City of Chandler and Brinshore Development Agreement for The Haven on Hamilton

DEVELOPMENT AGREEMENT

This Development Agreement (this “Agreement”) is effective as of ___, 2024 (the
“Effective Date”) by and between the City of Chandler, a political subdivision of the State of Arizona
(“Authority”) or its nominee or assignee, and Brinshore Development, L.L.C., an Illinois limited liability
company (the “Developer”).

RECITALS
A. Developer is a developer of affordable housing in the State of Arizona.
B, Authority, as a part of its mission, provides safe, decent, and sanitary affordable housing

in the State of Arizona.

Cc. Developer has been procured by Authority to develop one (1) or two (2) phased
multifamily housing projects (as more particularly described herein the “Project”) on the property that is
described in Exhibit A attached hereto (the “Site”). The Authority intends resident transfers consisting of
thirty-seven (37) units from Kingston Arms and fifty-three (53) units from Casa de Esperanza resulting in
a one for one replacement of the same unit mix.

D. It is anticipated that the Project will include approximately two hundred fifty (250) units
of housing, including a mix of one (1) to five (5) bedroom units, gym, community spaces and park areas.
Additional requirements for the Project are described in Section 2.01 as well as the Development Plan
described below.

E. Authority will retain fee ownership of the Site and anticipates that the Site will be leased
to Owner (defined in Section 5.01) pursuant to a long-term ground lease.

F, Authority and Developer intend to utilize the U.S. Department of Housing and Urban
Development (“HUD”) Rental Assistance Demonstration Program (“RAD”) (converting the Project from
public housing to project-based voucher assistance) and will consider other appropriate options for
developing and financing the Project, including, but not limited to Section 18 and state and federal low-
income housing tax credits (“LIHTCs”) in connection with the development of the Project.

G. The Project contemplated in this Agreement will be closed on or before August 2026.
AGREEMENTS

In consideration of the promises and mutual covenants set forth herein, and with the foregoing
Recitals incorporated herein, the parties hereto, with the intent to be legally bound hereby, agree as follows:

ARTICLE I - ENGAGEMENT OF DEVELOPER,
1.01 Engagement of Developer. Authority hereby engages Developer to perform the obligations

and services specified in this Agreement, and Developer hereby accepts such engagement, all upon the
terms and conditions set forth herein.

2024.11.25 Final Development Agreement

ARTICLE 0 - DEVELOPER SERVICES.

2.01 Development Plan. Within ten (10) business days of the date on which Authority and
Developer have both executed and delivered this Agreement, Developer will develop and submit to
Authority for its review, comment and approval, which shall not be unreasonably withheld, , a development
plan (the “Development Plan”) for the Project, which shall specify, at a minimum, the number of units in
the Project, the configuration and number of bedrooms in the apartment units to be developed as part of the
Project, any restrictions which will apply to each apartment unit, the approximate monthly rent for the
apartment units, the approximate cost of the Project, the expected types and sources of financing, and the
total projected Development Fee (as defined in Section 6.01) to be paid to Developer and Authority. The
Project shall comply with all applicable federal, state, and local rules, laws, regulations, and ordinances.
The Development Plan shall include an initial Development Budget (as defined in Section 4.02) and an
initial Development Schedule (as defined in Section 4.01). As of the Effective Date, Developer and
Authority anticipate that the Project will include two hundred fifty (250) units, ranging from one (1)-
bedroom to five (5)-bedroom units in five (5) buildings. The units will include the standard furnishings
and include the ability for wireless internet within the respective units. Areas to be enjoyed by tenants will
include but not be limited to community rooms with kitchens and wireless internet, a playground, gym,
splash pad, ramadas with barbecues and green open spaces. Office space for the Authority will be provided,
without charge, within the building housing the property management office. A Head Start classroom will
be incorporated into the Project. The Authority and Developer will evaluate carports with the option for
solar installation for the benefit of the Project.

Developer and Authority anticipate that the total Project development costs will be approximately
$92,000,000, provided that this is an estimate only and that market conditions at the time of Closing will
determine the final Project development costs. Authority and Developer acknowledge that market
conditions are changing rapidly and that these details and the Development Plan, once approved, may be
modified by mutual agreement prior to Closing (defined in Section 2.02).

2.02 Developer’s Obligation to Develop. Developer will submit an application for LIATC (the
“LIHTC Application”) to ADOH by December 31, 2024. Developer will use its best efforts to cause the
financial closing of the Project (the “Closing”) to occur in accordance with the Development Plan on or prior to
the date shown in the Development Schedule, subject to reasonable extensions of time, it being understood that
the Development Plan will contain Developer’s best estimate of time schedules, and that requirements of the
Arizona Department of Housing (‘ADOH”), HUD, lenders and Investor (defined in Section 5.01) may result in
modifications to the schedules. In any event, the Closing and the completion of the Project shall be completed in
order to comply with any LIHTC placed-in-service deadline under Section 42 of the Internal Revenue Code of
1986, as amended (the “Code”).

2.03 Developer Services. Except for the services to be provided by Authority pursuant to
Section 3.01 or as otherwise agreed in this Agreement, Developer shall, in conjunction with the Authority,
provide, or arrange for the provision of, all such services as are necessary for the development of the Project,
including without limitation the following services (collectively the “Development Services”):

(a) Project Planning and Predevelopment Services. All planning and predevelopment
services listed on Exhibit B (the “Project Planning and Predevelopment Services”).

(b) Financing Services, All financing services listed on Exhibit C (the “Financing
Services”).

(c) Design/Planning Services. All design/planning services listed on Exhibit D (the
“Design Services”).

(d) Site Preparation Services. All site preparation services listed on Exhibit E (the
“Site Preparation Services”).

(e) Construction Services. All construction services listed on ExhibitF (the
“Construction Services”).

(63) Mold/Water Intrusion Responsibilities. All mold/water intrusion prevention and
remediation activities as are set forth on Exhibit ] (“Water Intrusion Prevention and Remediation”).

(g) Section 3, Small and Minority, Women’s and Disadvantaged Business Services.
The Developer shall require all subcontractors working on the Project, including, without limitation, the
general contractor, the architect and the engineer, and all their respective subcontractors (collectively
“Subcontractors”), to use commercially reasonable efforts to comply with Section 3 of the Housing and
Urban Development Act of 1968, as amended, 12 U.S.C. § 1701u (“Section 3”) and the small and minority,
women’s and labor surplus area firm requirements set forth in 2 C.F.R. § 200.321. All such requirements
shall be set forth in a rider (the “Rider”) which will be attached to all subcontracts. The Rider shall be
agreed upon by both the Developer and the Authority and will contain all requirements necessitated by
various funding rules.

(b) Compliance. Compliance with other federal, state and local requirements as may
be identified in this Agreement, including Article 15, and all HUD regulations, form agreements, guidance,
notices and other documents as applicable.

@ Relocation Services. Upon completion, the relocation of Public Housing residents
to the completed Project will be the responsibility of the Authority and will be conducted in accordance and
compliance with all applicable law, including without limitation the Uniform Relocation Act.
Notwithstanding the Authority’s responsibility for relocation services the Developer agrees to assist the
City and have active involvement during events to including but not limited to tenant interviews, tenant
placement, and tenant relocation days.

2.04 Progress Reports and Information.

(a) Progress Reports. Developer shall provide Authority with written monthly
progress reports regarding the Project. Such reports may include (i) documentation of compliance with
applicable employment and contracting requirements, (ii) material variances between actual Development
Services completion dates and the Development Schedule, (iii) a summary of any meetings,
(iv) information on contracts, including changes under consideration or proposed contract changes,
(vy) actions taken when the requirements of any contract are not being satisfied, (vi) material variances
between actual predevelopment expenditures and the Development Budget and (vii) all material changes
and material modifications proposed to the Development Budget and Development Schedule. In addition,
Developer and Authority shall have regular calls regarding the Project at frequencies mutually agreed to by
Developer and the Authority, including what is anticipated to be weekly calls with Investor and lender(s)
leading up to Closing, Developer shall, upon reasonable request by Authority, furnish Authority with
copies of any work product prepared by Developer (not including Developer’s attorneys’ work product or
other confidential information) in connection with its Development Services.

(b) Additional Materials. Developer shall furnish to Authority the following:

i) Within ten (10) business days after receipt, copies of any material reports,
plans, specifications and manuals prepared or obtained by Developer in connection with the planning,
design, construction, and operation of the Project;

(1) Within ten (10) business days after receipt, copies of any material
correspondence, notices or orders of any government agency concerning the Project;

(ii) Within ten (10) business days after receipt, copies of any material
complaints, actions or arbitration or investigatory proceedings with respect to the Project; and

dv) Within sixty (60) days after the close of each fiscal quarter, an unaudited
financial statement for the Project prepared on a modified cash basis, including open accounts payable, in
accordance with conventional practice consistently applied and within six (6) months of the end of each
fiscal year, a set of audited financial statements for the Project.

2.05 Additional Services. Authority may request Developer to undertake certain additional
services which are not included as Development Services (the “Additional Services”), the compensation
for which shall be paid to Developer at the times and in the manner set forth in a separate agreement or
agreements. The scope of any Additional Services must be mutually acceptable to Authority and
Developer. Developer shall have no obligation to provide any Additional Services unless agreed to in
writing by Developer. Developer shall provide such Additional Services as an independent contractor and
not as an agent of Authority, unless the agreement providing for such Additional Services shall otherwise
specifically provide.

2.06 Meetings: Comments on Documents.

(a) Developer and Authority shall have an equal opportunity to participate in all
Project-related meetings with HUD, ADOH, and all governmental and quasi-governmental agencies and
community groups as well as in all material Project-related meetings with residents including, but not
limited to meetings regarding (i) financing; (ii) design, finishes and amenities for the Project; and (iii)
construction of the Project. The parties will exercise best efforts to provide one another with reasonable
advance notice of all such meetings.

(b) The Authority will provide to Developer copies of all material communications
with HUD regarding the Project and will promptly provide Developer with feedback regarding the Project
or documents relating to the Project from HUD.

(c) The parties will provide prompt feedback and comments on any documents
relating to the Project and/or Development Services when requested by the other party.

(d) Notwithstanding anything to the contrary in this Section 2.06, Developer
acknowledges that Authority may have meetings or other communications with HUD without the
Developer present, provided that Authority shall promptly report to Developer the discussion of anything
that could have a detrimental effect on the Project, the liabilities of Developer hereunder or otherwise
relating to the Project or the then-current Closing timeline for the Project financing or completion.

2.07 Insurance. If Developer, or any affiliate of Developer, or a contractor or subcontractor of
Developer or its affiliate commences any site preparation work or construction work on the Site either under
this Agreement or otherwise, Developer shall maintain and keep in force (or cause to be maintained and
kept in force by the party doing such work) insurance in the type and for the amounts specified on Exhibit
H with respect to such work. Developer shall furnish Authority with certificates of such insurance and shall
include Authority as an additional insured per requirements set forth in Exhibit H.

ARTICLE Ul - AUTHORITY RESPONSIBILITIES,

3.01 Authority Responsibilities, Authority shall have the responsibilities set forth on Exhibit G.
If Authority incurs any third-party expenses in connection with such responsibilities and such expenses are
included in the Development Budget, they will be reimbursed at Closing.

3.02 Authority Approvals. Authority recognizes that Developer’s ability to perform hereunder
depends in part on Authority’s responsiveness and Authority pledges to give timely attention to submissions
and requests made to Authority by Developer under the terms of this Agreement and shall review such
submissions and requests on a timely basis. In furtherance of the foregoing, Authority shall provide its
comments to, approval or denial of the submissions and requests for approvals by Developer required under
this Agreement, including, without limitation, proposed Development Plan, Development Schedule,
Development Budget, or revisions thereto within five (5) business days of receipt of the request.
Notwithstanding anything to the contrary herein, if Authority does not respond in writing to any proposed
submission or request from Developer, within five (5) business days of receipt of the submission or the
request, Authority shall be deemed to have approved the submission or request.

3.03 Property. The land reflected by the parcel(s) listed in Exhibit A will comprise the Site. It
is anticipated that the Authority will lease the Site for the Project to the Owner pursuant to the terms of a
Ground Lease. The Ground Lease will have lease payment mutually acceptable to the parties and for a
term of no less than sixty-five (65) years and no more than ninety-nine (99) years. The Ground Lease will
be a “triple net” lease requiring Owner to pay for all costs of developing, owning and operating the Site
(other than certain costs related to Environmental Conditions (as defined in Section 3.05) as set forth in
Section 3.05 below). Authority and the Owner shall negotiate, draft and approve the form of Ground Lease
no later than ninety (90) days prior to the scheduled closing. The base rent due under the Ground Lease
will be an operating expense of four thousand dollars ($4,000.00) increasing annually at a rate of three
percent (3%).

3.05 Tax Exemption Fee; Resident Services.

(a) The contemplated ownership structure of the Project may generate a real property
tax exemption for the Project which would need to be applied for by the Authority and, if the Project is
eligible, will be received annually (the “Project Exemption”). The Authority will be responsible for
applying for and securing the Project Exemption. If the Project qualifies for the Project Exemption in any
given year, and subject to any required approvals from ADOH, HUD, Investor and all lenders, and the
terms and conditions of this Agreement, Authority or Authority’s designee or assignee, will be paid,
beginning in the first full year after stabilization of the Project, a fee equal to $500.00 per unit annually,
increasing at three percent (3% ) annually, paid by the Owner (“Exemption Fee”). The Exemption Fee will
be payable by Owner to Authority as an operating expense for the Project. Authority acknowledges and
agrees that final terms and conditions relating to the payment of the Exemption Fee, including the agreed
upon payment schedule, will be reflected in the Owner Operating Agreement and/or other agreements
signed in connection with the closing of the financing for the Project. Notwithstanding anything to the
contrary in this Agreement, in the event payment of Exemption Fee by Owner would cause the Project to
violate any Investor or lender covenants as it relates to debt service coverage requirements, the Exemption
Fee will be temporarily reduced so as to ensure that all applicable benchmarks imposed by Investor and/or
lender(s) are achieved.

(b) To the extent permissible under the tax exemption statute(s) applicable to the
Project, Authority agrees to use the Exemption Fee for the purpose of providing services to the residents of
the Project, which shall be provided in accordance with the terms of a resident services agreement between
Owner and Authority with terms mutually acceptable to Developer and Authority. Such agreement will

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provide that Authority or Authority’s affiliate shall be responsible to the Owner for providing resident
services in accordance with the terms thereof and other applicable requirements referenced therein.

3.06 Environmental Conditions. If there are any existing Hazardous Materials (defined in
Section 3.06) on the Site, or there are any existing violations of Environmental Law (defined in Section
3.07) with respect to the Site (collectively, such existing Hazardous Substances or violations of
Environmental Law are an “Environmental Condition”), and any such Environmental Condition is known
to Developer and Authority, as to the Developer prior to the date Developer or its contractors, employees
or subcontractors have access to the site, and as to the Owner prior to the date the Site is leased to Owner,
Authority shall be solely responsible for the costs of remediating such Environmental Condition, such costs
to be reimbursed to the Authority at the financial closing. In the event the actual costs of remediating any
known Environmental Condition exceeds the budgeted amount, or in the event there are any costs
associated with remediating any unknown Environmental Condition (Le., an existing Environmental
Condition not known until after the date the Site is leased to Owner), Authority shall be solely responsible
for paying for such costs. Authority and Developer shall be jointly responsible (on a 50/50 basis) for any
Environmental Condition that occurs on the Site after the date the Site is leased to Owner, unless such
Environmental Condition is caused solely by Authority or Developer, in which event the party causing the
Environmental Condition shall be solely responsible for all costs associated with the condition including,
without limitation, all costs of remediating the Environmental Condition and any costs incurred by a third
party (including the Investor or a lender) as a result of the Environmental Condition. The Ground Lease
will provide that the Owner will indemnify Authority for any violations of Environmental Law arising from
the acts or omissions of Owner and its contractors, subcontractors, agents and employees with respect to
the Site after the effective date of the Ground Lease and for liabilities related to the presence of Hazardous
Materials on the Site that are first introduced after the date of the Ground Lease, all on such terms as may
be reasonably agreed to by Authority.

3.07 Hazardous Materials. For purposes of this Agreement, “Hazardous Materials” shall mean
(a) "hazardous substances” as defined by CERCLA (defined in Section 3.07); (b) “hazardous wastes” as
defined by RCRA (defined in Section 3.07); (c) any hazardous, dangerous or toxic pollutant, chemical,
waste, contaminant or substance within the meaning of any Environmental Law (defined in Section 3.07)
that governs the use, exposure, release, emission, discharge, generation, manufacture, sale, transport,
handling, storage, treatment, reuse, presence, disposal or recycling of such pollutant, chemical, waste,
contaminant or substance; (d) petroleum, crude oil or fraction thereof; (e) any radioactive material,
including any source, special nuclear or by-product material as defined in 42 U.S.C. Section 2011 et seq,
and amendments thereto and reauthorizations thereof; (f) asbestos-containing materials in any form or
condition; or (g) polychlorinated biphenyls in any form or condition.

3.08 Environmental Law. For purposes of this Agreement, “Environmental Law” means any
present or future federal, state or local law, ordinance, rule, regulation, permit, license or binding
determination of any governmental authority relating to, imposing liability or standards concerning, or
otherwise addressing the environment, health or safety, including, but not limited to: the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. (“CERCLA”);
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (“RCRA”); the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.;
and the Clean Water Act, 33 U.S.C. Section 1251 et seq. and any so-called “Superfund” or “Superlien” law;
and the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq., as each is from time to time
amended and hereafter in effect.

3.09 No Commitment of Funds, Notwithstanding any provision of this Agreement, the parties
agree and acknowledge that this Agreement does not constitute a commitment of funds or site approval,
and that such commitment of funds or approval may occur only upon satisfactory completion of

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environmental review and receipt by the Authority of a release of funds from the U.S. Department of
Housing and Urban Development under 24 C.F.R. Part § 58. The parties further agree that the provision of
any funds to the project is conditioned on the Authority’s determination to proceed with, modify, or cancel
the Project based on the results of a subsequent environmental review.

The Developer agrees to comply with: The National Environmental Policy Act of 1969 (P.L. 91-
190) pursuant thereto 40 C.F.R. Parts 1500 — 1508; Environmental Review Procedures for the HOME
Investments Partnership program, the RAD Program and the PBV Program pursuant to Title 24 C.F.R. Part
58, Subpart A; and with all conditions required in the process of the environmental assessment. An
Environmental Review Record (“ERR”) may be completed before taking any physical action on a site or
entering into Agreements. If other federal or non-federal funds are involved in an activity, then neither
federal nor non-federal funds may be expended or committed by Agreement (conditional or not) for
activities related to this project including design work, until the Authority provides written authorization
based on approval of an ERR.

No funds may be encumbered prior to the completion of the ERR. The ERR must be completed
before any funds are obligated. Funding is also conditioned upon the completion of the ERR by address.
The responsibility for certifying the appropriate ERR may rest with the Authority. It is the responsibility of
the Developer to notify the Authority, and to refrain from making any commitments and expenditures on
the site until a written authorization has been issued by the Authority. Failure to meet these conditions will
mean that requested funds will not be disbursed.

ARTICLE IV - GENERAL DEVELOPMENT ACTIVITIES,

4.01 Development Schedule. Not later than thirty (30) days after the written approval of the
Development Plan by Authority, Developer shall prepare and submit to Authority for review and approval
a schedule for the performance of the Project (the “Development Schedule”). Authority shall not
unreasonably withhold, condition or delay approval of the Development Schedule and shall work with
Developer to mutually agree on any matters in dispute. Developer shall, as necessary, supplement the
Development Schedule with schedules for submissions and responses of necessary deliverables associated
with tasks covered by the Development Schedule, taking into account appropriate scheduling for
submission, review and approval by the Authority. An updated Development Schedule will be provided to
Authority when deemed necessary by Developer or when reasonably requested by Authority. Proposed
material revisions to the Development Schedule will be submitted by Developer to Authority with
identification and explanation of changes. Authority will promptly review all such proposed material
revisions which, upon written approval by Authority, shall be deemed to constitute the revised Development
Schedule.

4.02 Development Budget. Not later than thirty (30) days after the approval of the Development
Plan in writing by Authority, Developer shall prepare and submit to Authority for approval a development
budget (the “Development Budget”). Authority shall not unreasonably withhold or delay approval of the
Development Budget and shall work with Developer to mutually agree upon any costs in dispute. The
Development Budget shall encompass all sources of funds for the Project and all expenses to be paid out
of the Project, as may be reasonably agreed to by Developer and Authority, and shall detail the assumptions
upon which the Development Budget is based. An updated Development Budget will be provided to
Authority when deemed necessary by Developer or when reasonably requested by Authority. Proposed
material revisions to the Development Budget will be submitted by Developer to Authority with
identification and explanation of changes. Authority will promptly review all such proposed material
changes which, upon approval by Authority, shall be deemed to constitute the revised Development Budget.

5.01 Owner. Developer shall cause the formation of a limited liability company (the “Owner”)
to own and manage the Project. Developer shall cause the formation of a limited liability company to be
the managing member of the Owner (the “Managing Member” or “MM”). In the event that the Authority
will form an entity to serve as a member of the Owner, such entity will make a 168(h) election to be treated
as a corporation. It is intended that the principal equity interest in the Owner will be owned by one or more
tax credit investors (whether one ot more, the “Investor”). All agreements in connection with the admission
of the Investor to the Owner shall be subject to the review and approval of Authority, which shall not be
unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Authority acknowledges
that Developer will be primarily responsible for negotiating such agreements with the Investor. It is
anticipated that Developer or its affiliate will hold forty-nine percent (49%) of the limited liability company
units in the MM and the Authority (or its affiliate) will hold fifty-one percent (51%) of the limited liability
company units in the MM. As between Developer and Authority, other than as may be expressly required
by HUD, Developer will have discretion in (a) the day-to-day operations of MM and the Owner and
(b) deciding or taking action on any matters that could cause Developer to have liability under any
guaranties Developer or its affiliates provide in connection with the Project. Developer shall, however,
consult with Authority on Project matters and must obtain Authority’s consent (which shall not be
unreasonably withheld, conditioned or delayed) on all matters involving HUD and in connection with any
Major Actions. For purposes of this paragraph, the term “Major Actions” is defined below and applies to
either the MM or the Owner (“Entity” or “Entities”):

(a) taking or authorizing any act which would make it impossible to carry on the
ordinary business of the Entity;

(b) voluntarily filing a petition of bankruptcy against the Entity;

(c) selling of all or any portion of the Project, or submitting a request to the Authority
to find a buyer for the Project pursuant to a qualified contract under Section 42(h)(6)E)@UD;

(d) effecting a refinancing, encumbrance, mortgage, conveyance, or other disposition
of all or a substantial portion of the Project;

(e) subleasing the Project as an entirety, or sublease any portion of the Project except
in the normal course of business, including residential leases;

O following the completion date of the Project, construct any new capital
improvements or replace any existing capital improvements costing in excess of Ten Thousand Dollars
($_10,000) and not contemplated in the Budget;

(g) on behalf of the Entity, acquiring any real property in addition to the Project;

(bh) on behalf of the Entity, incur debt not in the ordinary course of business or arrange
for the receipt of any grant of funds, nor incur debt in the ordinary course of business;

@ dissolving or winding up the Entity;

@) confessing any judgment or initiating any litigation on behalf of the Entity, or
compromising any claim or liability owed by or to the Entity (in each case, except for routine tenant
eviction actions);

(k) modifying or amending this Agreement;

) admitting any person as a member of either Entity, except as contemplated by this
Agreement;

(m) permitting any person to borrow from the Entity or commingle funds with the
funds of any person;

(n) making any material changes to the Management Agreement or dismiss or replace
the Management Agent once the Management Agreement is approved;

(0) modifying, in any material respect, any loan document or Project document, once
entered into;

(p) permitting the Owner, or any other person on behalf of or in connection with the
Owner, to pay directly or indirectly the MM or any Affiliate any fees except as provided for in Project
documents; or

(p applying the proceeds realized from any condemnation, insured casualty or insured
title defect.

In addition, Authority shall have the right to receive all documents and reports that the Investor
receives. It shall receive for review, accountant certifications of the itemized amount of construction,
rehabilitation, acquisition and development costs of the Project and the eligible basis and applicable
percentage of each building in the Project. It is anticipated that Developer will remain in ownership of
Owner for no less than the full fifteen (15) year LIHTC compliance period, and in any event, for so long as
Developer or any of its affiliates have liability under any guaranties related to the Project.

Subject to the terms set forth below, Developer shall be solely responsible for providing any
guaranties relating to completion of the Project, any guaranties relating to the LIHTCs allocated to the
Project, and any guaranties relating to operating deficits. In the event Developer or Authority is obligated
to make any guaranty payments or other advances related to the Project pursuant to such guaranties, such
payments shall be structured as loans to the Owner or loans to MM (for contribution to Owner ot to be
loaned to Owner by MM) (the “Guaranty Loans”), provided lenders and Investor approve the same.

Subject to the approval of the Investor and lenders, the Owner shall grant to Authority, its nominee
or assignee (or its nonprofit affiliate) a right of first refusal to acquire the Project at the end of the 15-year
tax credit compliance period for the “minimum purchase price” as defined in Section 42())(7)(B) of the
Code. In the event the Authority (or its nonprofit affiliate) exercises its right of first refusal, it will assume
all of the obligations of the Owner under the Ground Lease described in Section 3.03.

5.02 Management Agent. The Authority and Developer will work together to agree on a
Management Agent for the Project. Not later than the Closing, and subject to Investor and lender approval,
the Owner shall enter into a management agreement with a Property Manager that will be selected via
competitive procurement in accordance with any applicable Federal, State or local procurement
requirements (“PM”), for the management of the Project. The management fee shall be consistent with
HUD published underwriting guidelines as shall be more specifically set forth in a management agreement
to be entered into by and between the Owner and PM (“Management Agreement”). The Management
Agreement shall provide that PM shall be responsible to the Owner for management of the Project in
accordance with the terms of the Management Agreement and other applicable requirements referenced
therein, The Management Agreement will provide for Owner remedies due to PM’s default under the

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Management Agent. Notwithstanding the Owner’s remedies, in the event that PM , as Management Agent
under a Management Agreement for the management of the Project is in default beyond applicable notice
and cure periods and/or is unwilling or unable to perform its responsibilities under the terms of its
Management Agreement, then the Authority and Developer agree that the Authority may require the Owner
to terminate PM or other affiliate of Developer in accordance with the terms of the Management Agreement
and engage a replacement contractor for the management of the Project. The Managing Member Operating
Agteement (defined in Section 6.05) will provide that the Authority and Developer will reasonably agree
on any replacement property managers if any property manager is terminated. It is anticipated that the
Management Agreement will provide for monthly payment of management fees and compensation. Subject
to Investor and lender approval, an initial lease-up fee equal to one-month’s gross rent for the Project will
also be payable by Owner to PM pursuant to the Management Agreement, which fee will be included in
the Development Budget and will be payable by Owner. PM will pay Authority fifty percent (50%) of the
fee in consideration of Authority assisting in the initial lease-up of the Project. Developer will cooperate
with Authority and PM to ensure that staff of Authority engaged in management of the properties being
transitioned from public housing as part of the Project have an opportunity to be considered for available
employment opportunities with PM, subject to PM having the right to engage in such screening and
interviewing processes as it normally would for any employees it may hire. To the extent permitted by
Investor, lenders, ADOH and HUD, upon lease-up the Authority may act as a sub-manager (“Sub-
Manager”) for the completed project to include managing the Project’s wait list for households receiving
Project Based Vouchers. PM and Sub-Manager will execute a separate agreement (“Sub-Management
Agreement”) defining the duties to be performed by the Sub-Manager. PM and Sub-Manager will share in
the management fee as defined in the Sub-Management Agreement and Sub-Manager will be entitled to a
sub-management fee, payable from the fee paid to PM under the Management Agreement.

Section 5.03 Development Cost Savings. To the extent permitted by Investor, lenders, ADOH
and HUD, in the event there are cost savings (“Savings”) for the Project (i.e. the actual total development
costs of the Project are less than the total sources available for the Project), Developer and Authority agree
to use good faith efforts to have the Owner Operating Agreement and loan documents for the Project allow
for the use of Savings for the following, in the following order: (i) the payment of what would be Deferred
Development Fee but for the Savings; (ii) to fund required reserves; and (ii) the balance, if any, to be used
to pay for betterments of the Project, with such betterments to be decided per mutual agreement of
Developer and Authority. Notwithstanding the foregoing, to the extent any Savings results in a loss in
“eligible basis” (as such term is defined in Section 42 of the Code) and a related reduction in low-income
housing tax credits, the parties will work together to first utilize the Savings for permitted expenses related
to the Project so as not to lose eligible basis or reduce LIATC.

ARTICLE VI - DEVELOPMENT FEE; PROJECT CASH FLOW/TAX CREDITS:
PREDEVELOPMENT COSTS; MiVI INTERESTS

6.01 Development Fee. Developer and Authority (or its affiliate) shall be entitled to a
development fee to be earned and paid (unless deferred as set forth below) during the development period
(the “Development Fee”), as shown and agreed upon in the final Development Budget for the Project
approved at closing by Developer, Authority, Investor and lenders. In addition to the Development Fee,
Authority agrees to a $150,000 construction management fee to be paid to an affiliate of Developer. The
Development Fee shall comply with all HUD requirements, and will not exceed the maximum amount
permitted under the Code and by ADOH. The Development Fee shall be paid in accordance with a payment
schedule permitted by the Investor and lenders, Developer Fee shall be divided according to the following
percentages: 70% to Developer and 30% to Authority to be paid at or after Closing and prior to receipt of
Form 8609 from ADOH; 70% to Developer and 30% to Authority of deferred Developer Fee including
without limitation any Developer Fee to be paid out of available cash flow. Whether payable from equity
or other sources during development of the Project or deferred and payable from cash flow, Developer and

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Authority shall receive their respective share of Development Fee pro rata. The parties agree that if a
governmental authority, Investor or lender imposes any limitations on the Development Fee, then the most
restrictive limitations shall control and that any reduction in the Development Fee will affect Authority and
Developer on a pro rata basis. A portion of the Development Fee may be deferred and paid out of Owner’s
cash flow and/or sale and refinancing proceeds, subject to any limitations imposed by ADOH, Investor
and/or a lender (the “Deferred Development Fee”). In the event of a cost overrun in excess of any
contingency set forth in the Development Budget, the Development Fee shall be deferred, as necessary, to
pay for such overrun. Developer and Authority agree that cash flow based payments of Deferred
Development Fee will be paid to Developer and Authority ahead of the repayment of any loans to Owner
from Authority or its affiliates. If, during the course of development of the Project, there is a need to change
Deferred Development Fee, Developer and Authority will mutually consult with one another to minimize
the amount of additional Deferred Development Fee and cooperate in good faith to reduce the same. Any
changes to Deferred Development Fee after Authority’s approval of the Development Plan must be
approved by the Authority. In the event that Investor requires deferred Developer Fee to be paid prior to
the end of the 15-year compliance period, Developer will pay its portion of Deferred Development Fee
outstanding, and Authority will pay its portion of Deferred Development Fee outstanding.

6.02 Cash Flow: Tax Credits. Subject to the terms of Section 6.05, and Investor approval, any
cash flow distributed to MM shall be paid first in the amount of $7,500 to MM (the “MM Asset Management
Fee”). If the Owner pays the MM an administrative fee or other fees (other than the MM Asset Management
Fee) for providing any services to the Owner (e.g., company management fees, incentive management fees
or the like) (“Managing Member Fees”), such Managing Member Fees will be distributed by Managing
Member as follows: fifty percent (50%) to Developer and fifty percent (50%) to Authority. To the greatest
extent permitted by the Investor and the Code, all LIHTCs, HTCs or other tax credits (including, without
limitation, any 45L credits) allocated to the MM will be fully allocated to Developer.

6.03 Predevelopment Costs. The Development Budget shall include a budget of estimated
predevelopment costs. Predevelopment costs are defined as those costs incurred in connection with the
Project prior to the Closing. Such predevelopment costs contemplated for the Project will include, but not
be limited to, costs incurred to prepare applications for LIHTCs and other funding sources, appraisals,
market studies, capital needs assessments, environmental studies, surveys, Geotech reports, energy
modeling, and bond reservations. A preliminary estimate of predevelopment costs is included in Schedule
6.03. The final Development Budget will include an agreed upon amount of Authority’s legal fees.
Developer shall each be responsible for 100 percent (100%) of all budgeted predevelopment costs incurred
in connection with the Project. Developer shall provide Authority with monthly invoices setting for the
amount of predevelopment costs incurred each month. Developer shall be responsible for all
predevelopment costs in excess of budgeted predevelopment costs. At Closing, Authority and Developer
shall each be repaid the predevelopment costs they have incurred in connection with the Project, subject to
Investor and lender approval. [Ifthe Project receives an award of LIHTCs which Owner accepts, Developer
intends to obtain a predevelopment line of credit that will be used for predevelopment costs incurred after
the acceptance of such award and leading up to Closing. ]

6.04 Project Loans. All loans made by the Authority are referred to herein as “Authority
Loans.” The final amounts of all Authority Loans are subject to final approval by Developer, Authority,
Investor and lenders. To the extent that Deferred Development Fee is not sufficient to cover construction
overruns or there are operating deficits covered by Developer guarantees, the amount paid will be deemed
loans and repaid from available cash flow after payment of Deferred Development Fee. Such loans are
referred to as “Managing Member Project Loans.”

6.05 Adjustments to Cash Flow. If Investor or any lender determines that the amount of cash
flow to be distributed as set forth in Section 6.02 needs to be modified to preserve LIHTCs or to maintain

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Investor’s pricing for its investment in LIHTCs with Owner, Authority and Developer agree that they will
make such adjustments as are necessary to satisfy Investor’s requirements or lender’s requirements, as
applicable. The final Managing Member operating agreement (the “Managing Member Operating
Agreement”) and Owner Operating Agreement will include such terms as are necessary to reflect this
agreed upon split of cash distributions from the Project.

6.06 Purchase of MM Interest. Subject to the approval of Investor and lenders, and if required,
ADOH and HUD, the Managing Member Operating Agreement will provide that Authority will have the
right to purchase Developer’s interest in the MM after the expiration of the operating deficit guaranty period
set forth in the Owner Operating Agreement for an exit fee in the amount of $100,000. In the event that
the Project is issued an Internal Revenue Service Form 8611 or 8823, the exit fee will be reduced to $100.00.
In the event that the Project fails ADOH or other HUD-mandated physical inspections and the deficiencies
are not corrected within the allotted cure period, the exit fee will be reduced to $100.00, In the event the
Investor removes the Developer or requests the developer exit the ownership entity during the Compliance
Period, the exit fee will be reduced to $100.00, Authority’s right to purchase the MM Interest will be
conditioned upon HUD, ADOH, Investor and lender(s) providing any necessary consent to such purchase.

ARTICLE VU - SELECTION OF PROFESSIONALS,
CONTRACTORS AND CONSULTANTS

7.01 Selection of Providers, Authority and Developer shall mutually agree on any party that
will be providing any services in connection with the Project including, without limitation, attorneys,
accountants, and consultants; provided, however, that Authority and Developer agree that (a) Gary Todd
Architecture, Ltd. shall be the architect for the Project (“Architect”), (b) the general contractor for the
Project (“General Contractor”) will be selected via competitive procurement in accordance with any
applicable Federal, State or local procurement requirements, (c) TBD shall be the
management agent for the Project, and (d) Authority shall maintain sole right and ability to select and retain
its own legal counsel, accountants and consultants throughout the duration of the Project. Developer or an
affiliate may also provide relocation services in connection with the Project with the assistance of Authority.
The amount of any fees or other compensation payable to Developer or its affiliates for the services
described above, and the terms of any agreements related thereto, must be mutually acceptable to Developer
and Authority. The fees due to Architect and General Contractor will be as set forth in the LIHTC
Application. Notwithstanding the foregoing, in no event shall Developer contract with any party that has
been debarred or suspended by the HUD. Developer hereby represents to Authority that it and its affiliates
have not been disbarred or suspended by HUD. Authority shall have the right to review and approve, which
approval will not be unreasonably withheld, conditioned or delayed, all contracts between Owner and
Architect, General Contractor, PM or any other affiliate of Developer.

7.02 Architect’s Agreement; Construction Contract. Owner’s agreement with Architect (the
“Architect’s Agreement’) will provide for Owner remedies due to Architect’s default under the Architect’s
Agreement that are mutually acceptable to Developer and Authority and levels of service and measures of
Architect’s performance as an architect, consistent with industry practice and shall include termination
rights in favor of Owner mutually agreed to between Developer, Architect and Authority, all subject to the
approval of Investor and lenders. Owner’s agreement with General Contractor (the “Contractor’s
Agreement’) will provide for Owner remedies due to Contractor’s default under the Contractor’s
Agreement that are mutually acceptable to Developer and Authority and levels of service and measures of
Contractor’s performance as an architect, consistent with industry practice and shall include termination
rights in favor of Owner mutually agreed to between Developer, Architect and Authority, all subject to the
approval of Investor and lenders. In the event that Architect/General Contractor is in default beyond
applicable notice and cure periods and/or is unwilling or unable to perform its responsibilities under the
terms of its agreement between Owner and Architect/General Contractor, then the Authority and Developer

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agree that the Authority may require the Owner to terminate Architect/General Contractor in accordance
with the terms of the agreement and engage a replacement contractor. The Managing Member Operating
Agreement will provide that the Authority and Developer will reasonably agree, subject to Investor
approval, on any replacement architect or general contractor, as applicable.

7.03 Environmental Remediation and Monitoring. Prior to procuring environmental
remediation and/or monitoring services the Developer will require general contractor to contact the
Authority’s project manager to obtain a current list of approved contractors, If the list contains contractors
that perform the desired scope of work, the general contractor will enter into subcontracts exclusively with
those Authority-approved contractors. The general contractor will obtain bids from the approved
contractors and award the resulting contract(s) in accordance with its established procurement procedures.

ARTICLE VII - REPRESENTATIONS AND WARRANTIES,

8.01 Developer Representations. Developer hereby represents and warrants as follows:

(a) It has the legal and financial capacity to assume responsibility for compliance with
all applicable laws, regulations, rules, programs and agreements and to enter into this Agreement and to
perform all of the undertakings set forth herein.

(b) Developer is a duly organized and validly existing legal entity under the laws of
the State of Illinois and is qualified to do business in the State of Arizona.

(c) This Agreement has been duly and validly executed and delivered by Developer
and constitutes a valid and legally binding obligation of Developer enforceable in accordance with its terms.

(d) Developer is not a party to any contract or agreement or subject to any charter or
other legal restriction of any kind which materially and adversely affects the business, property or assets,
or the condition, financial or otherwise, of Developer. Neither the execution and delivery of this Agreement,
nor compliance with the terms, conditions and provisions hereof, will conflict with or result in a breach of
the terms, conditions or provisions of, or constitute a default under any law or any regulation, order or
decree of any court or governmental agency, or any indenture or other agreement or instrument to which
Developer is subject, or will result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of Developer pursuant to the terms of any such
indenture or agreement or instrument, and will not require the approval of any federal regulatory body or
of any state or local commission or authority having jurisdiction with respect thereto, unless such approval
has been obtained and is in full force and effect on the date hereof.

(e) There is no action, proceeding or investigation now pending before any court or
any governmental department or agency nor any basis therefor, known or believed to exist which: (i)
questions the validity of this Agreement or any action or act taken or to be taken by Developer pursuant to
this Agreement, or (ii) is likely to result in a material adverse change in the authority, property, assets,
liabilities or condition of Developer which will materially and substantially impair its ability to perform
pursuant to the terms of this Agreement.

® There has been no administrative action taken nor is any administrative action
pending against Developer, its directors and/or officers relating to any denial of patticipation, suspension
or debarment in any HUD program.

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8.02 Authority Representations. Authority hereby represents and warrants as follows:

(a) It has legal and financial capacity to assume responsibility for compliance with all
applicable laws, regulations, rules, programs and agreements and to enter into this Agreement and to
perform ail the undertakings set forth herein.

(b) Authority is a duly organized and validly existing legal entity under the laws of the
State of Arizona.

(c) This Agreement has been duly and validly executed and delivered by Authority
and constitutes a valid and legally binding obligation of Authority enforceable in accordance with its terms.

(d) Authority is not a party to any contract or agreement or subject to any charter or
other legal restriction of any kind which materially and adversely affects the business, property, or assets,
or the condition, financial or otherwise, of Authority. Neither the execution and delivery of this Agreement,
nor compliance with the terms, conditions and provisions hereof will conflict with or result in a breach of
the terms, conditions or provisions of, or constitute a default under any law or any regulation, or decree of
any court or governmental agency, or of any indenture or other agreement or instrument to which Authority
is subject, or will result in the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of Authority pursuant to the terms of any such indenture or
agreement or instrument and will not require the approval of any federal regulatory body or of any state or
local commission or authority having jurisdiction with respect therefo, unless such approval has been
obtained and is in full force and effect on the date hereof.

(e) There is no action, proceeding or investigation now pending before any court or
any governmental department or agency nor any basis therefor, known or believed to exist which:
(i) questions the validity of this Agreement or any action or act taken or to be taken by Authority pursuant
to this Agreement, or (ii) is likely to result in a material adverse change in the authority, property, assets,
liabilities or condition of Authority which will materially and substantially impair its ability to perform
pursuant to the terms of this Agreement.

3) There has been no administrative action taken nor is any administrative action
pending against Authority, its directors and/or officers relating to any denial of participation, suspension or
debarment in any HUD program.

ARTICLE IX - COOPERATION; PUBLIC STATEMENTS

9.01 Cooperation. The parties hereto agree to cooperate with each other and provide all
necessary documentation, certificates and consents and to take all necessary action in order to satisfy the
terms and conditions hereof and the applicable laws, regulations and agreements relating thereto.

9.02 Public Statements. The parties agree to cooperate and consult with each other regarding
any public statements or publication made regarding the Project, provided, however, that Developer
understands that Authority staff may have to appear at public hearings or other public meetings at which
the Project is discussed, and that in such instances, Authority may not be able to fully coordinate public
statements made at such meetings or appearances, Each party will make reasonable efforts to provide the
other with drafts of any written material prepared in connection with the Project for a government agency
or other third party prior to submission. Each party shall revise such drafts in accordance with reasonable
requests of the other. Nothing in this Section 9.02 is intended to require that Authority or any City
employees share with Developer any internal communications about this Agreement or the Project.

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ARTICLE X - ACCOUNTING RECORDS.

10.01 Books and Records. Developer’s books and records pertaining to the Project shall, prior
to Closing, be kept on a modified cash basis, including open accounts payable, in accordance with
conventional practice, and consistently applied and after Closing shall be kept in accordance with generally
accepted accounting principles. All books and records must conform to all regulatory and Investor
requirements. Authority shall have reasonable access to all such books and records.

ARTICLE XI - DISPUTES,

11.01 Disputes. In the event ofa dispute arising under this Agreement, the parties shall, without
delay and in good faith attempt to amicably resolve such dispute. Should the parties be unable to resolve
any dispute between themselves within ten (10) business days of both parties notice of such dispute (“10-
Day Dispute Period”) the parties will, within three (3) business days following the 10-Day Dispute Period
select a neutral mediator experienced in mediation and in matters customarily related to the area of dispute.
The dispute will be submitted to the mediator for non-binding mediation, the decision of such mediation
not to extend beyond sixty (60) days from the conclusion of the 10-Day Dispute Period. If the parties do
not reach a resolution to their dispute within the period referenced above, then, upon notice by either party
to the other, all disputes, claims, questions, or differences may be submitted to non-binding arbitration in
the State of Arizona in accordance with the Commercial Arbitration Rules and practices of the American
Arbitration Association. In the event of a dispute in the courts, the parties consent, agree and stipulate that
the exclusive forums and jurisdiction for maintaining any civil actions shall be in either the state or federal
courts located in Maricopa County, Arizona, and the parties to this Agreement agree to submit to the
personal and exclusive jurisdiction and venue of these courts.

ARTICLE XII - TERM; TERMINATION.

12.01 Term. This Agreement shall commence upon the execution hereof and shall terminate at
Closing.

12.02 Termination by Parties. This Agreement may be terminated:
(a) By the mutual agreement of Developer and Authority;

(b) By Developer or Authority if there has been a default in the performance or
observance of any term or condition of this Agreement by the other party that is not cured within thirty (30)
days after receipt of written notice thereof from the non-defaulting party; provided that, if such default
cannot reasonably be cured within thirty (30) days, and the defaulting party shall have commenced to cure
such default within such thirty (30) day period, then the defaulting party shall have such additional time as
is reasonably necessary to cure the default if the defaulting party promptly and diligently proceeds to cure
the same, it being agreed that no extension shall be for a period in excess of one hundred and eighty (180)
days unless mutually agreed to by the parties;

(c) Immediately by Developer or Authority, if the other party ceases doing business
as a going concern, makes an assignment for the benefit of creditors, files a voluntary petition seeking for
itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar
arrangement under the federal bankruptcy laws or any similar federal or state statute, law or regulation, or
files an answer admitting the material allegations of such a petition or consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of all or any part of its assets or properties.

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12,03 Payments and Damages. In the event Developer and Authority mutually terminate this
Agteement under Section 12.02(a), each party shall pay 50% of the predevelopment expenses (and
Authority shall reimburse Developer for 50% of any predevelopment expenses borne 100% by Developer)
or any Project in accordance with the terms of Section 6.03, and neither party shall be entitled to any
compensation from the other party unless mutually agreed by the parties. In the event Developer or
Authority terminates this Agreement under Section 12,02(b) or 12.02(c), the defaulting party shall be liable
for any and all damages incurred by the non-defaulting party including, without limitation, reasonable
attorneys’ fees and other costs and expenses resulting from termination of this Agreement.

12.04 Termination. Authority may terminate this Agreement for the convenience of Authority
if Authority determines in good faith that it is infeasible or contrary to the interests of the Authority to
proceed with the Developer for the Project, or with the Project as contemplated by Authority’s Request for
Proposals issued September 13, 2023. Any such termination shall occur by delivery to Developer of a
written notice of termination. In the event of such termination for convenience, the Authority shall pay to
Developer, as applicable, Termination Costs (as defined in this paragraph) within sixty (60) days after the
Authority has received written notice from Developer of the applicable amount of Termination Costs and
documentation that, to Authority’s satisfaction, provides direct evidence of such Termination Costs. If the
termination occurs prior to the date on which Developer and Authority have agreed on the Development
Plan, the “Termination Costs” shall equal the sum of out-of-pocket costs Developer has incurred and paid
in the development of the Project (the “Out-of-Pocket Costs”). If the termination occurs on or after the
date on which Developer and Authority have agreed on the Development Plan, but prior to the date on
which the Project receives a reservation or award of LIHTC, the “Termination Costs” shall equal the sum
of (i) the Out-of-Pocket Costs, plus (ii) fifty percent (50%) of Developer’s budgeted architect fees. The
budgeted amounts shall be based on the approved Development Budget or, ifa LINTC application has been
submitted, the amounts set forth in such application. If the termination occuts on or after the date on which
the Project has received a reservation or award of LIMTC, the Termination Costs” shall equal the sum of
(i) the Out-of-Pocket Costs, plus (ii) one hundred percent (100%) of Developer’s budgeted architect fees,
plus (iii) fifty percent (50%) of Developer’s fees paid to lendets (if any) for an application fee.

12.05 Survival. Notwithstanding any expiration or termination of this Agreement, all
indemnification obligations contained in of this Agreement, and the provisions contained in Articles II, III,
V, VI, VII, XI, XII, XVII and XVIII of this Agreement shall survive the termination of this Agreement to
the extent that the terms and conditions therein require continued performance, compliance, or effect
beyond the termination date of this Agreement.

ARTICLE XMI_- INDEPENDENT CONTRACTOR

13.01 Independent Contractor. It is expressly agreed and understood between Authority and
Developer, that Developer, in entering into this Agreement and carrying out its obligations hereunder, is an
independent contractor working for itself and is not, shall not be deemed to be and shall not hold itself out
as an agent, legal representative or employee of Authority. Developer is not granted any right or authority
to assume or to create any obligation, liability or responsibility, express or implied, on behalf of or in the
name of Authority, to bind the Authority in any manner to any contractual or other undertaking whatsoever
or to accept payment from any party of any obligation owing to Authority. Developer shall be responsible
for all costs it incurs in performing its obligations under this Agreement, and except as explicitly set forth
herein, Authority shall not have any liability for any debts or other obligations which Developer may incur
in rendering such performance.

13.02 Employees of Developer. Developer will provide staff for the proper administration,

coordination, and supervision of the services it is providing under this Agreement. All officers and
employees of Developer shall be compensated by Developer and shall be under the control of Developer.

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Authority shall not have any liability or obligation whatsoever with respect to any employment arrangement
between Developer and any of its officers and employees, All matters concerning the employment,
supervision, compensation, promotion and discharge of such officers and employees shall be the sole
responsibility of Developer. Developer shall comply with all applicable laws and regulations with respect
to workers’ compensation, social security, unemployment insurance, hours of labor, wages, working
conditions, licensing and other employer-employee related matters, including, without limitation, all laws,
tules and regulations with respect to non-discrimination based on race, sex or otherwise.

13.03 No Assignment of Funds. The Developer acknowledges that any transfer of Authority
funds by Authority to the Developer shall not be deemed an assignment of such funds. The Developer will
not succeed to any rights or benefits of Authority or attain any privileges, authorities, interests, or rights of
Authority.

ARTICLE XIV - CONFLICT OF INTEREST.

14.01 Conflicts of Interest.

(a) No employee, officer or agent of Authority shall participate in selection, or in the
award or administration of a contract supported by Federal funds if a conflict of interest, real or apparent
would be involved. Such a conflict would arise when (a) the employee, officer or agent, (b) any member
of his or her immediate family, (c) his or her parents or (d) an organization that employs, or is about to
employ, any of the foregoing, has a financial or other interest in the firm selected for the award.

(b) Neither Authority nor Developer nor its contractors shall enter into any contract,
subcontract or agreement in connection with the Project in which any member, officer or employee of
Authority, or any member of the governing board of the locality in which the Project is situated, or any
member of the governing body of the locality in which Authority was activated or in any other public
official of such locality or localities who exercises any responsibilities or functions with respect to the
Project during such person's tenure or for one (1) year thereafter has any interests, direct or indirect.

(©) If any such present or former member, officer, or employee of Authority, or any
such governing body member or such other public official of such locality or localities involuntarily
acquires or had acquired prior to the beginning of such person's tenure any such interest, and if such interest
is immediately disclosed to Authority, and such disclosure is entered upon the minutes of the Authority,
Authority, may waive the prohibition; provided that any such present member, officer or employee of
Authority, shall not participate in any action by Authority relating to such contract, subcontract or
arrangement.

(d) No member, officer or employee of Authority, no member of the governing body
of the locality in which the Project is situated, no member of the governing body of the locality in which
Authority was activated, and no other public official of such locality or localities who exercises any
functions or responsibilities with respect to the Project, during his/her tenure or for one year thereafter shall
have any interest, direct or indirect, in the Project or the proceeds thereof.

(e) In addition to those requirements specifically set forth in this Section 14.01,
Authority, Developer and their respective officers, employees, agents and/or contractors shall comply with
all applicable Federal and Arizona laws and regulations governing conflicts of interest. Specifically, all
parties hereto acknowledge that this Agreement is subject to cancellation by Authority or its successor, if
applicable, pursuant to the provisions of A.R.S. § 38-511. Authority represents to Developer that it has no
knowledge of any facts or circumstances that could give rise to the cancellation of this Agreement by
Authority pursuant to the provisions of A.R.S. § 38-511.

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14.02 Interest of Members of Congress. No member of or delegate to the Congress of the United
States of America shall be admitted to any share or part of this Agreement or to any benefit to arise from
it.

14.03 Limitation of Payments to Influence Certain Federal Transactions. The Limitation of Use
of Appropriated Funds to Influence Certain Federal Contracting and Financial Transactions Act, 31 U.S.C.
§1352, provides, in part, that no appropriated funds may be expended by recipient of a federal contract,
grant, loan, or cooperative agreement to pay any person, including Authority and Developer, for influencing
or attempting to influence an officer or employee of Congress in connection with any of the following
covered Federal actions: the awarding of any Federal contract, the making of any Federal grant, the making
of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation,
renewal, amendment, or modification of any Federal contract, grant, loan or cooperative agreement.

14.04 Certification. The Developer agrees to execute the Certification Regarding Lobbying
attached hereto as Exhibit J.

ARTICLE XV - FEDERAL REQUIREMENTS

15.01 With regard to all work on the Project, Developer shall comply with all applicable federal,
state and local laws and HUD regulations, including the following requirements to the extent they are
applicable, 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
C.F.R. Part 100; Executive Order 11063 (Equal Opportunity in Housing) and regulations issued thereunder,
24 C.F.R. Part 107; the fair housing poster regulations, 24 C.F.R. Part 110, and advertising guidelines 24
C..R. 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 C.F.R. Part 1.

(c) Age Discrimination Act of 1975, 42 U.S.C. §§ 6101-07, and regulations issued
thereunder, 24 C.F.R. Part 146.

(d) Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, and regulations
issued thereunder, 24 C.F.R. Part 8; the Americans with Disabilities Act, 42 U.S.C. §§ 12181-89, and
regulations issued thereunder, 28 C.F.R. Part 36, and the Architectural Barriers Act of 1968, as amended
(42 U.S.C. § 4151) and regulations issued pursuant thereto, 24 C.F.R. Part 40.

(e) Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C.
§ 1701(u) (“Section 3”) and its implementing regulations at 24 C.F.R. Part 75.

63) 24 C.F.R. Part 24, which applies to the employment, engagement of services,
awarding of contracts, subgrants, or funding of any recipients, or contractors or subcontractors, during any
period of debarment, suspension, or placement in ineligibility status.

(g) Section 306 of the Clean Air Act, Section 508 of the Clean Water Act, Executive
Order 11738 and Environmental Protection Agency regulations at 40 C.F.R. Part 15.

(h) The Immigration Reform and Control Act of 1986, Pub L. No. 99-603, 100 Stat.
3359,

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a Executive Order 11246 of September 24, 1965, entitled, "Equal Employment
Opportunity," as amended by Executive Order 11375 of October 13, 1967, and as supplemented in
Department of Labor regulations, 41 C.F.R. Part 60. (All construction contracts awarded in excess of
$10,000 by Federal grantees and their contractors or subcontractors.)

(0) Copeland “Anti-Kickback” Act, 18 U.S.C. § 874, as supplemented in Department
of Labor regulations at 29 C.F.R. Part 3. (All contracts and subgrants for construction or repair.)

(kb Davis-Bacon Act, 40 U.S.C. §§ 276a to 276a-7, as supplemented by the
Department of Labor regulations at 29 C.F.R. Part 5, and HUD regulations at 24 C.F.R. 941.610(a)(8)(vi)
or successor provisions. The provisions of 24 C.F.R. Part 70, as they may be amended from time to time,
will apply to the use of volunteers for activities covered by Section 12 of the United States Housing Act of
1937. In addition, if funds from other Federal programs are used in construction of the Project, Developer
agrees to comply with all applicable requirements of such programs relating to labor standards. Developer
shall comply with 24 C.F.R. Part 85, to the extent applicable.

dad) Sections 103 and 107 of the Contract Work Hours and Safety Standards Act, 40
ULS.C. Sections 327-330 (as recodified at 40 U.S.C. Sections 3701-3703), as supplemented by Department
of Labor regulations at 29 C.F.R. Part 5.

(m) Executive Orders 11625 (as amended by Executive Order 12007), 13170, 12432,
and 12138 (as amended by Executive Order 12608). Consistent with HUD's responsibilities under these
Orders, to the extent applicable to the work to be performed by Developer hereunder, Developer must make
efforts to encourage the use of minority and women's business enterprises in connection such work.

ARTICLE XV1- CONSENT: NO ASSIGNMENT,

16.01 Consent. In any request, approval, consent or other determination by any party required
under this Agreement, the party shall act reasonably, in good faith and in a timely manner unless a different
standard is explicitly stated. Nothing contained in this Agreement shall be deemed or construed in any way
as constituting Authority’s expressed or implied authorization, consent or request to any contractor,
subcontractor, laborer or materialman, architect, or consultant, for the construction or demolition of any
improvement, the performance of any labor or services or the furnishing of any materials for any
improvements, alterations to or repair of a Development or any part thereof.

16.02 Assignment. With the exception of the Authority’s nominee or assignee, neither party shall
assign, subcontract or transfer any services, obligations, or interests in this Agreement without the prior
written consent of the other party, which consent shall not be unreasonably withheld, conditioned or
delayed.

ARTICLE XVII- INDEMNIFICATION

17.01 Mutual Indemnity. Developer, its affiliates, joint venture partners, subcontractors, agents
or employees of any of them or anyone for whose acts they may be liable (collectively “Developer
Representatives”), severally and jointly, agree to indemnify, defend, and hold harmless, on demand, the
Authority, its successors and assigns, its elected and appointed officials, employees, agents, boards,
commissions, representatives, and attorneys, for, from and against any and all third-party liabilities,
obligations, damages, charges and expenses, penalties, suits, fines, claims, legal and investigation fees or
costs, arising from or related to any claim or action for injury or damage to persons, property or the
environment (collectively, “Claims”) which Claims allege or arise in connection with the violation of law
by, or the negligence or willful misconduct of, Developer Representatives on the Site or elsewhere in the

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performance of its obligations under this Agreement. Authority, its affiliates, joint venture partners,
subcontractors, agents or employees of any of them or anyone for whose acts they may be liable
(collectively “Authority Representatives”), severally and jointly, agree to indemnify, defend, and hold
harmless, on demand, the Developer, its affiliates and each of their respective successors and assigns,
members, managers, employees, officers, shareholders and directors, for, from and against any and all
Claims which allege or arise in connection with the violation of law by, or the negligence or willful
misconduct of, Authority Representatives on the Site or elsewhere in the performance of its obligations
under this Agreement.

17.02 Mutual Waiver of Subrogation. For the consideration of this Agreement, Developer and
Developer Representatives agree to waive all rights of subrogation against the Authority for losses arising
from or related to this Agreement. For the consideration of this Agreement, Authority and Authority
Representatives agree to waive all rights of subrogation against Developer for losses arising from or related
to this Agreement.

ARTICLE XVII - ROLE OF PUBLIC HOUSING AUTHORITY COMMISSION
OR CITY COUNCIL.

18.01 The parties acknowledge that closing of the transactions contemplated in this Agreement may be
contingent on the review and approval, consistent herewith, of the City of Chandler Public Housing Authority
Commission and/or the Chandler City Council if required by law or regulation, which approval is in the respective
body’s sole and absolute discretion. The Developer and the Authority agree to cooperate in order to obtain all
necessary approvals.

ARTICLE XIX - MISCELLANEOUS,

19,01 Notices. All notices, requests, demands, approvals, or other formal communications given
hereunder or in connection with this Agreement shall be in writing and shall be deemed given when actually
received or two (2) days after being sent by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

If to Developer: If to Authority:

Brinshore Development Chandler Housing and Redevelopment Division
Attn: Richard Sciortino 235 South Arizona Avenue

Phone: 847-224-5053 Chandler, AZ 85225

Email: richs@brinshore.com Attn: Amy Jacobson, Housing and

Redevelopment Senior Manager
Phone: 480-782-3207
Email: Amy.Jacobson@chandlerAZ.gov

With a copy to:

Duane Morris, LLP

Terrace 7

2801 Via Fortuna, Suite 200

Attn: Scott A. Marks, P.C.

Phone: 512-277-2268

Email: samarks@duanemorris.com

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