minneapolis (the "MPHA"), the Economic Development Authority in and for the City of New Hope (the "EDA") and PPL -Bass Lake Court Limited Partnership (the "Partnership") Ladies and Gentlemen: This letter will serve to confirm that Project for Pride in Living, Inc. ("PPL"), the general partner of the Partnership, hereby does guarantee completion of the Development, as defined in the Agreement, in accordance with the terms and conditions of the Agreement. This guaranty is absolute and unconditional, shall take effect immediately, and shall be enforceable as a primary obligation of PPL without MPHA or EDA's first having to pursue any remedies against the Partnership. PPL authorizes MPHA or EDA to amend the Agreement, extend the time for performance, and to deal with the Partnership without notice to PPL, and without PPL's consent, in all respects at the discretion of MPHA or EDA, without affecting PPL's obligations hereunder. This guaranty shall automatically terminate and be of no further force and effect upon completion of the Development and issuance of a Certificate of Occupancy for the Development by the City of New Hope. Very truly yours, P: C DAMNN 125\0 1 TD0CSIPYLGUA RANTEE. DOC HOLMES & ASSOCIATES, LTJX TWO CARLSON PARKWAY, SUITE 155, MINNEAPOLIS, MINNESOTA 55447 TELEPHONE:(612)249-0888 ♦ FACSIMILE: (612) 249-0777 February 3, 1999 The Secretary of the U.S. Department of Housing and Urban Development 451 Seventh Street, SW Washington, D.C. 29410 Re: Bass Lake Court, New Hope, Minnesota Grant No. MN46P00207395A Dear Sir: We are counsel for the Minneapolis Public Housing Authority in and for the City of Minneapolis ("Authority"), a public body corporate and politic created pursuant to Minnesota Statutes, Section 469.001 to 469.047, in connection with the Mixed -Finance Amendment to the Consolidated Annual Contributions Contract dated February 3, 1999 by and between the U.S. Department of Housing and Urban Development ("HUD") and the Authority (the "ACC Amendment"). We have been requested by the Authority to deliver this opinion in accordance with and pursuant to the ACC Amendment. In our capacity as counsel for the Authority, we have examined such matters of law, certificates and documents as we have determined to be necessary for the purposes of this opinion, including, among other documents, originals or true and complete copies of the following: (a) A certified copy of the Authority bylaws and certain other corporate records, documents and proceedings of the Authority; (b) An executed copy of the ACC Amendment; (c) An executed copy of the Initial Agreement dated August 26, 1998 between the Authority and the Economic Development Authority in and for the City of New Hope, Minnesota (the "EDA"), with Amendment No. 1 to the Initial Agreement dated September 22, 1998. DAMNN 125101AOPN10P1NIONDOC Secretary of U.S. Department of Housing and Urban Development February 3, 1999 Page 2 (d) An executed copy of the Cooperation Agreement dated July 22, 1998 between the Authority, the EDA and the City of New Hope (the "City"); (e) An executed copy of the Housing Development Agreement dated December 31, 1998 between and among the Authority, the City and PPL -Bass Lake Court Limited Partnership (the "Partnership"); (f) An executed copy of the Regulatory and Operating Agreement dated February 3, 1999 between and among the Authority, the EDA and the Partnership; (g) An executed copy of the Management Agreement dated February 3, 1999 between the Partnership and Project for Pride in Living, Inc. (the "Managing Agent") with an Amended and Restated Addendum dated February 3, 1999; (h) An executed copy of the Declaration of Restrictive Covenants dated February 3, 1999 executed by the Partnership; (i) An executed copy of the Master Disbursement Agreement dated February 3, 1999 between and among the Partnership, the Authority, the EDA, the Minnesota Housing Finance Agency ("MHFA"), Family Housing Fund ("FHF"), the County of Hennepin ("County") and Old Republic National Title Insurance Company ("Title"); (j) An executed copy of the Master Subordination Agreement and Estoppel Certificate dated February 3, 1999 between and among the Partnership, MHFA, EDA, FHF, and County; (k) An executed copy of the Pledge Agreement dated February 3, 1999 between the MHFA and Partnership; and (1) A Proposal originally dated October 6, 1998 as amended January 29, 1999 submitted to HUD by the Authority and EDA. The documents listed in (a) through (1), above, are hereinafter referred to as the "Authority Documents." The opinions expressed herein are subject to the following assumptions, in addition to the assumptions and qualifications set forth elsewhere herein: (i) all copies of all documents and all records and letters examined by me are accurate, true, complete and correct copies of the originals thereof and all factual D:IMNN 125\01710PMOPlN[ON.DOC Secretary of U.S. Department of Housing and Urban Development February 3, 1999 Page 3 warranties, representations and statements made by the parties in such instruments are true, accurate and correct; (ii) each of the individuals executing the Authority Documents has the requisite legal capacity and all signatures on the Authority Documents other than those of the Authority are genuine; (iii) each of the Authority Documents has been duly authorized, executed and delivered by all parties other then the Authority and constitute the legal, valid and binding obligations of each such other party, enforceable in accordance with their terms; and (iv) each party to the Authority Documents, other than the Authority, has all requisite certifications of authority, licenses, permits, consents, qualifications and documentation, and all requisite organizational power and authority to execute such documents to which it is a parry, to perform its obligations under such documents to which it is a party and to enforce documents to which it is a party. With your permission, we have made no investigation of the facts or law undergoing the foregoing assumptions, and the Authority has not requested us to do so, but we wish to advise you that nothing has come to our attention which would provide us with actual knowledge that we are not justified in making the assumptions. We have made no investigation regarding the accuracy or completeness of any documents, records, instruments, letters or other writings examined by us, or the accuracies of all warranties, representations and statements of fact contained thereon, nor has the Authority requested us to do so, and we express no opinion herein regarding the same. No opinion is expressed herein regarding the existence or nonexistence of, or the effect of, any form of fraud, misrepresentation, mistake, duress or criminal activity upon the legality, validity, binding effect or enforceability of the Authority Documents and we have made no investigation of the facts or law pertaining to such conduct, but we wish to advise you that nothing has come to our attention which would provide us with actual knowledge of the existence of any such conduct. Based upon the foregoing and such other proceedings, documents and certificates which we have deemed necessary and relevant to form our opinion, we are of the opinion that: 1. The Authority is a public body corporate and politic, duly organized and validly existing under the laws of the State of Minnesota with full power and authority pursuant thereto to engage in the activities by the Authority Documents. 2. The Authority Documents have been duly executed prior to February 3, 1999 and delivered on the part of the Authority to be effective as dated in the Authority DAM NN 1251017\OPMOPIN ION. DOC Secretary of U.S. Department of Housing and Urban Development February 3, 1999 Page 4 Documents and those parties executing the Authority Documents on behalf of the Authority have been duly authorized to do so in accordance with the Bylaws and authorizing resolutions of the Authority. 3. The Authority Documents constitute the valid and legally binding obligations of the Authority enforceable in accordance with their terms. 4. The procurement of the Partnership to serve as owner and developer to design and implement the project pursuant to the Housing Development Agreement satisfied the requirements of 24 C.F.R. 85.36. 5. Based on the foregoing and subject to the assumptions and qualifications set forth in this opinion, that each of the Authority Documents conforms to the Proposal and the requirements of the ACC Amendment, and that there is nothing in any of the Authority Documents which conflicts or is inconsistent with the requirements of the ACC Amendment. The obligations of the Authority contained in the Authority Documents and the enforcement thereof are subject to general principles of equity which may permit the exercise of judicial discretion, the reasonable exercise in the future by the State of Minnesota and its governmental bodies of the police power inherent in the sovereignty of the State, applicable bankruptcy, insolvency, moratorium or similar laws relating to or affecting creditors' rights generally, and the exercise by the United States of America by the powers delegated to it by the Constitution. The opinions set forth herein are limited to the matters expressly set forth herein, and no opinion is to be inferred or may be implied beyond the matters expressly so stated. The opinions set forth herein are based solely upon the laws and regulations of the State of Minnesota and the United States of America. This opinion is solely for the benefit and use of the party to whom it is addressed and its respective successors and assigns, and is not to be relied upon in any manner or for any purpose by any other party or entity, whether such person or entity claims any reliance or entitlement by rights of assignment, subrogation or otherwise. HOLM S & ASSOCIATES, LTD. DAMNN 125\01710PN10PIN 10N.D0C January 29, 1999 PROPOSAL of THE MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS and THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE for MIXED -FINANCE DEVELOPMENT (Bass Lake Court/New Hope, Minnesota) Originally submitted: October 6,1998 DAMNN12510171DOCSIPROPOSAL.DOC MDOED-FINANCE DEVELOPMENT NEW HOPE EDA! BASS LAKE TOWNHONES I. Identification of Participating Parties. A. The Minneapolis Public Housing Authority in and for the City of Minneapolis ("MPHA"), a public body corporate and politic, created pursuant to Minnesota Statutes, §§ 469.001 to 469.047. The MPHA holds an Annual Contributions Contract ("ACC") with the United States Department of Housing and Urban Development ("HUD") for the demolition and replacement of 770 units of public housing pursuant to a Consent Decree in settlement of Hollman et ad. v. Cisneros et al, U.S.D.C. (Minn. Dist., 4th Div.) Civil No. 4-92-712. B. The County of Hennepin, a political subdivision of the State of Minnesota ("County"). C. The City of New Hope, Minnesota, a municipal corporation ("City"). D. The Economic Development Authority in and for the City of New Hope, Minnesota, a public body corporate and politic (the "EDA"). E. PPL -Bass Lake Court Limited Partnership, a Minnesota limited partnership (the "Owner"). F. Project for Pride in Living, Inc., a Minnesota nonprofit corporation ("General Partner"). G. The Minnesota Housing Finance Agency, a Minnesota state public body created pursuant to Minnesota Statutes, Section 462A.01 to 462A.24 ("MHFA"). H. The United States Department of Housing and Urban Development, a department of the United States government ("HUD"). I. The Metropolitan Council, created pursuant to Minnesota Statutes, Section 473.123 ("Metropolitan Council"). J. Family Housing Fund, a Minnesota nonprofit corporation (the "Family Housing Fund"). K. National Equity Fund 1997 Limited Partnership, an Illinois limited partnership ("Limited Partner"). L. Project for Pride in Living, Inc., a Minnesota nonprofit corporation (also "Managing Agent"). D:\NlNN125\017\DOCS\PROPOSAL.DOC 1 '\UXED-FpvANCE DEVELOPMENT NEW HOPE IDA/ SASS LAKE TOWNHOMES II. Activities Undertaken by the Parties. A. The MPHA has created a program known as the Metropolitan Housing Opportunities Program (WHOP") for the location of up to 690 units of public housing throughout the metropolitan area other than Minneapolis, St. Paul, or any area of concentration as to race or poverty. B. The Owner proposes to acquire the real estate upon which the Owner is proposing to construct and operate a 34 -unit multifamily rental project to be known as Bass Lake Court (the "Development") located at 7300-7316 Bass Lake Road in the City of New Hope, Minnesota (Exhibit 1). Construction is to commence on or before December 17, 1998. C. The MPHR and the City have agreed to the location of twelve (12) MHOP public housing units to be located within the Development which is twenty new townhomes on two parcels of land and fourteen units in seven rehabilitated buildings . D. The MPHA and the EDA have entered into an agreement (the "Initial Agreement") (Exhibit 2) pursuant to the joint powers authority contained in Minnesota Statutes, Section 471.59 which authorizes the MPHA to prepare and submit this Proposal for a Mixed Finance Development to HUD pursuant to subpart F of 24 CFR part 941 (the "Regulations"). The specific information regarding the Development has been developed by the EDA and the Owner. E. The MPHR, the EDA and the City have entered into an agreement (the "Cooperation Agreement") (Exhibit 3), which grants an ad valorem tax exemption and provides for payments in lieu of taxes ("PILOT") for that portion of the Development taxes represented by units made subject to Section 5 of the United States Housing Act of 1937 (the "Act"). Minnesota Statutes, Section 469.040 authorizes such pro rata exemption agreements with respect to mixed finance projects. F. HUD will participate in the proposed transaction by (1) funding the Annual Contributions Contract Amendment with MPHA of approximately $1,356,480 in public housing development grants (Exhibit 19), and (2) providing operating subsidy for sustained operation of the MHOP public housing units. G. The . MPHA will enter into an agreement with the Owner (the "Housing Development Agreement") (Exhibit 5) by which the MPHA agrees to pay to the Owner upon completion of the Development the lesser of (1) $1,356,480 or (2) the certified costs of constructing and rehabilitating twelve (12) units, based upon number of bedrooms,. and the Owner agrees to (1) complete the Development, (2) cause twelve (12) units therein to be set aside within the Development, operated and maintained as public housing and (3) fund an operating reserve fund. D-.W4N12554171D0CSIPR0P0SAL.D0C 2 MI]W-D-FINANCE DEVELOPIv1ENT NEW HOPE EDA/ BASS LAKE TOWNHOWS H. The MPHA will enter into an agreement with the Owner (the "Regulatory and Operating Agreement") (Exhibit 6) which (1) obligates the Owner to operate the public housing in accordance with all federal, state and local laws and regulations for the period of the ACC, (2) describes that the MHOP public housing units within the Development will not be physically identified, but will "float" throughout the Development, (3) obligates the Owner's designee to manage all of the units within the Development, subject to the MPHA's right to terminate and replace the Owner's designee for failure to abide by law, regulation, policy or the ACC and (4) provides a method for payment of operating subsidy to the Owner by the MPHR. 1. The Managing Agent will manage the Development, including the MHOP public housing units, pursuant to a management agreement between it and the Owner. J. The MHFA has allocated $236,175 annually for ten (10) years in low income housing tax credits to the Development. K. The Limited Partner is making a $1,712,096 capital contribution to the Owner as the sole Limited Partner of the Owner, which Owner is to apply to the expenses of developing the Development (Exhibit 26). L. The MHFA is the term Mortgagee and will originate a first mortgage loan in the amount of $348,202 (Exhibit 20). M. The MHFA will be providing $130,000 by a second mortgage loan from its Super RFP Fund Loan Program, bearing a fixed rate of interest of 1% per annum with principal and all accrued interest due and payable at the end of the 30 year term (Exhibit 21). N. The Family Housing Fund has awarded a $200,000 deferred loan to the Owner (Exhibit 22). O. The County, authorized to act through the Hennepin Housing consortium established by a Joint Cooperative Agreement effective October 1, 1996, has awarded $680,000 by a subordinate nonrecourse mortgage loan from their HOME Loan Program, bearing a fixed rate of interest of 1% per annum for a term of 30 years (Exhibit 23). P. The Metropolitan Council has prepared a plan for the allocation of up to 690 of the MHOP public housing units throughout the Twin Cities metropolitan area and has awarded the General Partner $200,000 as a grant from its Local Housing Incentives Account (Exhibit 24). Q. The The City through its EDA will provide a loan to the Owner in the amount of $1,400,000 bearing interest at 1% for a term of 50 years (Exhibit 25). R. The MPHA and EDA will provide the post construction certifications and monitoring of the Development. D.\MNN125M71D0CSTR0P0SAL.D0C MIXED -FINANCE DEVELOPMENT NEW HOPE EDA/ BASS LAKE TOWNHOMES III. Legal and Business Relationships Between the WHA and the Participating Parties. A_ Although the Minnesota Legislature in 1996 granted the. authority for the MPHR and EDA to form a joint board for purposes of owning, operating, managing or administering public housing developed under MHDP, it is intended that for the Development the legal relationship between them shall be controlled by the Initial Agreement. B. Because the MHOP public housing units represent approximately thirty-five percent (35%) of the units in the Development, neither the MPHA nor the EDA wish to acquire a partnership interest, general or limited, in the Owner. It is felt that the Regulatory and Operating Agreement, the Declaration of Restrictive Covenants to be recorded against the property and the ongoing monitoring for audit and operating subsidy purposes will adequately protect the interests of all participating parties. C. The MHFA will: (i) act as the allocator of tax credits, with the ongoing responsibilities which are a part of that program; and (ii) originate and be the mortgagee on the mortgage secured by the Development, with the understanding that in the event of default, the Regulatory and Operating Agreement, as secured by the Declaration of Restrictive Covenants, will survive foreclosure or acceptance of a deed in lieu of foreclosure. D: 1bWN14nOMDOCSIPROPOSAL.DOC 4 MDMD-FINANCE DEVELOPMENT NEW HOPE IDA! BASS LAKE TOWNHOMES IV. Number of Units to be Developed. A. The Development will contain thirty-four (34) units, consisting of twenty (20) three-bedroom units and fourteen (14) four-bedroom units (Exhibit 1). There is one handicapped accessible three-bedroom unit and one handicapped accessible four-bedroom unit in the Development. In addition, two percent of the Development (one mut), will be adaptable for hearing and sight impaired. B. The twelve (12) MHOP public housing units will consist of six (6) three-bedroom units and six (6) four-bedroom units. These units will not be physically identified, but will "float" throughout the Development. C. All 22 non-MHOP units will be subject to the low income housing tax credit income and rental restrictions. D:%4NN125kOMDOCS\PROPOSAL.DOC S NHXM-FINANCE DEVELOPMENT NEW HOPE EDA! BASS LAKE TOWNHOM S V. Sources and Uses Budget for the Development. A. The estimated total development cost for Development is $6,026,778.00. The sources of funding are as follows: MHFA first mortgage $ 348,202 Limited Partner Equity $ 1,712,096 MHOP public housing funds $ 1,356,480 MHFA second mortgage $ 130,000 FHF Program $ 200,000 Owner Equity* $ 200,000 EDA local funds $ 1,400,000 Hennepin County HOME $ 680,000 Total $ 6,026,778 *Owner Equity is provided as a grant contributed by Metropolitan Council B. A complete sources and uses analysis is attached hereto as Exhibit 6 with attached commitments. D:\MNN12n0171DOCSIPR0P0SAL.D0C 6 NflXED-FWANCEDEVELOPMENT NEW HOPE EDA! BASS LAKE TOWNHONES VI. Ten Year Operating Pro Forma. A. Income from the entire Development has been estimated, taking into account the income and rental limitations of both the tax credit and public housing programs. Based upon the experience of the MPHA in operating its public housing program within the City of Minneapolis, it is estimated that average monthly income from these units will be $185.00 per month. Assuming average monthly per unit operating costs estimated by the Owner of $350.00 ($54.00 of which is estimated to cover utilities, except electric which will paid by the tenant), the average monthly operating subsidy for each public housing unit would be $165.00. In order to support $185.00 in rent, the public housing tenant family would need to earn at least $7400.00 per year. The MPHA Minneapolis experience is that their average family tenant in either scattered site or row house units earns $11,646.50 per year. ($12,241 in scattered site and $11,052 in row house units). B. Details of the expense, income and operating subsidy calculations are contained in the Regulatory and Operating Agreement. C. There is attached hereto as Exhibit 7 a complete ten year operating pro forma. DAMNN125101700CSIPROPOSAL,DOC 7 M MD -FINANCE DEVELOPMENT NEW HOPE EDAI BASS LAKE TOWNHOMES VII. Operating Subsidy Methodology. A: The MPHA has not sought waivers of income levels and has no reason to believe that the average income levels of tenants in the Development will vary from those which exist throughout the MPHA public housing program. The following is a summary of how the operating subsidy will be structured. B. The Owner will create an Operating Subsidy Reserve, equal to three years' total estimated operating subsidy of $5,940 for each of the twelve (12) MHOP Units, or in a total amount of $71,250. This will constitute the initial Floor Level of the reserve fund, but will be adjusted annually based upon the prior years' actual operating subsidy. All investment earnings and the Owner reimbursements of excess operating subsidy will be deposited in this reserve. C. The MPHA shall pay the Owner an operating subsidy equal to the lesser of (a) the difference between the "Estimated MHOP Unit Expenses" and the "Estimated MHOP Unit Income," or (b) the "Operating Subsidy Cap," as those terms are defined in the Regulatory and Operating Agreement. The Operating Subsidy Cap is an amount intended to reflect the annual subsidy which HUD has committed to pay to the MPHA per public housing unit room, so that the MPHA will not be required to pay to the Owner an amount which exceeds that which it receives from HUD for other units in its inventory. For this reason, the MPHA has duly considered the projected needs of all other MPHA public housing units and projects and, more specifically, the increased needs of all MPHA units, including the MHOP units, as a result of inflation and increased costs of operation over time. D. The Owner shall have the right to utilize this Operating Subsidy Reserve in the event the MPHA fails to make timely payment of the agreed upon operating subsidy amount or in the event the amount of subsidy paid is less than the difference between unit income and expenses because of the Operating Subsidy Cap. The MPHA and/or the EDA may, but will not be obligated to replenish the Reserve to its Floor Level. E. If the Operating Subsidy Reserve falls below the Floor Level, either because of Floor Level adjustments or withdrawals, and there is a vacancy in an MHOP Unit, the MPHA is given a series of options for maintaining the vacant unit as a public housing unit, including the leasing of the vacant unit to a qualified public housing tenant with sufficient income to afford a rent which will assure that Authority Unit Expenses do not exceed Authority Unit Income (including operating subsidy). F. If the Operating Subsidy Reserve falls below 50% of the Floor Level, and no vacancy in an MHOP Unit has occurred, the MPHA is given another series of options for maintaining the MHOP Units as public housing units. If it does not do so, the owner is given the right to permit leases of the MHOP Units to expire and, beginning with the incentive units, lease them to qualified public housing tenants with sufficient income to afford rent which will assure that Authority Unit Expenses do not exceed Authority Unit Income (including operating subsidy). D:1MNN12510171D0CSIPR0P0SALD0C 8 IMMD-FINANCE DEVELOPMENT NEW ROPE EDA/ BASS LAKE TOWNSOMES VIII. Management Plan. A. The Owner will enter into a management agreement with the Managing Agent, to manage all thirty four (34) units at the Development (Exhibit 8). B. The General Partner and the Managing Agent have extensive backgrounds in the housing field. A description of the General Partner and the Managing Agent and their respective resumes of experience is attached as Exhibit 9. C. The Owner agrees in the Regulatory and Operating Agreement and in the Management Agreement, to operate and manage the MHOP public housing units at the Development in accordance with all federal, state and local public housing requirements for the period of the ACC. DAAO N12=17WOCSIPAOPOSAL DOC 9 NQXED-FINANCE DEVELOPMENT NEW HOPE EDA/ BASS LAKE TOWNHONES IM The Site, Site Plan and Neighborhood. A. The site consists of approximately 3.4 acres. The Development consists of thirty- four units. Twenty units are three-bedroom new construction townhomes. Fourteen units are created by renovating seven existing fourplex buildings into side-by-side duplexes. Twenty three-bedroom units and fourteen four-bedroom units are created, including one three-bedroom and one four-bedroom handicapped accessible unit. - The site is located at 7300 - 7316 Bass Lake Road in New Hope. The unit configuration is as follows: No. of Units: Construction Type Baths Type Sq. Ft. No. of Units per Building 3 Bed. 4 Bed 14 Three Bedroom 14 6 20 TOTAL 1 22 13 Rehabilitated Fourplex 2 full Two Story 1,700 2 1 Rehabilitated Fourplex 2 full Two Story 1,700 1 of 2 14 Rehabilitated Units 18 New Construction 1.5 Two Story 1,200 5 1 New/Handicapped 1.5 Two Story 1,200 1 of 5 1 New/Handicapped 1.5 Two Story 1,500 1 of 5 20 New Construction Units TOTAL: 34 Units 11 Buildings Six of the four-bedroom rehabilitated fourplexes and six of the three-bedroom new construction townhomes will be MHOP units, for a total of twelve. Units Market MHDP TOTAL Four Bedroom 8 6 14 Three Bedroom 14 6 20 TOTAL 1 22 1 12 34 The Development is located within a primarily single family residential neighborhood in the City, a suburb which is 10 miles from downtown Minneapolis. The Development is designed for large families. All the units have two baths and the fourteen renovated units have full, unfinished basement play and laundry space. The site plan creates a courtyard play area accessible from all units without crossing the private road or any driveways. Two playgrounds are built in the courtyard, one designed for toddlers and one for children ages 4-10. The site plan provides garage parking for one car per D:\MM12510171DOCSIPROPOSAL.DOC 10 D -FINANCE DEVELOPMENT NEW HOPS EDA/ BASS LAKE TOWNHOMES unit, plus one (1) driveway off-street parking space per unit. There are also 23 visitor parking spaces. The northern boundary of the site adjoins Thorsen Family Resource Center, a former elementary school with playing fields, playground equipment, a full-time licensed daycare, early family childhood education programs, adult education, mental health counseling and a food shelf. A gate in the project fence will allow older children to use the playing fields as additional open space, again without crossing a street. The site also includes an eighth fourplex which is owned and operated as an adult group home by an unrelated nonprofit, Community Care Corporation. This building is owned by a private individual. The property is on a separate, legal, lot. The General Partner provides an easement to the property owner to use the common private road. The General Partner has an option to purchase the building when this individual sells it. This group home has an excellent reputation with the City of New Hope and Hennepin County. The property owner has agreed to pay the General Partner an annual fee for maintenance of their small yard, outdoor street lighting and street plowing and maintenance. The site plan indicates the group home's separate outdoor space; the central courtyard is not accessible to group home residents. Two neighborhood parks are within walking distance, as are two elementary schools. There are three bus routes along Bass Lake Road and Winnetka (1 long block from site), which provide local and express service to downtown Minneapolis, Brookdale Shopping Center and to employment centers in the adjacent suburbs. Full retail services are available within walking distance of the site. A large Catholic Church and elementary school are located across Bass Lake Road. B. There is attached as Exhibit 1 a site plan of the entire Development showing the location. C. There is attached as Exhibit 10 an environmental site assessment. DAMNN12510171 WSTROPOSALDoc I1 AGMED-FINANCE DEVELOPNff NT NEW HOPE EDA/ BASS LAKE TOWNHOMES X. Market Analysis. A. There is attached information (Exhibit 11) which consistently shows a need for the new construction of affordable housing in the County and surrounding communities. . The City had a population of 21,853 in 1990. The City is generally considered a fully developed suburb, built primarily in the 1960's and early 1970's. In 1990, 54 percent of the City's total housing stock was owner occupied, and 43 percent renter occupied. Rental vacancies were 2.5%; only .5% of owner occupied units were vacant. A large percentage of the rental units, 40.5 percent, are in apartment buildings with ten or more units, 15.2 percent are in apartment buildings with 50 or more units. The City has little rental housing available for families. Only 229 rental units have three or more bedrooms and only 48 (1.3% of the total inventory) meet the Metropolitan Council's standard of affordability. Although two bedroom units make up 41% of all rental units, only 26% of those units are affordable. Unit Size # of Rental Units % of All Rental Units # of Affordable Rental % of Affordable Rental 0 / One Bedroom 1,966 52.78 1,111 56.52 Two Bedroom 1,530 41,07 404 26.40 Tbree Bedroom 229 6.15 48 21.00 project. There are three rental developments which can be considered comparable to the current Park Ridge Way at 4219 Oregon; 19 three-bedroom units out of 159 total. Rent as of February 1, 1998 was $849. Independence Apartments at 4642 Independence; 3 three-bedroom units out of 18 total. Rent as of February 1, 1998 was $650 plus electricity. Windcrest at 5716 Winnetka; 18 three-bedroom units out of 107 total. Rent as of February 1, 1998 was $659 to $759, based on location of the unit. According to the Family Housing Fund, a well respected nonprofit corporation, there are 68,000 renter households with annual incomes below $10,000 in the Twin Cities Metropolitan area, but only 31,200 housing units with rents affordable to this income level. Even for households with annual incomes below $30,000, housing costs more than 30% of income for 185,000 households. According to the Metropolitan Council, 50,000 suburban households earning less than $20,000 per year pay more than 30% of their income for housing. D.\MNN1251017tiDOCS1PROPOSAL.DOC 12 NffXED-RNANCE DEVELOPNUNT NEW HOPE EDA/ BASS LAKE TOWNHONIES XI. Development Cost Estimates. A. There is attached as Exhibit 12 a copy of the Construction Bid Specifications submitted by the Owner with a breakdown of the construction cost estimates in detail. B. The development schedule for each major stage is also attached in Exhibit 12. D:ININN125101700MMOPOSAL.DOC 13 NIDED-FINANCE DEVELOPMENT NEW HOPE EDA/ BASS LAKE TOWNHOMMS XI1. Development Schedule. A. The Owner intends to commence construction of the Development on or about December 17, 1998 and estimates that the Date of Full Availability ("DOFA") will be on or about July 1, 1999. B. Based upon this schedule, the End of the Initial Operating Period ("EIOP") will be June 30, 1999. C. The Actual Development Cost Certification is anticipated to be accomplished as a part of the fiscal 1998-99 MPHR audit. DAMNN125101ADOCSWROPOSAL.DOC 14 NDMD FINA1rCE DEVELOPMENT NEW HOPE EDA/ BASS LAKE TOWNHOWS XIII. Adequacy of Existing Facilities and Services. A. Grocery, pharmacy, general goods, hardware are all available within one mile of the site. Brookdale regional shopping mall is accessible through one of the three bus lines serving the site, along with downtown and trans -suburban lines running north/south through the western suburbs. Downtown and the northern and western metro area employment centers are accessible through bus or freeway access (highways 169 and 100). Thorsen Family Resource Center adjoins the northern edge of the site and provides full- day licensed child care, pre-school and after-school programs, family mental health counseling, early family childhood education and adult education and job placement services. Thorsen also provides two additional acres of playground and playfields available to children without crossing a street B. There is attached as Exhibit 13 a letter regarding the ability of neighborhood schools to accommodate the children expected to reside in the MHOP public housing units. DANINN12SOMDOCSTROPOSAL.DOC 15 NIMD-FINANCE DEVELOPMENT NEW HOPE IDA/ SASS LAKE TOWNHOMES XIV. Relocation Plan. A. There is a Project Relocation Plan which is attached as Exhibit 14. D:4M1251 MDOCSIPROPOSAL-DOC 16 MMD -FINANCE DEVELOPMENT NEW HOPE EDAI BASS LAKE TOWNIIOMES XV. Operating Feasibility. A. See the ten (10) year operating pro forma attached as Exhibit 7. B. The financial feasibility of the Development has been reviewed by the MHFA, the FEF, EDA , Limited Partner and certain private funding organizations. The MHFA will complete the Subsidy Layering Review attached as Exhibit 18. C. Minnesota Statutes, Section 469.040 provides for property tax exemption and payments in lieu of taxes. The statute, enacted in 1996 in anticipation of the Mixed Finance Development regulations, provides for the prorating of the Development taxes based upon number of public housing units as a percentage of total units. The regulations provide that the prorating should be "a ratio reflecting the proposed bedroom mix of the public housing units as compared to the bedroom mix of the non-public housing units in the development." The regulations do, however, anticipate that HUD may provide an alternative method. In order to comply with State law, the MPHA proposes to prorate based upon units rather than bedrooms. D:%dNN125\417\DOCS\PR0POSAL.D0C 17 MUCED-FINANCE DEVELOPMENT NEW HOPE EDA! BASS LAKE TOWNHOMES XVI. Life -Cycle Analysis. See the letter attached as Exhibit 15. D:VANN12510171DOCS\MOPOSAL.DOC 18 MIXED -FINANCE DEVELOPMENT NEW HOPEEDAI BASS LAKE TOWNHOMES XVII. New Construction and 6(h) Compliance. A. It is the intention of the MPHR that the majority of replacement units ultimately located in the Twin Cities metropolitan suburbs will be the result of acquisition of existing housing and minor or substantial rehabilitation. However, the low income housing tax credit allocation system provided a meaningful opportunity to include some MHOP public housing units within new construction rental projects. This was a result of the decision by the MHFA, Metropolitan Council, WHA and other private housing providers, to give priority consideration in the allocation of tax credits and "soft money" to new construction proposals. (Exhibit 16) B. There was no existing housing stock in the area which encompasses the Development which could be purchased. D:\NM1251017WOCSIPROPOSAL.DOC 19 MIXED -FINANCE DEVELOPM&Nr NEW HOPE EDA/ BASS LAKE TOWNHOMES XVIII. Intergovernmental Review. See the letter attached as Exhibit 17. D.,W4NI2540171DOCSIPROPOSAL.D0C 20 MUCED-FINANCE DEVELOPMENT NEW HOPE EDA/ BASS LAKE TOWNHOMES XIYL. Certifications. A. The MPHA warrants to HUD as follows: 1. That it constitutes a PHA, as defined in 24 CFR § 941.103, and possesses the necessary authority to develop MHDP public housing units and to enter into the agreements described herein or otherwise required in order to carry out the terms of this Proposal; 2. That it has the legal authority to transfer the public housing development funds provided to it through the ACC to the Owner in return for the obligations of the Owner contained in the Housing Development Agreement and the Regulatory and Operating Agreement; 3. That the selection of the Owner and related entities to participate in this transaction was the result of an open and competitive process conducted by the MPHA in conjunction with the MHFA, the Metropolitan Council and certain private funding organizations. Both the tax credits and the "soft" money were allocated to the Development after a full "request for proposals" by the MHFA; 4. The General Contractor for the new construction was selected through an open competitive bid process conducted by the General Partner. The General Contractor for the rehabilitation is an affiliate of the Owner. At the time of selection of the Owner through the process described in Paragraph 3, above, it was known to the selecting parties that the general contractor would be an affiliate of the Owner. The Contractor has represented to the MPHA that (a) all construction work is to be performed by trade subcontracts, (b) all subcontracts have been competitively bid and (c) the Contractor shall only provide administrative and supervisory services. Watson Forsberg will be the general contractor for the rehabilitation. 5. That pursuant to the agreements described herein and attached hereto, the MHOP public housing units will be developed and operated in accordance with all applicable public housing requirements; 6. Through the agreements described herein and attached hereto, as well as through monitoring of the MHOP public housing units and the Development, the MPHA will assure that the units remain available to eligible public housing tenants for the period of the ACC; 7. Section 2.1 of the Regulatory and Operating Agreement attached hereto, and any subsequent management agreement respecting the MHOP public housing units will require that the units be operated in accordance with all public housing requirements; D:UW-"12A0171DOCSTK0P0SAL.D0C 21 MIXED -FINANCE DEVELOPMENT NEW HOPE EDA/ BASS LAKE TOWNHOMES 8. In accordance with Article II of the Regulatory and Operating Agreement, during a forty (40) year period the MHOP public housing units will be maintained and operated in accordance with all public housing requirements; 9. In accordance with Section 3.3 of the Housing Development Agreement, the MHOP public housing units will not be disposed of without the prior written consent of HUD during and for ten (10) years after the end of the period in which the MHOP public housing units receive operating subsidy. 10. In accordance with Article 11 of the Regulatory and Operating Agreement, the Owner will maintain the twelve (12) MHDP Units in the Development as MHOP public housing units at all times, and in the event that through condemnation or natural disaster the total number of units in the Development is reduced, no less than thirty-five percent (35%) of the largest remaining units shall be set aside and maintained as MHOP public housing units. 11. In accordance with Section 6.3 of the Housing Development Agreement, Section 10.1 of the Regulatory and Operating Agreement and the recorded restrictive covenants, the obligations contained in the Regulatory and Operating Agreement shall run with the land and shall survive foreclosure or acceptance of a deed in lieu of foreclosure. 12. In accordance with Section 3.3 of the Housing Development Agreement and the recorded restrictive covenants, the MHOP public housing units shall not be encumbered or demolished without the prior written consent of HUD. 13. Because the Regulatory and Operating Agreement in Section 3.1 incorporates by reference the terms and conditions of the ACC, the owner is bound by the terms thereof. 14. Article X of the Regulatory and Operating Agreement contains an acknowledgment by the Owner that the transfer of funds to the Owner does not constitute an assignment of funds and that the Owner is not a third -party beneficiary thereof. 15. That the participation of the MPHA and all other parties in this transaction, and the Development, including the MHOP Units to be contained therein, are consistent and in compliance with the Consent Decree. 16. That the procurement of the Owner to serve as owner and developer to design and implement the Development pursuant to the Housing Development Agreement satisfied the requirements of 24 C.F.R. 85.36. DA"12510171DOCSIPROPOSAL.DOC 22 NUXED-FINANCE DEVELOPMENT NEW HOPE IDA/ BASS LAKE TOWNHOMES XX. Development Rule Requirements. A. Non Dwelling Space. The Development has an office built as part of the southeast 'townhome building. Community meeting space and a wide variety of social services and social functions will occur in the adjacent Thorsen Family Resource Center. This is a former elementary school now operated as a private community center. B. Each unit has its own f irnace,hot water heater,. washer and dryer. Each unit includes a garage space plus one additional off-street parking space. There are two playgrounds located in the Courtyard area as well as another playground and extensive playing fields at the adjoining Thorsen Family Resource Center. All of the above spaces can be located on the plans included in Exhibit 1. DWNN12M017U)OCSTROPOSAL.DOC 23 MDED-FINANCE DEVELOPMENT NEW HOPE EDAI BASS LAKE TOWNHOMES DORSEY & WHITNEY LLP MINNEAPOLIS PILLSBURY CENTER SOUTH NEW YORK WASHINGTON, D.C. 220 SOUTH SIXTH STREET DENVER LONDON MINNEAPOLIS, MINNESOTA 55402-1498 SEATTLE BRUSSELS TELEPHONE: (612) 340-2600 FARGO HONG KONG FAX: (612) 340-2868 BILLINGS DES MOINES ROCHESTER MISSOULA COSTA MESA GREAT FALLS The Secretary of Housing and Urban Development 451 Seventh Street, S.W. Washington, D.C. 20410 Re: Mixed Finance Development Bass Lake Court/New Hope, Minnesota Ladies and Gentlemen: We have acted as counsel for PPL -Bass Lake Court Limited Partnership (the "Partnership"), with respect to the development of a 34 unit multi -family apartment complex to be located at 7300-7332 Bass Lake Road and known as Bass Lake Townhomes (the "Project"). We have also acted as counsel for Project for Pride in Living, Inc., a Minnesota non-profit corporation ("PPL"). PPL is the general partner of the Partnership. PPL will also act as manager of the Project ("Manager'). The Partnership, PPL, and Manager are collectively referred to as "Owner Entities"- A. ntities"_ A. Instruments and Loan Documents Examined In preparing this opinion, we have examined such matters of law and such certificates and documents as we have determined necessary for the purposes of this Opinion, including, among other documents, originals or copies represented to us as true and complete copies of the instruments and documents described on Schedule 1 attached hereto and incorporated herein by this reference. Items under Heading A of Schedule 1 are sometimes collectively referred to as the "Authority Documents" and all of the items listed on Schedule 1 are sometimes collectively referred to as the "Documents." B. Asa;mptions The opinions expressed herein are subject to the following assumptions, in addition to the assumptions and qualifications set forth elsewhere herein: DORSEY & WHITNEY LLP The Secretary of Housing and Urban Development February j 199 Page 2 1. All copies of the Documents, and all records and letters examined by us are accurate, true, complete and correct copies of the originals thereof and all factual warranties, representations and statements made by the parties in the Documents are accurate, true and correct. No material change has occurred in the period from the date of the Documents to the date of this opinion. 2. Each of the individuals executing the Authority Documents has requisite legal capacity and all the signatures, other than those of the Partnership, on the Authority Documents are genuine. 3. The Authority Documents have been duly authorized, executed and delivered by all parties other than the Partnership and constitute legal, valid and binding obligations of each such other party enforceable in accordance with their terms. 4. Each party to any of the Authority Documents, other than the Partnership and PPL is a duly organized corporation, general partnership, limited partnership, limited liability company, national banking association, authority, agents, public body, branch of the government, or other duly organized entity, as the case may be, under and pursuant to the laws of each such party's organizational jurisdiction and, to the extent necessary for the delivery of the opinions set forth herein, is in good standing under the laws of, and authorized to transact business in, the State of Minnesota. 5. Each party to any of the Authority Documents, other than the Partnership and PPL has all requisite certifications of authority, licenses, permits, consents, qualifications and documentation, and all requisite organizational power, capacity and authority, to execute such of the Authority Documents to which it is a party, to perform its obligations under such of the Authority Documents to which it is a party, and to enforce such of the Authority Documents to which it is a party. With your permission, we have made no investigation of the facts or law underlying the foregoing assumptions, and you have not requested us to do so, but we wish to advise you that nothing has come to our attention which would provide us with actual knowledge that we are not justified in making such assumptions. We have made no investigation regarding the accuracy or completeness of any documents, records, instruments, letters or other writings examined by us, or the accuracy of all warranties, DORSEY & WHITNEY LLP The Secretary of Housing and Urban Development February ,1999 Page 3 representations and statements of tact contained therein, nor have you requested us to do so, and we express no opinion herein regarding same. No opinion is expressed herein regarding the existence or nonexistence of, or the effect of, any form of fraud, misrepresentation, mistake, duress or criminal activity upon the legality, validity, binding effect or enforceability of any of the Authority Documents, and we have made no investigation of the facts or law pertaining to such conduct, but we wish to advise you that nothing has come to our attention which has provided us with actual knowledge of the existence of any such conduct. Based upon, and subject to, the assumptions set forth hereinabove and subject to the assumptions, qualifications, exceptions and limitations set forth in this opinion, we are of the opinion that: 1. The Partnership is a limited partnership duly created and validly existing under the laws of the State of Minnesota and is authorized to transact business in the State of Minnesota as a limited partnership. The Partnership has adequate partnership power to execute and deliver the Authority Documents to which it is a party and to perform its obligations thereunder. 2. PPL is a non-profit corporation duly created and validly existing under the laws of the State of Minnesota and are authorized to transact business in the State of Minnesota. The Partnership and PPL have adequate power to execute and deliver the Authority Documents on behalf of the Partnership and to perform their obligations thereunder. 3. The Authority Documents have been duly executed and delivered by each of the Owner Entities that is a party to the Authority Documents and those parties executing the Authority Documents on behalf of the Owner Entities and the consummation by each of the Owner Entities of the transactions contemplated thereby have been duly authorized by all necessary partnership, or corporate actions, as applicable. 4. The Authority Documents constitute valid and legally binding obligations of the Partnership and PPL enforceable in accordance with their respective DORSEY & WHITNEY LLP The Secretary of Housing and Urban Development February �,1999 Page 4 terms, subject to the qualifications that the enforceability of any Authority Documents may be limited or affected by customary principles governing equitable relief generally and by bankruptcy, insolvency, reorganization, rearrangement, moratorium, liquidation, fraudulent conveyance, receivership, conservatorship and other laws affecting the rights of creditors or the collection of debtors' obligations generally and a court may refuse to grant an order for specific performance or any other principles of equity which may limit the availability of certain equitable remedies. D. Qualifications 1. We express no opinion as to the truth or accuracy of any warranties, representations, or statements of fact contained in any documents examined by us, including, but not limited to, the Authority Documents listed in Section A of Schedule 1. 2. No opinion is given herein as to any laws regulating the business of any of the parties other than the Owner Entities, including, without limitation, (a) the types of investments that can be made by any of the parties other than the Owner Entities, or (b) the legal lending limit of any of the parties other than the Owner Entities. 3. Whenever our opinion herein is qualified by the phrases "to our knowledge"; "known to us"; "our attention'; or words of similar import, it is intended to indicate that the current actual conscious knowledge of Robert J. Silverman, Jon Peterson and Doering Meyer, the attorneys and legal assistant within this firm engaged in the representation of the Owner Entities (and not to the knowledge of the firm generally) is not inconsistent with that portion of the opinion which such phrase qualifies. We have made no independent investigation with respect to such matters. 4. The opinions set forth above are based solely upon the laws and regulations of the State of Minnesota and the state of facts in effect on the date hereof. Nothing herein shall be construed to be an opinion as to the applicability or effect of the laws of any other jurisdiction. 5. This opinion speaks only as of the date of this delivery. We have no obligation to advise the recipients of this opinion or anyone else of any matter or fact or law thereafter occurring, whether or not brought to our attention, even though that matter affects any analysis or conclusion of this opinion. DORS EY & WHITNEY L L P The Secretary of Housing and Urban Development February 1999 Page 5 6. This opinion is limited to the matters expressly set forth herein, and no opinion is to be inferred or may be implied beyond the matters expressly so stated. This opinion letter has been provided solely for the benefit of the addressee, at its request, and no other person or entity shall be entitled to rely hereon without the express written consent of Dorsey & Whitney LLP. This opinion letter shall not be quoted in whole or in part, used, published or otherwise referred to or relied upon in any manner, including, without limitation, in any financial statement or other document. Dated: February 1999 Very truly yours, RJS/ikk DORSEY & WHITNEY LLP SCHEDULE 1 1. The Housing Development Agreement dated December 31,1998 between the Partnership and The Minneapolis Public Housing Authority in and for the City of Minneapolis, a public body corporate and politic under the laws of the State of Minnesota ("MPHA') and The Economic Development Authority in and for the City of New Hope, a public body corporate and politic under the laws of the State of Minnesota ("EDA"). 2. The Regulatory and Operating Agreement dated February,1999 between and among the MPHR, EDA and the Partnership. 3. The Declaration of Restrictive Covenants dated February ,1999 executed by the Partnership. 4. The Master Disbursement Agreement dated February 1999 between and among the Partnership, MPHA, the Family Housing Fund ("FHF"); the Minnesota Housing Finance Agency ("MHFA"); Hennepin County ("County"); Old Republic National Title Insurance Company ("Title"); and Economic Development Authority in and for the City of New Hope ("EDA"). 5. Master Subordination Agreement and Estoppel Certificate dated February 11999 between and among the Partnership, UWA, County, Title and EDA. 6. Pledge Agreement dated February 1999 between MHFA and the Partnership. MEN 0 1. Organizational documents, records, resolutions and certificates of the Partnership, and PPL. FOR USE BY FUJNG OFFICER ONLY MINNESOTA HOUSING FINANCE AGENCY NEW CONSTRUCTION TAX CREDIT MORTGAGE LOAN PROGRAM MASTER SUBORDINATION AGREEMENT AND ESTOPPEL CERTIFICATE THIS MASTER SUBORDINATION AGREEMENT shall have an effective date of the 3rd day of February, 1999, and is made and entered into by and between PPL Bass Lake Court Limited Partnership, a Minnesota limited partnership, with its offices located at 2516 Chicago Avenue South, Minneapolis, MN 55404 (hereinafter referred to as the "Developer"), the Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota, with its offices located at 400 Sibley Street, Suite 300, St. Paul, MN 55101, (hereinafter referred to as the "MHFA"), the County of Hennepin, a political subdivision of the State of Minnesota, with its offices located at A2400 Government Center, Minneapolis, MN 55487 (hereinafter referred to as the "County" ), the Family Housing Fund, with its offices located at Midwest Plaza West, Suite 1840, 801 Nicollet Mall, Minneapolis, MN 55402 (hereinafter referred to as the "Fund"), and the Economic Development Authority of the Qty of New Hope, with its offices located at 4401 Xylon Avenue North, New Hope, MN 55428 (hereinafter referred to as the "City"). WITNESSETH: WHEREAS, the Developer is the owner of a multi -family housing development designated as MHFA Development No. 98-NCTC-2558 (hereinafter referred to as the "Development"), which is situated on that certain real property located in the County of Hennepin, State of Minnesota, and legally described in Exhibit A attached hereto and incorporated herein by reference; and WHEREAS, Developer has applied for and obtained a mortgage loan from the MHFA New Construction Tax Credit Mortgage Loan Program m an original principal amount of Three Hundred Forty -Eight Thousand Two Hundred Two and No/100 Dollars ($348,202.00) (hereinafter referred to as the "MHFA NCTC Loan"); and WHEREAS, Developer has applied for and obtained an additional mortgage loan from the MHFA Affordable Rental Investment Fund Program in an original principal amount of One Hundred Thirty Thousand and No/100 Dollars ($130,000.00) (hereinafter referred to as the "MHFA ARIF Loan"); and WHEREAS. the Developer has entered into a Housing Developauent Agremnent with the Minneapolis Public Housing Authority (hereinafter referred to as the "Funding Agreement") under Bus Lab Court, New Nape 1126/99 New Construction Tax Credit 1 96-NCTC-2556 Master Suborftadon Agreement NCrC-Mstr Sbrdntn Agrmnt and MHFA ARIF Loan Documents, the County Loan and County Loan Documents, and the Fund Loan and Fund Loan Documents; and WHEREAS, it is further intended that the parties hereto wish to specify how the terms and conditions contained m the loan documents referred to herein shall be interpreted in the event of a conflict or inconsistency therein. NOW, THEREFORE, in consideration of one dollar ($1.00) and other good and valuable consideration, and in further consideration of the parties hereto making and entering into the loans referred to herein, the parties hereto do hereby agree as follows: 1. Consent to Loans. The parties hereto do hereby consent and agree to all of the loans referred to and described herein. In addition, by executing this Master Subordination Agreement: A. The Fund agrees that all of the liens, encumbrances, and restrictive covenants, if any, created by the MHFA NCTC Loan Documents, the MHFA ARIF Loan Documents, the City Loan Documents, and County Loan Documents shall be deem to be "Permitted Encumbrances" under the Fund Loan Documents, and that the Fund Loan Documents are all hereby amended, if and where and as needed, to include all of the liens, encumbrances, and restrictive covenants, if any, created by the MHFA NCTC Loan Documents, the MHFA ARIF Loan Documents, the City Loan Documents, and the County Loan Documents as "Permitted Encumbrances" thereunder. B. MICA agrees that all of the liens, encumbrances, and restrictive covenants, if any, created by the Fund Loan Documents, the City Loan Documents, and County Loan Documents shall be deemed to be "Permitted Encumbrances" under the MHFA NCTC Loan Documents and the MHFA ARIF Loan Documents, and that the MHFA NCTC Loan Documents, and the MHFA ARIF Loan Documents are hereby amended, if and where and as needed, to include all of the liens, encumbrances, and restrictive covenants, if any, created by the Fund Loan Documents, the City Loan Documents, and County Loan Documents as "Permitted Encumbrances" thereunder. C. The County agrees that all of the liens, encumbrances, and restrictive covenants, if any, created by the MHFA NCTC Loan Documents, the MHFA ARIF Loan Documents, the City Loan Documents, and Fund Loan Documents shall be deemed to be "Permitted Encumbrances" under the County Loan Documents, and that the County Loan Documents are all hereby amended, if and where and as needed, to include all of the liens, encumbrances, and restrictive covenants, if any, created by the MHFA NCTC Loan Documents, the MHFA ARIF Loan Documents, the City Loan Documents, and the Fwtd Loan Documents as "Permitted Encumbrances" thereunder. D. The City agrees that all of the liens, encumbrances, and restrictive covenants, if any, created by the MHFA NCTC Loan Documents, the NWA ARIF Loan Documents, the County Loan Documents, and Fund Loan Dwime <ts shall be deemed to be "Permitted Encumbrances" under the City Loan Documents. and that the City Loan Documents are all hereby amended, if and where and as needed, to include all of the liens, encumbrances. and restrictive covenants. if any, created by the MHFA NCTC Loan Documents, the MHFA ARiF Loan Documents, the County Loan Documents and the Fond Loan Documents as "Pcrrnitted Encumbrances" thereunder. 2. Use of Documents. With respect to the loan documents referred to and described herein, the parties hereto do hereby covenant, warranty, consent and agree as follows: Sana rhe Court, New trope 1/26/99 Now Conwwtiot Tax Credit 3 98-NCTC-2558 Master Subordination Agrement NCTC-Marr Sbrdnm Agrmnt until approved and consented to in writing by all of the parties to this Master Subordination Agreement upon which such document has, or will have, an adverse effect, and upon such written approval such document shall be automatically considered to be included in the County Loan Documents and the County will execute any and all documents necessary to include such document in the County Loan Documents. E. The City covenants and warranties that (i) the City Loan Documents are all of the documents it has entered into regarding the City Loan, (ii) thele are no other documents relating to the City Loan, (iii) it will not enter into any abler documents relating to the City Loan which would have an adverse impact upon any other party to this Master Subordination Agreement without the prior written consent of such party or parties, and (iv) any document relating to the City Loan which may exist and is not listed in the City Loan Documents, or may come into existence in the future, shall not have any force or effect until approved and consented to in writing by all of the parties to this Master Subordination Agreement upon which such document gas, or will have, as adverse effect, and upon such written approval such documents hall be automatically considered to be included m the City Loan Documents and the City will executed any and all documents necessary to include such document in the City Loan Documents. F. The Fund agrees and consents to the use of the MiWA NCTC Loan Documents, the MHFA ARIF Loan Documents, the County Loan Documents, and the City Loan Documents. G - The WMA agrees and consents to the use of the Fund Loan Documents, the County Loan Documents, and the City Loan Documents. H. That County agrees and consents to the use of the MHFA NCTC Loan Documents, the MHFA ARIF Loan Documents, the Fund Loan Documents, and the City Loan Documents. I. The City agrees and consents to the use of the MfiFA NCTC Loan Documents, the MHFA ARIF Loan Documents, the County Loan Documents and the Fund Loan Documents. 3. Subordination of Loans and Documents. The parties hereto do hereby agree to the following priority and subordination of the loans and documents referred to and described herein. A. The Fund agrees and acknowledges that the MHFA NCTC Loan and MHFA NCTC Loan Documents, the MHFA ARIF Loan and MHFA ARIF Loan Documents, and the County Loan and County Loan Documents are sensor and prior to the Fund Loan and Fund Loan Documents. Therefore, the Fund agrees to and does hereby, (i) subordinate any and all liens, security interests and restrictive covenants, if any, securing repayment of the Fund Loan and created by the Fund Loan Documents, to any and all liens, security interests and restrictive covenants, if any, securing repayment of either the MHFA NCTC Loan or the MHFA ARIF Loan, or County Loan, or cleated by the MHFA NCTC Loan Documents, MHFA ARIF Loan Documents, or County Loan Documents, and (u) subordimatu the Fund Loan Documents to the W FA NCTC Loan Documents, the WWA ARIF Loan Documents, and the County Loan Documents. B. The County agrees and acknowledges that the WMA NCTC Loan and MHFA NCTC Loan Documents, the WWA ARIF Loan and MHFA ARIF Loan Documents are all senior and prior to the County Loan and County Loan Documents. Therefore, the County Barg LAM Court, Irew Hope 1126199 New Conetntcdon Tax Crodit 5 96-NC'rC-2559 Maswr 5obotdination Agreement NCPC-Mstr Stndatn Agtumt provision contained in any of the documents referred to herein, the patties hereto do hereby agree that if there ane any inconsistencies or conflicts with respect to the provisions contained in any of the documents referred to herein, then, (i) the provisions contained in the MHFA NCTC Loan Documents shall.control over any such inconsistent or conflicting provision in any other document, and (ii) the provisions contained in MHFA ARIF Loan Documents shall control over any such inconsistent or conflicting provision in any other document other than the MHFA NCTC Loan Documents. 5. Interpretation. The parties hereto are entering into and executing this Agreement in order to establish the subordination and priority of the loans and documents refereed to herein, and to resolve any inconsistencies or conflicts in such documents and, accordingly, such parties hereby agree, understand and acknowledge that the enforceability of this Agreement is not, and shall not, be restricted, limited, or impaired by the fact that not all of such parties are signatories to each or any of the documents referred to and incorporated by reference heroin. b. Compliance with Rent Limitations. Notwithstanding any provision to the contrary contained herein, the MHFA shall not authorize or require any rents to be imposed upon any tenants living in the Development which are inconsistent with any rents imposed by the Fund Loan Documents, for as long as such documents are in existence. 7. Control by Most Stringent Requirements. Notwithstanding any provision to the contrary contained herein, if any of the provisions contained in the Fund Loan Documents impose requirements that are inconsistent with any other requirement contained m such documents, then the most stringent provision contained in such documents shall control. 8. Compliance with Closing Requirements and Absence of Events of Default. The parties hereto do hereby state, represent and warranty as follows: A. The Fund states, represents and warranties that there are no Events of Default, or events which with the passage of time could constitute an Event of Default, currently existing under the Fund Loan Documents, and that the Fund and the Developer have both complied with all of the requirements imposed under such documents for the closing of the Fund Loan. B. The MHFA states, represents and warranties that these are no Events of Default, or events which with the passage of time could constitute an Event of Default, currently existing under the MHFA NCTC Loan Documents, or fire MHFA ARIF Loan Documents, and that the MHFA and the Developer have both complied with all of the requirements imposed under such documents for the closing of the NWA NCTC Loan and the MHFA ARIF Loan. C. The County states, represents and warranties that thele are no Events of Default, or events which with the passage of time could constitute an Event of Default, currently existing under the County Loan Documents. and that the County and the Developer have both complied with all of the requirements imposed under such documents for the closing of the County Loan. D. The City states, represents and warranties that there are no Events of Default, or events which with the passage of time could constitute an Event of Default, currently existing under the City Loan Documents, and that the City and the Developer have both complied with all of the requirements imposed under such documents for the closing of the City Loan. 9. Counterparts. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same insuument. Boss Laine Caun, New Hape 1126199 New Cmiluctim Tax Credit 7 98 -NCM -2558 Master 5ubozdinatlm Agreement N=-Mstr Sbrdotn AV= FUND; FAMILY HOUSING FUND H it Executed on tht-`Fk day of a , 1999. STATE OF MINNESOTA ) COUNTY OF�inl The foregoin . Master Subord' on Agreement and Esto pet cafe as acknowledged be f floe this day of 1999, by � __ of the Family Housing Fund, a Minnesota non-profit 'corporation, on b alf of said Corporation. ---------------- MARY a SOMWERRER tvowy mm-MNINOM Lj 6"MLu.2mv Notary Pub c Sass Lake Court, New Hope 1112199 New Construction Tax Credit 8 98-NCTC-2558 Master Subordination Agreement NCTC-Mstr Sbrdntn Agnnnt COUNTY: COUNTY OF HENNEPIN a public body corporate and politic of the State of Minnesota By: Cliaff of Its Muntiv Board And By: Its: AssiLtyXbunty AdX@is=m Attest: Its: tyAes County Board U Executed on thc07? day of 99. APPROVED AS TO STATE OF MNNESOTA ) ")ss. COUNTY OF The foregoing Master Su on Agreement rappel Certificate was aclmowledged hcM n,&s y of 1999, by and by of the Coun of epin. a public body corporate and of the State of Minnesota, on behalf of said county. mw -i 4o r a:W- -MINKtMTA HENNEPIN COUNTY cummmgan bonJm 31, tato Bess Lake Court, New hope 1126199 New Constnt dm Tax Credit 11 96-NCTC-2558 Master Subordination Agrmmt NCPC Matr Shrhtn Aprant comer of said Lot 32; thence Fast parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 5: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 282.17 feet of the following descirbed tract: That part of the West Half of the Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at light angles Northerly to a point 100 feet South from the Southeast comer of the North 6 acres of the West Half of said Lot 32 to actual point of beginning thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South lithe thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 6: The East 56 feet of the West 282.17 feet of the South 60.50 feet of the North 174.87 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast comer of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest comer of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 fed; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 7: The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly froth the South line of said Northeast Quarter of the Southwest Quarter as measured along said West line and its Southerly extension, to a point on the Fast line of Murray Lane 3rd Addition 444.66 feet Northerly from its inion with said South line. Being registered land as is evidenced by Certificate of Title No. 820577. Parcel 8: The South 145.2 fed of the West 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 9: The South 80 feet of the Fast 166.76 feet of the West 296.76 feet of Lot 32, Auditor's Subdivision No. 226, Hennepin County, Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. Abstract Property. Bess 1AS Court, New Hope 1126199 New ConsuKWm Tax Cmdit 13 98-NCTC-2558 Master Subordination Agm went NCrC-MM Sbrdnut Agrmnt EXIIIBIT B IMMA NCTC Loan Documents 1. That certain Minnesota Housing Finance Agency New Construction Tax Credit Mortgage Loan Program Combination Mortgage, Security Agreement and Fixture Financing Statement, of even date with the document to which this exhibit u attached, by and between PPL -Bass Lake Court Limited Partnership, a Minnesota limited partnership, as Mortgagor, and the hdinnesota Housing Finance Agency, as Mortgagee, which secures repayment of a mortgage loan in an original principal amount of Three Hundred Forty -Sight Thousand Two Hundred Two and Noll 00 Dollars ($348,202.00), and which will be filed in the office of the Registrar of Titles and County Recorder in and for the County of Hennepin, State of Minnesota. 2. That certain Minnesota Housing Finance Agency New Construction Tax Credit Mortgage Loan Program Regulatory Agreement, of even date with the document to which this exhibit is attached, by and between PPL -Bass Lake Court Limited Partnership, a Minnesota limited partnership, and the Minnesota Housing Finance Agency, and which will be filed in the office of the Registrar of Titles and County Recorder in and for the County of Hennepin, State of Minnesota That certain Minnesota Housing Finance Agency New Construction Tax Credit Mortgage Loan Program Assignment of Rents and Leases, of even date with the document to which this exhibit is attached, by and between PPL -Bass Lake Court limited Partnership, a Minnesota limited partnership, as Assignor, and the Minnesota Housing Finance Agency, as Assignee, which secures repayment of a mortgage loan in an original principal amount of Three Hundred Forty -Eight Thousand Two Hundred Two and Noll 00 Dollars ($348,202.00), and which will be filed in the office of the Registrar of Titles and County Recorder in and for the County of Hennepin, State of Minnesota. 4. The following Minnesota Housing Finance Agency New Construction Tax Credit Mortgage Loan Program documents: a. Mortgage Loan Commitment; b. Mortgage Note in an original principal amount of Three Hundred Forty -Fight Thousand Two Hundred Two and No/100 Dollars ($348,202.00); c. Master Subordination Agreement and Estoppel Certificate; d. Master Disbursement Agreement; e. Disbursement Agteetnent; f. Building Loan Agreement; g. Construction Contract; h. Owner/Architect Agreement; i . Working Capital Reserve and Escrow Account Agreement. j . Rent -Up Escrow Account Agreement; k. Request for Notice of Foreclosure; 1. UCC -1 Financing Statement; m. Borrower -Mortgagor Certificate or Family Relationships; and n. Declaration of Land Use Restrictive Covenants. Bass I.As Cowt, New Hope 1126/99 New Construction Tax Cmffit 15 98-NCTC-2558 Master Subordination Agreement NCI`C-Marr Sbrdam Ag=nt EXHIBIT D Fund Documents That cedant Combination Mortgage, Security Agreemaiit and Fixture Financing Statement, of even date with the document to which this exhibit is attached, by and between Mortgagor, to the Family Housing Fund, (hereinafter`FRF"), which secures repayment of a fourth mortgage loan in an original principal amount of Two Hundred Thousand and No/100 Dollars ($200,000.00), which will be filed in the office of the Registrar of Titles and County Recorder in and for the County of Hennepin, State of Mimesota (hereinafter the "FHF Fourth Mortgage„). 2. That certain Assignment of Rents and Leases, of even date with the document to which this exhibit is attached, by and between Mortgagor and FHF, which secured repayment of a loan secured by the FHF Fourth Mortgage in an original principal amount of Two Hundred Thousand and No/100 Dollars ($200,000.00), which will be filed in the office of the Registrar of Titles and County Recorder in and for the County of Hennepin, State of Minnesota. 3. The following Fund Loan Documents: a. Assignment of Architects Contract; b. Assignment of Construction Contract; c. Construction Loan Agreement; d. Escrow and Disbursernent Agreement; e. Funding Agreement; f. Promissory Note in an original principal amount of Two Hundred Thousand and No/100 Dollars ($200,000.00); g . Request for Notice of Foreclosure; and h. UCC -1 Financing Statement. Bass Labe Court, New Hope 1126/99 New Cmw=don Tax Credit 17 98-NCTC-2558 Master Subordination Agreement NC'rC-Mstr Sbrdntn Agrmnt EXHIBIT F City Loan Documents I. That oertain Mortgage, Security Agreement, Assignment of Laases and Rents and Fixture Financing Statement, of even date with the document to which this exhibit is attached, by and between Mortgagor, to the Economic Development Authority of the City of New Hope, (hereinafter "City"), which secures repayment of a fifth mortgage loan in an original principal amount of One Million Four Hundred Thousand and No/100 Dollars ($1,400,000.00), which will be filed in the office of the Registrar of Titles and County Recorder in and for the County of Hennepin, State of Minnesota. 2. The following City Loan Documents: a. Note in an original principal amount of One Million Four Hundred Thousand and No/100 Dollars ($1,400,000,00), and b. Loan Agreement. Bass Labe. Court, New Hope 1/26/99 New Coreg Tu Credit 19 98-NC7 -2338 Muter Subordinadon Agrmmcm NCM-Mstr Sbrdntn Agmmt (a) Upon execution and delivery by the Owner, the Owner shall cause this Agreement and all amendments hereto to be recorded and filed with the County Recorder of the county in which the Project is located, and shall pay all fees and charges incurred in connection therewith. Upon recording, the Owner shall immediately transmit to the MHFA an executed original of the recorded Agreement showing the date and document numbers of record, or a duly certified copy or the executed original. The Owner agrees that the MTA will not issue the Internal Revenue Service Form 8609 constituting final allocation of the Credit unless and until the MHFA has received the recorded executed original, or a duly certified copy, of the Agreement as recorded. (b) The Owner intends, declares and covenants, on behalf of itself and all future Owners and operators of the Project Land during the term of this Agreement, that this Agreement and the covenants and restrictions set forth in this Agreement regulating and restricting the use, occupancy and transfer of the Project Land and the Project (i) shall be and we covenants running with the Project Land, encumbering the Project Land for the term of this Amt, binding upon the Owner's successors in title and all subsequent Owners and Operators of the Project Land, (ii) are not merely personal covenants of the Owner, and (iii) shall bind the Owner (and the benefits shall inure to the UWA and any past, present or prospective tenant of the Project) and its respective successors and assigns during the term of this Agreement. The Owner hereby agrees that any and all requirements of the laws of the State of Minnesota to be satisfied in order for the provisions of this Agreement to constitute deed restrictions and covenants running with the land shall be deemed to be satisfied in full, and that any requirements of privileges of estate are intended to be satisfied, or in the alteroate, that an equitable servitude has been seated to insure that these restrictions run with the land. For the longer of the period this Credit is claimed or the term of this Agreement, each and every contract, deed or other instrument hereafter execrated conveying the Project or portion thereof shall expressly provide that such conveyance is subject to this Agreement, provided, however, the covenants contained herein shall survive and be effective regardless of whether such contract, deed or other instrument hereafter execrated conveying the Project or portion thereof provides that such conveyance is subject to this Agreement, (c) The Owner covenants to obtain the consent of any prior recorded lienholder on the Project to this Agreement and such consent shall by a condition precedent to the issuance of Internal Revenue Service Form 8609 constituting fugal allocation of the Credit. SECTION 3 - REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE OWNER The Owner hereby represents, covenants and warrants as follows: (a) The Owner (i) is a duly organized under the laws of , and is qualified to transact business under the laws of this State, (ii) has the power and authority to own its properties and assets and to carry on its business as now being conducted, and (iii) has the full legal right, power and authority to execute and deliver this Agreement. (b) The execution and performance of this Agreement by the Owner (i) will not violate or, as applicable, have not violated any provision of law, rule or regulation, or any order of any court or other agency or governmental body, and (ii) will not violate or, as applicable, have not violated any provision of any indenture, agreement, mortgage, mortgage note, or other instrument to which the Owner is a party or by which it or the Project is bound, and (iii) will not result in the creation or imposition of any prohibited encumbrance of any nature. (c) The Owner will, at the time of execution and delivery of this Agreement, have good and madwtable title to the premises constituting the Project tree and clear of any lien or encumbrance (subject to encumbrances created pursuant to this Agreement, any Loan Documents relating to the Project or other permitted encumbrances). (d) There is no action, suit or proceeding at law or in equity or by or before any governmental instrumentality or other agency now pending, or, to the Imowledge of the Owner, threatened against or affecting it, or any of its properties or rights, which, if adversely determined, would materially impair its right to carry on business substantially as now conducted (and as now contemplated by this Agreement) or would materially adversely affect its financial condition. Bass Late Court, New Hope 1/26199 New Consdvcdon Tax Credit 21 98-NC'TC-7358 h1aster Subotdinatioa Agreement NCTC-Matt Sbrdotu Agrmnt (Check applicable percentage election) (b) The determination of whether a tenant rneets the low-income requirement shall be made by the Owner at least annually on the basis of the current income of such Low -Income Tenant. SECTION 5 - MHFA OCCUPANCY RESTRICTIONS (OPTIONAL) This Section is intced1ed to make enforceable those extended use or deeper targeting covenants which the Owner represented to the MHFA in its Application. The Owner represents, warrants and covenants throughout the term of this Agreement that: (Check if applicable) (a) A For a period of five years following the placed in service date for each building, % of the units shall have gross rents established at a level not greater than 30% of either __-__30% or 50% of the area median income. (b) _ Owner agrees that the provisions of Section 42(h)(6)(Exi)(11) and 42(h)(6)(F) (which provisions would permit the Owner to terminate the zstricticns under this agreement at the end of the compliance period in the evert that the Agency does not present the Owner with a qualified contract for the acquisition of the Project) do not apply to the Project. and that the Section 42 income and rwtal restrictions shall apply for a period of 30 years beginning with the fust day of the compliance period in which the building is a part of a qualified low-income housing project. (c) 'throughout the term of this Agreement, the Project shall provide family housing that is not restricted to persons 55 years or older in which at least 75% of the units contain two or more bedrooms and at least one-third of the 75% contain three or more bedrooms. (d) 'Throughout the berm of this Agreement, the Project shall provide at least 50% or _75% of the units for single room occupancy housing with one bedroom or less rents affordable at 30% of median income. (e) Throughout the term of the Project shall rent at least 25% or 50% units to persons with mental illness, mental retardation, brain injury, drug dependency, developmental disabilities, or physical disabilities and shall obtain a commitment from a public or private social services agency to provide services consistent with applicable state licensing requiremeta for the services. Regardless of any provision in Section 6 of this Agreement to the contrary, the MWA Occupancy Restrictions provided by this Section shall remain in place for a period described above except in the case of foreclosure or deed in lieu of foreclosure. SECTION 6 - TERM OF AGREEMENT (a) Except as hereinafter provided, this Agreenimt and the Section 42 Occupancy Restrictions specified herein shall commence with the first day in the Project period on which any building which is part of the Project is placed in service and shall end on the date which is 15 years after the close of the compliance period. (b) Notwithstanding subsection (a) above, the Owner shall comply with the requirement of Section 42 relating to the extended use period for an additional 15 years, provided, however, the extended use period for any building which is part of this Project shall terminate: (1) On the date the building is acquired by foreclosure or instrument in lieu of foreclosure; or Hass LWm Court, New Hope 1126199 New Cawtto dm 1bx [fed$ 23 98-NCW-2558 Master Subordinadan Agm meat NCTC-Mstr 5brdntn Agrmat (a) SOMW& The invalidity of any clause, part or provision of this Agreement shall not affect the validity of the remaining portions thereof. (b) NWm. All notices to be given pursuant to this Agreement shall be in writing and shall be deemed given when mailed by certified or registered mail, return receipt requested, to the parties hereto at the addresses set forth below, or to such other place as a party may from tiros to time designate in writing. To the MHFA: ATTENTION: Low -Income Housing Credit Program Minnesota Housing Finance Agency 400 Sibley Street, Suite 300 St. Paul, MN 55101 To the Owner: ATTENTION: The MHFA, and the Owner, may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. (c) mgt. Notwithstanding anything to the contrary contained herein, this Agreement may be amended by a written agreement between the MHFA and the Owner, which agreement shall be effective upon execution thereof by the MHFA and the Owner and the recording of the amendment with the County Recorder of the County in which the Project is located. The Owner agrees that.it will take all actions necessary to effect amendment of this Agreement as may be necessary to comply with the Code any and all applicable rules, regulations, policies, procedures, rulings or other official statements pertaining to the Credit. (d) SubQmdiwWQn of Ammuzat. This Agreement and the restrictions hernunder are subordinate to the loan and loan documents, if any, on the Project except insofar as Section 42 requires otherwise (relating to the three-year vacancy control during the extended use period). (e) Goveminr Law. This Agreement shall be governed by the laws of the State of Minnesota and, where applicable, the laws of the United States of America. (f) Survival of Mcations. The obligations of the Owner as set forth herein and in the Application shall survive the allocation of the Credit and shall not be deemed to terminate or merge with the issuing of the allocation. IN WITNESS WHEREOF, the Owner has caused this Agrernnent to be signed by its duly authorized representatives, as of the day and year fust written above. OWNER By: Name: Tide: STATE OF MINNESOTA ) ss COUNTY OF } The foregoing instrument was acknowledged before me this day of , I9! by of a on behalf of the Notary Public Bus LaIm Cn% New HoM 1/26199 New Construction T x Credit 25 98-NCTC-2558 Master Subotdiudm Agmement NCrC-Msu Sbrdnin Agtmnt 1. That for the period established by the ACC, that is, forty (40) years beginning on the date of full availability of the facilities, the Partrtership, its successors or assigns, shall maintain and operate the public housing units in accordance with the terms of the Agreements, the ACC and ACC Amendments as provided for in the Agreements, and all federal, state and local regulations. 2. That the Partnership shall remain seized of the title to the Property and shall refrain from transferring, conveying, assigning, leasing, mortgaging. pledging, or otherwise encumbering or permitting or suffering any transfer, conveyance, assignment, lease, mortgage, pledge or other encumbrance of the Property or any part thereof or appurtenant thereto, or any rent, revenues, income or receipts therefrom, or in connecdon therewith, or any of the benefits or contributions granted to it by or pursuant to the Agreements, or pursuant to the ACC through the Agreements or any interest to any of the same, or demolishing any appurtenant thereto, without the approval of the MPHA and HUD. (a) To the extent permitted by Section 9.1 of the Housing Development Agreement, the Partnership may encumber the Property, provided that any and all encumbrances permitted by this clause shall at all times be subject and subordinate to the terms and conditions of the Agreements aad the ACC. (b) To the extent and in the manner provided by the Agreements and file ACC, the Partnership may (i) lease dwelling units and other spaces and facilities in the Property; (ii) convey or dedicate land for use as alleys, streets, or other public right-of way, and grant easements for the establishment. operation and maintenance of public utilities. (c) The MPHA with the prior approval of HUD may, in its sole discretion, approve release of the project and Property frwn the restrictions hereby created and said release shall be effective to germinate this Declaration. Upon expiration of the period during which the Parlmrship is obligated to operate the Property in aeomdance with the Agreements, the ACC, and the ACC Ameadmeats as provided for in the Agreements, this Declaration shall terminale and shall no longer be effective. 3. The MPHA with the prior approval of HUD, acting by and through duly authorized officials, may approve such action as may be necessary to allow the trans€er, conveyance, assignment, leasing, mortgaging, or encumbering of fire Prupeny or to accomplish the acts described above. 4. This Declaration and the covenants set forth herein regulating and restricting the use and occupancy of the Property (i) shall be and are covenants running with the Property, encumbering the Property for rite term of this Declaration, and binding upon the Partnership's successors in title and all subsequent owners of the Property, (ii) are not merely personal covenants of the Partnership, and (iii) shall bind the Partnership and its respe cave successors and assigns during the term of this Declaration. 5. Any and all requirements of the laws of the State to be satisfied in order for the provisions of this Declaration to constitute deed restrictions and covenants running with the land shall be deemed to be satisfied in full, and that any requirements or privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the land. For the term of this Declaration, each and every contract, deed, or other instrument hereafter executed conveying the Property or portion thereof shall expressly provide that such conveyance is subject to this DmIaratian. provided, however, that the covemis contained herein shall survive and be effective regardless of whether such contract, deed or other instrument hereafter executed conveying the Property or portion thereof provides that such conveyance is subject to this Declaration. EXHIBIT A TO DECLARATION OF RESTRICTIVE COVENANTS PROPERTY LEGAL DESCRIPTION Parcel l: The South 56 feet of the North 101 feet of the East 62.59 feet of the West 226.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Ralf of said I.ot 32; thence at right angles Northerly to a point 100 fed South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest comer of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West time of said Lot 32 to a point 173.0 feet North of the South line thereof; theme East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence Notch to the point of beginning. Abstract Property. Parcel 2: The South 69.37 feet of the North 114.37 feet of the East 56 feet of the West 101 feet of the following described tract; That part of the West Half of Lot 32, Auditor's Subdivision Nwnber 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast cornier of the West half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast confer of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; chance South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the Fast lithe of the West half of said Lot 32; thence North to the point of begim"g. Abstract Property. Parcel 3: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 101 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 m actual point of beginning; thence at right angles West to the West line of said Lot 32, thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest comer of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South Hoe thereof; thence East parallel with the South line of said l.at 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property_ ,Fared 7: The East 62.58 feet of the West 163.58 feet of the South 56 foot of the North 101 feet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly frons the South line of said Nordseast Quarter of the Southwest Quarter as measured along said West line and its Southerly extension, to a point on the East line of Murray Lane 3rd Addition 444.66 feet Northerly fh n► its intersection with said South line. Being registered land as is evidenced by Certificate of 'Tale No. 820577. Parcel 8; The South 145.2 feet of the West 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 9: The South 80 feet of the East 166.76 feet of the West 296.76 fret of Lot 32, Auditor's Subdivision No. 226, Hennepin County, Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. Abstract Property. Pw=l 10: The North 100 feet of that part of the West Half of Lot 32., lying South of the North G acres thcrcof, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 11: That part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, described as beginning at the intersection of the South line of said Northeast Quarter of the Southwest Quarter with the Southerly extension of the West lime of Murray Lane 4th Addition; thence Northerly along said Southerly extension and along said West line a distance of 444.49 feet; thence Westerly to a straight line to a point on the East line of Murray Lane 3rd Addition distant 444.66 feet Northerly from its intersection with said South line; thence Southerly along said East line to the North lite of the South 178.2 feet of said Northeast Quarter of the MINNESOTA HOUSING FINANCE AGENCY NEW CONSTRUCTION TAX CREDIT MORTGAGE LOAN PROGRAM MASTER DISBURSEMENT AGREEMENT THIS MASTER DISBURSEMENT AGREEMENT shall have an effective date of the 3rd day of February, 1999, and is made and entered into by and between PPL -Bass Labe Court Limited Partnership, a Minnesota limited partnership, with its offices located at 2516 Chicago Avenue South Minneapolis, MN 55404 (hereinafter referred to as the "Developer'), the Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota, with its offices located at 400 Sibley Street, Suite 300, St. Paul, MN 55101, (hereinafter referred to as the "h H A"), the Family Housing Fund, a Minnesota non-profit corporation, with its offices located at Midwest Plaza West, Suite 1840, 801 Nicollet Mall, Minneapolis, MN 55402 (hereinafter referred to as the "Fund"), the County of Hennepin, a public body corporate and politic of the State of Minnesota, with its offices located at A2400 Government Center, Minneapolis, MN 55487 (herei:salkv referred to as the '"County"), the Minneapolis Public Housing Authority ('WHA") the Economic Development Authority in and for the City of New Hope, with its offices located at 4401 Xylon Avenue North, New Hope, MN 55428 (hereinafter referred to as the "City'), and Old Republic National Title Insurance Company (hereinafter referred to as the "Title Company"). WITNESSETH: WHEREAS, the Developer is required to provide to the MHFA cash monies in an amount of Three Million One Hundred Thirty -One Thousand Seventy -Eight and No/100 Dollars ($3,131,078.00) (hereinafter referred to as "Developer's Funds"), some of which has been disbursed through the Title Company which will be used for the acquisition, consauction and/or rehabilitation of a multi family housing development (hereinafter referred to as the "Development") identified as MFIFA Development No_ 98-NCTC-2558, which will be situated on the real property located in the City of New Hope, County of Hennepin, State of Minnesota, and legally described in Exhibit A attached hereto; WHEREAS, Developer has obtained a loan from the Fund in an original principal amount of Two Hundred Thousand and No/100 Dollars ($200.000.00) (hereinafter referred to as the "Fund Loan"), none of which has been disbursed, which will be used for the acquisition, construction and/or rehabilitation of the Development; and WHEREAS, the Developer has obtained a loan from the County in an original principal amount of Six Hundred Eighty Thousand and No/100 Dollars ($680,000.00) (hereinafter referred to as the "County Loan"), none of which has been disbursed, which will be used for the acquisition, construction and/ar rehabilitation of the Development; and WHEREAS, the Developer has obtained a loan from the City in an original principal amount of One Million Four Hundred Thousand and Noll 00 Dollars ($1,400,000.00) (hereinatler referred to as the "City Loan"), none of which has been disbursed, which will be used for the acquisition, construction and/or rehabilitation of the Development; and WHEREAS, the Developer has entered into a Housing Development Agreement with etre Minneapolis Public Housing Authority and the New Hope Fxonomic Development Authority (hereinafter referred to as the "Funding Agreement") under which fends in the amount of One Million Three Hundred Fifty -Six Thousand Four Hundred Eighty and No/100 Dollars ($1,356,480.00) will be made available to the Developer to be used for the acquisition, construction and/or rehabilitation of the Development; and WHEREAS. Developer has applied for and obtained an additional mortgage loan from the MHFA Affordable Rental Investment Fund Program in in original principal amount of One Hundred Thirty Thousand and No/100 Dollars ($130,000.00) (hereinafter referred to as the PPL Baas Late Coma New Hope 1/29/99 NCTC Made Duburs mem Agmemml 1 98-NC1C-2338 approximately even date herewith, which provides for the disbursement of the Fund Loan, a copy of which is attached hereto as Exhibit B. (f) "Fund Loan" - A loan from the Fund to the Developer in an original principal amount of Two Hundred Thousand and Noll 00 Dollars ($200,000.00). (g) "MHFA" - The Minnesota Housing Finance Agency, a public body corporate and politic. (h) "MHFA Disbursement Agreement" - That certain Disbursement Agreement by and between the MHFA and the Title Company of even date herewith, which provides for the disbursement of Developer's Funds, and the proceeds of the MHFA ARIF Loan and the MHFA NCTC Loan, a copy of which is attached hereto as Exhibit C. (i) "Funding Agreement" - The Housing Development Agreement with the Minneapolis Public Housing Authority and the New Hope Economic Development Authority (hereinafter referred to as the "Funding Agreement") in the amount of One Million Three Hundred Fifty -Six Thousand Four Hundred Eighty and No/100 Dollars ($1,356,480.00). 0) "MHFA ARIF Loan" - A loan from the MHFA Affordable Rental Investment Fund Program to the Developer in an original principal amount One Hundred Thirty Thousand and No/100 Dollars ($130,000.00). 0c) "MHFA Mortgageable Costs" - certain categories of permissible costs listed in the documents relating to the MHFA loans. 0) "MHFA NCTC Loan" - A loan from the MHFA New Construction Tax Credit Mortgage Loan Program to the Developer in an original principal amount of Three Hundred Forty -Eight Thousand Two Hundred Two and No/100 Dollars ($348,202.00). (m) "County Loan" - A loan from the County of Hennepin to the Developer in an original principal amount of Six Hundred Eighty Thousand and No/100 Dollars ($680,000.00). (n) 'County Loan Agreement'- That certain document entitled "Loan Agreement", by and between the County and the Developer, dated of approximately even date herewith, which provides for the disbursement of the County Loan, a copy of which is attached hereto as Exhibit D. (o) "City Loan"— A loan from the Economic Development Authority in and for the City of New Hope to the Developer in an original principal amount of One Million Four Hundred Thousand and No/100 Dollars ($1,400,000.00). (p) "City Loan Agreement" — That certain document entitled "Loan Agreement", by and between the City and the Developer dated of approximately even date herewith, which provides for the disbursement of the City Loan, a copy of which is attached hereto as Exhibit E. (q) "Title Company" — Old Republic National Title Insurance Company. 2. Order of Priority for Disbursement. The Title Company has already been, or will be from time to time, be supplied with Developer's Funds and the proceeds of the Fund Loan, the County Loan, the Funding Agreement, the City Loan, the MHFA ARIF Loan, and the MHFA NCTC Loan, and shall disburse such funds in the following order of priority with the exception of the Funding Agreement, which shall be disbursed on each date of disbursement pro rata in amounts, if any, as approved by MPHA, with all of the other funds, provided that beginning with the third draw, the total amount disbursed under the Funding Agreement may not exceed on a cumulative basis 22.51% of the total amount of funds disbursed: (a) At the initial disbursement, $549,542.00 of the Developer's Funds, $1,139,400.00 of the City Loan, and $595,156.00 from the Funding Agreement. PPL Bass Lake Court, New dope 1/29/99 NCTC Master Disbursement Agreement 3 98-NC7'C-2556 that lender's funds. Upon authorization by the MHFA, it shall forward the draw request to the Title Company for disbursement of the applicable loan proceeds. The Title Company shall not disburse any monies without fust receiving a draw request approved by both the party whose monies are to be disbursed, and the MHFA, and upon receipt of an approved draw request the Tide Company shall disburse the applicable monies as follows: (a) If the monies to be disbursed are from the Fund Loan then such proceeds shall be disbursed in accordance with the Fund Escrow and Disbursement Agreement, the terms and provisions of which arc incorporated herein by reference; and (b) If the loan proceeds to be disbursed are from Developer's Funds, the MHFA ARIF Loan, or the MHFA NCTC Loan, then such proceeds shall be disbursed in accordance with the MHFA Disbursement Agreement, the terms and provisions of which are incorporated herein by reference. (c) If the monies to be disbursed are from the County Loan then such proceeds shall be disbursed in accordance with the Loan Agreement, the temps and provisions of which are incorporated herein by reference. (d) If the funds are to be disbursed from the Funding Agreement then such proceeds shall be disbursed pursuant to the terms of the Funding Agreement. (e) if the monies to be disbursed are from the City Loan then such proceeds shall be disbursed in accordance with the Loan Agreement, the terns and provisions of which are incorporated herein by reference. 4. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the patties hereto and their respective successors and assigns. 5. Tracing of loan proceeds. The loan agreements relating to the various MHFA loans limit the use of proceeds of such loans to the payment of certain categories of permissible costs (herein referred to as the "MHFA Mortgageable Costs"), None of the MHFA Mortgageable Costs is to be paid out of Developer's Funds, the County Loan, the Funding Agreement, or the proceeds of the Fund Loan. In order to avoid the necessity of tracing tate use of the proceeds of the MHFA loans to the payment of specific MHFA Mortgageable Costs, disbursernent of the proceeds of the MHFA loans will be deemed to be for MHFA Mortgageable Costs so long as immediately following the disbursement of any such proceeds, the total amount of disbursements for MHFA Mortgageable Costs, from any and all sources, equals or exceeds the cumulative disbursements of proceeds of the MHFA loans. 6. Counterparts. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall togedrer constitute but one and the same instrument. (THE REMAINING PORTION OF THIS PAGE IS U41W TTONALLY LEFT' BLAND APL Bass take Court, New Hope 1!29199 NCTC Mailer Disbumement Agreement 5 98-NCt1C-2558 FUND: FAMILY HOUSING FUND a Minnesota non-profit corporation Mtecuted on the =4 (lay A4604t, 1999. STATE OF MINNOOTA } )ss. COUNTY OF cn, The foregoing Master isb t Agreement was acknowl�j ed bef re me thi day o�, 1999, by �na�+�C.t-c Of the Famil Housing Fund, a Minnesota non-profit corporation, on behalf of sai Corporation. 19 Q� Notary Pub c wMrlwtlruts,ritat,>str PP Bass Lake Coun, New Hope 1112199 NCITC Master Disbursement Agreement 6 98-NCTC-2558 COUNTY: COUNTY OF HENNEPIN a public body corporate and politic of the State of Minnesota By: Lt Chair of Its Co card And By; Lu APE -m Its: Ass' unty AMC IF Its: the County"Board Executed on the ��ddaay of 1999. APPROVED AS STATE OF NIINNL�SOTA ) and politic of the State of Minnesota, on behalf of said cou`n ,q.ID1TH n. c±4-U,M--L- NOTARY >-tiENNEPIN r� PPL Bass Lake Coot, New Hope 1112199 NCTC Master Disbursement Agreement H 98-NCTC-2558 TITLE COMPANY: OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY By:. UW -Oh. Its: Executed on the 3rd day of February, 1999. STATE OF MINNESOTA ) )ss. COUNTY OF The foregoing Mester Disbursement A� w acilmo edged befom me this 3rd day of February, 1999 by ldf Old Republic National Title Insurance Company, on bcFWf of said company. r r DOERING S. MEYER NOTARY PUMJC - MNNESOTA RAMEYcouNTY I@ Mp 00mmi09W Exptras Jan. 81. 200 rVvvvwvvvvvv FPL Saes Late Court. New Hope 1/29199 NCTC Master Disfiuraememt Agreement 11 96-NCTC-2559 Abstract Property. Parcel 5: The South 52.5 feet of the North 227.37 feet of the East 56 feet of the West 282.17 feet of the following descirbed tract: That part of the West Half of the Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast comer of the North 6 arses of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest comer of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof, dm= East parallel with the South line of said Lot 32 to its in�on with the Past line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 6: The Fast 56 feet of the West 282.17 feet of the South 60.50 feet of the North 174.87 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast comer of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet dx nce South parallel with the West line of said Lot 32 to a point 173.0 Sect North of the South line thereof, thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 7: The Fast 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 fleet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly from the South line of said Northeast Quarter of the Southwest Quarter as measured along said West fine and its Southerly extension, to a point on the Fast line of Murray Lane 3rd Addition 444.66 feet Northerly from its intersection with said South line. Being registered land as is evidenced by Certificate of Title No. 820577. Parcel 8: The South 145.2 feet of the West 100 feet of Lot 32, Auditors Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 9: The South 80 feet of the East 166.76 feet of the West 296.76 feet of Lot 32, Auditors Subdivision No. 226, Hennepin County, Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. Abstract Property. Parcel 10: The North 100 feet of that part of the West Half of Lot 32, lying South of the North 6 acres thereof, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 11: PPL Baas take C=4 New Hope 1/29/99 NCrC Mutrx DiAmaement Agreement 13 98-NCTC-2558 FROM tAECRE A BENSON TED) 2, 3' 99 14:26/5T. 14:25/IiO. 4262058944 P 2 EXHIBIT B ESCROW ANM DMUMFEA NT AOFLBEBY� THS AGRMEM, made this '*6 day of r 1999, between the Family Housing Fund, a Minnesota nonprofit corporation (the "Lender" PPL -Bass Lake Court Limited Partnership, a Mmnewta limited partnership (the "Borrower's, Minnesota Housing Finance Agency C"'MRFA-1 a public body corporate and politic ( the "Authorizing Agent', and Old Republic Title Insurance Company, a A3innesota corporation (the "Escrow Agwtj, WHEREAS, pursuant to the Construction Loan Agreement between the Leader and the Borrower dated of event date herewith (the "Loan Agmment!j the Lender is this day making a loan of 3200,000 (the "Loan') pursuant to a note of even date herewith; and WREREA.S, the I=vkr requirm that all of the proceeds of the Loan ("Loan Proceeds") be used volusively to Pay for mWeriditures appy by Lander pursuant to this Agree namt and " Um Agreement (the opernined Uses") in connection with the Property located at CU - *A3 %- VLe &A - and WHEREAS, Authorizing Agent will awve as the agent for Lender is authorizing disbursal of the Loan Proceeds. and WHEREAS, Escrow Agent will serve as disbursing agent for the Loan Proceeds NOW, THEREFORE, it is agreed by and among the parties es follows: 1. The Loan Proceeds are herewith paid by Lender to Escrow Asst to be held Old disbursed ¢ vMo t to this AgremeM and the Loan Agreement. 2, Escrow t is hereby authorized to make an initial disbur*mnent of S to Harrower. 3. Requests for disbursement of the Loan Proceeds shall be originated by the Borrower by delivering to the Authorizing Agent a written disbursement request ("Disbursement Requcsel in the form altached hauo as Exhibit A, AIA Documents 0702 and 703, in the forms aitschod as Exhibit 8, and an invoice from each provider of aervicc to be paid (collectively, the "Disburseinant Documents"). Within ten (10) u n"S days after receipt of the Disbursement Documents and all artier documents required by the Lean Agreement, ft Authorizing Agent shall approve or disapprove the request, and if approved, shall forward the Disbmacment Request to Escrow Agent MRCfv FAEGRE & _3ENBON (W -ED) 2. 99 14:27iST. 14:2:: "IN0, 4862F634O ° 4 hereof, provided, however, that in the event the Loan Agreement is terminated, Escrow Agent shall return to the Lender any Loan Proceeds it holds, upon notification by the Authorizing Agent or the Lender of such termination. 10. This Agreement sha11 inure io the benefit of and be binding upon the parties and their respective successors and pei=tted assigns. 11. "this Agreement shall be govaned by and construed in accordance with the laves of the State of Minnesota. 12. This Agrensnent may be awaited in awry dumber of counterparts, each of which when so executed and delivered, shat] be an odgilnal, but such counterparts shall together constitute one and the same iustuixic rt. -3- FROM FAF.GRE & BENSON [WED) 2. 3' 99 14.27/ST. 14 :25/10. 4862(158840 ? E EXHIBIT A DISBURSEMENTREQUEST Number Date The umku*rsA pursuant to that ccrWn Escrow and Disbum mit Agreemcnt dated _ _. 1999, by and among the Family Housing Fund (the "Lender"}, PPL Bass Lake Court Limited Partnership (the "Borrower"), Minnesota. Housing Finance Agency ("AftER) (the Authmrizing Agenfl. and Old Republic Title Insurance Company (the "Escrow Agent") herebyem"as and requests w follows 1. The Borrower requests that the following amounts be paid by the Escrow Agent to the fobOwing persons from the Loan Proceeds as described m the Escrow and Disbursement AgreemcaL a b. c. Name and Address of Pee Amount Renuested to be Paid S S FROK FAEGBE & BENSON MEDI 2. 99 14:28!ST. 14:25/NO. 4862088840 P 8 APPROVAL This Disbursement Request is hereby approved by die Andmizing Agent pursuant to paragraph 3 of the above described Disbur9mcW Agreement. Dated: MINNESOTA HOUSING FINANCE AOENCV By Its FROW FAME & BENSON N V i O 3 a. e :Ru5, (WED) 2. 3' 99 14:26/3T. i4:"[5!N0. 4862058840 ? 10 _I Inc i= �uu' U 29 €; �W a a contractor(s) has contracted in connection with the project, the addresses of such subcontractors and suppliers, the work and materials furnished by the said subcontractors and suppliers, the amounts of said subcontracts, the amounts paid to date thereon, and the balance due thereon. (iii) Executed copy of the Owner's Application for Payment. 3. Prior to each disbursement of funds hereunder, Lender shall cause to be delivered to the Title Company: A. A sworn statement of each contractor, setting forth; (i) the names of all additional subcontractors and material suppliers with whom the contractor has contracted in connection with the project and the additional information with respect to such subcontractors CAUW for in Section 2.11(ii) hereinabove, (ii) all change orders, and (iii) the amount due to date on all subcontracts. B. The written approval of the Owner or its representative and Lender of the requested disbursement. C. A report of Lendees inspector ora certification by Lenders inspector to the effect that work has been completed and materials are in place as indicated by the request for payment of the general contractor. D. Sufficient funds to cover the requested disbursement and to pay for extras or change orders for which waivers have not been deposited, and for which funds have not previously been deposited. E. Sufficient funds to cover unpaid title and escrow charges. F. Statements, partial or final waivers and affidavits. supporting waivers and releases of liens, if necessary, satisfactory to Title Company. It is understood by and between the parties that Title Company shall not make any disbursement until all of the foregoing requirements have been satisfied, and that when all of the foregoing requirements have been so satisfied, Title Company may disburse, without liability for so doing. 4. All disbursements for construction purposes will be made by Title Company directly to specified contractor or subcontractor. If disbursements are made directly to the subcontractors and/or materialmen at the direction of Lender. each disbursement to said subcontractor andier materialmen shall be considered as a separate disbursement, and a payment to any subcontractor and/or matenalrnen shall not obligate Title Company to make _ disbursements to any other subcontractor and/or materialmen. S. The parties covenant and agree with each other as follows: A. In the event that True Company discovers a misstatement in any affidavit, statement or certificate furnished pursuant m this Agreement, it shall make no further disbursements until such misstatement has been corrected. B. Title Company assumes no liability to the Owner for mechanic's lien claims. C. The functions and duties of Title Company include only those set forth in this Agreement, and Title Company is not entitled to act and shall not act, except in. accordance with the terms and conditions of this Agreement. D. Title Company does not insure that the building will be completed, or that, when completed, the building will be in accordance with the plans and specifications, or that sufficient funds will be available for completion or that the certification of the Lender's inspector shall be accurate. E. Title Company shall not be liable to Lender or to Owner for interest on undisbursed' funds deposited with Title Company, except and to the extent that Title Company fails to disburse funds in accordance with the terms of this Agreement, or agrees PPL Bass Cern Cmur, New Hope 1126199 NCTC Msbursem m Agreement 2 91-NCTC-255$ IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written. MINNESOTA HOUSING FINANCE AGENCY By: Robert L. Odman, Director, Multifamily Division OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY By: Its: STATE OF MINNESOTA ) ) ss. COUNTY OF RAMSEY ) The foregoing Disbunement Agreement was admowledged before me this 3rd day of February, 1999, by Robert L. Odman, Director, Multifamily Division of the Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota, on behalf of the Agency. Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF RAMSEY ) The foregoing Disbursement Agreement was acknowledged before me this 3rd day of February, 1999, by of Old Republic National Title Insurance Company, on behalf of the company. Notary Public This instrument was prepared by: Minnesota Housing Finance Agency 400 Sibley Street, Suite 300 St. Paul, MN 55101-1999 APL Bast [elm Coun. New Hope 1126/99 NCDC Disbursement Agreement 4 99-NCPC-2559 Parcel 5: The South 52.5 feet of the North 227.37 feet of the Fast 56 feet of the West 282.17 feet of the following descirbed tract: That part of the West Half of the Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast comer of the West Half of said Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 foot North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 fect; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East pata11el with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 6: The Fast 56 feet of the West 282.17 feet of the South 60.50 feet of the North 174.87 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast comer of the North 6 am of the West Half of said LAX 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a paint 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; d=ce South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 7: The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly from the South line of said Northeast Quarter of the Southwest Quarter as measured along said West line and its Southerly extension, to a point on the East line of Murray Lane 3rd Addition 444.66 feet Northerly from its intersection with said South line. Being registered land as is evidenced by Certificate of Title No. 820577. Parcel 8: The South 145.2 feet of the West 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 9: The South 80 feet of the East 166.76 feet of the West 296.76 feet of Lot 32, Auditor's Subdivision No. 226, Hennepin County, Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. Abstract Property. Parcel 10: The North 100 fat of that part of the West Half of Lot 32, lying South of the North 6 acres thereof, Auditor's Subdivision Number 226, Hennepin County, Minnesota Abstract Property. Parcel 11: That part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, described as beginning at the intersection of the South line of said Northeast Quarter of the PPL Dim rate Court, New Hope 1/26199 N= E&burwmeut Agramwt 6 98-NCTC-2559 Jan -lb -99 01:101' IiS.7 k�7 lar N24 t1b/2 Y.U1 DEC -31-19917 16' 35 FF p Mttfii :.0 Uri. t,r -V -- EXHIBIT D Hennepin Housing Consattium Contract No. t 7- II0Inveatn ent Putnerahipa Program WaKDRD LOAN AUREEbWNT THIS AGREEMENT is made and entct'od into this day offret ieibrred tea hetwem Hennepin Co nty, a rnlilical sulldivision of the Eratc oinneurta, arema as "03unty,"A-2340 Gavcranteut Coater, MirmeapoJis, Minnesota 55487, ou behalf of this Hennepin Housing Ctmsortium, a joint powers consortium, ad PPL Sass lake Court Limited Partnership, whoio address is 2516 Chicago Avenue South, N inileapoiis- Minnesola 55444, hereinafter refemed to as "Provider." WffNESSETH, 1WHERLEAS, the Hennepin Housing Consot'tium is soint powers consortium established by the joint Cooperanon Agmeme�nt effective OcWber 1. 1996, for the pu of for ain a consortium of units of general local government for dcsi�tation as a Participating purr under the HUMP investment Paitawslups Program ereatcd through Title U of the Cranston-Goprales National Affordable Housing Act of 1990. a amended, hereinafter referred to as the "ROUT. Program," and WHEREAS, the County is authorized to act in a rcptvgcnt4nva capacity for all members of the Hennepin Honairlg Consortium under the terms of said Joint Cooperation Agrclrtrlent, and WHEREAS, Provider ' for a loan of TWO F ($680.09 icromeds of which no to 4e urea solely for me RK11151uvn and deroolitiou of eer[A n property on which will be constructed residcnlial rental bull ' Main which are to be used for vary low-income rental hoes' ppmtaaot vD the ellgt 1 ty rcquirtments of the HOME Investment Partnership Act, Title 11 of the Cranston- Gonzalea National Affordable Housing Act, PUH. Law Wo. 101-615, 42 USCA, Section 12701 ld R., an brie fcdrnmt p �sb p A t sadopted ul�nt there at 24 CI'R Part 92 {collectively, the WHEREAS, the County desires to have. certain activideahereimfler referred to as "Activities," petfoxmed by Provider as dcscribed within ntis Agreernak including any exhiblts and attachments, as authorized by resolutions of the Hennepin Coun7. Board of Commissioners for the purpose of Vnplementing eligible activities under the HOME Program. tltrd applicable rules, regulations, and guidelines promulgated by federal, state, azul cvuntY axo1writics, ami WHEREAS, it is appropriate and mutually deairable that Provider be designated by d►e County to underwlu: the afurcurculional cllaiblc Aetivi ica, so topg as the p=Uov adttae to the requirements of the HOME Program, Department of Housing' and Urban Development ("11131)") regulations, and state and local law, as provided for herein. WHEREAS, the H oncpir, #lousing, Consortium baa allocated Binds for such loan. W, lreRpAS, the County is willing to mare such loan on the terms hereof. NOW. THEREFORE. in eonside'ration of the foregoing and the mutual covenants and afire ernents sat forth herein, iLbe Panics ages as follows= 1. ?t pa., For purposes of this loan ag.aement, tie fallowing terms shalt have the followinot meanings: 1.1. "Agreement" nteaoc tl' , Amen Loan Agro mens, Jar -15-99 01:11P lisa kug ler 824 8672 M.u.s OEC -31-1998 16'36 !-14Ln 14 M w ur,- W— - - authorized to execute all relcvsat documents an behalf of the Prodder, and resolution of PPL lyase Lako Cowl Limited Parwmlhtp, vuUmnizing thiB trartsactio» and de sigstating the patties vuthot3ud to execute all rcicr.-ant docurneuts on bcbalf of PPL Base Lake Court Limited Partnership. 2.7, opinion of Provider's legal counsel that: A. Provider is a th�tly orgn*ti"A *rid validly ex+sting nrganioalirm unrtrr The law. of the State of Mtnaesota. B. Provider, has full power. richt and authority to execute and deliver this Asiwment, the Note and the other documents which this A;reettteut requires, to borrow the fiwds dertbod scin Section 4 and to perform and observe Wh and all of the matters and things provided for in the Loan Dacumen15. C. The eonstaoumtion of this transaction and performance of Provider's obligations under the Loan Documems will not result in any breach of, ar constitute a defrittlr under, any morigape, dad of trust, lease. Crank loan or credit agreement. partnership agreement or other imtruineut winch affects Provider, uT to wWclr Plurstki is a patty. 4.8. Fvidenca, satisfgcialy to Ike. County, that Provider has in place a policy ar politics of inluranet that plovidca for the follo.Ying inauronce, A. "All risk" property instafAMC is amounts not less than the full replacement cost of the bWrovetnents bate in eta event in amctnttts less than trig, unpaid Principal balance on the Note and any other priot liens at taneumbratices un the prop and boiler and Maclifimy insurance. SuGb praperry inswance and bmler and machinery insurance paGcits shall name mea mortnagoo in accordance with the so-called "standard mortgagee claus';nd shall be endorsed to: (1) Remove any and all cc insurance provisions or mquitements from the policy; and (2) Plovide atiirmative covcragr for rental ineomc lost as a result of an occurrence of a covered cause of loss far up to Six (6) months. B. Liability Insurance eguIvaleat to the insusuucc ptuvidcd undec the lusurancc Servicess office, Inc. 1996 Commercial General Liability Covorage foam - Such insurance shall be on an occurrence basis, and Provider shall maintain, at ail rintc>, cr,vcixgc linxita of not leas than $1,000,000.00 per occturanoa. The followiap coverages must be specifically insured and certified with no interval sublimits: (1) Pirmiscs arid operations: (2) iodel .ndemt ermir-u-tnr's cot modem liability or owncis Protective liability; (7) this or albankat basil. �ge ` d"an to specifically corer l the policy of liability insurance shall Ratrw the County, their otftcials and cmplayees, as additioW utsureds- Jan -15-99 01:11P lisa kugler 824 8572 P. CIS reC-M-1998 x6'38 rKmr MM %" L'-' � � .� w —— 3.6. No Lvcw of Default {¢r defined in Scadan 7 of Chir Agreement bas occurred and is continuing as of the date hereof and no event has occurred and ss continuing which would be an Event of Default were it not for any grace period specified in Section 7. 3.7. To the best of providers lmowledge, the property, if free of hazardous Substances and is riot subject to any "Super Fund" ". Isms or claims by govemmental rrgg�mrlatrrty agemri M er nr er t ird-jo,14% anstne from the releaee nr thrcalene t rcisasc of Aarstdous Substances in, on or about the Property. Provider also represents and warrants it alas not used the ftulmty in connectiuu with tho generation. disposal. Storage, treatment, or traneportalmun of Hazardous Substances end that the PropvnY will not be so used during the tarn of this agrccmeut by Provider, its agents, tenants or assigns. Provider agrees to indemnify and bold harmleas the County for any da sagas related to the presence of hazardous substances in, ort or about the Property 3.8. Provider bas obtained or will obtain prior to the disbursement of any loan proceeds all of the insurance described in Section 2.8 and such policies of tasurance ate or will be in full force and effect prior to the disbursement of any loan proceeds. 3.9. Nu rbdoul apprupriuttxl Luumla have beat paid or will be paid by, or on behalf of, Provider w any person for influencing or attempting to influence an officer or employee of any federal agency, a member of'Congan. an officer or employes of Congress, or an omplorc of a member of Congr+ss, in ocrtnactiox with the awardi�G of any federal contract, the snaking of any federal grant, the making of any federal loan, the entering into of any c000pperativc agmtmcnt, and the wansion, ctmtinuation, rarmwal, amendment or rnodiilcadon of any federal rpnMact, Vmrat, tnan, or cooperative agreement If any funds other than federal appropriated fonds have been paid or will be paid to any person for influencing or attempfinS to influence an nfticer or employce or any federal agency. a member of Coxpgxess. an officer or emnploycc of Congms. or an employee of a membcr of Cortgr�ss �n cunnecnon with this federal coetract, grant, loan, ar cooperBtiVe 219 �cmucutk Provider shall complete and submit Standard Porus--LI.L, "Disclosure Form to RAposi Lobbying", in 'Accordance with its instructions. Provider shaD include the language with true certification in ail subcontracts- . This certification is a material representation of fact upon wlmtch re11111ce was placed when this transaction was made or enterod into. Submission of this cartificatian is a ptrrCquisite for snaking or catering into this transaction imposed by Socdon 1352, Title 3l, U.S. Code. 4.1. SubjeoL w Ante tenus and conditions of the lion+ Documents, the County agraee to loan to PSIX JUW2REQ EMHTYrovider and Provider agrees toIALS o M to frowhich the County shall dishurse to Provider upon the cendrtions set forth below, per+ -ded, howr-ver, That C. the uunty shall have no obligation to disburse such funds if, at the time of disbursenncnt, Provider is in default undcF the terms of this Agreement or theses has been a cessation of federal funding by orAer of federal authority making funds unavailable for disbursement under this Agreement. The County shall disburse upon satisfaction of the following conditions. A. Thr, County's racetpt of invoices and supporting documentation indicating that the land demolition and aite improvcmrcats for which a draw under the Note is requested is being acquired and payment is duo and owing; Jan -AU -L9 Ul: l;dV I-IISA KLgg IeY iiG4 a`30/G r_al� DEC -71-1996 16'79 FjW F1EFN LEI t7FC tri• PLNU b DEI! TU 98248672 P,08 5A. Comply with all applicable requirements of the NOME Investment Tartriership Act and regulations. 5.9. Not knowingly allow any parson who aKetoisot any functions or responsibilities in connection with the federal HOME PtvVarn at the federal, county or city level to have any financial interest, direct or indirect in Ibis contract, and Pmvider shall not xcquire or hold any interest direct or Indirect, which would conflict in any Mannar nr degree with tht perfurmancc of its obligation under this Agreement. Ptvvidar further covemlity that in Ilii: perfurmanae of its obligations under dug Agreement, me person having any conflicting interest shall be employed. Further, Provsda shall comply with the conflict of hntemst provutwe in 24 CFR §85.36, OMB Circular A- 1 10, and 24 CFR #92.356, as applicable. 5.10. Include in all contracts and subcontracts for construction or repair of the Improvements aprAvisiort for compliance with Copeland 'Anti -kick -back" Ael, 18 'U.S.C. 1874, as =and as supplcmctued in Department of Labor Regulations, 29 CYR put 3. This Act provfdos &at each contracmr of subgrantee shall be grmhbited from induei"L by any means, any person, employed in the coastruction, completion or repair of public www. to give up any part of the compensation to wkWh the p=Lm is udmr•wiso wntitlad. 5.11. Provider shall comply with all fedurol. taws, executive order, and implemcatistg rules and rcgulatinus act fodh in 214 CFR $92350 to aaaurs that nc person shall on tha grounds of race, color, national origin, religion, haadiaapp, familial status; or sex be excluded from participation in, be denied the benefits of, or be subjected to discrimination under say program or activity funded in whnle nr in hart with Kf)MF funds. Thcsc requirements include: A. - Tbc Fair Housing Act, as mwwdod, and implamcuting regulations issued at 24 CFR Part 100; 8. Fatecutive order 11063, as am mdcd by Executive order 12259, "Equal Opportunity in blousing," and implementing regulations issued at 24 CFR Part 107; C. Title VI of the Civil Rights Act of 1964 and implementing regulations issued at 24 CFR Part 1; D. The A¢c Discrimination Act of 1975 and implementing regulations issued at 24 CFR Peat 146; E. Section 504 of the Rehabilitation Act of 1973 and impb=entiag regulations at 24 CFR Part 9,- F. ; F. IExctutive order 11246, "EQual Employtthent Opportunity," and implementing regulations issued ata 1 (.%I rlwrter 6600 G. Section 3 of the Housing and Urban Development Act of -1968 (requiring provision of trainintt and cmployrnma opportunities for very low-income persons and use of local businesses for contracts far work); and H. F.xocutive order 11625, 12432, and 12138 (requiring efforts to use women and minority-owned business enmrprises). ,�ar�- in-sy u 1 : l yr i six rcug rsr rsc4 ssoi cr . u2-1 DEC -31-•1999 16,74V 1_- tLx i r til ur•e: i t° K.rti x MV I U 'VdZ48672 P. 10 in accordance with the County'$ policies apinxt Jiayruuinatiolr, ttv person shall be excluded tions full employtnont rights or participation in or the bcacfiU of any program, scmce, or actio7ty on the grounds of race, color, creed, religion, age, sex, disability, tui"ital status, scxual cmeniation, public ussislenoe status, or national origin; and no person who u protectesd by licablc federal or state laws, rules, of regulations against diacriminadon shall be otherwise subjected to discrimination. And till also comply with applicable local rules and regulations for alYumativc action. When federal, state, and/or local policies and requirements for af$rinativc action and equal employment nppartunity differ, the ptost restrictive policies and retlahwents shall apply. However, Provider shall provide any mporu or other doeunmUtion required by each jurisdiction in orderto demonstrate compliance with applicable laws, ordinsnocs. and tegulatiotts. 5,16. Shall comply with Section 504 of the Rehabilitation Act of 1973, as amended, anti implemennn regulations issued at 24 CFR Part 8 to ensure that no otherwise qualified inAvidual Kith a handicap, as de lied to Section Sun, shall, solely by reason of his or bar handicap, be excluded from pamcipation in, be denied the benefits of, or be subjected to discrimination by Provider, who accepts fcdtml tinsAcial assistance through the HOME Pffl9mM. When and where applicabir, Provider ebl<ll CO L� y with, And Mae best ef%tts to Wive its third party piuridcis comply with, ru tie. Law 101-336 Air cricans With Disabilities Act of 1990, Title I 'EmployntenS, -Title la "Public Sm ices" - Subtitle A, and Tide Ill "Public Ac commodatlons and Scrvsccs Operated by Private Entities" and all ensuing Winn! ragulaboaa implementing said Act. 5.17. Shall construct and maintain the apartment building at 7300.7332 Bass Lake Road, Now Hope, Niinacrota, an the Premises, at a rainimnm, to moon the hour -Ing quality startdards in 24 CFR 1882.109, meet Hennepin County's Housing Quality Standards. and mainlain compliance with all applicable ordinances, building anti use rearrirtionp, cease -required building permits, and any requirtantmu with respect to licenses, pertnits, avid agreements rucessary far the lawful use and operation of the Improvetnews for the duration of this Atient. Newly constructed housing must meet th6 cum -at edition of the Model Pae Code published by The Council of American Building tJfi"icials, and subatatttialrehabiLeseed housing must inert the cost-effective energy sansm vation and effectiveness sUndards in 24 CPR Part 39. 5.11. Maintain (j units to the aparimew building at 7300.7332 Bars Lake Road, New Hope, Minnesota, in compliance with the affordability and occupancy requirements set forth below for a period of it minimum of Twenty (20) yean after completion of the construction efthe; Improvcmcnts or until obit Nuic is pend, wGiulre, ci is longer: A. Not less than (—) of Much units in the Improvements must be rented for rearto which do nor exceed the icsser of the HUD fair market runt eshbliahed in 24 CFR $888.111 or an amount equal to nutty percent30% of the adjusted income of a household whose galas income equals Sixty-five percent (46544) of the area median income, lees a monthly allnwanra file any utilities and services (excludingWlephoae). These traits must be occupied by botueholds with gross annuaincomea that do not exceed Sixty perogen (60°A) of the area median income. Not less than (__) of such units in the lmprwninents (must be rented for rctd3 which do oot exceed an amount equal to Ibitty percent (30%) of the adjusted income of a household whose gross income equals fifty pttroenr (SO%) of the aeon median income, Iasi monthly allowances far utilities and Jan -lb -h% UL:14#- I75a KU�t 12r" tse4 tlu14 r.li DEC -3i-1.999 %42 r -KU rl Vl e.0 u k. yr r — the County to comply with the rrquiremetlts of Executive order 12372 as provided in 24 GPIs $92-359. 5.12. Shall carry out all acquisitions of teal property and take all reasonable steps to rrunungzo dieplacemcut of peracme a; ncoossmy for iwpleutanladon of the Aotivlhes. provider shall conduct all such Acquisitions in its name, or in the name of auothct eligible organization acceptable to the County, which shall hold title to all real property Purchased. Provider shall prepare alt notices, appraisals, and Ancumentatian required M conducting acquisition under the latest applicable: regulations of the Uniform Relocation Assistance and Reel Property Acquisition Act of 1470, Section 1 f14(d) of the Housing and Community Davuloptnent Act Of 1992 and of the HOME Prol(tam at 24 CFR §92.353, and provide au mloeation notices, counseling, and scrvices required by said regulations. 5.23. Shall comply with all federal laws, executive orders, and implementing rules and regulations set forth in 24 CFR §92.354 regarding prevailing wages and other babot Rtandards. The County shall be responsible for the pKpatatlon of 211 r1urgt5 to HUD for wage rata determinations on ACCvsttcs undertaken by Provider. Provider shall notify the County prior to initiating any Activity, including advertising los contractual services which will include costs likely to be subject to the provisions on federal Tabor Standards and Equal Employment oppurtunsty and relakd itnplamenting regulation,. 3.24. $hall cu#uply with the lead -basad paint notification, inspectiasr, testing, and absteroad procedures as tecluired in 24 CFR 192.355. 5.25. To the extent that data on individuals =0 made available between the County and Provider pursuant to this Agreement, Provider agneas that it will abide by the prvvisicros of the Minnesota Government Data Practices Act and all other applicable ,tate and Federal laws, r#des, and 7091113tirms retating to such .isra, and as my of the same may be atnendo¢. Provider agrees to defend and hold the County, its alcuwd officials, offficets, Agents, and wnployeoa harmless from any claims rnulttng from Provider's unlawful disclosure and/or use of such data on individuals - 5.26. Shall be responsible for providing necessary information, relevant documents. and public notices to the County to accomplish environmental reviews as required wuw Z4 CFR Parts 54 and 58; and comply with all applicable statute$, =gulzUons, codes and ordinances regulating the use or siarage of Hizardous Substances whicb Provider stores an the Property. 5.27. Cam ply with the provisions of the Clean Air Act, as amended (42 U.S.C. §1857 el seq.) ennddthe regulations sousdo#hamuudta Control400 FR Y� ed (33 U.S.C- § 1251, et 5.28. Meet the historic preservation raq+nrements of Public Law 89-665 and flit Archeological and Iliswrio pmcwvation Act of 1974 (Pub. L. 93 291) and Executivo Order 11593, inchtding the procedures described by the Advisory Council on Histotric Preservation and property listed in or found to be eligible for inclusion in the National Register of Hiatunc Placts grill be subject to the requirrmrrtts of 24 f FR Pan 58. 1.7.9, c m ply with the desizn rcquircmcuts of rhe Architectural Barrirrs Act of 1968 (42 U.S.C- J 415 1) to consC ,bon Of the Improvements. 5.30. Include in news releases and public signage related to the Project infarmation identifying the Counrfs ROME Proplast as a wumc ofttmds for the spm/acct_ Jan -1S -9'J- a1' 171Jlisa kug ler a14 ad7t u�et-J1-1y`ib 6 143 FPZ" WEMI CO OFC OF PLNrA & DR) ;0 yB.aE ;!;! P.14 7.6. "judgme:Gt for the payment of IWUzy iu cxvrsa UFS I 0AW-00 shall yc docker spun Provider, Ptovider is not contesting or appealiTig the judp=t through apptrry 4 judicial proceedings; and the judgment remains unsatisfied for a period o tip (30) daps aft r the entry thoreaf, Ard any such failura shall not have beett mired by Provider within Thirty (30) days of written dwund by the County thea, in any such eti eat, an "Evert% of nRN Fir" shall be deemed to have occurred and the County may, at its option fin addition to the County's rights vadet the Note and Mortgasge), declare all amounts advanced against the idntc OUR interest thereof to be itramedjatcly due and payable and demand payment in full of the then principal balance plus accrued interest owing as the Note and may, but shall have no obligation to, cure any defaults under this Agreement and in such event provider dull be responsible for all amounts nutttanding on the Note together with 4 addltionat amounts advanced by the County in exctss of the amounts outstanding on the irate to cure raid defaults. 8. MkMIUMM" 8.1. All loan documents shall be prepared by or ttwiewed by t11c County's legal t Msel and all documents must be sattstactory to the County in i is soft dixzestion. 8.2. All reprantaliou and warranties cmtaiacd herein or made in writing by or on Whit ul' Piuvitlt, iu .--suwwtion with the transactions contemplated hcrcby sb&U survive the execution sad delivery of this Agreement attd the advances hemunder All statements contained in any certificate or other instrument delivered by or out behalf of Ptovidur purmatst thereto or in connection —ith the Irrusutions contemplated hereby shall constitute representations tend warrantics by Provider. 9.3. This Aam"nent shall hr. binAieg stmt and inure to the benefit of lite stmcessors and aesigtts of the paries. 8.4. No arnendntent, change, waiver or modification of this Afs'etaacat shall be valid unless it is in a written docutnent which Provider and the County sign, and the County's waiver of any breach or default of arty of Provider's obligations, agreements or covenants under the Loan Documetds shall not be deemod. to be a waiver of any subsequent brunch of 01c Loan Documents, or any other obligation, agreorneat or covenant. The Couaty's forbear ncr to pursuing or enforcing a remedy for Provider's breach of any of the obligations set forth in the Loan Documents shall not be deemed a waiver of the County's rights and tmrlydics with respect to rich breach. 8.5. This Loan Agreement may be executed simultaneously in two or more eounterpa%te, each of which sl3adl be iu uriyival, Luo ull of Which shall constitute Otte agrcottscat. 8.6. This Loan Agreement shall be goveraad by, intxrpreted, and construed in itccoidatece With the lawn of the &talc of Minnesota. 8.7. This Loan Ageement shall remain effixtive so long as there are any sums remaining outsttading on the Note. 8.8. This Agrctmcnt Lu ersedes and has merged into it all prior oral and vrtirtm :,Emcmenu between Provider and the County regarding the Property_ 8.9. Any noticee required or Oonlatnplated hamunder shall be at%ctive upon the placing thereof in the united Stales mails, certified mail, ramm receipt tsquestted, postage prepaid, and addressed as follows: 13 N.01 Jan -lb -%IW Ui:1k9V IIs& KU q i� U �C OF PLIIa E DEU kL4 m6IL 7 ^ r.u.A uc�.^moi-acv ib,44 rrQA9 old 0 913486^,2 P. is in the event that Provider assips its rights and obligations under the Loan DuLurnraiu its r iu1*tioii of the pr vision of 1ha Loan L)ocumcnts_ Provider, hawing signed this Agreement, and the County having duly approved this ASTcemo st an , 1992, and pursuant to such approval and the proper County officials having a geed a Agrsametrt, the panics hereto agree to be bound by the provisions herein set fatth. APPROVED AS TO FORM AND EXBCUTIOlq istant County Attornwy STATE OF MrNNESOTA) ) ss. COUNTY OF HENNEF" COUNTY OF 11ENNEFIN, STATE OF MWNESOTA ON BEHALF OF THE HENNE>pU HOUSING CONSORTIUM By: chair of ns twinty, Board And: AssistanVDeputylCounty A4hninistrator Attest; Deputy/Cie o e County $ PPL BASS LAKE COURT LiMTTED PARTNERS$IP ay: Its: 15 o7m aerie CourtLumtc�t�aitntas� p Jan-lb-�JJ U1:1tiF' I lza kuq I@r i3L4 bb/e F+_Ub •vow r'rRmr FIL144 (:0 OFC OF PUZ, 8 DEI) TO 482-d96^e2 P. le EXHIM I LEGAL DESCRIPTION That certain real properties located is tho Cuum of Hennepin, SIM of Minaescta, and legally described ae follows: 1.zga1: Address: 17 Jars-1—yjq_U1:19H"b1155 KUpMUM HElor' be4 tithe ' N -U/ EXHIBIT 3 ASSURANCE AND CERTWICATION In connaciioa with our responsibilities to manage the Fiscal Year 1498 HOME investment Partaexsbips Program I rade limit have been provided to our organization, we certify aad assure that we are in cotnpHance with the financial standards set forth in Metal Offec of Management and Budget (OMB) Circular A• I 10 - Specifically, our organizatiom'a financial management system provides for the following: 1. Accurate, Current, and complete disclosure of the financial results of each federally spansoted projmt or program itl accordance with rho rcportiug tequiremants set forth in OMB Circular A--110 (Finnnc:ial Reporting Requirements). 2. Records that identify adequately the source and application of funds for federally sponsored autivitim- 7'lieie teuonds contain information pertairring to fadcral awarda, authorization, obligations, unobligated balances, aneq, outiaya, and income, 3. Effictive control over the accountability for all finds, property, and other assets these cascts are adequately safeguarded and are usad solely for authorized purpot es. 4. Comparison of actual outiaya with budget amounts for each grant or other agreement and whenever appropriate or acquired, compariwsts of financial infomativa with performance and unit cost data. 5. Procedures to minimize the elapsed time between the transfer of funds from the County to our orgatlization and the disbursement of funds by our organization. 6. Proctduna for determinin¢ the tcaaomableness, allovabilhy, and allocability of costs in accordance with the provisium of the applicable itderal cost principles and the terms of the grant or other aSMAMrsent. 7. Accotmting rccords that are supported by sonrce documentation. S. Annual audits by a firm of independent Ccrdfirtl Public Accouatauts to ascertain the effectiveness of the financial management systems and internal procedures that we have established to meet the tcrMs and conditions of the fedCral grants and other agreaments, The audits ora conducted on an organization -wide basis and include an appropriate sampling of federal agicrmenis. 9. A systcmatic method to assure timely and appropriate resolution of audit findings and =oatonendations. 10. Organizations (subrecipiemts) that receive NOME; itmds from us are required to comply with the fiuncW management standards set forth in ibis certification. 19 EXHIBIT E 07m , x 0 nqui THIS LOAN AGREEMENT, dated as of January _, 1999 is by and between PPL -Bass Lake Court Limited Partnership, a limited partnership organized under the laws of the State of Mim=ota (the'Bormwee), and Economia Development Authority in and for the City ofNew Hope, Mimresota, a Wfumcsota Municipal Corporation (the %ender'). DEFINITIONS AND ACCOUNTING TERMS Section 1.1 DffMW-U= As used in this Agrawnent the following tarns shall have the following respective meanings: 'IkhW: Any event which, with the giving of notice (whether such notice is required under Section 6.1, or tinder some other provision of this Agreement, or otherwise) or lapse of rime, or both, would oorWtute an Event of Default. : Any event described in Section 6.1. "QQ=M1WW EMUIremcaku- All laws, statutes, codes, ordinances, and governmental rules, reguladoma and requirements applicable to the Borrower, the Lender and the Pxvjea '1mmp': The buildings and iruproventeots located upon the Land. apart hereof. `L W: The land legally described on Exhibit A attached hereto and hereby nada 'Lm': As defined in Section 2.1. uhdflgtdly_1 ': Febroary 1, 2049. ••": The Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement dated of even date herewith, executed by the Borrower in favor of the Tender. W: The Note dated of even date htrewith, in the amount of the Loarr, executed by the Borrower and payable to the order of the Lender. "%lialliMC: The Borrower's obligations in respect of the due and punctual payment of principal and interest on the Note when and as due, whether by Acceleration or otherwise and all fees, wgxwes, indemnities, reimbunmacats and other obligations of the CONDITIONS PRECEDENT Section 3.1 Co ationa of the LM The obligatim of the Lender to make the Loan hereunder shad be subject to the prior or simttltateaus flu hnent of each of the following conditions: 3.l (a) D2zm=. The Leader &hili have received the Note and Mortgage other materials as set forth on Schedule 3.1(a) attached hereto and hereby made a part hereof. I I(b) Othm bh=. All organizational and legal proceedings relating to the Borrower and all inset meats and agreements in conneotion with the transactions contemplated by this Agrement d>tall be satisfactory in scope, form and substance to the Lender and its counsel, and the Lendtr shall have received all hdbrmation and copies of all docunwats, including records ofpuuxrship prccee ftp, which it may reasonably have requested in connection tlherewith, such doc nacuts where appropriate to be certified by Borrower or governmental MAborities. REPRMSENTATIONS AND WARRANTIES The Borrower represents and warrants to the Leoder. Swdon 4.1 The Borrower is a limited partnership duly organized and validly existing and in good sftuling under the laws of Minnesota, and has all requisite parfierdhip power and mrihority to own its properties and to carry on its business as now conducted, to enter into this Agreement and the other Loan Documents to which it is a Party and to issue the Note and to perform its obligations hereunder and thereunder. This Agreement, the Note and the other Loan Documents to which it is a party have been duly authorized by all necessary partnership action and when executed and delivered will be the legal and binding obligations of the Borrower. The mucution. de ivory and performance of this Agrametit the Note and The other Loan Doccnmenta to which it is a party will not violate the Borrower's parmerahi¢ agreement or any law applicable to do Bomwer. To the Bono er's knowledge, it is not in default (beyond nay applicable grace period) in the performance of any agreement, order, writ, injunction. decree or demand to which it is a party cc by which it is bound. -3- the Boriower or shall ruin undismissed for sixty (60) days, or an order for relief shall have been entered against the Borrower. (d) Borrower droll fail to perform the covenants and agreements contained in this Mortgage or tate Loan Agreement and such failure shall not be cured within thirty days oiler notice from Lender epecl$rirtg in what respect Borrower hag failed to perform; provided, however, if such failure can not be cured or connoted within such thirty day period no Event of Default 4411 occur for so long as Borrower droll continua to use reasonable efforts to accomplish such etre. Sectirm 6.2 $wig. If on Event of Default shall occur and be continuing, then the Leader may declare the Note and all other abligaians of the Borrower to the Lender under this Agreement and the other Loan Documents to be forthwith due and payable, wbueupom the same shall inrmediatieiy become due and payable, in each case without presefnent, demand, protest or other notice of any kind, all ofvvhich are hereby expressly waived, anything in this Agreement or in tic Note or in any of the other Loan Documents to thea contrary notwithstanding. Section 6.3 Non . Notwithstaudmg anything apparently to the contrary herein contained, neither the Bomwer nor arty of its partrtors shall have say personal i lability hereunder and the sole recourse upon an Event of Defanh shall be to foreclose the Mortgage and exercise its rights against the Mortgaged Property as described in the Mortgage. MISCELLANEOUS Section 7.1 MWificali on . Notwithstanding any pruvisions to the contrary herein, any tent of this Agmment may be amended with the written consent of the Borrower; midded that no ameadmen% modification or waiver of any provision of this Agreement or consent to any departure by the Borrower d=cfmm shall in any event be effective unless the same shall be in wriW& and signed by the Lender, and then such amtendm=4 modification, waiver or consent shall be effective only in the specific malacca and for the purpose For which given. Secdon 71 CoSM Md EMMM. Whether or not the tran•ecdons contemplated hereby are ccnstmomated, the Harrower agrees to reimburse the Lender upon demand for all roasonablc out-of-pocket expenses paid or incurred by the Lender in connection with the ncgm MUM preparation, appwval. review, execution, delivery, amendment, modification interpletatiM collection and enforcement of this Agreement, the Note and t'.te other Loan Documents_ The obligations of the Borrower under this Section stall survive any termination of this Agreement. Section 7.3 WsivM etc, No faiture on the part of the Lander or the holder of the Note to exercise and no delay in exercising any power or right hereunder shall operate as a .g. IN WITNESS V44MOF, the parties hereto have caused this Agreement to be executed as of the date first above written. Borrower's Address; PPL -Hass Lake Court Limited Parma7Mp 2516 Chicago Avenue South MianeapoUs MN 55404 Attention: Stave Cramer PFL-Bass Lake Court Limited Partnsrahip By: Project for Pride in Living, Inc. Gewal Partner By. Print Name: Steve Cratl<aer Titin. Prasidew Economic Nvelopmcnt Authority in and for the City ofNew Hope, Minnesota By print Name Tido Lcnd&s Address: Economio Development Authority in and for the City of New Nope, Minnesota 4401 Xylan Avenue North New Hope MN 55428 New Hope, Minnesota 53428 .7- �� �. •.• err ay.yy .•L. VLLMYVfVLI YVgJGl !G inL S:�Li Wj U.4L Number 226, Hennepin County, Xinnesota, described as follows. Commencing at the Southeast corner of the West Half of said Lot 321 thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the Wast Ralf of said Lot 32 to actual point of beginning; thence at right anglem West to the Went line of said Lot 32; thence South along the West line of said Lot 32 to a point 176.2 feet North of the Southwest corner of said Lot 321 thence East parallel with the South line of said Lot 32 a distance of loo feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet north of the South line thereof; thencs East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 321 thence North to the point of beginning. Abstract property. Parcel 4: That South 69.37 feet of tto North 114.37 feet of the East 56 feet of the West 292.17 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Homapin County, Minnesota, described as follows: Comammaing at the Southeast corner of the West Half of eaid Lot 321 thence at sight angles Northerly to a point loo feet South from the Southeast corner of the North 5 acres of Vast Ealf of said Lot 32 to actual point of beginning; thence at right angles ;!Pest to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.1 feet North of the Southwest earner of said Lot 321 thence rant parallel with the South line of said Lot 31 a distance of 100 feet; thence South parallel with the West lino of said Lot 32 to a point 173.0 feet North of the south line thereof; thence East parallel with the South line of said Lot 32to its intersection with the East line of the West Ralf of said Lot 321 thence North to the point of beginning. hbatraet Property. Parcel S: The South S2.3 feet of the North 227.37 feet of the East 56 feet of the West.282.17 feet of the following desciibed tract: That part of the West Half of the Lot 32, Auditor's Subdivision Dumber 226, Hennepin County, xinnesota, described as lollc,.ss V1, V1 go ♦Ur. i0.1J sly► U'A04U1041 UVJbbl R PR11ffiL1 %J Ui4 Southerly extension, to a point on the Hast line of Murray Lane 3rd Addition 444.66 feet Northerly from its intersection with said South line. Being registered land as is evidenced by certificate of Title No. 820577. INFORMATION NOVEs Thep office of the Registrar of Titles advises that the Owner's Duplicate Certificate is at the Torrens Office. Parcel Bi The South 145.2 feet of the Went 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Kinnesota. Abstract Property. Parcel 9: The South 80 feet of the Hast 166.76 feet of the West 796.76 feet of. Lot 33, Auditor's Subdivision No. 326, Re:mepin County, Hianesota, according to the recorded plat thereof, and situate in Hennepin County, Minne4ota. Abstract Property. Parcel 10: The North 100 feet of that part of the West Half of Lot 33, lying South of the North 6 acres thereof, Auditor's Subdivision Number 726, Reauepin County, NiOnesota. Abstract Property. Parcel 11: That part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, described as beginning at the intersection of the South lia4'of said Northeast Quarter of the Southwest Quarter with the southerly extension of the West line of Xurray Lane 4th Addition; thence V0rtherly along said Southerly extansicm and along said West line a distance. of 444.49 feets thence Westerly in a straight.line to a point on the Hast line of Murray Lane 3rd Addition distant 444.66 feet Northerly from its intersection with said South line= thence Southerly along said East line to the North line of the South 178.2 feat of said ]northeast Quarter Of the Southwest Quarters thence Easterly along said North line to a line drawn FOR USE BY FILING OFFICER ONLY MINNESOTA HOUSING FINANCE AGENCY PLEDGE AGREEMENT THIS AGREEMENT, made this 3rd day of February, 1999, by and between the Minnesota Housing Finance Agency, a public body corporate and politic of the State of Minnesota ("Agency"), existing under the Minnesota Housing Finance Agency Law of 1971, Chapter 702, as amended (the "Act'), as mortgagee under a New Construction Tax Credit Program Mortgage dated February 3, 1999, as further 'identified below; and PPL -Bass Lake Court Limited Partnership, a Minnesota limited partnership, mortgagor under the aforesaid Mortgage ("Owner"); WITNESSETH: WHEREAS, Agency is the first mortgagee of record of certain real property upon which is to be erected a housing development for persons and families of low and moderate income pursuant to the provisions of the Act, identified as MHFA Development No_ 98-NCTC-2558 (the "Development"), as more fully described in Exhibit A which is attached hereto and hereby made a part hereof, and Owner is the mortgagor and owner in fee simple of the Development; and WHEREAS, on or prior to the date of this Pledge Agreement, Agency made mortgage loans for the Development under the Act, pursuant to certain mortgage notes ("Mortgage Notes") and mortgages executed by Owner, and pursuant to certain regulatory agreements, building loan agreements and other related documents executed by Agency and Owner (hereinafter collectively referred to as the "Loan Documents"); and WHEREAS, the Minneapolis Public Housing Agency ("MPHR') and the United States Department of Housing and Urban Development ("HUD") are parties to a Mixed -Finance Amendment to Consolidated Annual Contributions Contract dated March 10, 1971 ("the ACC") pursuant to which the MPHA has been granted funding for mixed financed developments throughout the Minneapolis -St. Paul metropolitan area; and WHEREAS, the Owner and MPHA have entered into certain documents, including that certain Housing Development Agreement dated December 31, 1998 and Regulatory and Operating Agreement dated February 3, 1999,' ant to which the MPHA will provide to the Owner funds to pay certain Certified Costs (as defined in the Housing Development Agreement) for the construction of twelve (12) of the units in the Development, to be disbursed pro -rata with other sources of funds (the "Certified Costs"), as well as a development operating subsidy (as defined in the Regulatory and Operating Agreement) for the twelve (12) units (the "Development Operating Subsidy"); and PPL -Bass Lake Court, New Hope 1119199 Pledge Agreement 1 98-KCTC-2558 (3) Subject to the approval of MN -1A and HUD, executing any assignments or other instruments of transfer respecting the Mixed -Finance Documents after any default under the Loan Documents; and (4) Inspecting and auditing the books and records of Owner. (b) Owner will execute financing statements whenever requested to do so by Agency as mortgagee. 6. At any tune Agency as mortgagee may assign or transfer its rights under this Pledge Agreement, and the Security Interest, directly to a trustee for Agency as mortgagee's notes and bonds. 7. Except insofar as inconsistent with the Mixed -Finance Documents and the United States Housing Act of 1937 and regulations issued thereunder, this Pledge Agmement shall be governed by, and construed in accordance with, the laws of the State of Minnesota. Nothing in this Pledge Agreement shall be construed in a manner which would conflict with the limitations set forth in 24 CFR Section 941.610(a)(8)(iii) and (iv). 8 . This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. C HB REMAWING PORTION OF THIS PAGE WAS INTENTIONALLY LEFT BLANK) PPL -Daae Late Com, New Hope 1/19/99 Pledge Agreement 3 98-NCTC-2558 By: Its: PPL -Hass Lain Court, New Hope 1119199 Pledge Agreement 5 98-NCTC-2558 United States of America, Secretary of Housing and Urban Development Daniel H. Larson Its: Dinictord Public Housing Minneapolis -St. Paul Area Office This instrument was drafted by: Minnesota Housing Fusance Agency 400 Sibley Street, Suite 300 St. Paul, MN 55101-1998 PPL -Bass take Court, NeW Hope 1119/99 Pledge Agreement 6 98-NCTC-2558 thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Pamel 5: The South 52.5 feet of the North 227.37 feet of the Fast 56 feet of the West 282.17 feet of the following descirbed tract; That part of the West Half of the Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of said Lot 32; thence at light angles Northerly to a point 100 feet South from the Southeast comer of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof, thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 6: The East 56 feet of the West 282.17 feet of the South 60.50 feet of the North 174.87 feet of the following described tract: That part of the West Half of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota, described as follows: Commencing at the Southeast corner of the West Half of Lot 32; thence at right angles Northerly to a point 100 feet South from the Southeast corner of the North 6 acres of the West Half of said Lot 32 to actual point of beginning; thence at right angles West to the West line of said Lot 32; thence South along the West line of said Lot 32 to a point 178.2 feet North of the Southwest corner of said Lot 32; thence East parallel with the South line of said Lot 32 a distance of 100 feet; thence South parallel with the West line of said Lot 32 to a point 173.0 feet North of the South line thereof; thence East parallel with the South line of said Lot 32 to its intersection with the East line of the West Half of said Lot 32; thence North to the point of beginning. Abstract Property. Parcel 7: The East 62.58 feet of the West 163.58 feet of the South 56 feet of the North 101 feet of that part of the Northeast Quarter of the Southwest Quarter of Section 5, Township 118, Range 21, lying South of a line drawn Westerly from a point on the West line of Murray Lane 4th Addition distant 444.49 feet Northerly from the South line of said Northeast Quarter of the Southwest Quarter as measured along said West line and its Southerly extension, to a point on the Fast line of Murray Lane 31d Addition 444.66 feet Northerly from its intersection with said South line. Being registered land as is evidenced by Certificate of Title No. 820577. Parcel 8: The South 145.2 feet of the West 100 feet of Lot 32, Auditor's Subdivision Number 226, Hennepin County, Minnesota. Abstract Property. Parcel 9: The South 80 feet of the East 166.76 feet of the West 296.76 feet of Lot 32, Auditor's Subdivision No. 226, Hennepin County. Minnesota, according to the recorded plat thereof, and situate in Hennepin County, Minnesota. Abstract Property. Parcel 10: The North 100 feet of that part of the West Half of Lot 32, lying South of the North 6 acres thereof, Auditor's Subdivision Number 226, Hennepin County, Minnesota. M,Baw Lake Court, New hope 1119/99 PWV Amt 9 98-NCTC-7559 MINNESOTA HOUSING FINANCE AGENCY December 17, 1998 Howard Goldman U.S. Department of Housing and Urban Development 220 South Second Street Minneapolis, MN 55401-2195 FiS: Subsidy Layering Review Bass Lake Townhomes, New Hope, MN Dear Mr. Goldman: Minnesota Housing Finance Agency (MHFA) staff has completed the Subsidy Layering Review (SLID) for the above referenced development. In accordance with MHFKs acceptance of SLR on January 23, 1996, the above referenced development was evaluated and underwritten per instructions obtained in the Tax Cadt Subsidy Training Manual, published on February 13, 1995. osvelopgr Fbw.The maximum MHFA developer fee for this development is 15 % (calculated in accordance with MHFA's Low Income Housing Tax Credit Procedural Guide and Qualified Allocation Plan). As calculated in Attachment A of this letter, the development fee requested by the developer is 5%. SLR Conclusion: The developer fee falls within the SI -R guidelines (10% of total development cost) presented by HUD. •n R uir Contractor Ove h d C The maximum MHFA feesfexpenses for low income housing tax credit developments are W/o, 2%, and 6% respectively. The MHFA will allow a development a collective 14% for General Requirements, Contractor Overhead and Contractor Profit, thus, a project could exceed the maximum percentage in one area, but would have to fall below a maximum percentage by a corresponding amount in one or two of the other areas (defined in MHFA's Low Income Housing Tax Credit Procedural Guide and Qualified Allocation Plan). As indicated in Attachment A of this letter, the General Requirement is calculated at 7%, the Contractor Overhead is calculated at 2% and the Contractor Profit is calculated at 3%, for a cumulative total of 12%. SLR Conclusion: The General Requirements, Contractor Overlmd and Contractor Profit fall within MHFA's Qualified Allocation Plan (146/6) and are in agreement with the HUD SLR guidelines. 440 Sibley Street, Suite SDO, St. Paul, Minnesota 55101 (651)29&7608 Telecommunications Device for the Deaf (TDD) (651) 297-2361 Equal Opportunity Housing and Equal Opportunity Employment &i-- a - —- a _ -—- -.tea - L..c .....,.-, .— A A."—%%." 1-&&.`4&741 ia. -u i L'Gr%Q=C3. a kAW% 3/13 Page 2 Syndication_ =nnM.- I no above referenced development's Syndications costs are estimated at $30,000. Attachments B and C have been included for your review. The attachments are the Syndication Agreement (Attachment B) and a present value calculation of the syndication proceeds (Attachment C). The fee calculation on Attachment A demonstrates that this figure is 2% of the gross syndication proceeds. SLR Conclusion: The syndication expenses and syndication proceeds fall within the 3LR safe harbor of 15% for a public offering and does not require any further action on the part of MHFA. MHFA has made the following assumptions when conducting the SLR review for the above referenced development. The Present Value of the syndication proceeds was used because of an estimated one year equity pay -in schedule. The interest rate of 8% was used in the Present Valve Calculation, this interest rate corresponds to MHFA's bridge loan interest rate. MHFA SILR Recommendation: The Subsidy Layering Review for the above referenced development has shown that this development has met all required tests under the Tax Credit ManUpl. Please contact MHFA if further Information is deemed necessary by HUD staff. MHFA staff will await final approval by HUD before issuing a tax credit reservation. Attachments A) Project Profile B) A signed Syndication Agreement C) Syndication Equity Pay in Bohedule D ) 911 Certification if you should have any questions regarding the MHFA SLR review process or information provided, please feel free to contact Phillip X Hagelberger (651)297-7219. Sincerel be L n, or Multifamily Division u '-Lr-sn ii•i-i rftUK:rir 7YUub,40U tiiiFiiii.t riaaort. If i": 0—dMbt2b4:3 YAiab %/Ij PMEUP. BASS LAM COM PREPARED BY' Phi HepebeW DATE: DEG'"ER 10.1tt9a PROJECT P. SE.WUHC4M-037 Tax Cmt ftw,d. $1,688,242 rxlab - NeW-006190-- 1at331'SOIJIiGl34 lal man=@ loans dftwm 845 2 Oter rams . NWIMIM S1.966.00 Oftf FA IHFAn-M $930,000 MAk HQW .080,929 �UIIY Contractor PFG* $102,152 0 Addle al Sawwr equity aq.000 Other act;rc.-s Carmirgal'im 2gagaSM Mama Site yo $1,421,000 rxlab - NeW-006190-- 1 NET ROCEED$ A 000 FS. Grom gym. Proceeds SumWs Mrhead 171:07 Suildaft gInend regwivemerft $221,067 Contractor PFG* $102,152 NUN. PA aq.000 Developer fee - S% Carmirgal'im 2gagaSM Mama Texas a Fees (Property) $42.000 HUD AdluMeM for Farty & Late Ln3taWments 011w $17,372 Title I LOW $P5,000 Profit 3% ErMironmentM 47.gOgSuliders Ar011iW a ErMr $151,273 1 tta 5700 $ $8,000 n km SS1000 General A@*Oamwds 7% certification $6,000 Corlslmallon loan fees(interest) ;1969642 anRarion so OMM soft costs (legavaccound2w $28,600 amffu- 10. Fees Appraisal $0,000 -10,611 SuBdom Overhead a 2% DOE Reserve 6,13,202 Holhm Raervs- $117,058 kffA Fin Fee Syndscatlon Costs 0 2% Operatirig Plow. Fee $279,000 Fees $15,000 1:iiiN , •s.nrM aJ•■l Tota red��i^�e r..�.., re.�e S1A SOi' Not Synd Procaadmi%9% of eaooated tax credits $1,688,242 1JiOW $2,278,020 $7 Pay -in per $1 credits purchased t- Gross Est, Syd. Proceeds ware PV - See IX S 1 NET ROCEED$ Total Tax Credit A8 $229,901 par Year FS. Grom gym. Proceeds 6 8 2 ke ensac LWAI 8 amurift lags $5 doo 00 A0o s too NUN. OFgarIgallon [Bridge e Esftod Swkdlggon ftwma AdluMeM for Farty & Late Ln3taWments Tota red��i^�e r..�.., re.�e S1A SOi' Not Synd Procaadmi%9% of eaooated tax credits $1,688,242 1JiOW $2,278,020 $7 Pay -in per $1 credits purchased t- Gross Est, Syd. Proceeds ware PV - See IX S J>EC-37—W5 3I L-2$ kWUN;V1e HOUSING FINANCE ACobNLY 5/13 NATIONAL EQUITY FUND, INC. An of share a/ total huriareves Suppor Corporation ff f5ugnist 24, 1970 Mr. Steve Cramer Ms. Lisa Kugler Exccudve Dirwilor 4737 Garfield Ave. South Project for Pride in Living, inc. Minneapolis, MN 55409 2516 Mcago Avenue . Mmes is, MN 55404 Rsc Bass Lake Townhowes Limited Partnership (the "Limited Partnership") Dear W. Crarnw and Ms. Kugler: I am pleased to mro m you filet Natiotnal Equity Fund, Inc. ("NEF), on bdWf of a related investor limited partnership, has approved the purchase of a limited partner intent in the above-refaenced Limited Parlaarwp. The proposed investment is more fully deseniiod in the Invesument Proposal, dated August 17, 1998. as it may be amended, a copy of which is attached hmto for your files (the "Proposal"). Project for Pride in Living, Inc. shad set as general Partner (the "General Payer") of the Limitrxl Partnership. and the NEF investor limited partnedUp shall act as the limited partner (the "Limited Partner"). We am phased to have the opportunity to participate with you in this important project (the "Project") nttd believe that it offers substantial and continuing benefits for you and NEF_ TWO commitm l letter (d w "Commitment") will describe the main terms of our agreement and, when countersigned by you, will be our agreement to participate in the fow ation of the Limited Partnership in accordance with this Commitment artd the Proposal. In addition to the terms described in this Commitment, the temps of our investment etre described in the Proposal and the NEF model farm of limited partnership agrement to be excctitad by the General and Limited Partners (thc "Limited Pannmbip Agreement") and in the odw documents and agreements to be exmftd in conjunction therewith, as set forth in the NEF Project Invemnatt Manual. In the event the tmu described in this Commitment, Jthe Proposal, and the Limited Parttnerft Agreement differ, this Commitment will control ova the Proposal, and the Limited Partnership Agreement will control over both the Proposal and the Conunivnent, when it is approved and cxecutcd by the Limited Partner. Generally, the terms dascn-W in dw Proposal, this Commitmeut and the Limited Partnership Agreement should be considered in the aggregate to constitute the whole of our agmeernent. ?a' «rtl J.JCL..un BDj e%:Ar�1 5uilr f301 Chicago. Illinois 60661 -5701 1Jt_► 3&0.04 a0 --- e . -- w 4 -`.a. -...a ;.---&env - .fi r-- .aur,1.aava j'M"= d/ l.1 etas W. bugler $s Ise Tow"ames Angst Rd, 1999 Page 2 1' The Limited Partner will purchase a 99.99% limitod Partner interest in the Limited Partnership for a met purchase price of two MiIlion Six Hundred Sixty. Six Thousand Six Hundred Sixteen Dollars (S 1,666,616) to be paid as follows. OW a) 100°/ of the net purchwe price, I= the development fee of 'three Hundred Fifty Thousand Dollars ($350,000) will be paid at checklist a mplianWelming (••Project Start-LVIL b) The development fee, less any defamed deveiopmetxt fee, will be paid as follows: i) 509 at Project Start -Up. ii) 400/6 upon_ A) Qualified Occupaaey Certif v -lion; B) Cost Certification; Q Completion of Punddisr, D) Receipt of updatdd title policy and rural lien waivers; F) Receipt of Certificate of Substaotial Completion; P7 Receipt ofFinal Ccrtificatte(s) of c, G) Receipt ofEnvironntontal Certification; H) Receipt of a WY executed Form 9609 for all buildings; and 1) Receipt of any outstanding Closing Checklist or Required Reporting items. 1 -ii) 10% upon submission and acceptance of the fust years tau retum after Qualified Occupwy. c) The deferred development fee, if any, shall be paid only to the extent of available cash flow. d) The agoing Purchase price is subject to adjustIUMM lased on changes in underwriting facts and assumptions. 2. adignal to F nding a) Carnpliar►ce with all of the requirement& herein and as set forth in the NEF Project Investment Manual(s� omtain* the basic information and model forms, as the same may reasonably be updated and revised from time to tune, inclvdk% the closing checklist, and any other documents as may be reasonably re9u'rtd, except as thcY MY be OqPreWy waived or modified by NEF or the Limited Partncr in writing. b) Execution of a Limited Partnership Agreement that in all material respects reflects the terms of this Commitn>erit and is found to be satisfactory to NEF staff and counsel. U-ft%--af-=d ta=co VKUM2MM 1-iUUbIN" kIMAMUk AUJhNg-V IL):b122:tib! S$S PAGE 7/13 Mr. Cramer and Ms. Kugler Baas Lake 'Townhames August 24, 1998 Page 9 C) Submission and approval of a favorable tax opinion for the Limited Partnership, based on qP"Q :zt tax assumptiot►s (as pre =ted) and the NEF Project Tax Opinion Guidelines, rendered by qualified and substantial tax counsel approved by NEF. d) Awad of a forward commi-hent for an projected low-income housing tax credits from the appropriate allocating agency. e) All financing dom mitts shall provide that the mmrtgage or deed of aust shall not be sold, assigned, vanskm d or aanveyad by the lender to Fannie MW nor included in any pool of loans to be sold assigned, anus& d or conveyed to Fannie Mae. Arrangements will have to be made satisfactory to NU that PtojWt pups and specifications have been reviewed and approved by a qualified indepwWknt professional acceptable to NU as to (i) the adequacy of design (ii) tate cost to complete, and (iii) the dine to complete. g) Arnasrgerpeuts will have to be made satisfactory to W fot reviews to be made by a qualified indeptutdent praofessiorl acoeptabia to NEF, prior to any construction disbum menta. as to (i) the quality of the work in place, (ii) the appropriateness of the disbsuserircrtt request, and (iii) the adequacy of the funds remaining to complete consirucdon. h) Aurins the progress of construction, periodic checks will have to be made to ensure that subcontractors and suppliers have been paid and that no liens have been filed against the project. i) Documentation acceptable to NEF of abatement scope of work to be completed by the City of New Hope and proof of satisfactory completion of this work should be pravkled to NEF prior to the c1MVCY4MC of the subject ptoporty to the patmership. ]) Submission of commitments to finance talc Bass EAw Road project from the MMM"ota Housing Finance Agency and the Miumeapolis Public Housing Authority, with approval from HUD k) Submission and approval by NEF tax counsel of the final terms of the New Hope Economic Developmemt Authority's loan or SMnt to ppL or the project. 1) NU to obtain an envirournental indemnification from the City of New Hope, if possible. for the gas station site that will be coudernned by the City, cleaned up, D EC -17-90 11-2S FROM : MN HOUSING FINANCE AGENCY I D : 6 1 22969 54 5 FACE 8/13 August 24, 1998 Page 4 and transfected to the project partnership- The gas station property must comply with all applicable envirqTIMCAW laws at the time it is uamferred to the project partnership. In) Remodeled unit designs to be reviewed by NEL~ Construction ManagMent and, if noccsssty, MViscd to roake units more marktable. Final design of units =at be acceptable to NE> 's Portfolio Managcmept Department. n) HUD review and approval of HUD -related due diligence r imemonts. 3'1=1 Of TAMIMd PMMInhigi Aga=mr The funding under this Comm— shall be upon the terms and renditions set forth in the Limited Partnership Agreement, with specific peleerltagess amounts and dates bo be entcrod oa Exhibits A and D thereto as fallow$: E General Partner Capital - $941,146 G (l) Development Cost Overtuns Liability Limit --Lesser of 259 of basic rehabilitation or construction cost or 40% of the Limited Partner's capital contribution. G (2) Operating Deficits Liability Limit-- Greater of 550,400 or the total projected operating expenses and debt service during the frrsl year of stabilized operation. G (3) 'Tax Credits Liability Limit --Greater of $50,000 or one full year of the low-income housing tax credits allocated to the Project. minus any redu*tions is the Limited Partner's unpaid Capital. J (1) Initial Operating Reserve $44,000 7 (z) Inti Replsceineut Reserve $17,000 ] (3) Replacement Reserve - $292 per unit/par year J (4) Opematilrg Reserve - 1.50% J (5) MHOP Reserve- $59,256 1C (1 } Ordinary Profits and Losses - -01% to the General Paltrier, 94.99°10 to the Limited Partner K (2) Capital Transactions - -01% 10 the General Pamper and 99.99% to the Limited Partner. P Placement in Service - May 1, 1999 iiini.-a•-ted di -,do rftui`e:elffm nuu5lmu rafletiM—r— Muf-- ul iii: ai�C?.=ft3tlb45 kAGA; L v�r..zwr at�� as. &ugler ass I:a�e'oaha'tnes August 24, 1998 Page 6 1. I►elopment Fee - $350,000 2. Initial Partnembip Managmuent Foe - so and g8,W0 armually therrafler. if available fiom crib itw 3. Caatingent bcm ive Management Fn - up to 33 1I30/6 of net 4. Pmpr ray Mana t Fee - operating irte;ome 8.8°Yo 4• At any time prior to the payment of any installment of its capital contribution, the Limited Putter shall reurise the Pwiectiow to determine whether chore has been a reduction in the Limited Partner's Projected Tax Credit Senefi% (as defined in the Limited Partnership Agrvicement)� Itx the event the snot of revised Projected Tax Cmdit Bestefsts is less than the arnot nt of original Projected Tax Credit Benefits. the Limited Partner shall have the right to reduce its Net Investment (as defined in the Partnerdtip Agreentent) in the same proportion as the reduction in Projected Tax Crcdit $ette:.nits. S.HAIIIIIISMAIRD 12:1 ' . To the extent tie Project qualifies for the historic r MMUtation tax a retht, alk General Partner shall pay to the Limited Parbner a Historic credit Delay Payment (as defined in the Limited Partnership Agreement) to cornpensate, the Limited Partner for any delay in realizing the historic credit, due to a delay in achieving Placement in Service within tltc time specified in the Limited Partnership Agreemeru. The Historic Credit Delay Payment shall be calculated as follows: The historic credit amount specified in tate Proposal, as it may be amended, time, the prime rate of interest charged to corrtrtter0i2l borrowers by the First National battle of Chicago on the last day of the calendar year during which such credit was projected to be Mahzed times the number of years for which the realization of such credit is delayed, 6. $tile �Of EMU. The perfomaance recluirerrtcnts on which the projected equity investment, development fee, profitsllosses, cask flow and tax credits arc predicated ars as follows: Project Start -Up Deadline No later than October 1, 1998 Project Certificate of Occupancy Deadline No lam than May 1. 1999 PmJect Qualified Occupancy Deadline No hater tbas Phase I - 22 units June 1, 1999 Phase II - 6 units July 1, 1999 Phase M - 6 units August 1, 1999 7- . Upon completion of rehabilitation or construction, the General Partner shall certify to the Limited Partner, in writing, that (a) no hazu4ous condition or 9/13 ij hq-—I t-543 A A - eka Jr AVUre=CSft raw USAfVL. jr AliihifV-= rlivCfti44 Au=udilat Illy/ &J Mr, Crammer and Ms. Kugler Bess Lake Townhouses August $d, 1998 Page B ssbstance exists art the Project; (b) the. Project is not in violation of any federal, state, or local environmental law or regulation; and (c) to the extent any hazardous condition or substance was disclosed in any environmental reports) for the Project, reitabilirati m or construction has been completed in accordance with the re Ommendatiom for rerrmcdiation. 8- . 10 G event that the first W fartlt in Paragraph G ahoM together with the ex=tion and deli &C do wue requd other every of the documents reed other itims nquired by and in a form and content acceptable to NEF acrd its counsel, arc not satisfied in a timely mum", NEF reserves the right to amend or tamdImto this Commitment. If terminated, this CmMitmont shall be null and void and of no fimher force or cMa and shall terminate any duties and/or obligations that NEF or the Limited put= may have with tespect to the Geral Partner, the Sponsor, the Limited Partnership, the Project and all outer persons and entities. If amended, this Commitrucat shall be subject to your aereptsnce of such modified performance reguircrnertts, documents and/or other conditions as may be required by such amended conunitmenr. 9. . In the event dot (a) there is litigation pending or threatened against the Sponsor, the Genet Puma, tha Limited Partnership, the Limited Ptaoter or dte PrnjM or (b) material changes have oocrtmed in any of the facts, circuMSUMCM certditiotts or assumptions upon which this Cpmmitment is based, Of (c) the Sponsor or General Partner Its failed to inibrm NEF or the Limited Partner of a material Fact or has misrepresented. intentionally or unintentionally, a material fact in connection with the Limited partner's amity invesenent in the Project and the Limited Pwmer. in its sole discretion, determines titer any of the above such matteKs) would adversely affect (i) the financial feasibility of the Project,, or (ii) the tax boneftts to be generated by the Pmiect, or (iii) the capacity or the ability of the Sponsor or General partner to successfully a wire, develop. construct, rehabilitate, own, operate or manage the Project as low-income housing qualifying for federal tax credits under Section 42 of the h"Mal Revenue Code, as amended, throughout the carttpliance period, then, in arty such event, NEF shall have rite right to terminate this Commitment_ if terntinated, this Commitment shall be null and void and of no further force or effect and shall terminate any duties andlor obligations that NEF or the Limited partner may have with respect tD the General Partner, the Sponsor, the Limited partnership, the project and all other prions artd entities. 10. Itripauggo at coMMian"Tertnination of this Commitment by NEF or the Limited Farmer pursw wt to the terms hereof shall be deemed effective three (3) business days atter mailing of written notice by first class mail with postage prepaid, or on the first day following placement with an overnight delivery service, or the day of facsimile ttau mission by NEF or the Limited Partner. No delay by NEF or the Limited Partner in the exercise of its right to terminate this Commitment shall be deemed to impair such right or be a waiver thereof It, PIRMUM UaWlity. No board member, oft"icer, employee or agent of Nps or any of its investor limited Iraxmonhips shall be perscxtaily liable concerning any matter arising out of or in relation to the undertakings or obligations set forth in this Cuero "Cat or the Limited PartnersWp aj pr4 - 8 r - -ai? 3 d = di7 i MU i'e = VAWQ a iw-J 2 8 rein i 6 itlrwi'ai. i.. iiia S. ilii. a d i.i = d i r C :-j mo n -ie y ratiiaG d d / 1 Mr. Cramer &ad Ms. Kugler Now Lake Townbonw, Aaguet E4, IM Pae 7 Asrectnait of its any other of the documents end sgrWAIM s to he cxeottted or delivered in conjunction thrrewift 12. The daties and abliphow of dw Gnael Pargtetr andlor the Sponsor SS set fw& l *so survive the clm n& ala the Genezzi Part= and the Sponsor $hall cwwwc to opopc:aa with NEF and the Limited Psrdter and fiu ibb any 4MUMeaat or showing rntaottably rWAnd by NEF or the Litnitod Partner, all io a form and ra wnt acoeptsbie to NEP and the Limimd Past' 13. &plgnWft This Commitment is that assignable in whale ar in pert, rrridk= the prior wrina ,ppmai, ofthe Ftxddent or Vicc-Pte gdcwt of NEF. 14. The ee im sad Conditions of this Comr kmmt cannot is wdved or mactiW =oW in writog sled by you UW ata President or Vice -Fre amt of NEF. A vetiver of aqr ofthe pmvisiotts at conditions of We Cowflil tI shell w be dewwd or intpliw to be s 000umog az futuro waiver or a weivec of any other pfavWm or condition of 9& Commiti hent, or of any brewh thereof. 15. This Camndtmem" rrot beeome effective unless arta until an e=uwd cagy of the later has been signCd by the party indicated and ntttmod to Eva L. Gernert. Dgwty Gctreral Counwi, NEF, Me., 547 W. Jack *= Boulevard, Suite bot. Chimp. Plinais 6t1661. so that an is in rcceipt of same an or before Septanber 7, 1948. At and A� to this day of HCl' PRAiE MNCrr cc: Daidte Schmidt parr darts Mary Arun Mayas Kari Drenz~n INC. vary truly yrs, NATIONAL EQUITY KIND. AVG, i3y \l Vic o a1--- .. -- Mn -.rte . ar ra ea aeea ee—aav- a a•aa-seBy :., —.-4 iSi=aaeii.a ate.• as :] ra a 0 M W N A N �AA�35 o���cn - $. a Q INC: OQ0a n ci 0 Q 6949 46 W A A �p _C71 M 0 0) - 0 03 0) a) 0 -I -400) N 4�- 0, - co N N N O A W al (o -1 C.) OD GO A <0 O M -4 — A 4L O � 0 �p 2 r} o' CL lc o p o z � o N 2 v so UI-00m, � .16 7 e� CL W 1r-Nl+L 1 �9/ l i Am 0 cmm N m I IL 4b 00 m m o OR Z W O l y C� z 0 LA i.i s. i. i , ._.0 i I I e r mid Vi = 1'leV 3'su uzi I AAA r i 1,40AI —r- Htst.l151. if i L) - 4 1 22buH 54 b PAGE 13/13 Attachment D SECTION 911 CERTIFICATION Pursuant to Section 911 of the Housing and Community Development Act of 1992 (HCDA 192), as amended, and in accordance with HUD's Administrative Guidelines for implementation thereof, the Minnesota Housing Finance Agency ("MHFA") of St. Paul, Minnesota, hereby certifies that Bass Lake Townhomes, New Hope, MN, HUD/MPHA Project #MN45P 002472, will be receiving tax credits for the number of units presumed by and discussed with your office (34 units). Attached hereto please hind the applicable approved Sources and Uses Statement. Pursuant to the subsidy layering review performed for projects receiving tax credits, I also certify that: a "Market Rate" in accordance with Standard 4 was used to establish the maximum LYHTC Reservation/Allocation; and Standards 1 and 2 have been applied in accordance with HUD processing allowances; or, _x HUD accepted Minnesota Housing Finance Agency's underwriting limits and standards. Standards 2 and 3 Safe Harbor or Ceiling amounts have been applied, as applicable, with all supporting Governing Board, Approval Authority, or Qualified Allocation Flan documentation attached; OR at least one Ceiling standard was exceeded, but the MHFA has determined that this case presents extraordinary circumstances warranting an Applicability Exception, and the MHFA's Governing Board or Approving Authority approves (copy attached). Project Cost estimates reflected on the attached applicable Sources & Uses Statement Format are those provided by or discussed with your office, and are deemed reasonable. The MHFA certifies that as of the date thereof it has satisfied the Administrative Guidelines which implement the mandates of Section 911(b) of the HCDA '92, as amended, the MHFA further certifies that, in accordance with its Qualified Allocation Plan, and the Administrative Guidelines, the combination of tax credits, HUD Assistance in the form of a HUD/MPHR Holman Units being provided to meet allowable project uses, is not more than is necessary to provide affordable g. ( u iZ01FA idal) ( te) 6a4-29-96 10: 248M Fran-WLS PUILIC HOUSING AUTHORITY 61Z34ZI49f I-rIQ r.uliuz/ r-a%aa - --.-- – ,.q —W r., wu �eerVIHFN111111� /, // AWashirwan, D.C. 70410-SOOD IJ// ar' o OFFICE OF THE ASSISTANT SECRETARY DEC 17 1998 FOR PUBLIC AND INDIAN HOUSING Ms. Core MCCorvey Executive Director Minneapolis Public Housing Authority 1001 Washington Avenue North Minneapolis, Minnesota 55401-1043 subject: Proposal Approval Bass Lake Townhomes Development, Now Hope, MN _ Door Ms. McCorvey: This letter is to confirm that the Department of Housing and Urban Development (HUD) has approved the Minneepolls Public Housing Authority's (MPHA) Proposal for the mixed -finance development of the Bass Laka Townhomses pr 4ect in New Hope, Minnesota This project will corw in a total of 34 housing units. consisting of 2D three-bedroom and 14 four-bedroom units. A total of 12 housing units will be operated as public housing units, all of which will 'float' throughout the townhomes which comprise the projea Of the 12 "lie housing units, there -will be 6 three-bedroom and 6 four-bedroom units. 'All of the 22 non-public housing units will be subject to low income housing tax credit and rental restrictions. This approval is based on the Minnesotss State Office's review of MPHA's>s Proposal and its recommendation Ibr approval. MPHA's submission of the Proposal and accompanying documents satisfies the conditions set forth in 24 CFR 941, subpart F. Approval is contingent upon the Minnesota SW* Office's review and QMrovasl of the prof ds final evidentiary materials. which should be submitted by the PPL Bass Lake Court Townhomes Limited Partnership, the project's owner, to the Minnesota State Office prior to the date when the Partnership Intends to draw down funds_ Approval is further contingent upon ssatisfactory completion by the Minnesota Housing Finance Agency of a subsidy layering review based upon guidelines published in the Federal Register on February 25, 1994 regarding Low Income Housing Tax Credits_ DOC -29-99 14:24am From-MPLS PUBLIC HOUSING AUTHORITY 61234114or T-7IU P.Oi/OZ F-651 _2 - Please be advised that once the above contingencies have been satisfied, closing can pri used and the Mixed -Finance Amendment to the Consolidated Annual Contributions Contract (ACC) may be executed. The Declaration of Covenants must also be recorded. Your staff should work with Stephen Gronewold, Chief Counsel for the Minnesota State Office, to complete review of all evidentiary materials and to arrange for the execution of the ACC. Mr. Gronewobfs phone number is (612) 370.3010, extension 2210. Development funds in the amount of $1,3$6,480 will be entered into em Line of Credit Control Sys -tern — voice Response System (LOCCS-VRS) by the Minnesota State Office_ MPHA will flan be permitted to access thew funds in the following Budget Line Items and amounts, the draw down of which will be in accordance with LOCCS-VRS and Section 7 and Exhibits F and G of the Mixed- Finance Amendment to the Annual Contributions Contract: Budget Line Item 141U: $ 28,000 Budget Line Item 1425: S 2,000 Budget Line Item 1480: $1,356,4130 Congratulations on the approval of this projecC3 Proposal which will benefit public housing and other low-income families In Minnesota. Should you have any additional questions, please do not hesitate to call Luci Blackburn of my staff on (202) 708$014, extension 4190. Sincerely, E inor R. Bacon Deputy Assistant Secretary Office of Public Housing Investments