Draft_October 2025_West Orange_HEFSP_with Appendices

ed in respect of the Project or the Owner, except for Loan.disbursements. Project Revenues shall be deposited in such account and all operating expenses should. be paid from this account. Section 21. Reserve and Escrow Payments. On the date of the execution of this Agreement, the Owner will deposit with the Agency the following amounts as shown on the closing budget for the Project (“Form 10°) which wiil serve as 2 reserve against late payments and be available to pay expenses when due or be available to assist with project expenses. These amounts will comprise the Special Needs Project Escrow: (a) an amount cquai to twelve (12) months of the estimated annual insurance payments: and (b) an amount equal to twelve (12) months of the estimated annual tax payments; and {c} an amount(s) as stated on the Form (0 for a project escrow. 13

Additionally, the Owner will deposit an amount as agreed upon between the Borrower and the Agency for the Project as a reserve for repairs and replacement of items at the Project and initial project costs, excluding social service and/or operating costs. Additionally, the repair and replacement reserve will be funded quarterly by the Borrower with an amount cqual to three (3} months repair and replacement reserve as shown on the Project's Form 10, This reserve will be separate from the Special Needs Project Escrow and will be known as the Repair and Replacement Reserve. Alt reserve and escrow payments required pursuant to this Section shall be held in accounts under the sole control of the Agency and shall be paid out for the benefit of the Project as needed on request of the Owner or on the Agency's own initiative. Any interest which._may be eamed on such reserves shall remain in the escrow account and shall be used for similar purposes unless the Owner and Agency mutually agree to apply the funds to some other Project purpose. Ifthe Agency determines that the payments specified heréin are insufficient to ensure prompt payment of taxes, payments in lieu of taxes, insurance pfetniumns,’ or to properly fund painting, decorating, repair and replacement needs with respect to the Project, then the Agency may require an increase in the minimum required escrow amounts necessary to assure proper funding. Section 22. Inspection of Premises. The Owner covenants and agrees to permit the Agency, its agents or representatives, to inspect the Project at any and all reasonable times with or without notice, pursuant to the provisions of the Act ‘and the Program. Section 23. Books and Records. The Owner covenants and agrees to maintain adequate books and records of its transactions, indluding the social services provided to the Project's residents, with respect to the Project in the Owner's standard form. Such books and records shall be available for inspection and audit by the Agency or its agents at any time during business hours, with notice, pursuant to the provisions of the Act and the Program. The Owner further covenants and agrees to cause the financial affairs with respect to the Project to be audited by independent certified public accountants and shall furnish the Agency with its audit report of such accountants as may from time 10 time be required by the

with respect to the Project to be audited by independent certified public accountants and shall furnish the Agency with its audit report of such accountants as may from time 10 time be required by the Agency. The Owner shall {arnish to the Agency such other information and reports respecting the Project as may trom-time te time be required by the Agency. Section 24. Management Contract. The Owner may, and if the Agency so elects, shall contract for the services of a firm experienced in real estate management to act as the managing agent for the Project. The selection of any such managing agent, the scope of the agent's duties and the basis of the agent's compensation shall be the subject of a consultation between the Agency and the Owner and any contract for the employment of any managing agent shall provide that such contract may be terminated by the Agency at any time by notice of such determination by the Agency given to the Owner and managing agent. Section 25. Prohibited Actions. Except with the express approval of the Agency, which approval shall not be unreasonably withheld, the Owner shai] not with Project Revenues (as defined in Section 20 hereof), Loan disbursements or grant advances: 4

1. incur any liabilities, except in connection with the acquisition, rehabilitation and rental of the Project and its operation and maintenance: 2. engage in any business activity except the ownership and operation of the Project; 3. pay more than fair market value thereof for goods or services; and 4. pay compensation to any officer, director or partner in such capacity or make any cash distribution to any of the foregoing. Section 26. Transfers of Ownership Interests. The Owner shall nol transfer or sell any interest in the Project, except in accordance with the Agency's regulations governing such transfers, Section 27. Statutory Powers and Restrictions. The Mortgage shall be subject to the restrictions in the Act and the Program. and in connectioy therewith, the Agency shall have the powers set forth in the Act, the Program and the regulations now or hereafter promulgated pursuant to the Act and the Program and the Owner hereby consents té such restrictions and agrees to be bound thereby, Such powers and restrictions shall be in addition to and not in limitation of the rights of the Agency expressly set forth in this Agreement. “ Section 28. Accounting in Event of, Default; Estoppel. Upon the occurrence of an Event of Default and within ten (10) business days of demand therefore by the Agency, and otherwise within ten (10) business days of written‘demand by the Agency, the Owner will fumish to the Agency in writing a statement of the principal umount remaining due on the Loan, together with a statement of any known detenses whish may exist as to any liability of the Owner on the Notes or otherwise thereunder. Section 29. Financing Statements. The Owner hereby irrevocably authorizes the Agency to execute on its behalf one or more financing statements or renewals thereof in respect to any of the security interests granted by the Mortgage. Section 30. Assigpment by Agency. The Owner hereby consents to any assignment of any Loan Document by the Agency. Section 31. Defaults. Each of the tollowing shall be an Event of Default: {a) failure by the Owner to pay more than thirty (30) calendar days after the due date any installment of principal or interest on the Loan or any other payment required by the Owner to the Agency or any other person pursuant to the terms of this Agreement, the Mor(gage or the other Loan Documents; provided, however, that

rest on the Loan or any other payment required by the Owner to the Agency or any other person pursuant to the terms of this Agreement, the Mor(gage or the other Loan Documents; provided, however, that interest shall accrue on any payment made beyond its due date; (b) commission by the Owner of any act prohibited by the terms of this Agreement, the Mortgage or any other Loan Document, failure by the Owner to perform or observe in a timely fashion any action or covenant required by any of the terms of this Agreement, the Mortgage or any 15

other Loan Document, or failure by the Owner to produce satisfactory evidence of compliance therewith; (c) the filing by the Owner under any federal or state bankruptcy or insolvency law or other similar law of any petition in bankruptcy or for reorganization or composition with creditors or the making of an assignment for the benefit of creditors: (d) the Alig against the Owner of a petition seeking its adjudication as a bankrupt or the appointment of a receiver for the benefit of its creditors which shall not have been dismissed within sixty (60) calendar days of the filing thereof. or the adjudication of the Owner as a bankrupt or the appointment of a receiver for the benefit of its creditors; or the appointment by court order of a custodian (such as a receiver, liquidator or trustee} of the Owner or of any of its property or the taking of possession of the Owner or any of its property for the benefit of its creditors and such order remains in cffect or such possession continues for more than sixty (60) calendar days; {e) the occurrence of substantial destruction of the Project by an uninsured casualty ot the mabilily to replace or restore the Project in accordance with § Section L1, or tailure to maintain insurance that fully complies with the Agency insurance requirements set forth at Section 11 or in Agency insurance specifications minimum requirements, or failure to provide. immediately ar no later than 30 days trom notice, replacement insurance to meet Agency insurance requirements as set forth in Section 11 during the term of the Mortgage Loan: (any representation in conjunction with the Loan and the Project by or on behalf of the Owner that is knowingly false or misleading i in any respect or warranty of the Owner that is breached; » (g) any breach by the Owner of its obligations or any failure to observe its covenants under this Agrecment, and the other ‘Loan Documents; and (h) failure to complete thé Project. (i) failure or refusal to acquire, rehabilitate, operate and/or maintain the Project in accordance with the Program.’ > 7 ion N The events set forth in the subsections (b) and (g)} of this Section shall not censtitute Events of Detault until the prohibited acts, failure to perform or observe, oy breaches shall remain uncured for a period of thirty (30) calendar days after the Agency's written notice to the Owner, specifying such

ult until the prohibited acts, failure to perform or observe, oy breaches shall remain uncured for a period of thirty (30) calendar days after the Agency's written notice to the Owner, specifying such prohibited act, failure or breach and requesting that it be remedicd, unless the Agency shall agree in writing to an extension of such time prior to its expiration; provided, however, that after the Rehabilitation Period only, if the prohibited act, failure, or breach stated in each notice is correctable, but cannot be corrected within the 30-day period, the Agency may not unreasonably withhold its consent to an extension of up to 120 calendar days trom the delivery of the written notice referred to herein if corrective action is instituted by the Owner, within the initial 30-day period and diligently pursued.

The tailure of the Owner to comply with any of the provisions of Section 25 or 31 of this Agreement shall not be deemed an Event of Default hereunder unless such failure has not been corrected within a period of 60 calendar days, have actual or constructive knowledge of such lailure or atter the Agency's written notice to the owner, whichever ts earlier. Section 32. Remedies. Upon the occurrence of any Event of Default, the Agency may at its option take any one or more of the following actions or remedies and ne failure to exercise any remedy or take any action enumerated shail constitute a waiver of such right or preclude a subsequent exercise by the Agency of any such remedy: (a} declare the entire principal sum of the Mortgage together with all other liabilities of the Owner under the Note to be immediately due and payable: ~ < wt . (b) cease making disbursements to the Owner of any funds under the Loan or from reserves held by the Agency; € (c) apply any reserves held by the Ageney or the balance in the accounts for Project disbursements and revenues, or any combination of these monies, to the payment of the Owner's liabilities hereunder; : (d) foreclose the lien of the Mortgage on the Project and Land ora portion thercof. including without limitation all Improvements existing or hereafter placed in or on the Project and Land. In any action to foreclose, the Agency shall be entitled to the appointment of a receiver of the rents and profits of the Project as a matter of right and without notice, with power to collect the rents, uses and protits of said Project, due and becoming due during the pendency of such foreclosure suit, such rents and profits being hereby expressly asigned and pledged as additional security tor the payment of the indebtedness secured by thé Mortgage without regard two the value of the Project or the solvency of any person or persons liab{e for payment of the mortgaged indebtedness, The Owner for itself and any such subsequent owner hereby waives any and all defenses to the application for a receiver as above and hereby specifi ically consents to such appointment without notice, but nothing herein contained is to be construed to deprive the holder of the Mortgage of any other right, remedy or privilege it may now have under the law to have a receiver appointed, The provisions for the appointment of a receiver of the rents and

deprive the holder of the Mortgage of any other right, remedy or privilege it may now have under the law to have a receiver appointed, The provisions for the appointment of a receiver of the rents and profits and the assignment of such rents and profits, is made an express condition upon which the Loan hereby secured are made. Upon such foreclosure the Agency shall Rave the right to have a receiver appointed for the Project and the rent from the Project; (e) pursuant to its rights under the Act and the Program, remove the Project Manager(s) after consultation with the Owner, or, if the Agency, after consultation with the Owner, decides, it is in the best interest of the Project and Clients, hereinafter defined, the Owner shall deed the Project and Land to the Agency; (f) take possession of the Project and Land or a portion thereof; (g) without judicial process, collect all rents and other revenue including federal and State subsidies as the agent of the Owner (which upon the occurrence of any Event of Default the Agency 1?

is deemed to have been inevocably appointed by the Owner). and apply the same at the Agency's option either to the operation and maintenance of the Project or to the liabilitics of the Owner under the Mortgage; (h) act as landlord of the Project and rent or lease the same on any terms approved by it, or dispossess by summary proceedings or other available means any tenant detaulting under the terms of the lease of a dwelling unit: (i) take possession of equipment, appliances or other tangible personal property in which a security interest has been granted by this Agreement or the Mortgage and dispose of the same in any commercially reasonable manner. The Agency shall have the option to dispose of any such equipment and personal property either separately from the Project and Land or in conjunction with a sale of the Project and Land, and the Owner agrees that either. method of disposition shall be commercially reasonable; pe ke G) make effective an assignment of the Architect’¢ Contract by the Owner to the Agency, in which event the Agency is specifically empowered by the Owner to cxercise any and all rights of the Owner under the Architect's Contract, and at the option of the Agency to proceed with the rehabilitation of the Project. in which event all payments by the Owner made with respect to the Architect's Contract shall be treated as disbursements, on the Loan; (k) subject to Section 40 hereof, sue the Owner for a mandatory injunction or other equitable relief requiring performance by the Owner of any of its obligations under this Agreement or the Mortgage or the other Loan Documents. “The Owner agrees with the Agency that the Agency's remedy at law for the violation or nonpérformance of the Owner's obligations under the Mortgage or this Agreement or the other Loan Documents is not adequate by reason, among other things, of the Agency's public purpose to provide adequate, sate and sanitary dwelling units: (I) after consultation with the Owner, sue under the Architects Contract or on a warranty to recover any amount payable to the Owner pursuant to the Architect's Contract or payable to the Owner pursuant to any such warranty and to settle any such claim or liability and release the same and apply the proceeds éf ahy such suit, settlement or release to the liabilities of the Owner under this Agreement or thé Mortgage: {m) if’ the Owner commits a