West Orange Fourth Round HEFSP_adopted 111025_Appendices

y relies upon the facts, data, and representations contained within the Entity’s tax exemption Application attached hereto in granting this tax exemption. 1.02 General Definitions. Unless specifically provided otherwise or the context otherwise requires, the following terms when used in this Agreement shall have the following meanings: 2

8/3/17 Affordable Housing Units – Shall have the meaning as set forth in the recitals hereof. Agency Mortgage – The mortgage on the Property in favor of the HMFA pursuant to the HMFA Law. Annual Gross Revenue – The total annual gross rents and other income of the Entity from the Project. Annual Service Charge – The amount the Entity has agreed to pay the Township pursuant to Article IV hereof for municipal services supplied to the Project, which sum is in lieu of any taxes on the Land and the Improvements, which amount shall be pro-rated in the year in which the Annual Service Charge begins and the year in which the Annual Service Charge terminates. Annual Service Charge Start Date – The Annual Service Charge Start Date shall be the date that Substantial Completion has been achieved. Application - The application filed by the Entity for a long-term tax exemption for the Project, which is attached hereto as Exhibit A. Auditor's Report – A complete financial statement outlining the financial status of the Project (for a period of time as indicated by context), which shall also include, among other things, a certification of Annual Gross Revenue for the Project and the Annual Service Charge due to the Township for each year that this Agreement is in effect. Certificate of Occupancy – New document, whether temporary or permanent, issued by the Township authorizing occupancy of a building, in whole or in part, pursuant to N.J.S.A. 52:27D-133. Default – Shall be a breach of or the failure of the Entity to perform any obligation imposed upon the Entity by the terms of this Agreement, or under the Law, beyond any applicable grace or cure periods. Default Notice – Shall be as defined in Section 12.02. Effective Date – The date of this Agreement. Entity - Shall have the meaning as set forth in the recitals hereof. HMFA – The New Jersey Housing and Mortgage Finance Agency. HMFA Law – Shall have the meaning as set forth in the recitals hereof. Improvements - Shall mean the existing building on the Land and any and all other improvements to be constructed on, in or under the Land in accordance with the terms hereof. 3

8/3/17 In Rem Tax Foreclosure - A summary proceeding by which the Township may enforce the lien for taxes due and owing by a tax sale, which shall be governed by the Tax Sale Law. Land – The land, but not the Improvements, comprising the real property identified on the Township’s tax map as Block 64, Lots 3, 21, 22, 25 and 27. Law – The term shall refer to the HMFA Law, the resolution pursuant to which the Township Council approved the Application, and all other relevant Federal, State or Township statutes, ordinances, resolutions, rules and/or regulations applicable to this Agreement. Notice of Termination – Shall be as defined in Section 12.05. Parties – Shall have the meaning as set forth in the recitals hereof. Project – Shall have the meaning as set forth in the recitals hereof. Pronouns – He or it shall mean the masculine, feminine or neuter gender, the singular, as well as the plural, as context requires. Property – Shall mean property identified on the Township’s tax map as Block 64, Lots 3, 21, 22, 25 and 27. State – The State of New Jersey. Substantial Completion – The determination by the Township that the Project has been substantially completed, which shall mean the date on which such Project receives, or is eligible to receive, a Certificate of Occupancy. Tax Sale Law – Shall mean N.J.S.A. 54:5-1 et seq., as amended or supplemented from time to time. Termination - Any action or omission which by operation of the terms of this Financial Agreement shall cause the Entity to relinquish its tax exemption. Township – Shall have the meaning as set forth in the recitals hereof. 1.03 Exhibits and Recitals Incorporated. The Application (including all exhibits to the Application), attached to this Financial Agreement as Exhibit A are incorporated herein and made part hereof. ARTICLE II APPROVALS 2.01 Township Approval of Tax Exemption. The Land and the Improvements comprising the Project shall be exempt from taxation as provided for herein and under the 4

8/3/17 HMFA Law. Such tax exemption shall constitute a single continuing exemption from local property taxation for the term described below. The Project shall be as described in the Application and the Entity hereby expressly covenants, warrants and represents that the Property, including any Improvements related thereto, shall be used, managed and operated for the purposes set forth in the Application and in accordance with the Law. ARTICLE III DURATION OF AGREEMENT 3.01 Term. It is expressly understood and agreed by the Parties that this Financial Agreement shall become effective on the Effective Date and shall remain in effect until the earlier of: (i) Thirty-five (35) years from the Effective Date, (ii) Thirty (30) years from the Annual Service Charge Start Date, (iii) the Entity’s voluntary termination of this Agreement, or (iv) the continuance of a Default as set forth within Article XII of this Agreement beyond the applicable notice and cure periods set forth therein; provided, however, that the exemption from taxation and the Entity’s obligation to make payments in lieu of taxes shall not extend beyond the date on which the Agency Mortgage is paid in full. Upon the expiration of the tax exemption provided for herein, all restrictions and limitations of this Financial Agreement imposed upon the Entity and the Property shall terminate and the Property shall thereafter be assessed and taxed according to the general law applicable to other non-exempt property in the Township; provided, however, that any and all related remedies available to the Township shall survive the termination of this Agreement. ARTICLE IV ANNUAL SERVICE CHARGE 4.01 Commencement of Annual Service Charge. In consideration of the tax exemption, the Entity shall make payment of the Annual Service Charge in accordance herewith following the Annual Service Charge Start Date. In the event that the Entity fails to timely pay any installment, the amount past due shall bear the highest rate of interest permitted under applicable New Jersey law and then being assessed by the Township against other delinquent taxpayers in the case of unpaid taxes or tax liens on the land until paid. 4.02 Payment of Annual Service Charge. The Annual Service Charge shall begin to accrue on the first day of the month following the Annual Service Charge Start Date. The Annual Service Charge will be prorated in

nt of Annual Service Charge. The Annual Service Charge shall begin to accrue on the first day of the month following the Annual Service Charge Start Date. The Annual Service Charge will be prorated in the year in which the Annual Service Charge Start Date begins and terminates. The Annual Service Charge shall continue for a period of thirty (30) years from the Annual Service Charge Start Date for the Project in accordance with the terms contained herein. 4.03 Annual Gross Revenue. Annual Gross Revenue shall be calculated as the total annual gross rents and other income of the Entity from the Project. 5

8/3/17 4.04 Calculation of Annual Service Charges. The Annual Service Charge shall be equal to 6.28% of the Annual Gross Revenue. 4.05 Land Taxes. The Land shall be exempt from taxation as of the Annual Service Charge Start Date in accordance with the HMFA Law, provided however, that if such exemption of the Land is invalidated by a court of competent jurisdiction, then this Agreement shall remain in full force and effect and shall be reformed to provide that: (a) Conventional taxes are assessed against the Land; (b) the Entity shall be entitled to a credit against the Annual Service Charge for the amount, without interest, of the Land tax payments timely made in the last four (4) preceding quarterly installments; and (c) In any year that the Entity fails to make any Land tax payments if and when due and owing, such delinquency shall render the Entity ineligible for any Land tax payment credits against the Annual Service Charge for that year. No credit will be applied against the Annual Service Charge for partial payments of Land taxes. In addition, the Township shall have, among this remedy and other remedies, the right to proceed against the Property pursuant to the Tax Sale Law and/or to declare a Default. 4.06 Annual Service Charge Installments. Payment of the Annual Service Charge shall be paid to the Township on a quarterly basis on February 1, May 1, August 1, and November 1 after the Annual Service Charge Start Date, subject, nevertheless, to adjustment for over or underpayment within thirty (30) days after the close of each calendar year. In the event that the Entity fails to timely pay any installment, the amount past due shall bear the rate of interest permitted under applicable New Jersey law and then being assessed by the Township against other delinquent taxpayers in the case of unpaid taxes or tax liens on the land until paid. 4.07 Payments After Recordation of Agency Mortgage. In accordance with N.J.S.A. 55:14K-37, from the date of recording the Agency Mortgage on the Project to the date of Substantial Completion of the Project, the annual amount payable to the Township as taxes or as payments in lieu of taxes in respect of the Project site shall not be in excess of the amount of taxes on the Project site for the year preceding the recording of the Agency Mortgage. ARTICLE V ADDITIONAL PROJECT COVENANTS 5.01 Improvements to be Constructed.

all not be in excess of the amount of taxes on the Project site for the year preceding the recording of the Agency Mortgage. ARTICLE V ADDITIONAL PROJECT COVENANTS 5.01 Improvements to be Constructed. The Entity will construct the forty-four (44) Affordable Units and all related improvements. The Entity shall commence the Project in accordance with the schedule set forth within the Application and the Redevelopment Agreement. To the extent that the schedule set forth within the Application and the schedule within the Redevelopment Agreement shall conflict, and/or if the schedule set forth in the Redevelopment Agreement shall be adjusted in accordance with the terms thereof, the schedule established under the Redevelopment Agreement shall control. 6

8/3/17 5.02 Construction Schedule. The Entity agrees to diligently undertake to commence construction and complete the Project in accordance with Section 5.01 of the Financial Agreement. Failure to commence or complete construction in accordance with that schedule shall be grounds for Termination of this Agreement. 5.03 Ownership, Management and Control. The Entity represents that on or before the commencement of construction of any portion of the Project as set forth herein, it will be the fee title owner of the Land upon which that portion of the Project is to be constructed and which is the subject of this Financial Agreement. 5.04 Project Financing. The Entity represents that the Improvements shall be financed in accordance with the financing plan attached to the Application. ARTICLE VI CERTIFICATE OF OCCUPANCY/CERTIFICATE OF COMPLETION 6.01 Certificate of Occupancy; Certificate of Completion. It is understood and agreed by the parties that it shall be the obligation of the Entity to make all good faith efforts to obtain the Certificates of Occupancy for the Property and the Improvements related thereto in a timely manner. 6.02 Filing of Certificate of Occupancy or Certificate of Completion. It shall be the primary responsibility of the Entity to forthwith file with both the Tax Assessor and the Tax Collector a copy of the Certificate of Occupancy issued for the Project. Failure of the Entity to file such issued Certificate of Occupancy as required by the preceding paragraph shall not militate against any action or non-action, taken by the Township, including, if appropriate, retroactive billing with interest for any charges determined to be due, in the absence of such filing by the Entity. ARTICLE VII REPORTS AND AUDITS 7.01 Accounting System. The Entity agrees to maintain a system of accounting and internal controls established and administered in accordance with generally accepted accounting principles. 7.02 Annual Audit. Within one hundred twenty (120) days after the close of each fiscal or calendar year following issuance of the Certificate of Occupancy, depending on the Entity’s accounting basis, during the Term of this Agreement, the Entity shall submit to the Mayor, Township Council, the Tax Collector and the Township Clerk, who shall advise those municipal officials required to be advised, a certified Auditor’s Report of the operation of

all submit to the Mayor, Township Council, the Tax Collector and the Township Clerk, who shall advise those municipal officials required to be advised, a certified Auditor’s Report of the operation of the Project setting forth the Annual Gross Revenue of the Project. The Entity shall assume all costs associated with the preparation and submission of the Auditor’s Report. 7

8/3/17 ARTICLE VIII SALE AND/OR ASSIGNMENT PROVISIONS 8.01 Approval. The Township, on written application by the Entity, will consent to a sale of the Project and the transfer of this Agreement provided that (a) in the event that the Project or relevant portion thereof has not been completed, the transferee Entity shall have demonstrated to the reasonable satisfaction of the Township that it possesses the experience and capitalization necessary to complete the Project, which determination shall not be unreasonably withheld; (b) the transferee entity qualifies under the HMFA Law and assumes the Agency Mortgage; (c) the Entity is not then in Default of this Agreement or the Law; (d) the Entity’s obligations under this Agreement are fully assumed by the transferee entity; (e) the transferee entity agrees to abide by all terms and conditions of this Agreement including, without limitation: and (f) the principal owners of the transferee entity possess the same business reputation, financial qualifications and credit worthiness as the Entity and are otherwise reputable. (b) The parties hereto acknowledge that the Entity shall transfer a portion of its membership interest to one or more tax credit investors in connection with the financing of the Project. The Township agrees that its consent is not required for this transfer. ARTICLE IX WAIVER 9.01 No Waiver. Nothing contained in this Financial Agreement or otherwise shall constitute a waiver or relinquishment by the Township or the Entity of any rights and remedies provided by Law except for the express waiver herein of certain rights of acceleration and certain rights to terminate this Financial Agreement and tax exemption for violation of any of the conditions provided herein. Nothing herein shall be deemed to limit any right of recovery that the Township or the Entity has under law, in equity, or under any provision of this Financial Agreement. ARTICLE X NOTICE 10.01 Notice. - Formal notices, demands and communications between and among the Township and the Entity shall be in writing and deemed given if dispatched to the address set forth below by registered or certified mail, postage prepaid, return receipt requested, or by a commercial overnight delivery service with packaging tracking capability and for which proof of delivery is available. In that case such notice is deemed effective upon delivery. Such