___

OFFICE OF THE CORPORATION COUNSEL OPINION

f4

To:

Honorable Jorge Perez, President of the Board of Aldermen Victor A. Bolden, Corporation Counsel Christopher Neary, Deputy Corporation Counsel Alison Lanoue, Assistant Corporation Counsel August 17, 2012 Proposed Tax Agreement for the 360 State Street property

From:

Date: Re:

Issues
(1) Whether the current agreement(s) between the City of New Haven and the owner(s) of the property at 360 State Street address how to assess the value of that property and what amount of real estate taxes may be imposed? Regardless of whether the current agreements between the City of New Haven and the owners of the property at 360 State Street address the issue of real property taxation now, does the Connecticut City and Town Development Act, Chapter 114 of the Connecticut General Statutes, provide sufficient statutory authority for the City to enter into a new agreement with the owners now to abate or otherwise alter the taxes, as currently assessed? Short Answers (1) Yes. The City and the owners of the property at 360 State Street currently have an agreement with respect to property taxes that: (1) fixed the assessment value of the property until improvements were completed; (2) provided for the adoption of a new assessment value of the property following the completion of improvements in accordance Conn. Gen. Statutes Section 12-53; and (3) phased-in any new assessment value of the property over a five-year period following the completion of improvements.

(2)

(2) Probably not in this particular case. The plain language and legislative history of the Connecticut City and Town Development Act does not provide for the granting of tax abatements or tax exemptions of any kind to existing buildings not now under construction or rehabilitation and such a statutory construction is fraught with peril, given that the current agreements between the City and the owner(s) unequivocally foreclose the granting of additional property tax relief. The City could be subject to suit for imposing additional and arguably unauthorized significant costs on taxpayers.
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Relevant State and Local Law Provisions Conn. Gen. Statutes Section 7-480, et seq. Conn. Gen. Statutes Section 12-53 Conn. Gen. Statutes Section 1 2-65c-65f Discussion A. The Current Agreements Between the City and the Property Owners of 360 State Street

The City of New Haven and the owners of the property at 360 State Street have entered into three binding legal agreements: (1) a Development Agreement (DA) (attached as Exhibit A); (2) a Land Disposition Agreement (LDA) (attached as Exhibit B); and (3) a Tax Deferral Agreement (attached as Exhibit C). Under the DA, the City sold the land currently known as 360 State Street for the price of one dollar ($1.00). See DA, Section 3.2. Consistent with Section 7.1 of the DA, the City also waived over $3 million dollars in building permits and fees and, in Section 7.3, agreed to provide up to $500,000 in sidewalk and streetscape improvements as well as assist the developer with obtaining millions of dollars more in financing for the project. In addition to contractual commitments in the DA, the LDA contains specific provisions relating to property taxes and remedies for addressing issues arising under these agreements on this issue or any other. Under Section 2.7, entitled Real Property Tax Adjustments, the LDA provides that: The City and the Developer agree that it is their intention that, commencing upon Closing, the Property shall be, and shall remain, subject to real estate tax and in no event shall the Developer or any successor or assignee seek exemption from such taxes. LDA, 2.7(8) (emphasis added). The plain meaning of this provision could not be any clearer. The parties agreed that the property will be subject to taxation by the City and, under no circumstances, will an exemption from taxation be sought. To the extent that there is an issue about whether an exemption of some kind from taxation can be sought by the owners of 360 State Street under the terms of the DA or 2

LDA, the City and the owners of 360 State Street agreed to resolve any such disputes through binding arbitration. See DA, Section 9.3 (The City and the Developer agree that they shall endeavor to resolve any dispute that may arise under this Agreement through good faith negotiations, prior to submitting to binding arbitration Connecticut courts have long favored arbitration and the law is quite clear that arbitration clauses will be strictly enforced. Connecticut General Statutes Section 52408 states that: [a]n agreement in any written contract. to settle by arbitration any controversy thereafter arising out of such contract... shall be valid, irrevocable and enforceable... See also Fink v. Golenbock, 238 Conn. 83,194, 680 A.2d 1243 (1996); Carlin Pozzi Architects, P.C. v. Town of Bethel, 62 Conn. App. 483, 767 A.2d 1272 (2001).
. . .
.

Furthermore, to the extent that there is any doubt as to how the real property taxes for 360 State Street should be determined, the third document, the Tax Deferral Agreement between the City and the owners of 360 State Street addresses this issue directly. First, [tjhe assessment of the Property during the period of improvement shall be $2,097,830. Tax Deferral Agreement, Section 301. Second, [u]pon completion of the improvement. the Assessor shall determine the new assessment in accordance with C.G.S. Section 12-53a and Section 4 of this Agreement, if applicable. Id. at Section 303. Connecticut General Statutes Section 53a describes a process for assessing and taxing new real estate construction. In addition to providing a methodology for assessing new real estate construction, this statute provides the process for addressing any valuation dispute between the amount assessed by the municipality and the amount the taxpayer believes is appropriate to pay: appeal to the local Board of Assessment Appeals and then, appeal to the Superior Court and, while such an appeal is pending, pay a substantial portion of the disputed tax amount under protest to avoid liability for interest. See Conn. Gen. Stat. Section 12-53a (d). 1
. .

Third, [fjor the first year following completion of the improvement the entire increase in assessment shall be deferred and phased-in in twenty percent increments over the next five years. Tax Deferral Agreement, Section 304. Fourth, the owners of 360 State Street are in breach of the Tax Deferral Agreement and that contract terminates immediately if the Owner receives abatement or deferral of increases caused by the rehabilitation under any other assessment deferral or tax abatement program, id. at Section 801(f), or [t]he Property receives federal or state subsidies which include payment of local taxes for more than twenty-five percent (25%) of the dwelling units, or payment in lieu of taxes (PILOT). Id. at Section 801(h). Moreover, if the owners of 360 State Street receive a tax abatement, an additional deferral of taxes or a PILOT agreement, then all deferrals created [by the Tax Deferral

Section 1 4 of the Tax Deferral Agreement describes how taxes would be assessed in the event of a city wide property revaluation.

Agreement] shall be null and void and the Owner shall pay a penalty equal to all taxes abated to date by the Agreement. Id. at Section 802. In other words, any additional tax relief provided to the owners of 360 State Street would result in the owner(s) of the property having to pay the City for all of the tax revenue lost so far under the Tax Deferral Agreement. Arguably, the fixed tax assessment during the construction also would be vacated and the owners would have to be assessed property taxes during the construction phase at the rate the Assessor deems appropriate. Any legal argument for limiting the property tax liability for 360 State Street to no more than $1.4 million per year is wholly unsupported by the Tax Deferral Agreement entered into by the City and 360 State Streets owners. As discussed above, the Tax Deferral Agreement provided for a specific process for determining the propertys value for tax purposes and that methodology makes no reference to or provides for a set tax rate of $1.4 million dollars. The Tax Deferral Agreement does not provide for a specified assessment amount once the improvements have been completed. Nor can any other document outside of the scope of the Tax Deferral Agreement suggest otherwise. As expressly provided in Section 1002 of the Tax Deferral Agreement: [tjhis agreement incorporates all the understandings of the parties hereto and supersedes any and all agreements reached by the parties prior to the execution of this Agreement, whether written or oral. Tax Deferral Agreement, Section 1002 (emphasis added). In other words, as a matter of law, on the issue of property tax valuation, the language of the Tax Deferral Agreement and the language of the Tax Deferral Agreement alone controls. See Colliers, Dow and Condon, Inc. v. Schwartz, 77 Conn. App. 462, 823 A.2d 438, (2003) ([W]hen the parties have deliberately put their engagements into writing.., it is conclusively presumed, that the whole engagement of the parties, and the extent and manner of their understanding, was reduced to writing. After this, to permit oral testimony, or prior or contemporaneous conversations, or usages [etc.] in order to contradict what is written would be dangerous and unjust in the extreme...).
...

B.

The Proposed New Tax Agreement Between the City and the Property Owners of 360 State Street

Despite the clarity of the DA, LDA and the Tax Deferral Agreement with respect how to real property taxes at 360 State Street should be assessed and that no further agreements with respect to taxation are permissible or even appropriate for 360 State Street to seek, a proposed new tax agreement between the City and the owners of 360 State Street has been presented to the Board of Aldermen. This proposed Tax Agreement and the accompanying ordinance amendment have several components. First, it would terminate the Tax Deferral Agreement. See proposed Ordinance Amendment, 360 State Street Taxes (attached as Exhibit D). Second, it would exempt [360 State Street] from any and all real estate taxes for a period of twenty (20) years Id.
. . . .

Third, it would require the owners to make certain payments in lieu of real estate taxes to the City for a period of twenty (20) years. Id. In the first year, the payment in lieu of real estate taxes or PILOT would be $280,000. See Proposed New Tax Agreement at paragraph 3 (attached as Exhibit E). In the second year, the PILOT would be $560,000. Id. In the third year, the PILOT would be $840,000. Id. In the fourth year, the PILOT would be $1, 120, 000. Id. In the fifth year through the twenty year, the PILOT would be $1, 400,000. Id. After the twentieth year, the City and Owner shall mutually and in good faith pursue the execution of another agreement, under terms similar to this Agreement, for an additional twenty (20) year period under the then-existing state and municipal laws, for the payment in lieu of real estate taxes for the Project and the Property. In other words, the new Tax Agreement seeks an exemption of taxes and a PILOT agreement for a forty-year period.
. . .

Fourth, the tax assessment of 360 State Street would be fixed for a period of time starting on October 1, 2012 and continuing for a period of sixteen (16) years thereafter, up to and through the Grand List of October 1, 2027 Id.
.
.

Having outlined the basic terms of the proposed Tax Agreement, this Opinion will now turn to the legal issue of whether the DA, LDA and Tax Deferral Agreement can be voided and re-written under the Connecticut City and Town Development Act, as proposed. As a threshold matter, it is always necessary to address the scope of taxation powers possessed by municipalities. Connecticut courts have long held that a municipality has only the powers which are expressly conferred upon it by the general statutes or by some special act of the General Assembly and those which are fairly to be implied as necessary to carry into effect Old Colony Gardens, Inc. v. Stamford 147 Conn. 60 (1959). With regard to municipal taxing power, the Connecticut Supreme Court ruled in 1976: [a] municipality, as a creation of the state, has no power of its own nor does it have any powers of taxation except those expressly granted to it by the legislature. For these reasons, a municipalitys powers of taxation can be lawfully exercised only in strict conformity to the terms in which they were given and statutes conferring authority to tax must be strictly obse,ved. Joseph W. Pepin et al. v. City of Danbury et al., 171 Conn. 74 (1976). Thus, absent a specific statute authorizing the City to provide tax relief to the owners of 360 State Street, the City has no authority to provide them tax relief. The pending proposal before the Board of Aldermen seeks to use the Connecticut City and Town Development Act to abate or change the taxes, as currently assessed, on the subject property, more specifically, Conn. Gen. Stat. Section 7-498, which provides that: Any development property may be exempted from any property tax imposed by the municipality; provided any municipality may enter into an agreement approved by resolution, providing for a payment or payments in lieu of taxes with respect to any such property, or providing that any such property is subject to all or any portion of local property taxes. In no case shall development property be exempt in whole or in part from such property tax for a period or periods, in the aggregate, in excess of twenty years.

Given the plain language of Section 7-498s text and the condition of the property at issue here, 360 State Street, there is little question that this would empower the City to enter into a tax agreement like the one proposed now, prior to the development of this property. This proposed Tax Agreement, however, has been brought for adoption after 360 State Street has already been fully developed and there are already over 500 residents living there. In other words, the threshold issue in this matter is whether this kind of post-development use of municipal tax power is contemplated under the City and Town Development Act. This is not a tax deal to entice someone or some entity to develop property; this is a tax deal for an entity that has already developed the property at issue, but seeks a higher rate of return on the investment through a tax exemption and the entering of a PILOT agreement. The history of the City and Town Development Act reveals that it was intended to remedy areas within cities that had fallen to blight, misuse or economic distress and that the Act itself was intended to allow cities to bring new businesses into the fold by way of tax incentives and financial assistance by way of municipal bonds: Under the Pollyanna spirit of this bill, existing industry in a given community is supposed to welcome the opportunity to pay higher taxes on its own property in order to help finance special favors to any new industry which can be persuaded to come into their town. The Morning Record. 8/21/75 The Office of Legislative Research issued a memorandum that partially addressed the Act as well: Under the Connecticut City and Town Development Act, municipalities may acquire, improve, and convey tracts of land to private developers and lend money to these developers if they cannot obtain financing from banks or other traditional lenders. The loans must be authorized by a resolution of the municipalitys legislative body and be subject to any rules and regulations the resolution establishes (CGS 7480503). The statute requires that a sponsor or developer be approved by the municipality as financially qualified to own, construct, acquire, rehabilitate, operate, manage, or maintain development property. OLR Research Report: 8/27/09 The Act itself sets out a lengthy preamble of its intent and includes a section entitled Purposes of this Chapter. That section provides: (k) Purposes of this chapter means ameliorating the deterioration of T municipalities by preserving and expanding employment opportunities and the tax base of municipalities by undertaking or assisting in the financing, development or construction of housing, industrial, commercial, parking, retail, office, hotel, warehouse, recreational or transportation facilities or any combination thereof and any service facilities related thereto or supportive thereof. Section K of the Act does not reference the abating of taxes on buildings that have already been constructed and are not in need of rehabilitation. Any attempt to read the City and Town Development Act more expansively would be ill-advised. The Connecticut Supreme Court has addressed the issue of reading into a statute where the black letter of the law is stated:

Public Act 03-154 provides: The meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered. City of New Haven v. Bonner, 272 Conn. 489, 494 n.5 (2005). The intention of the City and Town Development Act is to rehabilitate distressed buildings and areas or facilitate new construction, not to give tax abatements to buildings already constructed or not in need of rehabilitation. While one could plausibly argue otherwise, there is no case law on this matter and a decision to use the Act in this way could expose the City to lawsuits brought by other taxpayers challenging the resulting tax exemption and PILOT agreement. As discussed above, given the clear language in the DA, LDA and the Tax Deferral Agreement regarding real property taxes and how they should be determined, there is no legally plausible argument that property tax issues were not squarely addressed during the development phase of this project. Real property taxes have been deferred for a five-year period and the property will be assessed by the Assessor and any issues with respect to valuation can be addressed through the normal appeals process for these matters, the Board of Assessment Appeals and Superior Court. See Tax Deferral Agreement at Section 303. Indeed, consistent with the Tax Deferral Agreement, the issue of whether the Assessor properly assessed 360 State Street is pending in Superior Court. See, e.g., MEPT Chapel Street LLC v. City of New Haven, Docket No. HHB-CV11-6014157-S, filed June 16, 2011; MEPT Chapel Street, LLC v. City of New Haven, NNI-CV12-6005179-S, filed June 21, 2012. To the extent that the presently assessed value of 360 State Street is improper, as with any other taxpayer or owner, the proper valuation will be determined in a court of law and a determination will be made as to whether the owners of 360 State Street are entitled to any relief in the context of that property tax appeal. Thus, the invocation of the City and Town Development Act is not necessary to ensure the fair valuation of 360 State Street, making its use here especially suspect. As a result, if the City and Town Development Act was used to justify this proposed new Tax Agreement and to establish both the taxes and the assessment value such that the property taxes on 360 State Street did not exceed $1.4 million for the next twenty years (and perhaps, twenty years after that), then the City could be subject to suit and face lengthy court proceedings challenging this transaction. City taxpayers, some of whom have experienced significant tax increases after the most recent city-wide property revaluation, may sue claiming that there is no statutory basis for this deal as well as raising why the City would enter a deal expressly prohibited by its current agreements without receiving anything of equivalent or better value in return - and the resulting economic injury would cost the City millions of dollars a year in tax revenue, revenue which would have to be made up either through higher taxes on them or a reduction in services for them. The Connecticut Supreme Court has clarified that

taxpayers have standing to challenge allegedly improper municipal conduct. [if a] project has directly or indirectly increased taxes. West Farms MaI LLC v. West Hartford, 279 Conn. 1, 13(2006).
. . .
.

In short, while seeking legislative relief before the Board of Aldermen may prevent the owners of 360 State Street from having to undergo the time and expense of property tax proceedings already underway in court (even though such a process was clearly contemplated and bargained for in good-faith by both parties), the City would not be spared from lengthy legal proceedings regarding the propriety of entering into a new Tax Agreement, particularly since the plain language and legislative history of the City and Town Development Act do not suggest that a post-development tax agreement is within the statutes scope and the current agreements between the parties prohibit such tax relief. This opinion is limited to the issue set forth and does not apply to any other situation not discussed herein.
th 17

Dated at New Haven, Connecticut, this

day of August, 2012

Office of the Corporation Counsel

By________________________ Victor A. Bolden Corporation Counsel cc: Office of the Corporation Counsel Opinion Book

EXHEBrr

DEVELOPMENT AGREEMENT BETWEEN THE CITY OF NEW HAVEN AND BECKER DEVELOPMENT ASSOCIATES, LLC A07-0249

lNDEX

BACKGROUND ARTICLE I Section 1.1 Section 1.2 ARTICLE II Section 2.1 Section 2.2 ARTICLE III Section 3.1 Section 3.2 Section 3.3 Section 3.4 DEFINITIONS Defined Terms Interpretation REPRESENTATIONS AND WARRANTIES Representations and Warranties of the Developer Representations and Warranties of the City PROPERTY 2 2 4 5 5 6

Property Transfer
Purchase Price

6 6 7 7

Easements and Licenses

Chase Agreement

ARTICLE VI
Section 4.1 Section 4.2 ARTICLE V Section 5.1 Section 5.2 ARTICLE VI Section 6.1 Section 6.2 Section 6.3 Section 6.4 Section 6.5 ARTICLE VU Section 7.1 Section 7.2

ENVIRONMENTAL Environmental Survey

Indemnification PROJECT FINANCING General

Overall Responsibility
OBLIGATIONS OF ThE DEVELOPER Development Project Schedule Private Financing Basic Project Requirements Workforce and Utilization Requirements OBLIGATIONS OF THE CITY Building Permits and Fees Access to Property

Page 1

Section 7.3 Section 7.4 Section 7.5 ARTICLE Vifi Section 8.1 Section 8.2 ARTICLE IX Section 9.1 Section 9.2 Section 9.3 Section 9.4 ARTICLE X

Public Financing Applications to Governmental Authorities Records and Access to Records TRAFFIC AND PARKING Parking Facilities Traffic Improvements DEFAULT Events of Default Remedies Dispute Resolution Procedure Indirect, Special or Consequential Damages GENERAL PROVISIONS

Section 10.1 Notices Section 10.2 No Waiver Section 10.3 Rights Cumulative Section 10.4 Successors Section 10.5 Severability Section 10.6 Governing Law Section 10.7 Waiver of Jury Trial Section 10.8 No Partnership, Joint Venture or Agency Section 10.9 Consents Section 10.10 Amendments Section 10.11 Counterparts Section 10.12 Term EXHIBIT A: EXHIBIT B: EXHIBIT C: EXHIBIT D: EXHIBIT E: EXHIBIT F: EXHIBIT G: Land Disposition Agreement Description of Project Property Description Project Schedule Environmental Report Union-Backed Financing

Quit Claim Deed

Page 2

THIS DEVELOPMENT AGREEMENT is entered into and effective as of this

ay of

tO

by and between the CITY OF NEW HAVEN, a municipal corporation , 7 OO 2 p organized and existing under the laws of the State of Connecticut, with a mailing address at 165 Church Street, New Haven, Connecticut 06510 (the City) and BECKER DEVELOPMENT

ASSOCIATES, LLC, a limited liability company organized and existing under the laws of the State of Connecticut, with a mailing address at 95 Reef Road, Fairfield, Connecticut 06824 (the Developer).

BACKGROUND

The City is the fee simple owner of a certain parcel of land located in New Haven, Connecticut known as 745 Chapel Street, which parcel is more particularly described in Exhibit A to the Land Disposition Agreement (a copy of which is attached hereto as Exhibit A and made part hereof) and which the City considers to be an underused parcel (the Property). The City also owns the nearby Pitkin Plaza and the Pitkin Tunnel. The City issued a Request for Proposals for the development and future use of the Property. The Developer proposed a mixed use facility for the Property, which proposal was subsequently selected by the City. A description of such proposal, following modification thereof; is more particularly set forth in Exhibit B attached hereto (the Project). The City and the Developer previously entered into a Memorandum of Understanding, dated April 12, 2007, outlining the basic elements to be included in the Project and certain other basic terms and conditions. Based upon the framework set forth in said Memorandum of Understanding, the City and the Developer have negotiated and agreed all of the terms and conditions pursuant to which the City shall facilitate and the Developer shall carry out the Project, as hereinafter set forth.

NOW THEREFORE, the City and the Developer agree as follows:

ARTICLE I DEFINITIONS Section 1.1 Definitions

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For the purposes of this Agreement: (i) Agreement means the four corners of this instrument, and includes any appendices, exhibits or schedules incorporated by reference, as well as any amendments, modifications, or supplements which may be executed by the City and the Developer sub sequent to the effective date of this instrument, but does not include any agreement, understanding or other arrangement between the City and the Developer, including (without limitation) the Memorandum of Understanding which is hereby superseded in its entirety. (ii) Chase Agreement means a separate agreement entered into between the City of New Haven and Connecticut Financial Center Associates Limited Partnership, and recorded at Volume 5462, Page 115 of the New Haven Land Records. City has the meaning ascribed in the first sentence of this Agreement. Developer has the meaning ascribed in the first sentence of this Agreement and shall include any permitted successor or assign of Developer. Environmental Conditions means any conditions which, under applicable Environmental Laws, require testing, remediation or monitoring. Environmental Laws means any and all laws, statutes, ordinances, rules, regulations, and orders of any Governmental Authority pertaining to the environment, including the federal Clean Water Act, the federal Clean Air Act, the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, the federal Water Pollution Control Amendments, the federal Resource Conservation and Recovery Act of 1976, the federal Hazardous Materials Transportation Act of 1975, the Federal Safe Drinking Water Act, the federal Toxic Substances Control Act, and any comparable or similar environmental laws of the State of Connecticut, including Title 22a of the General Statutes. (vii) Event of Bankruptcy means any of the following: (a) if a receiver or custodian is appointed for all or a substantial portion of the Developers property or assets, which appointment is not dismissed within one hundred eighty (180) days; (b) if the Developer files a voluntary petition under the United States Bankruptcy Code or any other bankruptcy or insolvency laws; (c) if there is an involuntary petition filed

(iii) (iv)

(v)

(vi)

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against the Developer as the subject debtor under the United States Bankruptcy Code or any other bankruptcy or insolvency laws, which is not dismissed within one hundred eighty (180) days of filing, or which results in the issuance of an order for relief against the debtor; or (d) if the Developer makes or consents to an assignment of its assets, in whole or in part, for the benefit of creditors, or a common law composition of creditors. (viii) Existing Environmental Conditions means any Environmental Conditions at the Property existing on the date of this Agreement. (ix) Force Majeure means any event, act or failure to act directly caused by: riots, civil disturbances, insurrection or acts of public enemy; war; court or administrative or other governmental order directing that the construction of the Project be stopped; strikes or labor disputes where the primary dispute is not related to the Developer and also affects construction projects other than this Project; acts of terrorism; casualty at the job site or proximately causing direct physical damage to the Project or proximately causing physical damage to the Project or proximately causing a disruption or delay in the supply chain of labor or materials to the Project; an act or omission of the City in violation of the tenns of this Agreement or the Land Disposition Agreement; or any other event or circumstance which is outside the Developers immediate reasonable control. (x) General Statutes means the General Statutes of the State of Connecticut, 1958 Revision, as amended. (xi) Governmental Authorities means all federal, state or local governmental bodies, instrumentalities or agencies (including municipalities, taxing, fire and water disicts and other governmental units).
(xii)

Grocery Store shall have the meaning ascribed under Section 6.4(B). HANH shall have the meaning ascribed under Section 7.3(D). Hazardous Materials means (i) any chemical, compound, material, mixture or substance that is now or hereafter defined as or included in the definition of hazardous substances, hazardous wastes, hazardous materials, extremely
hazardous waste, restricted hazardous waste or toxic substances or terms of

(xiii) (xiv)

similar import under any applicable federal, state or local law, or under the

Page 5

regulations adopted or promulgated pursuant thereto, including Environmental Laws; (ii) any oil, petroleum or petroleum derived substance, any flammable substances or explosives, any radioactive materials, any hazardous wastes or substances, any toxic wastes or substances, or any other materials or pollutants which cause any part of any facility, structure or improvement to be in violation of any Environmental Laws; and (iii) asbestos in any form, urea formaldehyde foam insulation, and electrical equipment which contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of applicable legal or regulatory limits. (xv) (xvi) Land Disposition Agreement has the meaning ascribed under Background. LEED Green Building Rating System means the Leadership in Energy and Environmental Design green building rating system developed by the United States Green Building Council as of the date the execution of this Agreement. (xvii) Opening Date has the meaning ascribed under Section 6.4(B) of this Agreement. (xviii) Parking Authority means the New Haven Parking Authority. (xix) Pitkin Plaza means that certain parcel of land owned by the City of New Haven, which faces Orange Street and is more particularly described in Exhibit C. (xx) Pitkin Tunnel means that tunnel, being a public right of way, linking State Street and Elm Street, a portion of which is adjacent to the Shartenberg Site and above which portion exists the air rights which are part of the Property, and which is subject to an agreement dated July 18, 2006, between the City and the United States of America. (xxi) Property has the meaning as ascribed under Background.

(xxii) Project has the meaning as ascribed under Background. (xxiii) Project Schedule means the projected schedule for the development of the Project, a copy of which is attached hereto as Exhibit D. (xxiv) Urban Act Funding has the meaning ascribed under Section 7.3(A). (xxv) Work With or any similar phrase means diligently and continuously pursue, cooperate with, assist and facilitate the desired result or objective, including, as necessary or appropriate under the circumstances, execution and delivery of documents; scheduling, attending and participating in conferences or meetings; contacting and requesting action from other governmental personnel or agencies;

Page 6

responding promptly to all reasonably requests for documents or information; and make introductions to persons, entities or agencies. Work With shall not require the expenditure of funds by the City unless these funds are prepaid by the Developer.

Section 1.2

Interpretation

(A) Words such as hereunder, hereto, hereof and herein and other words of similar import shall, unless the context requires otherwise, refer to the whole of this Agreement and not to any particular article, section, subsection, paragraph or clause hereof. (B) A reference to including means including without limiting the generality of any description preceding such term and for purposes of this Agreement the rule of ejusdem generis shall not be applicable to limit or restrict a general statement, followed by or referable to an enumeration of specific matters, to matters similar to, or of the same type, class or category as, those specifically mentioned.

(C) Any reference to days shall mean calendar days unless otherwise expressly specified. (D) Any reference to any statute, law or regulation includes all statutes, laws or regulations amending, consolidating or replacing the same from time to time, and a reference to a law or statute includes all regulations, codes or other rules issued or otherwise applicable under such law or statute unless otherwise expressly provided in such law or statute or in this Agreement. This rule of interpretation shall be applicable in all cases notwithstanding that in some cases specific references in this Agreement render the application of this rule unnecessary.

(E) All approvals, consents, waivers, acceptances, concurrences and permissions required to be given or made by any party hereunder shall not be unreasonably withheld, delayed or conditioned by the party whose approval, consent, waiver, acceptance, concurrence or permission is required, whether or not expressly so stated, unless otherwise expressly

Page7

provided herein. Wherever under this Agreement reasonableness is the standard for the granting or denial of any approval, consent, waiver, acceptance, concurrence or permission of any party hereto, the City shall be entitled to consider governmental considerations, as well as business and economic considerations.

(F) The City and the Developer have participated in the drafting of this Agreement and any ambiguity contained in this Agreement shall not be construed against the City or the Developer solely by virtue of the fact that either the City or the Developer may be considered the drafter of this Agreement or any particular part hereof: (G) With regard to interpretation of individual words in this Agreement, the singular version shall be construed to include the plural version, and vice versa, except where the context or a reasonable reading of a word could only mean either a singular or plural version of such word.

ARTICLE II REPRESENTATIONS AND WARRANTIES

Section 2.1

Representations and Warranties of the Developer

The Developer represents, warrants and covenants that (a) the Developer is a limited liability company, duly organized and existing under the laws of the State of Connecticut; (b) the authority 1 Developer has the legal to enter into and carry out the transactions to hich it is proposed to be a party (c) the execution and delivery of this Agreement by the Developer has been duly and validly authorized by all necessary action; and (d) this Agreement is a legal, valid and binding obligation of the Developer, enforceable against the Developer in accordance with its terms.

Section 2.2

Representations and Warranties of the City

Page 8

The City represents and warrants that (a) the City is a municipal corporation validly existing under the laws of the State of Connecticut, (b) the City has the legal power and authority to execute and deliver this Agreement and to carry out its terms and provisions, (c) said execution and delivery have been duly and validily authorized by all necessary action, and (d) this Agreement is a legal, valid and binding obligation of the City, enforceable against the City in accordance with its terms.
ARTICLE ifi PROPERTY Section 3.1 Property Transfer

Concurrently herewith or upon the satisfaction of all conditions precedent contained herein (whichever is the earlier) the City shall quit claim the Property to the Developer, subject to any and all encumbrances existing as of the date of the Agreement (including without limitation, the Chase Agreement) and subject to the Land Disposition Agreement, which shall be recorded in the New Haven Land Records immediately prior to the Quit Claim Deed. As a condition precedent to the quit claim of the Property to Developer, the City shall cause the Property, the Pitkin Tunnel, and the Pitkin Plaza to be surveyed. Title to the Pitkin Tunnel and the Pitkin Plaza shall remain with the City. Subject to the preceding sentence, the Developer hereby acknowledges and agrees that it has made its own investigation as to title and is satisfied that the same is good and marketable. The delivery of the Deed shall take place at a closing to be held at such place and time as the parties heieto shall agree (the Closing). It is acknowledged and agreed that the City must have not less than sixty (60) days notice of the date of the Closing in order to obtain vacant possession of the Property. The foregoing provision notwithstanding, the Developer, at any time after the signing of this Agreement, may request that the City set a date for the Closing, after receipt of which request the City must respond within fifteen (15) days to Developer with a reasonable offer for a date for the Closing. At such time as all conditions precedent to the conveyance of the Property have been met by the City, the City may so notify the Developer and such notification shall include a proposed date of Closing. In the event that the Developer shall dispute the fulfillment of all conditions precedent, then the Developer shall

Page9

notify the City within seven (7) days of receipt of the Citys notice, whereupon the City and the Developer shall meet to agree upon the completion of outstanding conditions precedent (if any)

and of the date of Closing. The Developer acknowledges that the Developer may not
unreasonably delay the Closing. Notwithstanding the foregoing provisions, before the date of closing, if requested by Developer, the City may in its discretion lease the Property to the Developer. If such a lease is negotiated with the City: (a) the Developer shall have an exclusive

right to purchase the Property pursuant to the terms of this Agreement; (b) the Deed to the
Property shall held in escrow until the date of closing; and (c) the Developer shall tender to the City payments in lieu of taxes in an amount equivalent to real estate property taxes which would be assessed on the Property if the Property were owned by a private entity which was not exempt from real property taxation.

Section 3.2

Purchase Price

As set forth in the Land Disposition Agreement, the Property shall be conveyed to the Developer by quit claim deed (the Quit Claim Deed) in consideration of the sum of One Dollar and Zero Cents ($1.00) and the mutual covenants and conditions contained herein and in the Land Disposition Agreement.

Section 3.3

Easements and Licenses

It is acknowledged that the construction and operation of the Project will require the Citys

granting of various easements or licenses to Developer with respect to City owned rights of way
or City owned property surrounding, or otherwise adjacent to, the Property, including (without limitation): (a) an easement benefiting the Property over, under and across the streets and sidewalks surrounding the Property, including an easement benefiting the Property to place geothermal wells under such sidewalks; (b) a construction easement benefiting the Property and covering the Pitkin Tunnel; (c) a permanent easement allowing the connection of the Property to the Pitkin Tunnel for pedestrian and vehicular ingress, egress, and other uses to be determined; and (d) an easement benefiting the Property over Pitkin Plaza for the purpose of access, subject to the conditions which the City may impose in such easement. A substantially completed draft Page 10

eted and signed by of the Quit Claim Deed containing these four specified easements, to be compl agreement, is hereby the parties to this Agreement within a reasonable period after executing this easements and licenses attached as Schedule G. The City hereby approves the grant of any other t, provided that which may reasonably be needed to construct, complete and operate the Projec ements that will be the the Developer shall provide the City with detailed plans of those improv Economic subject of the easements or license in question for final approval by the Citys ld, conditioned or Development Administrator (which approval will not be unreasonably withhe granted by the delayed) and provided further that with respect to any such easement or license respect to insurance. City, the Developer shall comply with customary City requirements with such easements or The City will Work With the Developer to secure any approvals needed for es. licenses from the United States of America or any other governmental agenci Section 3.4
Chase Agreement

acknowledged by the The obligations contained in the Chase Agreement are hereby expressly delivery of the Land Developer and the Developer hereby covenants that upon the execution and plated under Disposition Agreement and execution and delivery of the Quit Claim Deed contem with those Section 3.1 hereof; the Developer shall be solely responsible for compliance Developer takes title obligations under the Chase Agreement arising from and after the date that iance may require to the Property, both during and after construction of the Project, which compl with the licensee (to the extent possible) the renegotiation ofportions of the Chase Agreement that the Chase thereunder. In particular (but without limitation) the Developer acknowledges to parking under Agreemnt currently provides for temporary displacement of persons entitled requested by the the Chase Agreement at the time of the execution of this Agreement. As pers negotiations Developer, the City shall Work With the Developer to assist with the Develo Chase Agreement with the licensee of the Chase Agreement and the Parking Authority under the the construction for the purpose of arranging a temporary relocation of these parkers during ss the City period of the Project. The Developer hereby agrees to indemnifS and hold harmle under the Chase against and from any liability, costs or expenses of any nature whatsoever ownership, use or Agreement, arising (whether directly or indirectly) out of the Developers occupation of the Property.

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ARTICLE IV ENVIRONMENTAL

Section 4.1

Environmental Survey

the Property (the The City has carried out a Phase II environmental survey with respect to arid made a part hereof Environmental Survey) a copy of which is attached hereto as Exhibit E and understood the The Developer hereby expressly acknowledges and agrees that it has read will accept the Environmental Survey, and by execution and delivery of this Agreement, and all Existing Property in its existing condition including (without limitation) subject to any nmental Survey. Environmental Conditions, whether or not expressly referred to in the Enviro

Section 4.2

Indemnification

officials, employees and The Developer shall indemnify, defend and hold harmless City and its ents, actions, or ds, agents from and against any and all liability, fines, suits, claims, deman judgm including, without losses, penalties, damages, costs and expenses of any kind or nature,
, due to or arising limitation, reasonable attorneys fees made or asserted by anyone whomsoever g Environmental out of any Environmental Conditions on the Property, including Existin the date the Conditions, but excluding any Environmental Conditions first arising after by the .City or its agents, Developer takes title to the Property which are caused or contributed to such action or proceeding contractors or employees. If the Developer is required to defend any the City shall be entitled to which action or proceeding and the City desires to be made a party, Citys election (and sole to appear, defend, or otherwise take part in the matter involved, at the action does not limit or cost and expense), by counsel of its own choosing, provided any such or matter in question. make void any liability of any insurer hereunder with respect to the claim Agreement, provided the This indemnification shall survive the termination or expiration of this

City is not then in default hereunder.

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ARTICLE V PROJECT FINANCING

Section 5.1

General

The Project will be financed through a combination of private and public finding sources, as more particularly described in this Agreement.

Section 5.2

Overall Responsibility

It shall be the sole responsibility of the Developer to ensure that the financing described herein is sufficient to complete the Project or, if insufficient, to obtain additional financing from such source or sources as may be available to the Developer, provided that such additional financing shall not contravene the provisions of Section 6.3 below, without obtaining the prior written consent of the City Economic Development Administrator or Mayor, which consent may be granted or withheld in the sole and absolute discretion of such parties.

ARTICLE VI OBLIGATIONS OF THE DEVELOPER

Section 6.1

Development

Upon execution and delivery of the Land Disposition Agreement and the conveyance of the Property to the Developer, the Developer shall commence and thereafter complete the Project in accordance with this Agreement, including the Project Schedule.

Section 6.2

Project Schedule

The Developer shall complete the Project in accordance with the Project Schedule. The Developer acknowledges that the Project Schedule contains a number of progress deadlines

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which the Developer is obliged to meet, as outlined in Exhibit D (a Progress Deadline). In the event that the Developer shall fail to meet a Progress Deadline, and such failure shall not arise as a result of Force Majeure or any action or omission of the City, then the Developer shall in each instance, as liquidated damages and as the sole consequence thereof, pay a penalty to the City in the amount of Twenty Thousand Dollars and Zero Cents ($20,000.00) to be used to support other economic development projects in the City, at the discretion of the City Economic Development Adn,iriistrator. Notwithstanding the foregoing, the City Economic Development Administrator shall have the discretion, which shall be exercised only under reasonable circumstances, to waive any penalty which would otherwise be payable hereunder, provided that such discretion may be used not more than twice.

Section 6.3

Private FinancLn

The Developer has secured and delivered to the City a written term sheet for an investment in the minimum amount of One Hundred Million Dollars and Zero Cents ($100,000,000.00) from a union pension investment fund, a copy of which is attached hereto on Exhibit F (the Union Backed Financing). The Developer acknowledges that the source of funding was an important factor in the Citys selection of the Developer and that in no event shall the Union Backed Financing represent less than fifty percent (50%) of the total capital investment in the carrying out of the Project. Once the Certificate of Completion has been secured for the Project, this Union-Backed Financing requirement shall be no further in force or effect. Section 6.4 Basic Project Requirements

(A) Without prejudice to the more specific provisions concerning design review set forth in Section 6.3 (C) below andlor the descriptions set forth in Exhibit B, it is agreed and understood that unless expressly agreed otherwise in writing by the City and the Developer: (i) The Project shall not, without the express written approval of the City, contain less than Four Hundred Thousand (400,000) square feet of useable space;

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(ii) The minimum base height of that portion of the Project which is not part of the proposed tower, shall be forty-five (45) feet;

(iii)The Developer guarantees that not less than fifty (50) of the housing units contained within the Project are affordable; the Developer guarantees that not more than fifty percent (50%) of the housing units on any one floor of the Project shall be affordable; and the Developer shall ensure that it complies with the terms and conditions with any subsidies received for the purpose of affordable housing for the applicable duration of such terms and conditions;

(iv) The Developer shall design and build the Project to meet, at a minimum, certification under the LEED Green Building Rating System as to at least the residential portion of the Project and shall use commercially reasonable efforts to obtain the Silver Standard. The Developer acknowledges that failure to achieve the basic LEED Green Building Rating System certification for the residential portion of the Project shall obligate Developer (as the sole consequence thereof) to pay the City a penalty of Two Hundred

and Fifty Thousand Dollars and Zero Cents ($250,000.00), provided that the Developer
shall first be accorded a reasonable amount of time to remedy any such default;

(v) The Developer shall exert commercially reasonable efforts to ensure that the Project contains a childhood education center, subject to the Developer receiving sufficient

financing;
(vi)In no event during the term of this Agreement shall any portion of the Project be used as a discount department store, dollar store, charity thrift shop, five and dime store, or other such retailer of comparable quality or as a liquor store, or as any commercial establishment of any nature whatsoever related to adult use/entertainment or related to the sale or use of firearms or other weaponry.

(B) Within thirty-six (36) months from the issuance of the first temporary Certificate of Occupancy for any portion of the Project, The Developer shall secure as a tenant in the

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Project (in the form of an executed lease or commitment to lease) a full service urban grocery store, located in the first floor of the Project (the Grocery Store). The Grocery Store shall be of the quality and reputation of Whole Foods, Trader Joes, Gristedes, Fairway Market, Wild Oats, Limon Gourmet or Stew Leonards Grocery or other grocery of similar quality

and reputation. The Grocery Store shall be an element of the Project for a period of not less than five (5) years from the date upon which the Grocery Store opened for business (the
Opening Date). In the event that the Developer falls to secure such a Grocery Store as a tenant within the thirty-six (36) month period, or such grocery store shall cease operations within one (1) year of the Opening Date and is not replaced by a comparable tenant within

six (6) months following the Grocery Stores vacation of its premises, the Developer shall, as
liquidated damages and as the sole consequence thereof pay the City a one time penalty of Two Hundred Fifty Thousand Dollars and Zero Cents ($250,000.00) provided that said penalty shall automatically be reduced by Fifty Thousand Dollars and Zero Cents ($50,000.00) on each anniversary of the issuance of the first temporary Certificate of Occupancy, so that the same shall expire and become null and void and of no further effect on the fifth anniversary of the Opening Date. This penalty provision shall be the sole remedy for the City in the event the Developer falls to secure such grocery store of the quality and reputation described, except that after the penalty is paid, the Developer shall consult with the City regarding a preferred replacement retailer and shall keep the City apprised of its efforts until the fifth anniversary of the Opening Date or until eight (8) years after the issuance of the first temporary Certificate of Occupancy, whichever comes first. In no event shall the Developer seek to replace the Grocery Store with any type of establishment specifically excluded pursuant to the provisions at Section 6.4 (A)(vi) above.

(C) The City, acting through the City Economic Development Administrator and the Executive Director of the City Plan Department or their respective designees, shall have the opportunity to participate in the design process of the Project as follows:

(i) The Developer shall deliver to the City schematic design drawings of the Project reasonably consistent with the obligations of the Developer set forth in this Agreement,

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and the City shall have fifteen (15) days after receipt thereof to provide written comments on the schematic design specifying recommended alterations;
(ii) Upon submission of revised schematic design drawings, the City and the Developer

design team shall meet within ten (10) days to endeavor to resolve any differences. The City shall be reasonable in its proposals with consideration given to the visual impact the design would have on the surrounding neighborhood, market conditions, and economic viability of the Project, pedestrian enhancements, the cost of design, and the reasonable needs and concerns of the community and the Developer. It is hereby agreed, stipulated and understood that this review process shall be in addition to and not in lieu of Site Plan Review by the City Plan Commission, and the Developer hereby acknowledges that nothing herein shall be deemed to waive or modify any and all planning, zoning and such municipal requirements and regulations applicable to the Project and/or the Developer to which the Project shall be and
remain subject.

Section 6.5

WorkIorce and Utilization Requirements

In carrying out the provisions of this Agreement, the Developer shall comply with, or require that its general contractor for the Project comply with, all applicable City workforce
requirements and small contractor utilization requirements now and hereafter existing, including, without limitation, all Equal Employment Opportunity requirements and Small Business

Construction Initiative requirements nd in particular, during the carrying out of the Project, the Developer agrees to, or require its general contractor:
(A)to comply with all provisions of Executive Order 11246 and Executive Order 11375, Connecticut Fair Employment Practices Act and Chapter 12 1/2, the contract compliance ordinance of the City of New Haven; including all standards and regulations which are promulgated by the government authorities who established such acts and requirements, and all standards and regulations are incorporated herein by reference, including 24 CFR Part 135, Davis Bacon Act & Related Acts (40 USC 276a; 29 CFR 1. 3. 5. 6 and

a Copeland

Page 17

Act (18 Usc 874 and 40 USC 276c: 29 CFR 3), 40 U.S.C. Section 327 et seq 29 CFRS, Title VU of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Equal Pay Act. Under Title VII (N-915.040), Immigration and Reform and Control Act of 1986 (ERCA)

( USC

1101 as amended)

Immigration and Nationality Act, Section 274A. FLSAs recordkeeping Regulations, 29 CFR Part 516. State of Conn. General Statues Section 31-53, State of Conn. P.A.97-263, Sec. 31S id-S. Standards of apprenticeship;

(B) not to discriminate against any employee or applicant for employment because of race, color, religion,, age, sex, physical disability or national origin, the Developer shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to race, color, religion, age, sex, physical disability or national origin, and such action shall include, but not limited to, employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of any or other forms of compensation, and selection for training, including apprenticeship; (C) to post, in conspicuous places available to employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause;

(D) to state, in all solicitations or advertisements for employees placed by or on behalf of the Developer, that all qualified applicants will receive consideration for employment without regard to race, color, religion, age, sex, physibal disability or national origin; to utilize the only City-sponsored workforce program (Construction Workforce Initiative 2) as a source of recruitment; and to notify the City of New Haven Commission on Equal Opportunities of all job vacancies;

(E) to send to each labor union or representative of workers with whom the Developer has a collective bargaining agreement, or other contract or understanding, a notice advising the labor union or workers representative of the Developers commitments under the equal opportunity clause of the City of New Haven, and to post copies of the notice in conspicuous

PagelS

places available to employees and applicants for employment, and the Developer shall register all workers in the skilled trades, who are below the journeyman level, with the Apprentice Training Division of the Connecticut State Labor Department; (F) to comply with the provisions of City of New Haven Ordinance 12 1/4-9, which requires that all construction contractors aggressively make every effort to obtain 25% overall Minority Business Enterprise (MBE) utilization goals for subcontracting. The Developer acknowledges that for the purposes of this Agreement and the goals of the City of New Haven the deffiition of MBE is persons having origins in Black African and Hispanic racial groups as defined by Ordinance 12 1/4 -3 (g)(3); that failure to achieve the 25% MBE goal will require documentation of good faith efforts to achieve the utilization goals; and that the good faith efforts will be evaluated, verified and recognized by the Small Business Initiative office if a contractor has accomplished at least four (4) of the following: (1) placing advertisements in at least two local newspapers, (2) placing advertisement in one minority publication, (3) mailing notices to development agencies, (4) placing notice with the Small Business Initiative and the New Haven Contractors Alliance, (5) showing proof of outreach to and collaboration with the New Haven Contractors Alliance, (6) showing proof of quotes received from subcontractors, and (7) undertaking other efforts undertaken to encourage MBE participation as determined in advance by the Small Business Initiative; (G)to ensure equal opportunities for construction and construction related small and minority contractors by instructing the Developers general contractor to notify the Small Business Initiative of all contracting opportunities; by allowing such information to be distributed to contractors via fax and email; and by holding a workshop detailing the Project and the contracting opportunities with the New Haven Contractors Alliance, if such alliance Works With the general contractor to hold such workshop; (H)to comply with the Developers obligation for increasing the utilization of minority contractors, by working in conjunction with the Small Business Initiative to implement mentoring partnerships providing management, technical, and developmental training skills through sub-contracting opportunities;

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(I) to furnish all information and reports required by the City Contract Compliance Directo r pursuant to section 12-1/2-19 through section 12-1/2-32 of the Citys Code of Genera l Ordinances and to permit access to the Developers books, records and accounts by the contracting agency, the City Contract Compliance Director, and the City Secretary of Labor for purposes of investigations to ascertain compliance with the program;
(3) to file, along with its construction subcontractors, if any, compliance reports with the City in the form and to the extent prescribed in this Agreement by the City Contract Compl iance Director and to file compliance reports at such times as directed which shall contain information as to the employment practices, policies, programs and statistics of the Developer and its subcontractors, if any;

(K) to comply, as a United States employer, with the Immigration and Naturalization Servic e (INS)s 1-9 verification process, which requires employers to confirm the employment The Developer acknowledges that an employer can be fined or otherwise sanctioned for knowingly hiring an undocumented worker; that the 1-9 forms also provide employers with a good faith defense if they hire someone who later turns out to be working illegally in the United States; and that the City Commission on Equal Oppor tunities will monitor and report of any alleged violations of the 1-9 verification process to the proper authorities; (L) to acknowledge that a finding, as hereinafter provided, of a refusal by the Developer, or subcontractor, to comply with any portion of this program as herein stated and describ ed, may subject the offending party to any or all of the following penalties: (i) refusal of all future bids for any public contract with the City of New Haven, or any of its departments or divisions, until such time as the Developer, or subcontractor, is in compliance with the provisions of this Agreement; (ii) cancellation of this Agreement; (iii) recovery of specified monetary penalties; eligibility of workers.

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(M) to comply with the Developers obligation that Section 3 of the HUD Act of 1968 applies to contracts in excess of $200,000 or where contracts to contractors are in excess of $100,000 in which any HUD funds are utilized for construction, renovation and rehabilitation activities, including lead paint, regardless of ownership. Such HUD-assisted contracts must contain Section 3 provisions with respect to employment and other economic opportunities, withholding funds from sub-recipients to ensure compliance with Section, and termination of contract of debarment for failure to adhere to the requirement provision. The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u (Section 3). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low and very low-income persons, particularly persons who are recipients of HUD assistance for housing; (N) to comply with the Developers obligation that each contractor and construction subcontractor hire the following groups, in correspondence to the following percentages of total hours completed on the Project: twenty-five percent (25%) worked by minorities; six and nine-tenths percent (6.9%) worked by females; thirty percent (30%) completed in compliance with Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u (Section 3), twenty-five percent (25%) residents of the City of New Haven,

and fifteen percent (15%) worked by apprentices provided that fifty percent (50%) of apprentice hours must be worked by first-year apprentices.
(0) to include the provisions of sub-paragraphs (A) through (P) of this Section 6.5 in every subcontract or purchase order so that said provisions will be binding upon each such subcontractor or vendor;

(P) to take such action, with respect to any subcontractor, as the City may direct as a means of enforcing the provisions of sub-paragraphs (A) through (P) herein, including penalties and sanctions for noncompliance and fines and penalties related to the ruJ.es of practice enforced

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by the City Commission on Equal Opportunities or the Small Business Initiative, whichever is applicable, provided however that, in the event the Developer becomes involved in or is threatened with litigation as a result of such direction by the City, the City will intervene in such litigation to the extent necessary to protect the interest of the City and to effectuate the Citys Equal Employment Opportunity program.

ARTICLE VU OBLIGATIONS OF TJ{E CITY

Section 7.1

Building Permits arid Fees

(A) For the purposes of this Section, Completion Date shall mean the date on which the Developer receives the final Certificate of Completion. (B) The City agrees that the: (i) Developer shall not have to pay any building permit fees due

and owing to the City until the first calendar day of the twelfth (12th) year after the Completion
Date (Building Fee Due Date); (ii) Developer shall thereafter pay One Hundred Thousand Dollars ($100,000) on the first calendar day of each of the five (5) calendar years immediately following such Building Fee Due Date; (iii) Developer shall thereafter pay Two Hundred Thousand Dollars ($200,000) on the first calendar day of each of the calendar years immediately following until Develope?s total obligation to pay the building permit fee is extinguished; (iv) Interest shall not be chargeable by the City on sucl building permit fees; and (v) Such agreement shall be legally binding, now and in the future, on the City, and shall benefit the Developer and any successor or assiiee of Developer. A memorandum of this agreement set forth in Section 7.1(B) shall be prepared and executed in recordable form and recorded in the Land Records of the City of New Haven. (C) The City shall diligently pursue and Work With the Developer and all relevant

Governmental Authorities and entities to help obtain for Developer the maximum tax credit available for the Project under the State of Connecticut Urban and Industrial Sites Reinvestment

Tax Credit Program, created under Public Act 00-170 and as amended from time to time,

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including any successor of that tax credit, if and to the fullest extent applicable to the Project. If as a result of Citys efforts, Developer is awarded such tax credit before the Building Fee Due Date, then, as, when and to the extent necessary to pay building permit fee installments as such installments become due under Section 7.1 (B) above, Developer shall pay the City an amount equal to sixty percent (60%) of the net cash benefit, if any, received by Developer from such tax credit (net of all expenses and fees incurred in connection therewith). Any and all payments by Developer to the City under this Section 7.1(C) shall be applied and credited by the City exclusively and entirely toward the installments of the building permit fee payable by Developer as described in Section 7.1(B) above. It is agreed and understood that nothing in this Section 7.1 (C) shall affect the Developers obligations set forth in Section 7.1 (B) above, except insofar as the additional payments to the City shall reduce the principal ba1ane owed to the City, thus reducing the totai. period of payments. (D) It is agreed and understood that the Developer shall be responsible for the payment in full of all Certificate of Occupancy fees.

(E) For the purposes of this Section, the Building Permit Fee rate for this project shall be the current rate of twenty-five dollars and sixteen cents ($25.16). In the event that any new type of fees for construction activities are adopted by the City ofNew Haven following the execution and delivery of the Land Disposition Agreement, then the Project shall be exempt from such new fees. However, it is agreed and understood that this exemption does not apply to any fees that are legally charged by independent agencies which are not controlled by the City and which have the authority to impose the same.

Section 7.2

Access to the Property

(A) Prior to the execution and delivery of the Land Disposition Agreement, the City shall grant the Developer and its designees, agents, employees and consultants reasonable access to the Property to perform such inspections and testing as deemed reasonably necessary by the Developer.

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(B) It is agreed and understood that the Developer shall provide its employees, designees, agents, consultants and contractors with appropriate safety equipment when accessing the Property, and that the Developer shall be responsible for causing the Developers contractors to observe all applicable workplace safety rules and regulations. By agreeing to this Section 7.2(B), the Developer does not forgo any available legal protection from liability that may arise out of the torts or other misconduct of Developers employees, designees, agents, consultants and contractors.

(C) The Developer itself shall obtain and shall cause its general contractor to obtain general liability insurance in the amount of Five Million Dollars ($5,000,000.00) and shall name the City as an additional insured on all such insurance policies. In addition, the Developer shall cause all construction subcontractors to obtain general liability insurance in the amount of Two Million Dollars ($2,000,000.00) and shall name the City as an additional insured on all such insurance policies.

Section 7.3

Public Financing

(A) If the State of Connecticut has deposited the Urban Act Funding for the Project into the bank account which the City has dedicated to the purpose of receiving the Urban Act Funding, within sixty (60) days of said deposit, the City shall contribute the cash sum of Nine Million Nine Hundred and Two Thousand Three Hundred and Seventy-One Dollars and Zero Cents ($9,902,371.00) in Urban Act grant funds to the Project (the Urban Act Funding),. The Developer shall decute and deliver such documentation as may be requird by the State of Connecticut with respect to the Urban Act Funding and shall use such Urban Act Funding strictly in accordance with the terms and conditions set forth in such documentation. To the extent that the City shall be subject to any obligations to the State of Connecticut in connection therewith, the Developer hereby agrees to indemnify and hold harmless the City against and from any liability of any nature with respect thereto.

(B) The City shall carry out and pay for certain sidewalk and streetscape/landscape improvements, to be used solely with respect to the sidewalks and streetscape/landscape

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surrounding the Property at a cost to the City of between Four Hundred and Fifty Thousand Dollars and Zero Cents ($450,000.00) and Five Hundred Thousand Dollars and Zero Cents ($500,000.00), such improvements to be of a general standard and quality comparable to the streetscape/landscape improvements located in the Ninth Square section of the Citys downtown. Such sidewalk and streetscape/landscape improvements shall include on-street parking on Chapel, Orange, and State Streets, if such parking is recommended by the City Department of Parking and Traffic. The City shall begin carrying out such improvements, which carrying out shall include at a minimum the commencement of the bidding process, within thirty (30) days after request by Developer, and shall complete such improvements within a reasonable time.

(C) Provided that the City shall receive sufficient funding therefor, the City will contribute cash in the amount of up to One Miffion Dollars and Zero Cents ($1,000,000.00) in 2008-2009 HOME funds for the provision of eight (8) affordable housing units within the Project. If the Developer has already commenced construction on the Project when these funds are received, the funds will be contributed to the Developer within sixty (60) days of the Citys receipt of these funds. If the Developer has not yet commenced construction when these funds are received by the City, the funds will be contributed to the Developer within sixty (60) days of Developer commencing construction on the Project. These eight (8) units will be allocated for households earning eighty percent (80%) or less of Area Median Income, corresponding with the HOME Program requirements. The Developer agrees that the Developer shall be responsible for compliance with all rules and regulations with respect to the use of any such HOME fuitds and agrees to indemnify and hold harmless the City against and from any liability of any nature arising out of the Developers use or misuse of any such funding.

(D) The City shall Work With the Developer in obtaining from the Housing Authority of New Haven (HANI{) a grant in the sum of approximately Three Million One Hundred Thousand Dollars ($3,100,000.00), which shall be used to pay for development costs, as well as certificates for project based Section 8 funding for the provision of twenty (20) affordable housing units within the Project. These twenty (20) units will be allocated for households

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earning fifty percent (50%) or less of Area Median Income and the affordability of these twenty (20) units will be maintained for not less than seventeen (17) years, subject to the availability ofproject-based Section 8 certificates. The rental subsidies associated with these twenty (20) units will be between one hundred and ten percent (110%) and one hundred and
twenty percent (120%) of fair market rents. In the event that such funding is secured, the

Developer agrees that it shall comply with any and all applicable rules and regulations with respect thereto, whether from the United States Department of Housing and Urban Development (HUD) or from HANH, and that the Developer shall be required to execute and deliver a separate agreement with HANH regarding such funding. The use of this funding is subject to environmental clearance and approval from the United States Department of Housing and Urban Development. It is agreed and understood that the funding described in this Section 7.3(D) is dependent upon the execution and delivery of an agreement or a set of agreements between the City, HANH, and the Developer in a form expressly approved in writing by HUD, and that in the absence of same, no such funding shall be available. The City shall Work With the Developer in pursuing this approval and execution of such agreement. (B) The City shall Work With the Developer in securing additional public financing to be used to provide affordable housing within the Project, including (without limitation) funding from the Connecticut Affordable Housing Trust Fund and the Federal Home Loan Bank. Section 7.4 Applications to Governmental Authorities The City Economic Development Administrator shall Work With the Developer to support applications for funding or other approvals made by the Developer to any Governmental Authority, including without limitation any applications made to the City Redevelopment Authority, the New Haven Board of Aldemian, the State Traffic Commission, and the City Board of Zoning Appeals. The City Economic Development Administrator shall Work With the Developer to procure the existing, city-wide five (5)-year Assessment Deferral Program benefits, tax credits under the State of Connecticut Urban and Industrial Sites Reinvestment Tax Credit Program, and empowerment zone benefits.

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Section 7.5 Records and Access to Records

The City shall promptly make available to the Developer for inspection and copying all documents, information and public records in the possession or control of the City, which relate to the Property or the Project.

ARTICLE VIII TRAFFIC AN]) PARKING Section 8.1 Parking Facifities

(A) As an element of the Project, the Developer shall obtain all necessary approvals and construct a parking facility (the Parking Facility) comprising not less than five hundred (500) parking spaces;

(B) The Parking Facility shall be constructed below grade or to the extent that the Project shall contain any above-grade parking, the structure must be wrapped by active commercial uses on the street frontage first floor and by an appropriate skin, reasonably acceptable to the

City, blending into the remainder of the Project, on each other floor containing any parking
facilities;

(C) Upon completion of the Parking Facility, and the issuance of a Certificate of Occupancy the Developer may, at its discretion, provide for the management of the Parking Facility, or the Developer may elect to negotiate a master-lease for the Parking Facility with the Parking Authority, with the conditions as described in Section 8.1(D) of this Agreement.

(0) In the event the Developer elects to negotiate a master-lease for the Parking Facility with the Parking Authority the following conditions shall apply:
V

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(i) The Developer agrees that the master-lease shall provide for a monthly per space cost equal to the debt service per space, it being understood that debt service shall include third-party debt as well as equity provided by Union Backed Financing;

(ii) The Developer agrees to guarantee a minimum of three hundred thirty five (335) monthly parkers for the Parking Facility, for use by tenants at a rate to be determined, and currently estimated at One Hundred Fifty Dollars and Zero Cents ($150.00) per space provided that security, utilities, and maintenance are considered building costs and therefore excluded;

(iii)It is understood that any master-lease negotiated between the Developer and the Parking Authority would be subject to the approval of the Board of the Parking Authority Board and the Board of Aldermen of the City.

Section 8.2

Traffic Improvements

(A) The Developer is in the process of completing a traffic study, at the Developers sole expense, with respect to the projected effects of the Project and finalizing a traffic plan with respect thereto (the Traffic Plan) and obtaining State Traffic Commission approval thereof; to the extent necessary. (B) To the extent that the Traffic Plan requires a break in the median on State Street to create an entry to the Pitkin Tunnel from the left lane (northbound) of State Street (the State Street Entry) the City shall, subject to obtaining all necessary permits and approvals, and at the Citys sole cost and expense, provide a break in, or relocation of; the median, including design and engineering costs, to create a State Street Entry.

(C) The Developer acknowledges that subject to the provisions of Section 8.2(b) above, the

Developer shall be responsible, at the Developers sole cost and expense, for implementation of the Traffic Plan. The City Traffic and Parking Department shall impose only those obligations on the Developer which are reasonably necessary to mitigate the impact of the

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Project, as further described in the Traffic Plan or as reasonably determined by the City Traffic and Parking Department andlor as determined by the State Traffic Commission.

ARTICLE LX DEFAULT

Section 9.1

Events of Default

(A) The following shall constitute an Event of Default by the Developer:

(i)

an Event of Bankruptcy a failure to perform any monetary covenant or agreement on the part of the Developer to be performed, and to cure such failure within five (5) business days of notice thereof from the City; and a failure to perform any other covenant or agreement of this Agreement on the part of the Developer, and to cure such failure within thirty (30) days of notice thereof from the City or such longer time as may be required to cure such failure provided the Developer has commenced and is diligently pursuing such cure.

(ii)

(iii)

(B) A failure to perform any covenant or agreement of this Agreement on the part of the City,, where such failure is not cured by the City within thirty (30) days of notice thereof from the Developer (or such longer time as may be required to cure such failure provided the City has commenced and is diligently pursuing such cure) shall constitute an Event of Default by the City.

Section 9.2

Remedies

Subject to the provisions of Section 9.3, both the City and the Developer shall have all rights and remedies available at law and in equity upon an Event of Default by the other party.
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Section 9.3

Dispute Resolution Procedure

(A) The City and the Developer agree that they shall endeavor to resolve any dispute that may arise under this Agreement through good faith negotiations, prior to submitting to binding arbitration pursuant to clauses (B) through (E) of this Section 9.3. Either party may initiate negotiations by providing written notice (Notice of Dispute) in letter form to the other party setting forth: (i) the subject of the dispute; (ii) the partys position and (iii) the relief requested. Within five (5) business days of delivery of the Notice of Dispute, the receiving party shall respond in writing with a statement of its position. At the request of either party, representatives

of each party with full settlement authority shall meet at a mutually

acceptable time and place in the City of New Haven within ten (10) days of the Notice of Dispute in order to attempt to negotiate in good faith a resolution to the dispute. (B) If the dispute is not resolved by the parties in accordance with the provisions of this Section 9.3, then within thirty (30) days of delivery of the Notice of Dispute or such other time as may be agreed to in writing by both parties, either party may commence binding arbitration, with the American Arbitration Association hereby agreed as the designated arbitrating body hereunder. The party filing the demand for arbitration shall name one arbitrator at the time it files a demand for arbitration, and the other party shall name a second arbitrator within ten (10) days of the date the demand is received by the American ArbitratiOn Association. The two arbitrators so selected shall appoint a third arbitrator from a list provided by the American Arbitration Association, within five (5) days of receipt of said list. If either party fails to name an arbitrator within the time prescribed in this Section or if the arbitrators appointed by the parties do not appoint a third arbitrator within the time prescribed in this Section 9.3, the designated arbitration firm shall make the appointment. Such arbitration hearing shall take place within the City of New Haven and shall commence within sixty (60) days of the appointment of the third arbitrator or such later time as the parties shall agree to in writing. (C) Upon the request of either party, the arbitrators will determine what pre-hearing discovery is necessary or desirable for a full airing of the facts to render a fair and equitable judgnaent and

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set a schedule for such discovery. The arbitrators shall issue a written reasoned opinion within thirty (30) days of the arbitration hearing. The decision of the arbitrators shall be binding upon the parties. (D)Any arbitral award may be confirmed and enforced, and judgment entered thereon, in the state or federal courts of Connecticut. (E) The prevailing party shall be entitled to reimbursement of all costs and expenses incurred in connection with any such arbitration and any judicial review thereof, including, but not limited to attorneys fees.

Section 9.4

Indirect.. Special or Consequential Damages

Neither the City nor the Developer shall be entitled to indirect, special or consequential damages for an Event of Default. ARTICLEX GENERAL PROVISIONS Section 10.1 Notices

(A) Except as otherwise provided in this Agreement, any notice or approval required or permitted to be given under this Agreement shall be in writing and shall be considered to have been

given upon the earlier of (i) receipt thereof; (ii) three (3) business days after deposit in the
United States mail, registered or certified mail, postage prepaid, return receipt requested, or

(iii) day of delivery by hand, and addressed as set forth below If to the Developer:
Becker Development Associates, LLC 95ReefRoad

Fairfield, Connecticut, 06824

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Attention: Bruce Becker, Managing Member

With copies to:

Kennedy Associates Real Estate Counsel, LP 7315 Wisconsin Avenue, Ste 350 West Bethesda, MD 20814 Attention: David Antonelli Vice President of Acquisitions

And to:

McNaul Ebel Nawrdt & Heigren PLLC 600 University Street, Suite 2700 Seattle, WA 98101 Attention: MarcO. Winters

If to the City:

Economic Development Administrator City of New Haven 165 Church Street New Haven, CT 06510 Attention: Kelly Murphy

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With copies to: City of New Haven 165 Church Street New Haven, CT 06510 Attention: John R. Ward Deputy Corporation Counsel

(B) Each party shall have the right to change the place or person or persons to which notices, requests, demands, and communications hereunder shall be sent or delivered by delivering a notice to the other parties in the manner required above.
Section 10.2 No Waiver

No failure on the part of the City or the Developer to enforce any covenant or provision herein contained, nor any waiver of any right hereunder by the other, shall discharge or invalidate such covenant or provision or affect the right to enforce the same in the future. No default shall be deemed waived by either party unless such waiver is in writing and designated as such and signed by such party, and such waiver shall not be a continuing waiver but shall apply only to the instance of default for which it is anted. Rights Cumulative

Section 10.3

The rights and remedies conferred upon either party hereby are in addition to any rights or remedies to which either party may be entitled at law or in equity. Successors

Section 10.4

This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the respective parties to this Agreement. The Developer is expressly authorized to assign this Agreement (a) to another legal entity that is either owned or controlled by the

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Developer (controlled meaning that the Developer maintains at least 51% equity interest) and which retains Developer as the developer principally in charge of the development of the Project, or (b) to another legal entity which is owned or controlled by the provider of the Union Backed Financing and which retains Developer as the developer principally in charge of development of the Project. Except in the circumstance described in the preceding sentence, the Developer shall not be authorized or permitted to assign this Agreement to any other party without the prior consent of the City Economic Development Administrator or Mayor, which may be withheld in such parties sole discretion.

Section 10.5

Severability

If any term, provision or condition contained in this Agreement shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term, provision or condition to persons or circumstances (other than those in respect of which it is invalid or unenforceable) shall not be affected thereby, and each term, provision and condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law provided each party shall have substantially received the benefit of the Agreement accruing to it.

Section 10.6

Governing Law

This Agreement shall be governed by and construed in accordance with the internal laws of the State of Connecticut, without regard to its conflicts of law principles.

Section 10.7

Waiver of Jury Trial

BOTH THE CITY AND THE DEVELOPER HEREBY IRREVOCABLY WAIVE, AS AGAINST THE OTHER, ANY RIGHTS SUCH PARTY MAY HAVE TO A JURY TRIAL IN RESPECT TO ANY CIVIL ACTION ARISING UNDER THIS AGREEMENT TO THE EXTENT PERMITTED BY LAW.

Section 10.8

No Partnership. Joint Venture or Agency

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Nothing contained herein or done pursuant hereto shall be deemed to create, as among the parties to this Agreement, any partnership, joint venture or agency relationship.

Section 10.9

Consents

Where the consent or approval of the City is required to any action (or inaction) pursuant to the provisions of this Agreement, such consent or approval shall be granted (or denied) by the Economic Development Administrator.

Section 10.10

Amendments

Both the City and the Developer agree that the provisions of this Agreement may be modified or amended, in whole or in part, only by written document, executed and acknowledged by both parties.

Section 10.11

Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
Section 10.12 Term

This Agreement shall expire on the earlier to occur of (a) full performance and satisfaction of all covenants, agreements and obligations of the City and Developer hereunder, or (b) forty (40)
years from the date hereof

IN WITNESS WHEREOF, the City and the Developer have executed this Agreement as of the date set forth above.

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THE CITY OF NEW HAVEN

By: John D tefano, Jr. ItsM or Dul Authorized to act herein Date: 7

Approved as o form and correctness:

John R. Ward Deputy Corporation Counsel Date:

BECKER DEVELOPMENT ASSOCIATES, LLC

By:%\ Bruce Becker Its Managing Member Duly Authorized to act herein Date:

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EXHIBIT A Land Disposition Agreement

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EXHIBIT

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LAND DISPOSITION AGREEMENT

BETWEEN
THE CITY OF NEW HAVEN

AND BECKER DEVELOPMENT ASSOCIATES, LLC A07-0249

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INDEX BACKGROUND ARTICLE I DEFINITIONS Section 1 Section 1.2 Defined Terms Interpretation ARTICLE II CONVEYANCE OF THE PROPERTY Section 2.1 Section 2.2 Section 2.3 Section 2.4 Section 2.5 Section 2.6 Section 2.7 Section 2.8 Covenant of Sale Condition of Property to be Conveyed Title and Instruments of Conveyance Purchase Price Time of Sale an Conveyance Real Estate Conveyance Tax and other Closing Costs Real Property Tax Adiustments Allowable Activity Prior to Closing

ARTICLE HI RESTRICTIONS AND CONTROLS UPON DEVELOPMENT

Section 3.1 Section 3.2 Section 3.3 Section 3.4

General Covenants Covenants: Binding Upon Successors in Interest Construction Work

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Section 3.5 Section 3.6 Section 3.7 Section 3.8 Section 3.9

Time for Commencement and Completion of Construction Remediation Prompt Payment of Obligations Access to the Property by City Personnel Certificate of Completion ARTICLE 1V TRANSFER AND MORTGAGE OF iNTEREST IN PROPERTY

Section 4.1 Section 4.2 Section 4.3 Section 4.4

Transfer by the Developer Mortgage of Property by the Developer Rights and Duties of the Mortgagees Upon Acquisition Prior to Completion Rights and Duties of Mortgagee Upon Acquisition after Completion ARTICLE V

OPERATION. MAiNTENANCE. ENFORCING COMPLIANCE AND DEVELOPERS

/

OBLIGATIONS

Section 5.1 Section 5.2

Operation and Maintenance of the Property Reimbusement of the City ARTICLE VI INDEMNIFICATION

Section 6.1 Section 6.2

Indemnification Survival ARTICLE VII DEFAULT

Section 7.1

Failure by the Developer to Purchase the Property

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Section 7.2 Section 7.3 Section 7.4 Section 7.5 Section 7.6 Section 7.7 Section 7.8

Failure by the City to Transfer the Property Default Subsequent to Purchase of the Property Notice of Default to Mortgagees Mortgagee May Cure Default by the Developer Rights of Developer and Mortgagee in the Event of Revesting of Title in City Remedies Consequential Damages ARTICLE VIII MISCELLANEOUS PROVISIONS

Section 8.1 Section 8.2 Section 8.3 Section 8.4 Section 8.5 Section 8.6 Section 8.7 Section 8.8 Section 8.9 Section 8.11 Section 8.13

Obligations and Rights and Remedies Cumulative Finality of Approvals Covenants to be Enforceable by the City Members and Officers Barred From Interest Agreement Binding on Successors and Assigns Severability Waivers Amendments Approvals and Notices Obligations to Continue Number and Gender

Section 8,10 Matters to be Disregarded Section 8.12 No Personal Liability Section 8.14 City Regulatory Authority

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TIllS LAND DISPOSITION AGREEMENT (this Agreement) is entered into this I (say of J2A , 2008, by the CITY OF NEW HAVE N, a municipal corporation organized and existing under the laws of the State of Connecticut, with a mailing address at 165 Church Street, New Haven, Connecticut 06510 and BECKER DEVELOPMENT ASSOCIATES, LLC, a

limited liability company organized and existing under the laws of the State of Conne cticut, with a mailing address at 95 Reef Road, Fairfield, Connecticut 06824. BACKGROUND In accordance with the terms and conditions set forth in that certain Development Agreement (the Development Agreement) dated October 5, 2007 between the City and the Developer it is agreed between the City and the Developer that all conditions precedent (if any) to the conveyance of the Property (as therein defined) have been satisfied and accord ingly, the City, at the request of the Developer has agreed to convey the Property to the Develo per subject to the terms and conditions set forth in this Agreement.
NOW THEREFORE, he City and the Developer agree as follows:

ARTICLE I DEFINITIONS Section 1 Demned Terms

For the purposes of this Agreement, the following terms shall mean: (A) City shall mean the City of New Haven, Connecticut, a munici pal corporation organized and existing under the laws of the State of Connecticut, with a mailing address at 165 Church Street, New Haven, Connecticut 06510, and shall include any of its boards or commissions, and any successor in interest whether by operation of law, or otherwise. The Economic Development Administrator of the City is authorized to act on behalf of the City to

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implement the provisions of this Agreement. (B) (C) (D) (B) Closing shall have the meaning ascribed in Section 2.5 of this Agreement. ttConstruction Work shall have the meaning assigned to it in Article III, Section 3.4(A). Deed shall have the meaning ascribed in Section 2.3 of this Agreement.

Developer shafl mean Becker Development Associates, LLC, a limited liability company organized and existing under the laws of the State of Connecticut, with a mailin g address at 95 Reef Road, Fairfield, Connecticut 06824, and its successors and permitted

assigns, whether by operation of law or otherwise, but shall not mean mortgagees, unless and until such mortgagee shall succeed to Developers interest in the Property by foreclo sure or deed in lieu of foreclosure. (F) Development Agreement shall have the meaning ascribed in the Background section of this Agreement.

(G)

Environmental Condition shall mean any conditions which, under applicable Environmental Laws, require testing, remediation or monitoring.

(H)

BLUR, an acronym, shall stand for Environmental Land Use Restriction and shall mean those use restrictions as described in Connecticut General Statutes Sections 22al.33n to 22a133r, inclusive, as amended from time to time.

(I) Environmental Laws shall mean any and all laws, statutes, ordinances, rules, regulations or orders of any Governmental Authority pertaining to the environment, includi ng the federal Clean Water Act, the federal Clean Air Act, the federal Comprehensive Enviro nmental Response, Compensation and Liability Act of 1980, the federal Water Polluti on Control Amendments, the federal Resource Conservation and Recovery Act of 1976, the federal Hazardous Materials Transportation Act of 1975, the federal Safe Drinki ng Water Act, the federal Toxic Substances Control Act, and any comparable or similar environmental laws of

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the State, including Title 22a of the General Statutes. (J) Existing Environmental Conditions shall mean any Environmental Condition at the Property existing on the date hereof. (K) Force Maj eure shall have the meaning ascribed in Section 1.1 of the Development Agreement.

(L)

Governmental Authority shall mean any federal, state, local, or other governmental , regulatory or administrive agency, governmental commission, department, board, subdivision, court or tribunal.

(M)

Hazardous Substance shall mean (i) any chemical, compound, material, mixtur e or substance that is now or hereaIer defined as or included in the definition of hazardous substances, hazardous wastes, hazardous materials, extremely hazardous waste, restricted hazardous waste or toxic substances or terms of similar import under any applicable federal, state or local law, or under the regulations adopted or promulgated pursuant thereto, including Environmental Laws; (ii) any oil, petroleum or petroleum derived substance, any flarnmable substances or explosives, any radioactive materi als, any hazardous wastes or substances, any toxic wastes or substances, or any other materi als or pollutants which cause any part of any facility, structure or improvement to be in violati on of any Environmental Laws; and (iii) asbestos in any form, urea formaldehyde foam insulation, and electrical equipment which contains any oil or dielectric fluid contain ing levels of

polychiorinated biphenyls in excess of applicable legal or regulatory limits. (N) LEP, an acronym, shall stand for Licensed Environmental Profes sional and shall mean that individual licensed by the Connecticut State Board of Examiners of Environmental Professionals as set forth in Connecticut General Statutes Section 22a-l 33v and the implementing regulations thereto. Project shall have the meaning ascribed in the Development Agreement and as

(0)

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further described in Exhibit B (Description of Project) attached thereto. (P) Project Schedule shall mean the preliminary construction schedule set forth in Exhibit 0 of the Development Agreement and incorporated herein by reference. Property shall have the meaning ascribed in the Background section of the

(Q)

Development Agreement. (R) (S) Purchase Price shall have the meaning ascribed in Section 2.4 of this Agreement.

Release shall mean any discharge, spillage, uncontrolled toss, seepage, filtration, emission, migration, leaking, pumping, injection, deposit, disposal or discharge of any Hazardous Substance into the environment to the extent prohibited under Environmental

Laws. (I) Remediation shall mean any of the following activities to the extent that they relate to

or arise from the presence of Environmental Conditions in the soil or groundwater or both at the Property for which remediation is required under Environmental Laws: (i) monitoring, investigation, cleanup, containment, remediation, removal, mitigation, or establishment of an BLUR at the Property required or permitted by the Connecticut Transfer Act should the Developer elect to use an BLUR; (ii) obtaining any permits, consents, approvals or authorizations from any Governmental Authority necessary to conduct such Remediation; (iii) preparing and implementing any plans or studies for such Remediation. (U) emediation Standard Regulations or RSRs shall mean Sections 22a- 133k-ito 22a1 33k-3 of the Regulations of Connecticut State Agencies. and

(V)

Site Plan shall mean the plan for the Project site, as submitted by Developer, and as approved by the City Plan Commission through said commissions site plan review proces s,

including approved modifications thereof. (W) Union-Backed Pension Fund shall have the meaning ascribed in the Development Agreement.

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Section 1.2

Interpretation

(A) Words such as hereunder, hereto, hereof and herein and other words of similar import shall, unless the context requires otherwise, refer to the whole of this Agreement and not to any particular article, section, subsection, paragraph or clause hereof. (B) A reference to including means including without limiting the generality of any description preceding such term anl for purposes of this Agreement the rule of ejusdem generis shall not be applicable to limit or restrict a general statement, followed by or referab le to an enumeration of specific matters, to matters similar to, or of the same type, class or category as, those specifically mentioned.

(C) Any reference to days shall mean calendar days unless otherwise expres

sly specified.

(D) Any reference to any statute, law or regulation includes all statutes, laws or regulations amending, consolidating or replacing the same from time to time, and a reference to a law or statute includes all regulations, codes or other rules issued or otherw ise applicable under such law or statute unless otherwise expressly provided in such law or statute or in this Agreement. This rule of interpretation shall be applicable in all cases notwithstanding that in some cases specific references in this Agreement render the application of this rule unnecessary. (E) All approvals, consents, waivers, acceptances, concurrerzces and permissions required to be given or made by any party hereunder shall not be unreasonably withheld, delayed or conditioned by the party whose approval, consent, waiver, accept ance, concurrence or permission is required, whether or not expressly so stated, unless otherwise expressly provided herein. Wherever under this Agreement reasonableness is the standard for the granting or denial of any approval, consent, waiver, acceptance, concurrence or permission of

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any party hereto, the City shall be entitled to consider governmental considerations, as well as business and economic considerations. (F) The City and the Developer have participated in the draIing of this Agreement and any ambiguity contained in this Agreement shall not be construed against the City or the Developer solely by virtue of the fact that either the City or the Developer may be considered the drafter of this Agreement or any particular part hereoL ARTICLE II CONVEYANCE OF THE PROPERTY Section 2.1 Covenant of Sale

4.

Subject to all of the terms, covenants and conditions of this Agreement, the City covenants and agrees to sell and convey, and the Developer covenants and agrees to purchase, the Proper ty.

Condition of Property to be Conveyed (A) The Developer acknowledges, represents and warrants that any information in any manne r pertaining to the Property, or any part thereof, supplied or made available by the City, is furnished to the Developer solely as a courtesy. THE INFORMATION IS PROVIDED, AND THE PROPERTY IS TO BE TRANSFERRED ON AN AS-IS-WHERE-IS BASIS AND THE CITY MAKES NO REPRESENTATION, EXPRESS OR IMPLiED, OR. ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY OF CONDITIONS, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE AS TO THE INFORMATION OR THE PROPERTY, and no representations, whether written or oral, have been made by the City, or its agents or employees, regarding the Property, except as expressly set forth in this Agreement or in the Development Agreement.

Section 2.2

(B) The Developer acknowledges, represents and warrants that the Developer has made a

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complete inspection of the Property and is familiar with the Property, including any Environmental Conditions thereon, and has made such independent investigation s as the Developer deems necessary or appropriate concerning the Property. The City makes no representations or warranties and specifically disclaims any representation , warranty, or guaranty, oral or written, past, present or future with respect to the physic al conditions or any other aspect of the Property including the compliance of the Proper ty with any applicable laws, including Environmental Laws, the financial earning capacity of the operation of the Property, the nature and extent of any right-of-way, lien, encumbrance, license, reservation, condition, or otherwise, the existence of soil instabi lity, past soil repairs, soil additions or conditions of soil fill, susceptibility to landsli des, sufficiency of undershoring, sufficiency of drainage, whether the Property is located wholly or partially in a flood plain or a flood hazard boundary or similar area, the existence or non-existence of Hazardous Substances, or other toxic materi als of any kind (including, without limitation, asbestos or petroleum products) or any other matter affecting the stability or integrity of the Property. (C) As part of the Developers agreement to acquire the Property AS-IS-WHERE-IS, and not as a limitation on such agreement, THE DEVELOPER HEREBY UNCONDffiO NALLY AND IRREVOCABLY WAIVES AND RELEASES THE CITY FROM ANY AND ALL ACTUAL OR POTENTIAL RIGHTS THE DEVELOPER MIGHT HAVE REGARDING ANY FORM OF WARRANTY, EXPRESS OR IvIPLIED, OF ANY KIND OR TYPE, RELATING TO THE PROPERTY AND THE INFORMATION, INCLU DING ANY CLAIMS ARISING FROM NEGLIGENCE OR STRICT LIABILITY. SUCH WAIVER AND RELEASE IS ABSOLUTE, UNCONDITIONAL, IRREVOCABLE, COMPLETE, AND NOT LIMITED IN ANY WAY. SUCH WAIVER AND RELEA SE INCLUDES, BUT IS NOT LIMITED TO, A WAIVER AND RELEASE OF EXPRESS WARRANTIES, IMPLIED WARRANTIES, WARRANTIES OF FITNE SS FOR A PARTICULAR USE, WARRANTIES OF MERCHANTABILITY, WARRANTIES OF HABITABILITY, STRICT LIABILITY RIGHT S AND CLAIM OF EVERY KIND AND TYPE, INCLUDING, BUT NOT LIMITED TO, CLAIMS REGARDING DEFECTS, WHETHER OR NOT DISCOVERABLE, PRODUCT

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LIABILITY CLAIMS, PRODUCT LIABILITY TYPE CLAIMS, ENVIRONMENTAL

CLAIMS AND ALL OTHER EXTANT OR LATER CREATED OR CONCEIVED CLAIMS AND RIGHTS. Section 2.3 Title and Instruments of Conveyance

The sale and conveyance of the Property shall be of fee simple title to the Property and shall be by quit claim deed substantially in the form attached hereto as Exhibit A (the Deed), granting marketable title to the Property to the Developer. The Deed shall be made expressly subject to the terms andprovisions of this Agreement, which shall survive delivery of the Deed. The Deed shall be delivered to the Developer at the Closing upon the Developers payment of the Purchase Price to the City. Section 2.4 Purchase Price

The purchase price for the Property shall be One Dollar and Zero Cents ($1.00) (the Purchase Price). The Purchase Price shall be paid to the City upon the Citys delivery of the Deed to the Developer. Section 2.5 Time of Sale and Conveyance the

The delivery of the Deed shall take place at a closing to be held at such place and time as

parties hereto shall agrec (the Closing). It is acknowledged and agreed that the City must have not less than sixty (60) days notice of the date of the Closing in order to obtain vacant posses sion of the Property. The foregoing provision notwithstanding, the Developer, at any time after the signing of this Agreement, may request that the City set a date for the Closing, after receipt of which request the City must respond within fifteen (15) days to Developer with a reason able offer for a date for the Closing. Real Estate Conveyance Tax and other Closina Costs The Developer shall pay the cost of obtaining any title search and policy of title insuran ce, the cost, if any, of any real estate conveyance tax, and all other costs related to the Closin g, including the cost of recording this Agreement and the Deed. Each party shall be responsible for payment of the legal fees of its own counsel in the negotiation and execution of this Agreement Section 2.6

to

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and the transfer of the Property. Section 2.7 (A) Real Property Tax Adjustments

With respect to any tax period during which the City on the one hand, and the Develo per on the other hand, both had title to the Property, real estate taxes allocable to the Property for such period shall be prorated between the City on the one hand, and the Develo per on the other hand, in proportion to the respective periods of ownership of title by (i) the City and their predecessors in title on the one hand, and (ii) the Developer or any pennitted assignee on the other hand, in accordance with the custom in the County of New Haven, Conne cticut.
hi

(B)

or any successor or permitted assignee shall be liable for taxes pursuant to Sectio n 12-81 a of the General Statutes of the State of Connecticut, and shall make payment of such taxes in accordance therewith (or if spch section shall be held invalid, unenforceable or unconstitutional by a court of competent jurisdiction, the Developer or any permit ted assignee shall make a payment in lieu of taxes, to the City, based upon the assessed value of the Property or portion thereof, at the tax rate then prevailing in the City, for that portion of the tax year during which the Developer or such assignee had title). The City and the Developer agree that it is their intention that, commencing upon Closing, the Proper ty shall be, and shall remain, subject to real estate tax and in no event shall the Developer or any successor or assignee seek exemption from such taxes. This Section 2.7(B) shall survive the expiration or any termination of this Agreement for a period of forty (40) years from the record ing of the Certificate of Completion. Notwithstanding the foregoing, it is expressly agreed , stipulated and understood that nothing contained in this Section 2.7(B) shall be constru ed as limiting the Developers ability to take advantage of the Citywide Rehabilitation Area Agreement Deferral Program for tax assessment phase-in, pursuant to the provisions of Section 1 2-65c Ct. seq. of the Connecticut General Statutes (and City of New Haven ordinance made thereunder) to the extent that the Developer is so entitled and any other such as of right tax abatement

the event the Property is fully exempt from taxation on the assessment date next preceding the date on which the Deed is recorded in the Land Records of the City ofNew Haven by virtue of title being vested in the City or other tax-exempt entity, the Developer

II

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deferment program existing at the date hereof (C) Any amounts owed by the Developer or any successor or assignee under this

260

Article II shall be due and payable in the manner and at the time set forth in Section 12-8 Ia of the General Statutes of the State of Connecticut. Allowable Activity Prior to Closing

Section 2.8

(A) Prior to the Closing, the City shall grant the Developer and its designees, agents, employees, contractors and consultants an exclusive license to reasonably access the Property to perform such inspections and testing as deemed reasonably necessary by the Deve loper, and to conduct such demolition or construction work in accordance with all the activities allowed to maintain the Project Schedule. Prior to Closing, the City may not sell, lease, file liens or any kind upon, or borrow against, the Property, unless title has reveste d in the City pursuant to the default provisions of this Agreement. (B) It is agreed and understood lhat the Developer shall provide its emplo and that the Developer shall be responsible for causing the Develo

consultants and contractors with appropriate safety equipment when accessing

yees, designees, agents, the Property,

pers contractors to observe all applicable workplace safety rules and regulations. By agreeing to this Section 2.8, the Developer does not forgo any available legal protect ion from liability that may arise out of the torts or other misconduct of Developers employees, designees, agents, consultants and contractors. (C) The Developer itself shall obtain and shall cause its genera l contractor to obtain general liability insurance in the amount of Five Million Dollars ($5,00 0,000.00) and shall name the City as an additional insured on all such insurance policies. In addition, the Developer shall cause all construction subcontractors to obtain general liability insurance in the amount of Two Million Dollars ($2,000,000.00) and shall name the City as an additional insured on all such insurance policies.

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ARTICLE Ill

RESTRICTIONS AND CONTROLS UPON DEVELOPMENT

Section 3.1

General

The general composition and design of the Project has been determined taking into account the visual impact that the Project will have on the surrounding neighborhood, market conditions and economic viability, pedestrian enhancements and the reasonable needs and concerns of the community, the Developer and the City. Section 3.2 Covenants (A)The Developer covenants that it shall construct the Project on the Property in accordance with all zoning and other regulations and the terms, conditions and restrictions set forth in this Agreement and the Development Agreement (the ?ermitted Use). Witho ut limiting the foregoing, the Developer covenants and agrees that it will not use or occupy, nor permit the Property to be used or occupied, for any purpose which (i) violates any zoning, land use, or building restriction then in force; (ii) breaches any existing private covenant, restriction, license, condition, easeme nt or agreement covering or affecting the use of the Property; or (iii)constitutes a violation of applicable law.

(B) The Developer covenants on behalf of itself and its successors and assigns, that any development of this Property, including that permitted pursuant to this Article III, is and remains subject to all applicable City approval processes.

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(C) Without prejudice to the generality of any provisions of this Article Ill, Section 1(a), the Developer covenants on behalf of itself and its successors and assigns that the Developer and its successors and assigns shall: (i) devote the Property to (and operate in accordance with) the Permitted Use, in accordance with all zoning and other regulations and the terms, conditions and restrictions set forth in this Agreement; not discriminate upon the basis of race, color, religion, gender, sexual orientation, national origin, ma!ital status or physical disability in the sale, lease, or rental or in the use and occupancy of the Property or any improvements erected or to be erected thereon or any part thereof; (iii) comply with all federal, state and local laws in effect from time to time, prohib

(ii)

iting discrimination or segregation by reason of race, religion, color, gender, sexual orientation, national origin, marital status or physical disability in the sale, lease, or rental or in the use and occupancy of the Property or any improvements erected thereon or to be

erected thereon, or any hart thereof; (iv) not cause or permit obnoxious odors to emanate, or be dispelled, from the Property; (D) Without prejudice to the generality of Section 3.2(A) above, it is hereby agreed and understood that the provisions of Section 6.4 and 6.5 of the Development Agreem ent are incorporated herein in their entirety as if set out in full.
Section 3.3 Covenants; Binding Upon Successors in Interest

(A) It is intended and agreed (and the Deed shall expressly so provide) that the agreem ents and covenants contained in this Article III shall be covenants running with the Proper ty, and that unless otherwise specifically provided for in this Agreement, they shall, in any event, and without regard to technical classification or designation, legal or otherw ise, be binding to the fullest extent permitted by law and equity for the benefit of the City, and shall be enforceable

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by the City against the Developer and every successor in interest to the Property, or any part thereof, or any interest therein. It is further intended and agreed that the agre ements and covenants provided in this Article III shall remain in effect without limit ation as to time, and that such agreements and covenants shall be binding on the Develope r itself, each successor in interest to the Property, and every part thereof, for such period as such successor shall have title to, or an interest in, or possession or occupancy of, the Prop erty or any part thereof. (B) in amplification of, and not in restriction of:, the provisions of this Artic le III it is intended and agreed that the City and its successors and assigns shall be deem ed beneficiaries of the agreements and covenants provided in this Article UI both for and in their own right and also for the purposes of protecting the interest of the community and othe parti r es, public or private, in whose favor or for whose benefit such agreements and cove nants have been provided. Such agreements and covenants shall (and the Deed shall so state) run in favor of the City for the entire period during which such agreements and cove nants shall be in force and effect, without regard to whether the City has at any time been , remains, or is an owner of any land or interest therein to or in favor of which such agre ements and covenants relate. The City shall have the right, in the event of any breach of any such agreements or covenants, to exercise all of the rights and remedies available to it, and to maintain any actions or suits at law or in equity or other proper proceedings designed to enforce the curing of any such breach, to which it or any other beneficiaries of said agreements or covenants may be entitled.
Construction Work

Section 3.4

(A) The Developer shall improve the Property by constructing

with all of the obligations set forth in the Development Agreemen t (the Construction Work). All plans, specifications, work and improvements for the Construction Work shall conform to applicable state and local laws, regulations and ordin ances. The Developer has submitted (or will shortly submit) to the City Plan Commiss ion site plan applications for the Construction Work, which Construction Work cannot be commenced until the same have been approved by the City Plan Commission and building permits issued therefor.

on it the Project in accordance

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(B) During the Construction Work, no materials, objects or other things shall be stored or kept on any portion of the Property unless such materials, objects or other things are enclosed in a building or are screened from view by an architectural screen of not less than eight (8) feet in height, around the boundary of the Property. (C) No portion of the Construction Work shall be carried out unless such work materially conforms with the Site Plan, except and only to the extent that material modifications to the Site Plan have been requested by the Developer in writing and have been approved in writing by the Executive Director of the City Plan Department after having obtained the written opinion of the City Plan Commission. In the event that the Developer shall fail to comply with the foregoing requirements, the City may within a reasonable time after discovery thereof by the City direct in writing that the Developer so modify or reconstruct such portion or portions of the Construction Work as are not in material conformance with the Site as to bring it into conformance therewith. The Developer shall promptly comply with Plan so any such directive, and shall not proceed further with the Construction Work until any such directive is complied with. In the event the Developer, within thirty (30) days (or such additional time as may be ncessitated by Force Majeure), fails to comply with such a directive, the City upon notice to Developer may cause to be performed such modifi cation

or reconstruction and charge all costs therefor to the Developer, provided, however, that the City shall have no right to proceed in the event the Developer has commenced to comply with the directive and continues to diligently pursue its completion. In the event the City undertakes to perform the modification or reconstruction as herein set forth, the Developer agrees to pay all such costs without objection, provided that the City shall cause such modification or reconstruction to be performed only after the Developer has been notified in writing of the Citys intention to cause such work to be performed and has failed for thirty days (or such additional time as may be necessitated by Force Majeure) after (30) the receipt of such notice to comply with the Citys prior directive to modify or reconstruct. In the alternative, the City may (in the sole and absolute discretion of the City) apply to a court of competent jurisdiction for an order of specific performance compelling the Develo per to comply with such prior directive.

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(0) In the event the City directs that the Construction Work be modified or reconstructed due to

the Developers failure to materially conform to the Site Plan, Developer shall have such period of time to complete such work as is reasonable under the circumstances (taking into account Force Majeure, if applicable), provided Developer promptly commences such work and diligently performs it.

Section 3.5

Time for Commencement and Completion of Construction

(A) Subject to delays caus by Force Maj cure, the Developer shall perform the Construction Work in accordance with the Site Plan and substantially in accordance with the Project Schedule. (B) Following the commencement of the Construction Work and until such time as the Construction Work has been completed, the Developer shall deliver a written report to the Citys Economic Development Administrator, in such detail as may reasonably be require d, every three (3) months as to the actual progress of the Developer with respect to the Construction Work. (C) The time for the commencing or completing of the Construction Work shall be extend ed for any period equal to the period of any delay (plus any necessary start-up time should the delay require such) resulting from Force Maj cure or from any delay in the delivery of the Deed and/or delivery ofpossession of the Property to the Developer pursuant to this Agreem ent. In the event of the occurrence of any of the foregoing, the time for the performance of the Developers obligations to commence and complete the Construction Work shall be extended, in writing, for such period as the Citys Economic Development Administrator shall reasonably find in writing to be the period of the enforced delay, provided the Developer shall promptly after the Developer becomes aware of any of the aforem entioned reasons for delay, notify the Citys Economic Development Administrator in writing of any such reasons. In calculating the length of the delay, the City shall consider not only the actual work stoppages but also the consequential delays resulting from such stoppages.

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(D) The Developers development obligations with respect to the Project shall incontestably be deemed completed (and the Citys right of reentry shall be terminated except with respect to an unauthorized transfer of the Property as set forth in Article 1V, Section 1) upon recording of a Certificate of Completion in accordance with Section 3.9 of this Article III. Section 3.6 Remediation

(A)The Developer shall be solely responsible for the Remediation at the Property, if any, required by Environmental Laws. If applicable, the Developer shall comply with the requirements of the Connecticut Transfer Act and perform such Remediation in accord ance with the RSRs and any other applicable Environmental Laws. (B) The Developer shall be solely responsible for all costs of Remediation, if any, of the Property, including, without limitation, the payment of any LEP hired by the Develo per and all filing fees associate with any BLUR on the Property, should the Developer elect or be legally required to use an BLUR. Section 3.7
Prompt Payment of Obligations

and legally owing to all persons doing any work or furnishing any materials or supplies to the Developer or any of its contractors or subcontractors in connection with carrying out the Constr uction Work Section 3.8 Access to the Property by City Personnel

The Developer shall make or cause to be made, prompt payment of all money due

Upon prior notice by the City to the Developer, the Developer shall provide represe ntatives of the City reasonable access to the Property during and after the carrying out of the Construction Work, for the purpose of inspecting the same and ascertaining whether the Proper ty is being used and maintained in accordance with the Permitted Use, provided such access does not unreasonably interfere with the Developers business operations.

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Section 3.9

Certificate of Completion

(A) Within twenty (20) days after completion of the Construction Work (as evidenced by the issuance of final Certificates of Occupancy for each component of the Project), the Citys Economic Development Administrator will deliver to the Developer a certificate of completion so certifying (the Certificate of Completion). Final Certificates of Occupancy will not be unreasonably withheld, delayed, or conditioned. Such Certificate of Completion shall be a conclusive determination of full satisfaction and termination of the agreements and covenants in the Agreement and the Deed with respect to the obligations of the Developer and its successors and assigns to construct the Project. The Certificate shall specify such other obligations of the Developer in this Agreement that survive its issuance. The Certificate of Completion shall be in a form proper for recording on the Land Records of the City of New Haven and the Developer shalibe permitted to record the Certificate of Completion. (B) If the City Economic Development Administrator refuses to provide a Certificate of Completion in accordance with this Section 3.9, following the Developers request therefore, the Economic Development Administrator shall, within said twenty (20) day period, provide the Developer with a writtep statement indicating in reasonable detail in what respects the Developer has failed to complete the improvements in accordance with the provisions of this Agreement, or is otherwise in default, and specifying the measures or acts necessary for the Developer to take or perform in order to obtain the same. Upon Developers completion of such measures or acts, to the reasonable satisfaction of the Citys Economic Development Administrator then the City shall deliver the Certificate of Completion to Developer within fifteen (15) days of such completion.

ARTICLE IV
TRANSFER AND MORTGAGE OF INTEREST IN PROPERTY

Section 4.1 (A)

Transfer bY the Developer

The Developer represents and agrees that it is purchasing the Property for the purposes herein described, and not for speculation in land holding. The Developer further recognizes

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that, in view of:

(i) the importance of the rehabilitation of the Property to the general welfare of the community; and (ii) the substantial financing and other public aid that has been made available by the federal and local government for the purpose of the Project; and (iii)the fact that any change in the identity of the Developer or the interest held in the Property by the Developer, or any other act or transaction involving or resulting in a significant change in the ownership of the Property or control thereof is for practical purposes a transfer or disposition of an interest in the Property, the qualifications and identity of the Developer are of particular concern to the community and to the City. The Developer further recognizes that it is because of the Developers qualifications and identity that the City is entering into this Agreement and, in so doing, is relying upon the Developer for the faithful perfoymance of all of the undertakings and covenants set forth in the Development Agreement and this Agreement. Accordingly, the Developer shall not transfer any interest in the Property until the Certificate of Completion has been issued. For purposes hereof a transfer shall include a transfer of a controlling interest in the Developer. However, a transfer shall not include (and there shall be no restriction upon) a transfer or sale of the Property to (a) another legal entity that is either owned or controlled by the Developer (controlled meaning that the Developer maintains at least fifty-one percent (51%) equity interest) and which retains Developer as the developer principally in charge of the development of the Project, or (b) to another legal entity which is owned or controlled by the provider of the Union Backed Financing and which retains Developer as the developer principally in charge of the development of the Project. In addition, a transfer shall not include (and there shall be no restriction upon) (a) the granting of easements or licenses in connection with the construction, development or operation of the Project, and (b) any change in the beneficiaries or participating pension plans or other investors in the provider of the Union Backed Financing.

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(B)

Any assignment of any interest in this Agreement which is in contravention of the provisions of Article IV, Section 1 above, shall be an event of default entitling the City to

exercise any arid all of the various rights and remedies available to it, whether set forth herein or existing at law or in equity. (C) For a period of forty (40) years after the recording of the Certificate of Completion, there

shall be no transfer of any interest in the Property or in the owner thereof that might cause the Property to be exempt from real property taxation, unless the transferee agrees to make payments in lieu of taxes in an amount equal to the amount of real property taxes that would otherwise be due on the Property if it were not tax-exempt and in a manner acceptable to the City in its reasonable discretion. Furthermore, the Property shall remain subject to the limitation on use to the Permitted Use, as provided in Article III, Section [(a) for the life cycle
th) 40 of the Project, but in no event shall terminate prior to the fortieth ( anniversary of the

recording of the Certificate of Completion.

(D) Any deed of conveyance by the Developer shall contain the surviving agreements and covenants set forth in Articl III, Section 1 (c)(ii) and (iii) above and in Article IV, Section

1(c) above, and the Deed and the reversion rights set forth in this Agreement and the Deed. Section 4.2 Mortae of Property by the Developer

Notwithstanding any other provisions of this Agreement, the Developer shall at all times have the right to encumber, pledge, or convey its right, title and interest in and to the Property, or any portion or portions thereof, by way of a bona fide mortgage to secure the payment of any loan or loans obtained by the Developer to finance the Project provided that any mortgagee taking title to the Property or part thereof (whether by foreclosure or deed in lieu of foreclosure or otherwise) shall be subject to the provisions of this Agreement and that the Developer shall give prior written notice to the City of the existence of any such mortgage, the amount thereof and the name and address of the mortgagee. Section 4.3 Rights and Duties of the Mort2a2ees Upon Acquisition Prior to Completion

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(A) If a mortgagee acquires fee simple title to the Property or, forecloses its mortgage by judicial sale or exercises any power of sale in conjunction with its mortgage prior to issuance of a Certificate of Completion for that Property, such mortgagee shall, at its option: (i) Complete construction of such improvements in accordance with this Agreement and in all respects (other than time limitations) comply with the provisions of this Agreement, or (ii) Sell, assign or traner (including, but not limited to, at a foreclosure by sale or pursuant to any power of sale in connection with the mortgage) with the prior written consent of the City, which consent shall not unreasonably be withheld, conditioned or delayed (but without restriction as to the consideration received), fee simple title to the Property to a purchaser, assignee or transferee who shail expressly assume all of the covenants, agreements and obligations of the Developer under this Agreement in respect to the Property (and shall be deemed a Developers under the terms of this Agreement), by written instrument reaso,nably satisfactory to the City filed forthwith and recorded in the Land Records of the City of New Haven, or (iii)Reconvey to the City fee simple title to the Property subject to the provisions of Article VII, Section 7.5 of this Agreement, in which event said provisions of that section relative to resale shall apply. (B) Notwithstanding any other provision of this Agreement, including but not limited to those that are or are intended to be covenants running with the land, any mortgagee (including one who obtains title to the Property as a result of foreclosure proceedings or action in lieu thereof) shall not be obligated to construct or complete the Project or to guarantee such construction or completion, nor shall any covenant or any other provision in the Deed or certificate of foreclosure be construed to so obligate such mortgagee, provided that nothing in this section or in this Agreement shall be deemed or construed to permit or authorize any such mortgagee to devote the Property to any uses or to construct any improvements thereon,

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other than those uses or improvements permitted in this Agreement. Section 4.4 Rights and Duties of Mortgagee Upon AcQuisition after Completion

If a mortgagee acquires fee simple title to the Property after issuance of a Certificate of Completion, the mortgagee shall comply with the applicable provisions of this Agreement, provided the mortgagee shall have the right to sell, assign or transfer the fee simple title to the Property on the same basis as set forth in Section 4,1(c) of this Article IV.
4.

ARTICLE V OPERATION, MAINTENANCE, ENFORCING COMPLIANCE AND DEVELOPERS OBLIGATIONS Section 5.1 Operation and Maintenance of the Property

The Developer and each permitted successor shall keep the Property and all improvements thereat, now or hereafter existirg, in good and safe condition and repair, and shall comply with all applicable laws, ordinances, codes and regulations (federal, state or municipal). Section 5.2 ReImbursement of the City

The Developer shall pay all reasonable costs and expenses, judgments and decrees which may be incurred by the City in proceedings brought to enforce compliance with the provisions of this Agreement, including, without limitation, the obligations set forth in this Article V, except any obligations which arise before the date the Developer takes title to the Property and which are caused or contributed to by the City or its agents, contractors or employees.

ARTICLE VI
INDEMNIFICATION Section 6.1 Indemnification

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(A)The Developer shall indemnify, defend and hold harmless the City and its officials, employees and agents from and against any and all liability, fines, suits, claims, demands, judgments, actions, or losses, penalties, damages, costs and expenses of any kind or nature, including, without limitation, reasonable attorneys fees made or asserted by anyone whomsoever, due to or arising out of (i) any default in the observation or performance of any covenant, condition or agreement, or the material untruth or inaccuracy of any representation or warranty of the Developer on the part of the Developer to be fulfilled, kept, observed and performed under the terms of this Agreement; (ii) any damage or injury to property or persons, including, without limitation, death resulting at any time therefrom, occasioned by the Developers use and occupancy of the Property or which the Developer may otherwise permit or suffer to be man of the Property, or otherwise occurring in the Property, and (iii) any Environmental Conditions on the Property, including Existing Environmental Conditions, and the Remediation thereof. Nothing in this Agreement shall be deemed to waive or release the City from any and all liability, fines, suits, claims, demands, judgments, actions, or losses, penalties, damages, costs and expenses of any kind or nature, including, without limitation, reasonable attorneys fees made or asserted by anyone whomsoever, due to or arising out of Environxpental Conditions first arising after the date the Developer takes title to the Property which are caused or contributed to by the City or its agents, contractors or employees. (B). If the Developer is required to defend any such action or proceeding to which action or proceeding and the City desires to be made a party, the City shall be entitled to appear, defend, or otherwise take part in the matter involved, at the Citys election (and sole cost and expense), by counsel of its own choosing, provided any such action does not limit or make void any liability of any insurer hereunder with respect to the claim or matter in question. Section 6.2 Survival

This indemnification shall survive the termination or expiration of this Agreement, provided the City is not then in default hereunder,

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ARTICLE Vii
DEFAULT Section 7.1 Failure by the Developer to Purchase the Property

In the event that the Developer shall fail to complete the purchase of the Property, the City may, upon such failure, and in its sole discretion, terminate all of its obligations to the Developer hereunder. The City shall, in the alternative, be entitled to the remedy of specific performance. These shall be the sole and exclusive remedies available to the City for this default. Section 7.2 Failure by the Cliv to Transfer the Property

In the event that the City shall fail to deliver title to and possession of a Property as required hereby then, and in any such event, the Developer shall be entitled to the remedy of specific performance. This shall be the sole and exclusive remedy available to the Developer for this default. Section 7.3 Default SubseQuent to Purchase of the Property

(A) In the event the Developer shall fail due to reasons other than Force Maj eure to perform its obligations under this Agreement with respect to commencement and completion of the Construction Work and the City has acted promptly and in good faith with respect to the granting of approvals, consents, and reviews necessary for or related to the Permitted Use, the City shall notify the Developer of such default, in writing. After the Developers receipt of any such notice, the Developer shall, subject to Force Majeure extensions, have ninety (90) days within which to cure a failure to commence construction and one hundred eighty (180) days within which to cure a failure to complete Construction Work. If the Developer fails to cure any such default under this Article VII, Section 7.3(A) within the period specified (or such longer period as may be required to complete the Construction Work as long as the Developer is diligently pursuing its completion), then, the City may, in its discretion deliver written notice to the Developer that all estate and title conveyed pursuant to

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this Agreement and the Deed has automatically reverted to and become fully and completely

revested in the City (subject to the rights of the xnortgagees), so that the City (or its successors or assigns) shall be entitled to and may of right enter upon and take possession of the Property, provided that any such revesting of title in the City shall always be subject to and shall not defeat or render invalid the lien of any existing mortgages with respect to the Property permitted by this Agreement or the rights of mortgagees herein set forth. Such automatic reversion and revesting in the City shall be evidenced by the filing of any such notice on the Land Records of the City of New Haven. Notwithstanding the foregoing, the Developer shall not 13e liable for any delay or default in performing its obligations with respect to construction of the Project if such delay or default is caused by conditions beyond its reasonable control as set forth in Section 3.5(C) of Article Ill above. The Developer shall execute such documentation as the City may reasonably consider necessary or desirable in order most effectively to record such reversion of title, but failure to do so shall not affect the Citys rights hereunder. Said rights of the City shall be in addition to, and not in lieu o1 any and all other rights of the City arising out of such default. The reversionary right under this Article VII, Section 7.3 (A) shall terminate upon recording of the Certificate of Completion. (B)Tn the event of a violation of Article IV, Section 4.1(C) of this Agreement, then, the City shall provide written notice to the Developer. The Developer shall have thirty (30) days within which to provide to the City a commitment by the transferee for the payment of payments in lieu of taxes pursuant thereto. If the Developer fails to provide such commitment, the City may, in its discretion, deliver written notice to the Developer that all estate and title conveyed pursuant to this Agreement and the Deed has automatically reverted to and become fully and completely revested in the City (subject to the rights of the mortgagees), so that the City (or its successors or assigns) shall be entitled to and may of right enter upon and take possession of the Property, provided that any such revesting of title in the City shall always be subject to and shall not defeat or render invalid the lien of any mortgagees with respect to the Property permitted by this Agreement or the rights of s as herein set forth. Such automatic reversion and revesting in the City shall be by the filing of any such notice on the Land Records of the City ofNew Haven. The Developer shall such documentation as the City may reasonably consider necessary or desirable in effectively to

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record such reversion of title, but failure to do so shall not affect the Citys rights hereunder. Said rights of the City shall be in addition to, of; any and all other rights of the City arising out of such default. The reversionary right under this subsection extends through the natural life cycle of the Project, but in no event shall terminate prior to the fortieth (4O) anniversary of the recording of the Certificate of Completion. (C) In the event of any other default by the Developer under this Agreement, the City shall deliver written notice thereof and the Developer shall have a period of ninety (90) days to cure such default, or if such default is not susceptible of cure within such period, then such longer period as may be reasonably required provided that the Developer shall commence the cure within such ninety (90) day period and thereafter diligently complete the same. However, it is understood that nothing herein shall be deemed to limit any other remedy the City may have for any such default (if applicable) pursuant to the terms and conditions of the Development Agreement.
Section 7.4 NotIce of Default to Mortpaees

In the event the City gives notice to the Developer of any default under this Agreement, the City shall furnish a copy of such notice to any mortgagees of which the City has notice (including record notice by virtue of any mortgagee notice addresses appearing in the public records).
Section 7.5 Mortaaee May Cure Default by the Developer

In the event that the Developer fails to cure any default of which notice is duly delivered, then any mortgagee of the Property (or part thereof) may cure any such failure upon giving written notice of an intention to do so to the City within fifteen (15) days after the expiration of the applicable cure period, and may add the cost thereof to the amount then secured by the mortgagee and the City shall accept such cure as if it were carried out by the Developer.

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Section 7.6

Rights of Developer and Mortpaee in the Event of Revestiug of Title in Cty

(A) In the event that title to the Property shall revest in the City in accordance with the provisions of this Article VII, the City shall use commercially reasonable and continuous efforts to market and resell the Property in an all cash sale at full market value, subject to all mortgages, as soon as reasonably possible and consistent with the objectives of applicable law, to a qualified and responsible party or parties, as reasonably determined by the City, which will assume the obligation of making or completing the improvements specified under this Agreement and t nder the Mortgages and documents recorded in conjunction therewith, and in accordance with the Permitted Uses. (B) Upon resale of such Property the proceeds thereof shall be applied first to reimburse the City, for all costs and expenses incurred by it including, but not limited to: (i) all taxes, assessments, and water and sewer charges; (ii) any payments made or r to be made to discharge any encumbrances or liens ecessary 1 existing on the Property at the time of revesting of title thereto in the City or to discharge or prevent from attaching or being made any subsequent encumbrance or liens due to obligations, defaults, or acts of the Developer or of its successors or assigns, to the extent any of said liens or encumbrances have priority over the mortgages; (iii)expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Property; and (iv) any amounts otherwise owing the City by the Developer and/or its successors and assigns. (C) The balance of such proceeds, if any, shall be allocated and paid first, to the mortgagees in 0 order of priority to pay down the outstanding mortgage indebtedness, provided, however, for the purposes of this Section 7.6(C), if the Property being sold was conveyed to the City by

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any mortgagee such mortgagee shall be treated as holding a mortgage with the same priority as existed prior to such mortgagee acquiring title to the Property and such mortgage shall be treated as securing a mortgage indebtedness in an amount equal to the mortgage debt which existed immediately prior to such mortgagee acquiring such fee title, plus any expenditures made or obligations incurred by such mortgagee in improving or protecting the Property, less any income received by such mortgagee from the operation thereof, and, (ii) second, the balance to the Developer or its successors or assigns (but not including any such liability paid off by the City pursuant to this Section 7,6(C) such as a mortgage or mortgages) up to an amount equal to the sum of the purchase price paid by it for the Property and the cash actually paid or liabilities actually incurred by Developer or its successors or assigns in connection with the acquisition, design, development, financing, construction, marketing, operation, ownership and leasing of the Project, less the cash amounts of any net gains or net income withdrawn or made by the Developer from this conveyance or from the Property. (D) The balance (if any) remaining after such reimbursements shall be retained by the City. To the extent that the total outstanding indebtedness secured by a mortgage is not paid in lull, the Property shall remain eicumbered by such mortgage. Section 7.7 Remedies

It is understood by the parties hereto that, notwithstanding the specific rights and remedies set forth in this Article VII (and without prejudice thereto), in the event of any uncured default by the Developer hereunder, the City may institute such actions and proceedings (including proceedings to compel specific performance and payment of damages, expenses and costs) as the City may consider appropriate, whether such right or remedy is expressly set forth herein. Section 7.8 Consequential Damages

Without prejudice to the Citys reversionary interest under Section 7.3 or other remedies available to the City under this Article VII, neither the City nor the Developer shall be entitled to indirect, special, or consequential damages for any event of default under this Agreement or

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under the Development Agreement. ARTICLE VIII MISCELLANEOUS PROVISiONS Section 8.1 Obligations and Rights and Remedies Cumulative

(A) The respective obligations of the City and the Developer pursuant to this Agreement shall be cumulative and the reference to any one obligation shall not be construed as a limitation with
respect to

any other obligation.

(B) The respective rights and remedies of the City and the Developer, whether provided by this Agreement or by law, shall be cumulative, and the exercise of any one or more of such rights or remedies shall not preclude the exercise, at the same or at different times of any other rights or remedies permitted under this Agreement, at law, or in equity. Section 8.2 Finality of Approvals

Where, pursuant to this Agreement, any document of or proposed action by the Developer is submitted by it to the City, and the Developer has been notified in writing by the City that the same is approved or is satisfactory, the Developer may proceed in reliance that such determination shall be a final determination by the City with respect to such particular document or proposed action for which such approval or notice of satisfaction was given. Section 8.3
Covenants to be Enforceable by the City

The covenants of the Developer contained in this Agreement and/or the Deed shall constitute covenants running with the Property, but shall nonetheless be enforceable by the City whether or
not in

the City retains title to, an interest in or possession of any land to which such covenant runs

favor or relates.

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Section 8.4

Members and Officers Barred From Interest

No member, official or employee of the City shall have any personal interest, direct or indirect, in this Agreement or the Developer or any successor or assign thereof, nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his or her personal interest or the interests of any corporation, partnership, or association in which he or she is, directly or indirectly interested. No member, official or employee of the City shall be personally liable to the Developer or any successor in interest in the event of any default by the City or for any amount which may become due to the Developer or to its successor or with respect to any other obligations arising under the terms and conditions of this Agreement.
Section 8.5 Agreement Binding on Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the respective parties to this Agreement. Notwithstanding the preceding sentence, and except as provided in the next sentence, the Developer shall not be authorized or permitted to assign all or any portion of this,Agreement to any other party without the prior consent of the City, which consent may be granted or withheld in the Citys sole discretion. Notwithstanding anything to the contrary in this Agreement, the Developer is expressly authorized to assign this Agreement (a) another legal entity that is either owned or controlled by the Developer (controlled meaning that the Developer maintains at least fifty-one percent (51%) equity interest) and which retains Developer as the developer principally in charge of the development of the Project, or (b) to another legal entity which is owned or controlled by the provider of the Union Backed Financing and which retains Developer as the developer principally in charge of the development of the Project. Section 8.6 Severabillty

If any term, provision or condition contained in this Agreement shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term, provision or condition to persons or circumstances (other than those in respect of which it is invalid or

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unenforceable) shall not be affected thereby, and each term, provision and condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law provided each party shall have substantially received the benefit of the Agreement accruing to it. Section 8.7
Waivers

(A)Any right or remedy which the City or the Developer may have under this Agreement, may be waived in writing by the City or by the Developer (as the case may be) without execution of a new or supplementary agreement, but any such waiver shall not affect any other rights not specifically waived, or be deemed a waiver of such right in the future, unless the writing shall expressly so state. (B) BOTH THE CITY AND THE DEVELOPER HEREBY IRREVOCABLY WAIVE, AS AGAINST THE OTHER, ANY RIGHTS SUCH PARTY MAY HAVE TO A JURY TRIAL IN RESPECT TO ANY CIVIL ACTION ARISING UNDER THIS AGREEMENT TO THE EXTENT PERMITTED BY LAW. (C) No failure on the part of the City or the Developer to enforce any covenant or provision herein contained, nor any waiver of any right hereunder by the other, shall discharge or invalidate such covenant or provision or affect the right to enforce the same in the future. No default shall be deemed waived by either party unless such waiver is in writing and designated as such and signed by snch party, and such waiver shall not be a continuing waiver but shall apply only to the instance of default for which it is granted.
Section 8.8 Amendments

This Agreement may be materially modified or amended only by written document, duly executed by both the City and the Developer.

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Section 8.9

Approvals and Notices

(A) Except as otherwise provided in this Agreement, any notice or approval required or permitted to be given under this Agreement shall be in writing and shall be considered to have been given upon the earlier of: (i) receipt, (ii) three (3) busines days after deposit in the United States mail, registered or certified mall, postage prepaid, return receipt requested, or (iii)one (1) business day after deposit with Federal Express or similar overnight courier, or (iv)day of delivery by hand, and addressed as set forth below. If to the Developer: Becker Development Associates, LLC 95 Reef Road Fairfield, Connecticut, 06824 Attention: Bruce Becker, President With copies to: Kennedy Associates Real Estate Counsel, LP 7315 Wisconsin Avenue, Ste 350 West Bethesda, MD 20814 Attention: David Antonelli Vice President of Acquisitions And to: McNaul Ebel Nawrot & Heigren PLLC 600 University Street, Suite 2700 Seattle, WA 98101 Attention: MarcO. Winters

33

00009891 DoimE!flt 824:3 Pcte voiume

If to the City:

Economic Development Administrator City of New Haven 165 Church Street New Haven, CT 06510 Attention: Kelly Murphy With copies to: City of New Haven 165 Church Street New Haven, CT 06510 Attention: Carl Amento Deputy Corporation Counsel

(B) Each party shall have the right to change the place or person or persons to which notices, requests, demands, and communications hereunder shall be sent or delivered by delivering a notice to the other parties.
Section 8.10 Matters to be Disreaarded

The titles of the several Articles and Sections of this Agreement are inserted for only and shall be disregarded in construing or interpreting any of the provisions of this Agreement. Section 8.11 Obliaatious to Continue

Except as to obligations expressly to be performed at or prior to delivery of the Deed, the provisions of this Agreement shall survive delivery of the Deed. Upon recording of the Certificate of Completion in the Land Records of the City of New Haven, the Developer shall be deemed to have satisfied its obligations under this Agreement and the Deed with respect to the performance of the Construction Work, but all other covenants and obligations shall survive delivery of the Certificate of Completion. All such covenants shall run with the land for the natural life cycle of the Project, but in no event shall the covenants terminate prior to the fortieth th) 40 ( anniversary of the date of the recording of the Certificate of Completion.
Section 8.12 No Personal Liability

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(A)No member, officer, employee, or agent of Developer shall be personally liable to the City in the event of any default by the Developer or for any amount which may become due to the City with respect to any obligations arising under terms and conditions of this Agreement. (B) No official (elected or appointed), employee or other agent of the City shall be personally liable to the Developer in the event of any default by the City or for any amount which may become due to the developer with respect to any obligations arising under the terms and conditions of this Agreement
Section 8.13 Number and Gender

Whenever herein used and the context so permits, the singular shall be construed to include the plural and the masculine or neuter shall be construed to include both and the feminine gender. Section 8.14 City ReuIatory Authority Nothing in this Agreement shall affect the Citys powers and duties in its regulatory and governmental capacities.

35

DocL,mirIt 00009391. Vo1Ljmc: 8243 Pcs IN WITNESS WHEREOF, the City and the Developer have executed and deLivered this Agreement as of the date set forth above.

284

Signed, sealed and delivered in e resence of: THE PameflA L46tr

nyame,7AA/

/t47i/

Approved as to form and correctness:. JR,-ed Cr I P4mer Deputy Corporation Counsel

()
cL
Print1 e

BECKER DEVELOP

SOCIATES, INC.

BeCcrfl Managing Member lrint Name

Impressed and Attested:

yrrow%

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Vcjtim

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STATE OF CONNECTICUT) )ss.NewHaven COUNTY OF NEW HAVEN)

) 2i

,2008

Personally appeared, John DeStefano Jr., as Mayor of the City of New Haven, one of the signer(s) and sealer(s) of the foregoing instrument, and acknowledged the same to be the free act and deed ofhe City of New,iaven, and of himself as Mayor thereof, before me. Notary Public My Commission Expires:

f 3/10

STATE OF CONNECTICUT)

COUNTY OF NEW HAVEN)

) ss. New Haven

t(

2008

Personally appeared .?)C,b-C of Becker Development Associates, LLC., duly uthorized, as signer(s) and sealer(s) of the foregoing instrument, and acknowledged the s et behisfr ac d fore me.
,

Notary Public My Commission Expires:_______________ AMANL)A SHIJLAR

MYCOMMISSION EXPIRES OCt 31,2011

NOTARY PUBLIC

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Docqjn 00009891 Volt,rne: 8243 Pase:

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EXHIBif A Deed

4.

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EXHIBIT A OTCLAIM DEED

KNOW ALL PEOPLE BY THESE PRESENTS, THAT:

TUE CITY OF NEW HAVEN, a Connecticut municipality (the Grantor) for One Dollar ($1.00) and other valuable consideration received to its full satisfaction of Becker Development Associates, LLC, having a place of business 95 Reef Road, Fairfield, CT 06824(the Grantee) does hereby remise, release and forever QUIT CLAIM unto the said Grantee and unto its successors and assigns forever, all of its right, title, interest, claim and demand whatsoever as the Grantor has or ought to have in and to all that certain piece or parcel of land, together with all improvements thereon, situated in the City of New Haven, County of New Haven and State of Connecticut arid known as 360 State Street, being more particularly bounded and described on Schedule A attached hereto and made a part hereof (the Premises):

TOGETHER WITH the following rights, privileges and authorities appurtenant to said Premises: 1. Easement for Wells. A permanent, nonexciusive easement over, under and upon the sidewalks and/or streets adjacent to the Premises for the purpose of constructing, installing and maintaining permanent geothermal wells, with such sidewalks and/or streets as shown on a certain survey recorded or to be recorded on the Land Records of the City of New Haven, Property & Topographic Survey ALTAJACSM Land Title Survey (Lower Level sheet 1, Street Level sheet 2 & Upper Level sheet 3) 360 State Street Reuse Parcel D-1 New Haven, Connecticut, by URS, scale 1=20, dated August 2007, revised 5-16-08 (the Map).

2. Utility Easements, A permanent, nonexciusive easement over, under and upon the sidewalks and/or streets adjacent to the Premises including the Pitkin Plaza and Pitkin Tunnel (being, the Public Right of Way) as shown on the Map, for the purpose of locating, installing and maintaining utilities to provide service to the Premises. 3. Construction Easements. Such nonexciusive temporary construction easements over, under and upon the Public Right of Way as may be reasonably required to complete construction of the project (the Project) contemplated by a certain Land Disposition Agreement between Grantor and Grantee (the LDA) recorded together herewith on the Land Records of the City of New Haven, including, without limitation, the right to close certain lanes on adjacent streets, in such locations and for such periods as shall be approved by the Director of Traffic and Parking, the Director of City Plan Commission, the Director of Public Works, the Building Inspector and the Fire Marshal, as applicable. Upon the filing of a final Certificate of Completion, pursuant to the terms of the LDA, the temporary easement created hereby shall terminate and come to an end, 4. Building. Foundation and Footing Easements Such other nonexciusive permanent easements over, under or upon the Public Right of Way as shown on the Map as may be reasonably necessary to permit or facilitate the construction and completion of the Project, including, without limitation, easements for buildings,vaults, foundations, footings, support, signage and other similar purposes. Specifically, Grantee shall have the absolute right to install footings in the Public Right of Way and to construct those portions of the Project lying within the area directly over the Pitkin Tunnel, as shown on the Map, provided that such construction shall not permanently destruct the use of the

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Piticin Tunnel as a public right of way, and shall have a permanent easement allowing the connection of the Project to the Pitkin Tunnel for pedestrian and vehicular ingress and egress.
5. Pitkin Plaza. A nonexciusive permanent easement over Pitkin Plaza for purposes of pedestrian access to and egress from the structures on the Premises.

The Grantee, by its acceptance of this Deed, agrees, for itself and its successors and assigns, that in the event any activity in the easement areas undertaken by or on behalf of Grantee significantly disturbs the surface of any portion of the easement area shown on the Map, such disturbed surface area shall be restored by such Grantee to its former condition to the extent reasonably practicable. The covenants, agreements and grants herein contained shall be binding on and shall inure to the benefit of the respective parties hereto and their successors and assigns and shall be deemed coverants running with the land and rights appurtenant to the dominant tenement. All such licenses, rights, and obligations shall continue to exist appurtenant to the Premises in perpetuity unless specifically temporary in nature or specifically terminated by agreement in writing by the owner of the Premises. The Grantee, by its acceptance of this Deed, agrees, for itself and its successors, and assigns that it and they shall indemnify and hold harmless the Grantor and the Grantors successors and assigns, against and from any liability of any nature, direct or indirect, arriving out of the use by Grantee (or by any agent, contractor, licensee, or perinittee of Grantee) of any of the easements granted herein, including (without limitation) any and all legal costs incurred by Grantor in connection therewith. Further, in addition to the responsibilities of the Grantee to provide insurance under the LDA, the Grantee shall, during any period of construction, construction maintenance, or other work involving any of the easement areas, obtain and shall cause its general contractor during the carrying out of such work to obtain general liability insurance in an amount that is reasonably commensurate with the scope and impact of such work, with the Grantor named as an additional insured on such insurance policies. It is agreed and understood that during construction of any portion of the Project involving the air rights over the Pitkin Tunnel, such reasonably commensurate insurance shall be in an amount of not less then Ten Million Dollars ($10,000,000.00). SUBJECT TO the terms and conditions of the LDA. Without limiting the foregoing, the agreements and covenants contained in Section 3.2 of the LDA shall be covenants nmning with the Premises enforceable by Grantor against Grantee and any successor in interest to the Premises. Such agreements and covenants run in favor of Grantor for the entire period during which such agreements and covenants shall be in force and effect, without regard to whether Grantor has at any time been, remains, or is an owner of any land or interest therein to or in favor of which such agreements and covenants relate. TO HAVE AND TO HOLD the above remised, released and QUIT CLAIMED Premises with the appurtenances thereof; unto the said Grantee, and Grantees successors and assigns forever, to it and their proper use and behoof, so that neither the Grantor nor Grantors successors or assigns, nor any other person claiming in its or their name or behalf; shall hereafter have any claim, right or title in or to the Premises or any part thereof, but therefrom the Grantor and they are by these presents forever barred and excluded. -2-

___________

___________ ________ __

00009891 Do=Lment Vo1UM 8243 Fs

89

IN WITNESS WHEREOF, the Grantor, on day of , 2008 has caused this Deed to be executed and delivered by John DeStefano, Jr., its Mayor, who is duly authorized and empowered, and its corporate seal to be hereto affixed in its behalf by its City Clerk who is duly authorized to impress and attest said corporate seal of the City of New Haven has hereunto set its hand and seal this Signed, sealed and delivered in the presence of: THE CITY OF NEW HAVEN Print Name:
;.

By John DeStefano, Jr. Its Mayor Duly Authorized

Print Name: Approved as to form and correctness; Carl Amento Deputy Corporation Counsel

STATE OF CONNECTICUT

ss. New Haven

COUNTY OF NEW HAVEN)

.2008

of The City of New Haven, a Connecticut municipality, signer and sealer of the foregoing instrument, and acknowledged the same to be his/her free act and deed as such , and the free act and deed of said City of New Haven, before me.
Personally appeared

Notary Public

-3-

00009891 Doc*Jm$flt Vo1i-rn 8243 Page Schedule A

290

A certain piece or parcel of land located in the City and County of New Haven and State of Connecticut containing 69,918 square feet as shown on a map entitled Property & Topographic Survey ALTAJACSM Land Title Survey (Lower Level sheet 1, Street Level sheet 2 & Upper Level sheet 3) 360 State Street Reuse Parcel D-l New Haven, Connecticut, by URS, scale 1 =20, dated August 2007, revised 5-16-08, said parcel, and permanent easements appurtenant to such parcel, being more particularly bounded and described as follows:

Ground Portion of Parcel D-1

Containing 52,980 square feet

Beginning at a point marking the intersection of the westerly street line of State Street and the northerly street line of Chapel Street; Thence running North 60 44 44 West, 415.12 feet along said northerly street line of Chapel Street; Thence running North 29 45 36 East, 55.84 feet along the easterly street line of Orange Street; Thence running South 600 50 10 East, 77.45 feet and North 29 45 50 East, 67.24 feet along land now or formerly of Franford Property Group One, LLC; Thence running South 60 28 50 East, 29.00 feet and North 29 45 50 East, 24.37 feet along Pitkin Plaza; Thence running South 60 37 27 East, 281.24 feet and southeasterly on a curve to the right having a radius of 25.00 feet and an arc length of 38.98 feet along the southerly street line of Pitkin Street; Thence running South 28 42 04 West, 122.09 feet along the westerly street line of State Street to the point and place of beginning. Air Space Portion of Parcel D-1

Containing 16,938 square feet

Beginning at a point marking the intersection of the westerly street line of State Street and the southerly street line of Pitkin Street; Thence running northwesterly on a curve to the left having a radius of 25.00 feet and an arc length of 38.98 feet and North 60 37 27 West, 281.24 feet along the southerly street line of Pitkin Street; Thence running South 29 45 50 West, 24.37 feet and North 60 28 50 West, 4.00 feet along the Ground Portion of Parcel D- 1; Thence running North 29 45 50 East, 78.36 feet through Pitkin Plaza;

4-

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Thence running South 600 37 27 East, 308.95 feet along the northerly street line of Pitkin Street and through Pitkin Street, partly by each; Thence running South 28 42 04 West 78.71 feet along the westerly street line of State Street to the point and place of beginning. The lower limit of the air space is the top of the concrete deck of the existing underground access road structure. Easement area within Pitkin Plaza & Pitkin Street Together with an easement within portions of Pitkin Plaza and Pitkin Street, said easement being bounded and described as follows: Beginning at a point on the northerly property line of Pitkin Plaza, said point being located South 60 37 27 East, 102.45 feet from the easterly street line of Orange Street when measured along said property line; Thence continuing South 60 37 27 East, 308.95 feet along said property line, the northerly street line of Pitkin Street and through Pitkin Street, partly by each; Thence running South 28 42 04 West, 6.00 feet along the westerly street line of State Street; Thence running North 60 37 27 West, 309.06 feet through Pitkin Street and through Pitkin Plaza, partly by each; Thence running North 29 22 3 East, 6.00 feet through Pitkin Plaza to the point and place of beginning. Easement area within Pitkin Plaza, Pitkin Street, State Street, Chapel Street and Orange Street Together with an easement within portions of Pitkin Plaza, Pitkin Street, State Street, Chapel Street and Orange Street, said easement being bounded and described as follows: Beginning at a point marking the intersection of the westerly street line of State Street and the northerly street line of Chapel Street; Thence running North 60 44 44 West, 415.12 feet along said northerly street line of Chapel Street; Thence running North 29 45 36 East, 55.84 feet along the easterly street line of Orange Street; Thence running North 60 50 10 West, 8.50 feet through Orange Street; Thence running South 29 45 36 West, 73.23 feet through Orange Street and Chapel Street, partly by each;

-5-

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Thence running South 600 44 44 East, 435.94 feet through Chapel Street and State Street, partly by each; Thence running North 28 42 04 East, 173.67 feet through Chapel Street and State Street, partly by each; Thence running North 60 37 27 West, 321.77 feet through State Street, Pitkin Street and Pitkin Plaza, partly by each; Thence running South 29 45 50 West, 33.85 feet through Pitkin Plaza; Thence running South 60 28 50 East, 4.00 feet and North 29 45 5Q East, 24.37 feet along the Ground Portinof Parcel 0-1;
. .

Thence running South 607 27 East, 281.24 feet and southeasterly on a curve to the right having a radius of 25.00 feet and an arc length of 38.98 feet along the southerly street line of Pitkin Street; Thence running South 28 42 04 West, 122.09 feet along the westerly street line of State Street to the point and place of beginning. Access Easement over Pitkin Plaza Together with an access easement over Piticin Plaza excepting the area of an existing building easement and two existing air shafts. Pitkin Tunnel Connection
/

Together with a permanent easement allowing the connection to the Pitkin Tunnel for pedestrian and vehicular ingress and egress.

Jul 14,201J8 09:07A RONLO SMITH CITY CLERK CITY OF NEW HA1EN

-6--

Dojmenj OOOO989-, Vo1 243 Pa:

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MEMORANDUM OF AGREEMENT

2008, by and This Memorandum of Agreement (MOA) is entered into this II day of between Becker Development Associates, LLC, a limited liability company organized and existing under the laws of the State of Connecticut, with a mailing address at 95 Reef Road, Fairfield, Connecticut 06824, including any permitted successor or assign (the Developer), and the City of New 1-laven, a municipal corporation organized and existing under the laws of the State of Connecticut, with a mailing address at 165 (lurch Street, New Haven, Connecticut 06510 (the City), acting through Mr John DeStefano, Jr. WHEREAS Developer and City have entered into a development agreement dated October 4, 2007 (the Development Agreement), for that parcel now known as 360 State Street and more particularly described in Exhibit Cto that Development Agreement (the Property); and WHEREAS Section 7.1(B) of that Development Agreement stipulates that an MOA regarding Section 7.1(B) be prepared and executed in recordable form and recorded in the Land Records of the City; and WHEREAS the Development Agreement, itself or by reference to the land disposition agreement which is attached as Exhibit A to the Development Agreement and which shall be executed by and between Developer and City (the Land Disposition Agreement), stipulates the following definitions: Certificate of Completion shall mean that certificate, delivered from the City Economic Development Administrator to the Developer within twenty (20) days after completion of the construction work (as evidenced by issuance of final certificates of occupancy for each component of the project), which certificate is further defined in Section 3.9 of the Land Disposition Agreement. Completion Date shall mean the date on which the Developer receives the final Certificate of Completion. Project shall mean a mixed use facility for the Property; which facility is further defined in the Background section and Exhibit B of the Development Agreement. NOW, THEREFORE, the Developer and the City; in consideration of the mutual promises and covenants contained in the Development Agreement and the Land Disposition Agreement, as well as other good and valuable consideration, acknowledge the following: 1. (a) Developer shall not have to pay any building permit fees due and owing to the City until the first calendar day of the twelfth (12th) year after the Completion Date (Building Fee Due Dat&);

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(b) Developer shall thereafter pay One Hundred Thousand Dollars ($100,000) on the first calendar day of each of the five (5) calendar years immediately following such Building Fee Due Date; (c) Developer shall thereafter pay Two Hundred Thousand Dollars ($200,000) on the first calendar day of each of the calendar years immediately following until Developers total obligation to pay the building permit fee is extinguished; (d) Interest shall not be chargeable by the City on such building permit fees; and (e) This agreement shall be legally binding, now and in the future, on the City, and shall benefit the Developer and any successor or assignee of Developer. 2. The obligations seforth in Paragraph 1 above maybe modified in accordance with the provisions of Section 7.1(q of the Development Agreement, a copy of which is on file at the Office of the Corporation Counsel, Cltyof New Haven, 165 Church Street, New Haven, Connecticut 06510. 3. The Building Permit Fee rate for this project shall be the current rate of twentyfive dollars and sixteen cents ($25.16) per thousand dollars ($1,000.00) of construction costs. When the total amount of the building permit fee for the Project has been determined, the Developer and the City shall jointly execute in recordable form a document reciting the amount of the total building permit fee for the project, and that document shall be recorded in the Land Records of the City of Iew Haven. In the event that any new type of fees for construction activities are adopted by the City of New Haven following the execution and delivery of the Land Disposition Agreement, then the Project shall be exempt from such new fees. However, it is agreed and understood that this exemption does not apply to any fees that are legally charged by independent agencies which are not controlled by the City and which have the authority to impose the same. 4. This MOA shall be recorded in the Land Records of the City of New Haven. 5, Nothing in this MOA shall affect or modify any of the rights and obligations existing or created by the Development Agreement or the Land Disposition Agreement, as amended from time to time. 6. In the event that the terms of this MOA conflict with the Development Agreement or Land Disposition Agreement, the terms of the Development Agreement and Land Disposition Agreement shall prevail.

__________________

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IN WITNESS WHEREOF, the parties have executed and delivered this MOA as of the day and year first above written. Signed, sealed and delivered In the presence of: THE Y OF NEW HAVEN

4 xintName:?4-

A
BECR DEVELOP ASSOCIATES, LLC

Prix&t)Name:J
Bruce Becker Managing Member

Approved as to form and correctness:

JV* Cr ti oradon unsel Se Impressed and Attested:

STATE OF CONNECflCUT
COUNTY OF NEW HAVEN

) ) ss.NewHaven )

/)/ 7

2008

Personally appeared, John DeStefano Jr., as Mawr of the City of New Haven, one of the signer(s) and sealer(s) of the foregoing instrument, and acknowledged the same to be the free act and deed of the City of New Haven, and of himself as Mayor thereof, before me.

_____________

Dactnent 00009892 Volume: 8243 Pcie:

296

NotaryPubtic My Commission Expires:____________ STATh OF CONNECflCtJT ) ss. New Haven co OF W HAN

I (

2008

Personally appeared, Bruce Becker, of Becker Development Associates, LLC, duly authorized, as signer(s) and sealer(s) of the foregoing instrument, an?! acknowledged the same to be his free act and deed, before me.

My

Commission

NOTARy PUBLiC MY COMMISSION EXPIRES OCt 31,2011

Jul 14,2008 0907A RONALD SMITH CITY CLERK CITY OF NEW HAVEN

Dc3.zIJmentr flIjflfl9S93 Vo1j: 8243

297

QU1TCLAIM DEED KNOW ALL PEOPLE BY THESE PRESENTS, THAT: THE CITY OF NEW HAVEN, a Connecticut municipality (the Grantor) for One Dollar (SI .00) and other valuable consideration received to its full satisfaction of Becker Development Associates, LLC, having a place of business 95 Reef Road, Fairfield, CT 06824(the Grantee) does hereby remise, release and forever QUIT CLAIM unto the said Grantee and unto its successors and assigns forever, all of its right, title, interest, claim and demand whatsoever as the Grantor has or ought to have in and to all that certain piece or parcel of land, together with all improvements thereon, situated in the City of New Haven, County of New Haven and State of Connecticut and known as 360 State Street, being more particularly bounded and described on Schedule A attached hereto and made a part hereof (the Premises): TOGETHER WITH the following rights, privileges and authorities appurtenant to said Premises: I. Easement for Wells. A permanent, nonexclusive easement over, under and upon the sidewalks and/or streets adjacent to the Premises for the purpose of constructing, installing and maintaining permanent geothermal wells, with such sidewalks and/or streets as shown on a certain survey recorded or to be recorded on the Land Records of the City of New Haven, Property & Topographic Survey ALTAJACSM Land Title Survey (Lower Level sheet 1, Street Level sheet 2 & Upper Level sheet 3) 360 State Street Reuse Parcel D-l New Haven, Connecticut, by URS, scale l=20, dated August 2007, revised 5-16-08 (the Map).

2. Utility Easements. A permanent, nonexclusive easement over, under and upon the sidewalks and/or streets adjacent to the Premises including the Pitkin Plaza and Pitkin Tunnel (being, the Public Right of Way) as shown on the Map, for the purpose of locating, installing and maintaining utilities to provide service to the Premises. 3. Construction Easements. Such nonexolusive temporary construction easements over, under and upon the Public Right of Way as may be reasonably required to complete construction of the project (the Project) contemplated by a certain Land Disposition Agreement between Grantor and Grantee (the LDA) recorded together herewith on the Land Records of the City of New Haven, including, without limitation, the right to close certain lanes on adjacent streets, in such locations and for such periods as shall be approved by the Director of Traffic and Parking, the Director of City Plan Commission, the Director of Public Works, the Building Inspector and the Fire Marshal, as applicable. Upon the filing of a final Certificate of Completion, pursuant to the terms of the LDA, the temporary easement created hereby shall terminate and come to an end. 4. Building. Foundation and Footing Easements Such other nonexciusive permanent easements over, under or upon the Public Right of Way as shown on the Map as may be reasonably necessary to permit or facilitate the construction and completion of the Project, including, without limitation, easements for buildings, vaults, foundations, footings, support, signage and other similar purposes. Specifically, Grantee shall have the absolute right to install footings in the Public Right of Way and to construct those portions of the Project lying within the area directly over the Pitkin Tunnel, as shown on the Map, provided that such construction shall not permanently destruct the use of the

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Pitkin Tunnel as a public right of way, and shall have a permanent easement allowing the connection of the Project to the Pitkin Tunnel for pedestrian and vehicular ingress and egress. 5. Pitkin Plaza. A nonexelusive permanent easement over Pitkin Plaza for purposes of pedestrian access to and egress from the structures on the Premises. The Grantee, by its acceptance of this Deed, agrees, for itself and its successors and assigns, that in the event any activity in the easement areas undertaken by or on behalf of Grantee significantly disturbs the surface of any portion of the easement area shown on the Map, such disturbed surface area shall be restored by such Grantee to its former condition to the extent reasonably practicable. The covenants, agreements and grants herein contained shall be binding on and shall inure to the. benefit of the respective parties hereto and their successors and assigns and shall be deemed coveNants running with the land and rights appurtenant to the dominant tenement. All such licenses, rights, and obligations shall continue to exist appurtenant to the Premises in perpetuity unless specifically temporary in nature or specifically terminated by agreement in writing by the owner of the Premises. The Grantee, by its acceptance of this Deed, agrees, for itself and its successors, and assigns that it and they shall indemnify and hold harmless the Grantor and the Grantors successors and assigns, against and from any liability of any nature, direct or indirect, arriving out of the use by Grantee (or by any agent, contractor, licensee, or permittee of Grantee) of any of the easements granted herein, including (without limitation) any and all legal costs incurred by Grantor in connection therewith. Further, in addition to the responsibilities of the Grantee to provide insurance under the LDA, the rantee shall, during any period of construction, construction maintenance, or other work involving any of the easement areas, obtain and shall cause its general contractor during the carrying out of such work to obtain general liability insurance in an amount that is reasonably commensurate with the scope and impact of such work, with the Grantor named as an additional insured on such insurance policies. It is agreed and understood that during construction of any portion of the Project involving the air rights over the Pitkin Tunnel, such reasonably commensurate insurance shall be in an amount of not less then Ten Million Dollars ($10,000,000.00). SUBJECT TO the terms and conditions of the LDA. Without limiting the foregoing, the agreements and covenants contained in Section 3.2 of the LDA shall be covenants running with the Premises enforceable by Grantor against Grantee and any successor in interest to the Premises. Such agreements and covenants run in favor of Grantor for the entire period during which such agreements and covenants shall be in force and effect, without regard to whether Grantor has at any time been, remains, or is an owner of any land or interest therein to or in favor of which such agreements and covenants relate. TO HAVE AND TO HOLD the above remised, released and QUIT CLAIMED Premises with the appurtenances thereof unto the said Grantee, and Grantees successors and assigns forever, to it and their proper use and behoof so that neither the Grantor nor Grantors successors or assigns, nor any other person claiming in its or their name or behalf shall hereafter have any claim, right or title in or to the Premises or any part thereof, but therefrom the Grantor and they are by these presents forever barred and excluded.
2

______________________

_______ ____________________

___________________________

Do,rnant 00009893 Vo1iim: 8243 PcLg:

299

day of , 2008 has IN WITNESS WHEREOF, the Grantor, on caused this Deed to be executed and delivered by John DeStefarto, ,/ its Mayor, who is duly authorized and empowered, and its corporate seal to be hereto affixed in its behalf by its City Clerk who is duly authorized to impress and attest said corporate seal of the City of New Haven has hereunto set its hand and seal this

Signed, sealed and delivered the presence of: THE Cl

Print Namep

OF NEW HAVEN

t_wcw

By:__________ Jo n DeS efano, It Mayo D ly Au orized

Name Approved as to form and correctness: Carl J. Amento Deputy Corporation Counsel
I

STATE OF CONNECTICUT COUNTY OF NEW HAVEN

)
ss. New Haven 2008

Personally appeared qo 1 j44L4 414itdy of The City of New Haven, a Connecticut municipality, signer and sealeY of the foregoing istrument, and acknowledged the same to be his/her free act and deed as such )-14_.S16v , and the free act and deed of New Haven, before me. said City of

ary I lic 6
NOTARY PLJ

A.

Do t m nt 000(19893 VD1,rn 8243 Pas:

300

Schedule A

A certain piece or parcel of land located in the City and County of New Haven and State of Connecticut containing 69,918 square feet as shown on a map entitled Property & Topographic Survey ALTA/ACSM Land Title Survey (Lower Level sheet I, Street Level sheet 2 & Upper Level sheet 3)360 State Street Reuse Parcel D-l New Haven, Connecticut, by URS, scale l20, dated August 2007, revised 5-16-08, said parcel, and permanent easements appurtenant to such parcel, being more particularly bounded and described as follows:

Ground Portion of Parcel D-1

Containing 52,980 square feet

Beginning at a point marking the intersection of the westerly street line of State Street and the northerly street line of Chpel Street; Thence running North 60 44 44 West, 415.12 feet along said northerly street line of Chapel Street; Thence running North 29 45 36 East, 55.84 feet along the easterly street line of Orange Street; Thence running South 60 50 10 East, 77.45 feet and North 29 45 50 East, 67.24 feet along land now or formerly of Franford Property Group One, LLC; Thence running South 60 28 50 East, 29.00 feet and North 29 45 50 East, 24.37 feet along Pitkin Plaza; / Thence running South 60 37 27 East, 281.24 feet and southeasterly on a curve to the right having a radius of 25.00 feet and an arc length of 38.98 feet along the southerly street line of Pitkin Street; Thence running South 28 42 04 West, 122.09 feet along the westerly street line of State Street to the point and place of beginning. Air Space Portion of Parcel D-1

Containing 16,938 square feet

Beginning at a point marking the intersection of the westerly street line of State Street and the southerly street line of Pitkin Street; Thence running northwesterly on a curve to the left having a radius of 25.00 feet and an arc length of 38.98 feet and North 60 37 27 West, 281.24 feet along the southerly Street line of Pitkin Street; Thence running South 29 45 50 West, 24.37 feet and North 60 28 50 West, 4.00 feet along the Ground Portion of Parcel D- I;

Thence running North 29 45 50 East, 78.36 feet through Pitkin Plaza;

4-.

Vo1urne

Document

00009393 8243 Pe:

301

Thence running South 60 37 27 East, 308.95 feet along the northerly street line of Pitkin Street and through Pitkin Street, partly by each; Thence running South 28 42 04 West 78.71 feet along the westerly street line of State Street to the point and place of beginning. The lower limit of the air space is the top of the concrete deck of the existing underground access road structure. Easement area within Pitkin Plaza & Pitkin Street Together with an easement within portions of Pitkin Plaza and Pitkin Street, said easement being bounded and described as follows: Beginning at a point on th northerly property line of Pitkin Plaza, said point being located South 60 37 27 East, 102.45 feet from the easterly Street line of Orange Street when measured along said property line; Thence continuing South 600 37 27 East, 308.95 feet along said property line, the northerly street line of Pitkin Street and through Pitkin Street, partly by each; Thence running South 28 42 04 West, 6.00 feet along the westerly street line of State Street; Thence running North 60 37 27 West, 309.06 feet through Pitkin Street and through Pitkin Plaza, partly by each; Thence running North 29 22 33 East, 6.00 feet through Pitkin Plaza to the point and place of beginning. Easement area within Pitkin Plaza, PItkin Street, State Street, Chapel Street and Orange Street Together with an easement within portions of Pitkin Plaza, Pitkin Street, State Street, Chapel Street and Orange Street, said easement being bounded and described as follows: Beginning at a point marking the intersection of the westerly Street line of State Street and the northerly Street line of Chapel Street; Thence running North 60 44 44 West, 41 5.12 feet along said northerly street line of Chapel Street; Thence running North 29 45 36 East, 55.84 feet along the easterly Street line of Orange Street; Thence running North 60 50 10 West, 8.50 feet through Orange Street; Thence running South 29 45 36 West, 73.23 feet through Orange Street and Chapel Street, partly by each;

AGREEMENT BY AND BETWEEN THE CITY OF NEW HAVEN AND MEPT CHAPEL STREET LLC INCREASE FOR DEFERRAL OF TAX ASSESSMENT ON STREET) 360 STATE STREET (FIKIA 745 CHAPEL EN, CONNECTICUT NEW HAV CC NO.: A08-1316 at New Haven, Connecticut, this day of THIS AGREEMENT, made and entered into HAVEN 2009 by and between THE CITY OF NEW ember 2008, effective as of February 1, Nov Connecticut existing under the laws of the State of municipal corporation organized and New Haven, a a mailing address at 165 Church Street, (hereinafter referred to as the City), with NewTower STREET LLC, with a mailing address % Connecticut 06510 and MEPT CHAPEL esda, MD 20814 esda Metro Ctr., Suite 1600, Beth Trust Company Multi-Employer, 3 Beth improvements ) regarding certain real property and the (hereinafter referred to as the Owner necticut, (hereinafter Chapel Street), New Haven, Con located at 360 State Street (f/k/a 745 authorized. in by Bruce R. Becker, its Agent and duly referred to as the Property), acting here WITNESSETH THAT: of 12-65e the Board of Aldermen of the City WHEREAS, pursuant to C.G.S. 1 2-65c to Aldermen, of amendments thereto (Journal, Board New Haven adopted a resolution and Haven as a rehabilitation area and City of New September 19, 2005) designating the g of assessment during the period of for eligibility of real property for the fixin establishing criteria tion; and assessments attributable to such rehabilita rehabilitation and for deferral of increased ram advantage of Assessment Deferral prog WHEREAS, the Owner wishes to take of property assessment n; specifically, the phase-in provisions available in the City of New Have and sment during the period of improvement; and the freezing of the property asses to an application indicating Owners intent WHEREAS, the Owner has tiled with the City the t on requesting that the City fix the assessmen make Improvements to the Property, and carried out and defer increases in the ent is being Property during the period while improvem ents completed during the Property attributable to the improvem assessment on the improvement period; and rding representations in the application rega WHEREAS, the Owner has made certain rporated as part of by attached as Exhibit A, and inco the improvements, a copy of which is here this Agreement and ria to improvement meets the program crite WHEREAS, the Property as it exists prior Development, the Office of the Office of Business and such eligibility has been approved by and the Citys Tax Assessor. Building Inspection and Enforcement, mutual covenants hereinafter contained, the NOW, THEREFORE, in consideration of the parties hereto agree as follows

SECTiON 1:

PERIOD OF REHABILITATiON

not later rehabilitation described in the application 101. The Owner will commence the later than January 31, 2011. plete such improvement not ement. than February 1, 2009 and will com eby designated as the period of improv period between these two dates is her The time T OF WORK TO BE PERFORMED SECTION 2: DESCRIPTION AND COS rral is forth in the application for assessment defe 201. The improvement work as set on shall be applicati ntations by Owner contained in said shall incorporated herein so that all represe ution of the Agreement by City, and ts for the exec construed to be material inducemen residential, retail de ant land of a 32-story structure to inclu consist of new construction on vac and parking. be cost of such improvements will The Owner declares that the 202. 08,861 ,929,00. SECTION 3: 301. $2,097,830. ASSESSMENT DETERMINATION g the period of improvement shall be The assessment of the Property durin

se-in shall ng when the assessment pha 302. For the purposes of determini shall be whichever of the following occurs of improvement commence, the date of completion first: Issuance of a Certificate of Occupancy. (a) ciently complete to be used as The date that the improvement is suffi (b) e of Building Inspection & intended as determined by the Offic Enforcement. (c) the Agreement. Two (2) years from the effective date of

ement, ent as determined by 302 of this Agre 303. Upon completion of the improvem S. 12-53a and 4 of assessment in accordance with C.G. the Assessor shall determine the new this Agreement, if applicable. e in of the improvement the entire increas For the first year following completion ease 304. ent incr r, twenty percent (20%) of the assessm assessment shall be deferred. Thereafte h year until one hundred percent (100%) of such eac shall be assessed against the Property during this period, the . In the event of a general revaluation rease has been so assessed Inc apply. provisions of 4 of this Agreement shall SECTiON 4: CITYWIDE REVALUATION

h such luation by the City in the year in whic 401. In the event of a general reva ssment on such d resulting In any increase in asse rehabilitation or construction is complete deferred. e resulting from such improvements shall be property, only that portion of the increas 2

402. improvement proportion to such general

h such tion in any year after the year in whic In the event of a general revalua eased or decreased in ent shall be incr is completed, such deferred assessm ssment on the Property, as a result of the total asse the increase or decrease of revaluation. increase in eement shall be construed to defer any . Nothing contained in this Agr 403 plated by the ibutable to the improvement contem ssment of the Property not attr the asse application of the Owner. SECTION 5:

CERTiFICATION IMPROVEMENT INSPECTiON AND certification by nt shall be subject to inspection and 501. The completed improveme State Statutes and er the with the criteria established und Code, the the City as being in conformity licable provisions of the State Building such app Resolution referred to above, any of the City of New Haven, Health Code, the Zoning Ordinance State Fire Code, the State Public and any amendments thereto. SECTION 6: ASSIGNMENT

shall be binding sfer of the Property, this Agreement 601. In the event of a sale or tran , as the case may gns the Owners heirs, successors or assi Agreement on, and shall inure to the benefit of, for those purposes specified in this ty is continued be, provided the use of the proper creating such deferral.

SECTION 7:

INVALIDITY OF PROVISIONS

on of this tion, sentence, clause, phrase or porti . If any paragraph, section, subsec 701 of competent lid or unconstitutional by any court ent is for any reason held inva invalid, and this Agreem Agreement shall be deemed to be on, the remaining portions of this jurisdicti ls created herein shall be null and void. entire Agreement and all deferra

EEMENT SECTION 8: TERMINATION OF AGR inate effective ault and this Agreement shall term 801. The Owner shall be in def should any of the following ll any terms of this Agreement or immediately if the Owner fails to fulfi
occur: (a) (b) (c) improvements described in the The Owner does not complete the ormity with the said description. application filed by the Owner in conf t not result in an increase of at leas The improvements as completed do t assessment. thirty five percent (35%) of the curren set menced or completed by the dates The improvement work is not com forth in this Agreement. 3

(d)

Upon the completion of improvement the Owner is delinquent in the payment of real estate taxes levied on the property and the City Tax Collector has not signed an Agreement allowing such delinquency. After completion of improvement Owner becomes delinquent for more than two months in the payment of real estate taxes levied on the Property in accordance with the terms of this Agreement. Owner receives abatement or deferral of increases caused by the rehabilitation under any other assessment deferral or tax abatement program. Owner has a legal or equitable interest in any property in the City for

(e)

(f)

(g)

which property taxes are delinquent. (h) The Property receives federal or state subsidies which include payment of local taxes for more than twenty-five percent (25%) of the dwelling units, or payment in lieu of taxes (PILOT).
TM The Property is a Certified Historic Structure as defined by Federal Regulation 36 CFR 1208 or has been designated by the Historic District Commission as historically significant, and rehabilitation did not meet the federal Standards of Rehabilitation for historic properties (36 CFR 1208).

(i)

802. In the event of default, all deferrals created herein shall be null and void and the Owner shall pay a penalty equal to all taxes abated to date by the Agreement.
SECTION 9: PAYMENT OF TAXES

901. In the event that the Owner does not pay the real estate taxes levied on the Property in accordance with the terms of this Agreement during the fiscal year in which such taxes are due, the Owner shall be in default, and the City shall have the option of declaring this Agreement and all deferrals created herein null and void.
SECTION 10: MISCELLANEOUS

1001. The Owner agrees to abide by all applicable laws, statutes, regulations, ordinances, resolutions, and codes of the United States of America, the State of Connecticut and the City of New Haven. 1002. This Agreement incorporates all the understandings of the parties hereto and supersedes any and all agreements reached by the parties prior to the execution of this Agreement, whether oral or written.

this IN WITNESS WHEREOF, the parties have executed and delivered five (5) counterparts of and year first above written. Agreement as of the day WITNESS: By: ClTfF NEW HAVEN

A
I

John De.tfnoJr. Mayor LApproved as to Form and Correctness:

Carl J. Amento Deputy Corporation Counsel MEPT CHAPEL STREET LLC a Delaware Limited Liability Company By: NewTower Trust Company as Trustee of the NewTower Trust Company MultiEmployer Property Trust Its Managing Member Kennedy Associates Real Estsate By: Counsel, LP Its Authorized Signatory Kennedy Associates Real Estate By: Counsel GP, LLC Its General Partner By:_________

WITNESS:

i4

/iiAi

Name:
Its:

(tkt4
/N2
(

EXHIBJT

Exhibit 9: Board of Aldermen Resolution

CITY OF NEW HAVEN Signature

Ordinance: OR-20 12-

165 Church Street New Haven, CT 06510 (203)946-6483 (tel) (203)946-7476 (fax) www.cityofnewhaven.com

File Number:

ORDINANCE AMENDMENT TO THE CITY OF NEW HAVEN CODE OF ORDINANCES FOR THE PURPOSE OF AUTHORIZING AND REQUIRING THE MAYOR TO ENTER INTO AN AGREEMENT WITH THE OWNERS OF CERTAIN PROPERTY TO FIX THE TAX ASSESSMENT OF SAID PROPERTY, TERMINATE AN EXISTING TAX DEFERRAL AGREEMENT, AND ENTER INTO AN AGREEMENT CONCERNING PAYMENTS IN LIEU OF TAXES PURSUANT TO CONNECTICUT GENERAL STATUTES 7-498, 12-65, and 12-65a-e. WITNESSETH THAT: WHEREAS, MEPT Chapel Street LLC, a Delaware limited liability company (MEPT Chapel) and MEPT Chapel Street QALICB LLC, a Delaware limited liability company (MEPT Chapel QALICB, and together with MEPT Chapel, the Owners) own real property located at 360 State Street, New Haven, Connecticut, and identified on the City Assessors Map as MJB/L/U: 240/0256/00 102 to /00105 (the Property); WHEREAS, the Owners and the City entered into that certain Development Agreement by and between the City and Becker Development Associates, LLC, a Connecticut limited liability company on October 4, 2007 (the Development Agreement), which was assigned to MEPT Chapel pursuant to that certain Assignment and Assumption Agreement for Development Agreement and Land Disposition Agreement dated September 10, 2008 (the Assignment), and thereafter, partially assigned and assumed by MEPT Chapel QALICB pursuant to that certain Memorandum of Agreement Regarding Creation of the 360 State Street Condominiums dated September 2, 2010, by and between the City, MEPT Chapel and MEPT Chapel QALICB (the Condo Approval Agreement); WHEREAS, the Development Agreement, the Citys land use laws and the land use approvals for the Property, including the City Plan Commission Site Plan Review Approval dated November 18, 2009, the City Plan Commission Site Plan Review Approval dated September 19, 2007 and the City Board of Zoning Appeals Approval dated July 31, 2007 (such approvals being referred to herein as Land Use Approvals) authorize and anticipate the plan of redevelopment for the Property which included the new construction of certain improvements on the Property (the Project);

City of New Haven

Printed on

WHEREAS, the City of New Haven (the .jfl) and MEPT Chapel entered into that certain Agreement by and between the City of New Haven and MEPT Chapel Street LLC for Deferral of Tax Assessment Increase on 360 State Street (f/kla 745 Chapel Street) New Haven, Connecticut CC No. A08- 1316 dated November 18, 2008 and effective February 1, 2009, which was partially assigned and assumed by MEPT Chapel QALICB pursuant to the Condo Approval Agreement (the Tax Deferral Agreement); WHEREAS, the Connecticut City and Town Development Act, Chapter 114 of the General Statutes of Connecticut, Revision of 1958, as amended (the Act), authorizes Connecticut municipalities, upon adoption of required findings and determinations, and upon the satisfaction of certain other conditions, to execute an agreement with a property owner that provides for an exemption from real property taxes for a development project in rehabilitation areas and for payments in lieu of such taxes by the owners of such development project; WHEREAS, the City is authorized, pursuant to C.G.S. 12-65, upon adoption of required findings and determinations, and upon the satisfaction of certain other conditions, to execute an agreement with a property owner that fixes the tax assessment of such property owners property if such property is located within a redevelopment plan and a community development plan; WHEREAS, the Board of Aldermen of the City of New Haven (hereinafter referred to as the Board of Aldermen) adopted a resolution and amendments thereto (Journal, Board of Aldermen, September 19, 2005) designating the City as a rehabilitation area as defined under C.G.S. 12-65c to 12-65e; and WHEREAS, it is in the Citys best interest to terminate the Tax Deferral Agreement, fix the tax assessment of the Property and the Project, and arrange for the Owners to make payments in lieu of real estate taxes pursuant to the terms and conditions set forth below: NOW, THEREFORE BE IT ORDAINED that the City has made all findings and determinations under the Act, including finding and determining that the Property and the Project are development property pursuant to the Act; and BE IT FURTHER ORDAINED that pursuant to C.G.S. 12-65, the City has made all required findings and determinations, including finding and determining that the Property and the Project are a housing project as that term is used in 12-65, and that the Property and the Project are located in a redevelopment area pursuant to C.G.S. 8-127 and within a community development plan approved by the City pursuant to 8-169a to 8-169j; and BE IT FURTHER ORDAINED that within thirty (30) days after the date of this Ordinance, the Mayor shall be authorized and required, on behalf of the City, to enter into that certain Tax Agreement Concerning Real Property Taxes For 360 State Street attached hereto as Exhibit A (the Agreement), pursuant to which: (i) the Tax Deferral Agreement shall be terminated and of no further force and effect; (ii) the Property and the Project shall be exempt from any and all real estate taxes for a period of twenty (20) years from the effective date of such agreement; (iii) the Owners will be required to make certain payments in lieu of real estate taxes to the City for a period of twenty (20) years commencing on the effective date of such agreement (the PILOT Payments); and (iv) the tax assessment of the Property and the Project shall be fixed for a period of time starting on October 1, 2012 and continuing for a period of sixteen (16)

City of New Haven

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years thereafter, up to and through the Grand List of October 1, 2027 in the amounts set forth in such agreement, all pursuant to the terms and conditions set forth in the Agreement; and BE IT FURTHER ORDAINED that the Owners, the Property and the Project have satisfied all other conditions necessary to execute the Agreement which provides for (i) an exemption of the Property and the Project from real property taxes, (ii) for the payment by the Owners to the City of the PILOT Payments, including conditions relating to notice, summary, and public hearing of this resolution as proposed, and (iii) to fix the tax assessment of the Property and the Project; and BE IT FURTHER ORDAINED that the Agreement shall include the following conditions of approval: (1) Owners shall not become delinquent for more than two (2) months in the payment of such PILOT Payments to the City; (2) for any property in the City which the Owners have a legal and equitable interest, the Owner shall not be more than two (2) months delinquent in the payment of the any real estate taxes assessed against such property; and (3) the Agreement will terminate if the Property receives federal or state subsidies which include payment of local taxes for more than twenty five percent (25%) of the dwelling units in the Project. Final action has been taken for this legislative file.

ATTEST____________________ City Clerk

Date

SIGNED____________________ City Clerk SIGNED_____________________ May or

Date

Date

ALTERNATE SIGNATURE 1

Date

ALTERNATE SIGNATURE 2

Date

City of New Haven

Printed on

EXHIBIT A Form of Tax Agreement Concerning Real Property Taxes For 360 State Street (Attached)

0018-278 bg29ld2Oks.001 2012-07-31

City of New Haven

Printed on

EXHIBIT

-if--

Exhibit 10: Tax Agreement Concerning Real Property Taxes for 360 State Street

_____

L PROPERTY TAXES TAX AGREEMENT CONCERNING REA FOR 360 STATE STREET Taxes for 360 State Street (the This Tax Agreement Concerning Real Property (the Effective Date) Agreement) made and entered into as of icipal corporation organized and existing is by and among the City of New Haven, a mun jty), MEPT Chapel Street LLC, a under the laws of the State of Connecticut (the el) and MEPT Chapel Street QALICB Delaware limited liability company (MEPT Chap PT Chapel QALICB, together with LLC, a Delaware limited liability company (ME MEPT Chapel, the Owner). WITNESSETH: ential condominium unit WHEREAS, MEPT Chapel owns that certain resid necticut and MEPT Chapel QALICB owns located at 360 State Street in New Haven, Con parking condominium unit located at 360 that certain commercial condominium unit and h are legally described in Exhibit A, State Street in New Haven, Connecticut, whic attached hereto (collectively, the Property); certain Development WHEREAS, Owner and the City entered into that er Development Associates, LLC, a Agreement by and between the City and Beck ber 4, 2007 (the Development Connecticut limited liability company on Octo el pursuant to that certain Assignment Agreement), which was assigned to MEPT Chap Agreement and Land Disposition and Assumption Agreement for Development ignment), and thereafter, partially Agreement dated September 10, 2008 (the Ass ICB pursuant to that certain Memorandum assigned and assumed by MEPT Chapel QAL State Street Condominiums dated of Agreement Regarding Creation of the 360 MEPT Chapel and MEPT Chapel QALICB September 2, 2010, by and between the City, (the Condo Approval Agreement); Citys land use laws and the land WHEREAS, the Development Agreement, the City Plan Commission Site Plan Review use approvals for the Property, including the Plan Commission Site Plan Review Approval dated November 18, 2009, the City Board of Zoning Appeals Approval Approval dated September 19, 2007 and the City red to herein as Land Use Approvals) dated July 31, 2007 (such approvals being refer nt for the Property which included the authorize and anticipate the plan of redevelopme the Property (the Project); new construction of certain improvements on completion of the construction of WHEREAS, the City estimated that upon the ent Agreement and the Land Use Approvals, the Project as contemplated by the Developm Project would be approximately $34,230,000 the Citys total tax assessment value of the from the Property and the Project would and the annual real estate taxes due to the City Estimate), and Owner relied on the be approximately $1,400,000 (Original Tax invest retirement funds from its union pension Original Tax Estimate when it decided to plans to construct the Project; ed into that certain Agreement by WHEREAS, the City and MEPT Chapel enter T Chapel Street LLC for Deferral of Tax and between the City of New Haven and MEP a 745 Chapel Street) New Haven, Assessment Increase on 360 State Street (f/k/ er 18, 2008 and effective February 1, 2009, Connecticut CC No. A08- 1316 dated Novemb

which was partially assigned and assumed by MEPT Chapel QALICB pursuant to the Condo Approval Agreement (the Tax Deferral Agreement), whereby the City of New Haven, which was designated as a rehabilitation area, pursuant to C.G.S. 12-65(c) to 12-65(e), provided Owner with a fixed property assessment during the period of time Owner was constructing key features of the Project and a phase-in of the property assessment after the completion of the construction of such features of the Project: WHEREAS, on or around October 1, 2010, the City Assessor assessed the Property and the Project with its then-completed improvements at $130,051,320 with , annual real estate taxes for the Property and the Project of approximately $5,700 ,000: WHEREAS, Owner would not have invested retirement funds from its union pension plans to construct the Project if Owner had known that the annual real estate taxes for the Property and the Project would be higher than the Original Tax Estima te; WHEREAS, the Connecticut City and Town Development Act, Chapter 114 of the General Statutes of Connecticut, Revision of 1958, as amended (the Act), authorizes Connecticut municipalities, upon adoption of required findings and determinations, and upon the satisfaction of certain other conditions, to execute an agreement with a property owner that provides for an exemption from real proper ty taxes for a development project in rehabilitation areas and for payments in lieu of such taxes; WHEREAS, the Board of Aldermen of the City of New Haven (the Board), acting within its authority under the Act, and by resolution adopted on [date design ated j, the Project and the Property as development property pursuant to the Act and resolve d that all requirements and conditions required for the Citys execution of an agreem ent with Owner with respect to the Property and the Project under the Act are satisfie d; WHEREAS, the City is authorized, pursuant to C.G.S. 12-65, upon adoption of required findings and determinations, and upon the satisfaction of certain other condit ions, to execute an agreement with a property owner that fixes the tax assessment of such property owners property; WHEREAS, the Property and the Project are located both within a redevelopment plan (i.e. the State Street Redevelopment and Renewal Plan) and a community development plan (i.e. the City of New Haven Five Year Conso lidated Plan for Housing and Community Development Programs: 2010-2014), as defined in C.G.S. 12-65; WHEREAS, the City, acting through its Board and pursuant to its authority under C.G.S. 12-65, and by resolution adopted on [datej, resolved that all require ments and conditions required for the Citys execution of an agreement with Owner fixing the tax assessment of the Property and the Project are satisfied: and WHEREAS, the City and Owner have agreed that it is in the best interest of the parties to enter into an agreement pursuant to which the Property and the Project will be exempt from any and all real estate taxes, Owner will make payments in lieu of real estate taxes with respect to the Property and the Project and the City will fix the tax assessment of the Property and the Project pursuant to the terms and conditions set forth below:

AGREEMENT: tion, the receipt and NOW, TI-IEREFORE, for good and valuable considera es hereto agree as follows: sufficiency of which is hereby acknowledged the parti . As of the TERMINATION OF TAX DEFERRAL AGREEMENT 1. Deferral Agreement ce the Tax Effective Date, this Agreement shall supersede and repla t shall no longer be in force and effect. in its entirety, and the Tax Deferral Agreemen erty and the EXEMPTION. Pursuant to 7-498 of the Act, the Prop 2. and shall be exempt from r the Act Project are designated as development property unde would have been assessed against the the payment of any and all real estate taxes that ble by Owner for the term of the Property and the Project and that would have been paya h are collected by the City on PILOT Payments, including any real estate taxes whic such other public or private behalf of other public and private entities. The City and t upon the Property or the Project entities shall not impose any tax, charge or assessmen ribed in this Section. for the purpose of defeating the tax exemption desc lieu of taxes PILOT PAYMENTS. Owner shall make payments in 3. Project as follows: Property and the (PILOT Payments) to the City with respect to the Effective Date For the first calendar year of this Agreement in which the a. st) 1 ( anniversary of the Effective Date, Owner shall pay the City shall occur until the first ty Thousand and No/l00 Dollars annual PILOT Payments equal to Two Hundred Eigh ($280,000.00). St) 1 ( anniversary of the Effective Date until the second (2) From the first b. City annual PILOT Payments anniversary of the Effective Date, Owner shall pay the OU Dollars ($560,000.00). equal to Five Hundred Sixty Thousand and No/l until the third (3k) From the second (2) anniversary of the Effective Date c. the City annual PILOT Payments anniversary of the Effective Date, Owner shall pay Dollars ($840,000.00). equal to Eight Hundred Forty Thousand and No/I 00 th) 4 ( (31(1) anniversary of the Effective Date until the fourth From the third d. al PILOT Payments ry of the Effective Date, Owner shall pay the City annu anniversa sand and No/100 Dollars equal to One Million One Hundred Twenty Thou ($1,120,000.00). th) 4 ( anniversary of the Effective Date and continuing From the fourth e. st) 21 ( anniversary of the Effective Date, Owner shall pay thereafter until the twenty-first ion Four Hundred Thousand and the City annual PILOT Payments equal to One Mill No/100 Dollars ($1,400,000.00). st) 21 ( anniversary of the Effective Date Commencing on the twenty-first f. erty taxes which would be paid on the and thereafter, Owner shall pay the City real prop erty and the Project, provided, Property and the Project by a fee owner of the Prop in good faith pursue the execution of however, the City and Owner shall mutually and ement, for an additional twenty (20) another agreement, under terms similar to this Agre icipal laws, for the payment in lieu of year period under the then-existing state and mun real estate taxes for the Project and the Property.

4. PAYMENT AMOUNTS AND PAYMENT DATES. All PILOT Payments to be made under this Agreement shall be paid by Owner to the City every six (6) months in arrears in an amount equal to fifty percent (5 0%) of the PILOT Payments due and owing for such twelve (12) month period. The first such payment shall be due on the date which is six months (6) months after the Effective Date, with each subsequent payment due on the date which is six (6) months after the previous payment due date. In the event that any installment of a PILOT Payment is not paid within thirty (30) days after its due date, such installment shall be deemed delinquent and subject to interest at the Citys then-existing rate for delinquent tax payments from such due date and continuing until the Citys receipt of such installment and all accrued interest with respect thereto. Owner shall not be delinquent in the payment of such PILOT Payments to the City for more than two (2) months. In addition, for any property in the City which the Owner has a legal and equitable interest, Owner shall not be more than two (2) months delinquent in the payment of any real estate taxes assessed against such property. 5. ADDITIONAL PAYMENTS. a. In addition to the PILOT Payments, for each year that Owner is required to make PILOT Payments to the City pursuant to Section 3 above, the City shall be entitled to receive an additional payment, if any, (City Participation) equal to (A) ten percent (10%) of (B) any Net Operating Cash Flow (defined below) remaining after Owner receives from Net Operating Cash Flow the amount of Eleven Million Two Hundred Thousand and No/i 00 Dollars ($11,200,000.00) (the Owner Return), which the parties to this Agreement hereby stipulate and agree equals seven percent (7%) of Owners total investment in the Project as of the Effective Date of One Hundred of Sixty Million and No/100 Dollars ($160,000,000.00) (Owner Investment). b. In no event shall the City Participation amount payable to the City exceed an amount equal to: (i) the cumulative amount of real property taxes that would otherw ise be paid on the Project by a fee owner of the Project for the period of determination of the City Participation, minus (ii) the total of (A) the net increase in the amount of person al property taxes generated by the Project for such period, plus (B) the PILOT Payme nts for such period. c. The amount of any City Participation to be paid by Owner to the City for each year that Owner is required to pay the City the PILOT Payments pursuant to Section th 3 above shall be determined on April 15 of the succeeding calendar year and shall be th paid by Owner to the City no later than July 15 of such succeeding calendar year. d. In the event that Owner elects, in its sole and absolute discretion, to develop or construct any additional improvements on the Property or the Projec t, including the development of any undeveloped portion of the Property, after the Effective Date, the Owner Investment shall increase by an amount equal to the additio nal capital invested in the Project from any source, including equity or debt financing (Addi tional Investment), and accordingly, the Owner Return shall increase by the amoun t equal to seven percent (7%) of the Additional Investment. e. For purposes of this Section 5, Net Operating Cash Flow shall mean the gross rental and any other gross revenue of any kind or description to the extent received in cash by Owner from operation of the Property or the Project during a calend ar year

leases for the Project so long as (but excluding security or other deposits paid under any sit, and also excluding any Owner remains obligated to refund or return any such depo of owning, constructing, leasing, prepaid rent) after subtracting the following: (a) all costs to the extent paid in cash during maintaining and operating the Property and the Project, ents to the extent that the amounts such calendar year, but not including any such paym ating or capital reserves held for thereof were reserved against and funded from any oper r expenses of Owner paid in cash the benefit of the Project; (b) all other operating or othe rred by Owner during such calendar during such calendar year, or any casualty losses incu g such year by any third year to the extent that such losses are not reimbursed durin tained by Owner; (c) operating person responsible therefor or through insurance main as may be reasonably determined reserve payments equal to the amounts of reserved cash ce or operation of the Project, and for by Owner to be necessary to provide for maintenan capital reserve payments equal to ; increases in working capital or other contingencies (d) mined by Owner to be necessary the amounts of reserved cash as may be reasonably deter improvements, capital improvements from time to time, to be available for future tenant the Project, (e) any debt service and replacements and leasing commissions relating to Property or the Project, (e) the payments to be made by Owner in connection with the r Section 3 of this Agreement, PILOT Payments to be made by Owner to the City unde to the City under the Land and (f) any payments required to be made by Owner t. Disposition Agreement or the Development Agreemen ement, in the event Notwithstanding anything to the contrary in this Agre f. on of the Property or the Project by of any sale, transfer or assignment of all or any porti tional payments to the City under Owner to a third party, the obligation to make the addi or effect. this Section 5 shall terminate and be of no further force PROJECT. FIXED ASSESSMENT OF THE PROPERTY AND THE 6. a period of sixteen (16) years Commencing on the Effective Date and continuing for ber 1, 2027 (the Fixed Assessment thereafter, up to and through the Grand List of Octo Property and the Project as follows Period), the City shall fix its tax assessment of the (the Fixed Assessed Value): Residential Condominium Unit: $29,413,343. (i) (ii) (iii) (iv) Parking Condominium Unit: $1,951,268. Commercial Condominium Unit: $4,022,620. Land: $612,500.

the Project shall be During the Fixed Assessment Period, the Property and a. 2 above, and Owner shall pay the exempt from real property taxes pursuant to Section of this Agreement in the manner City the PILOT Payments as described in Section 3 prescribed in Section 4 of this Agreement. of the Connecticut Nothing in this Agreement or Title 12, Chapter 203 b. City to increase the tax assessment General Statutes shall be construed as permitting the Assessment Period over the Fixed of the Property and the Project during the Fixed City-wide revaluation of the Grand Assessment Value, including, without limitation, a List conducted pursuant to C.G.S. 12-62.

c. The parties shall submit this Agreement within ten (10) days after its execution to the Superior Court of New Haven (the Superior Court), in accordance with C.G.S. 12-65(a). The City, MEPT Chapel and MEPT Chapel QALICB hereby stipulate and agree that the provisions of Section 6 of this Agreement are fair and reasonable within the meaning of C.G.S. 12-65(a), as the Fixed Assessed Value is based on the Citys assessments of properties that are comparable in size, quality, location and occupancy located within the City of New Haven. If for any reason the Superior Court declines to approve Section 6 of this Agreement, then the parties to this Agreement shall negotiate in good faith to make changes to Section 6 to address any matters disapproved by the Superior Court and shall promptly resubmit this Agreement as so revised to Superior Court for its approval. However, at any time following Superior Court disapproval of Section 6 of this Agreement, Owner may, in its sole discretion, provide written notice to the City that it no longer wishes to have Section 6 included in this Agreement, in which case the parties shall execute an amended and restated version of this Agreement which excludes Section 6 but which is identical in all other respects to this Agreement. 7. CONVEYANCE OF PROPERTY OR PROJECT. In the event of a sale or transfer of all or any portion of the Property or the Project, (except for the payme nts to be made by Owner pursuant to Section 5 of this Agreement which shall terminate upon the sale or transfer of all or any portion of the Property or the Project), this Agreement shall remain in full force and effect and shall be binding on, and shall inure to the benefit of the Owners heirs, successors or assigns, as the case may be; provided that the use of the Property or the Project shall remain substantially unchanged from the use of the Property or the Project as of the Effective Date. In the event of any such sale or transfe r, the seller or transferor shall be released from any further obligations under this Agreement arising after the date of such sale or transfer, provided that the purchaser or assignee assumes such sellers or transferors obligations hereunder in writing. 8. AMENDMENT OF OTHER AGREEMENTS BETWEEN PARTIES. a. The City and Owner hereby agree to enter into a separate agreement, executed and acknowledged by all parties, to amend any provisions of the Development Agreement which may conflict in any way with the terms of this Agreement, and neither party shall unreasonably withhold or delay its consent or approval to such amendment to the Development Agreement. b. The City entered into that certain Land Disposition Agreement with Becker Development Associates, LLC, a Connecticut limited liability compa ny on July Ii, 2008 (the Land Disposition Agreement), which was assigned to MEPT Chapel pursuant to the Assignment, and thereafter, partially assigned and assumed by MEPT Chapel QALICB pursuant to the Condo Approval Agreement. The City and Owner hereby agree to enter into a separate agreement, executed and acknowledged by all parties, to amend any provisions of the Land Disposition Agreement which may conflict in any way with the terms of this Agreement, and neither party shall unreas onably withhold or delay its consent or approval to such amendment to the Land Disposition Agreement. 9. MISCELLANEOUS.

ement Entire Agreement. This Agreement embodies the entire agre a. s all prior agreements and and understanding among the parties and supersede is agreed that there are no terms, understandings related to such subject matter, and it ess or implied, other than those set understandings, representations or warranties, expr forth herein. ained in this s Severability. If any one or more of the provision cont b. lid, illegal, or unenforceable in any Agreement shall for any reason be held to be inva ty shall not affect any other provision respect, that invalidity, illegality, or unenforceabili the invalid, illegal, or unenforceable hereof, and this Agreement shall be construed as if ore, in lieu of any invalid, illegal, or provision had never been contained herein. Furtherm added to this Agreement a provision unenforceable provision, there shall be automatically provision as may be possible and be as similar to the illegal, invalid, or unenforceable legal, valid, and enforceable. warrant that Authority. Owner and the City each represent and c. Agreement, and that any necessary they have full authority to enter into and perform this any other parties have been consents, resolutions, approvals or authorizations from granted or obtained. r Notices. All notices, demands, and requests and othe d. in writing and will ement must be communications required or permitted under this Agre ved by facsimile or personal delivery or, if be deemed to be delivered when actually recei not, (i) upon deposit with a nationally earlier and regardless whether actually received or delivery, charges prepaid, or (ii) upon recognized overnight courier for next business day larly maintained receptacle for the three (3) Business Days following deposit in a regu aid, in either event to be addressed United States mail, registered or certified, postage prep to the addressee as follows: If to Owner: MEPT Chapel Street LLC MEPT Chapel Street QALICB LLC do NewTower Trust Company 3 Bethesda Metro Center, Suite 1600 Bethesda, MD 20814 Attn: Patrick 0. Mayberry Telephone: 240.235.9960 Facsimile: 240.235.9961 Bentall Kennedy (U.S.) Limited Partnership 1215 Fourth Avenue, Suite 2400 Seattle, WA 98161 Attn: Senior Vice President Asset Management Telephone: 206.623.4739 Facsimile: 206.682.4769

With a copy to:

And to:

Bentall Kennedy (U.S.) Limited Partnership 7315 Wisconsin Avenue, Suite 350 West Bethesda, MD 20814 Attn: Senior Vice President Asset Management Telephone: 301.656.9119 Facsimile: 301.656.9339

And to:

McNaul Ebel Nawrot & Heigren PLLC 600 University Street, Suite 2700 Seattle, WA 98101 Attn: Marc 0. Winters Telephone: 206.467.1816 Facsimile: 206.624.5128

_____________

If to the City

The City of New Haven Attn:_______________ Telephone:___________ Facsimile:______________

With a copy to: Attn:_______________ Telephone:___________ Facsimile:_____________ notice, demand, request and other Any party may change the address to which any such is to be delivered or mailed, by communication intended to be received by such party es hereto giving written notice of such change to the other parti days notice Estoppel Certificate. Any party will, upon twenty (20) e. dge and deliver an estoppel certificate at the request of another party, execute, acknowle force and effect (or, if there have stating that this Agreement is unmodified and in full and effect as modified, and setting been modifications, that this Agreement is in full force ents due to such party hereunder forth such modifications), and the dates to which paym s hereunder or specifying each such have been paid, and either stating that no default exist other matters relating to this default of which such party is aware, and stating such ficate may be relied upon by any Agreement as reasonably requested. Any such certi the same, including any existing person with a legitimate business purpose for obtaining of the Property. or prospective mortgagee or purchaser of all or any part this Headings. The descriptive headings of the paragraphs of f. are not intended to and shall not be Agreement are inserted for convenience only. They t of this Agreement or the meaning construed to limit, enlarge or affect the scope or inten of any provision of it. t in one or Counterparts. The parties may execute this Agreemen g. titute one and the together will cons more identical counterparts, all of which when taken transmission shall be binding on the same instrument. A facsimile or electronic mail executed, each counterpart is to be party or parties whose signatures appear thereon. If so rts shall, collectively, constitute one deemed an original for all purposes, and all counterpa shall not be necessary to produce or agreement, but in making proof of this Agreement, it account for more than one counterpart.

h. No Partnership. Nothing contained in this Agreement or any other documents contemplated by this Agreement is intended or shall be construed to create any other relationship between the parties, including that ofjoint venturers or partners. i. Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed by and construed and enforced in accordance with the laws of the State of Connecticut, exclusive of the conflict of laws principles of the State of Connecticut. The parties consent to the jurisdiction of the state courts located in New Haven, Connecticut, and to the Federal District Court for the District of Connecticut in the event of any litigation arising out of this Agreement. Attorneys Fees. In the event either party shall bring legal action j. for the breach of or to enforce this Agreement, the substantially prevailing party shall be entitled to reasonable attorneys fees, expenses and court costs, including those relating to any appeal. The provisions of this paragraph shall survive the expiration or termination of this Agreement. k. Fair Interpretation. This Agreement has been careflully reviewed and negotiated by both parties and it shall be given fair and reasonable interpretation in accordance with the words contained in it without any weight being given to whether a provision was drafted by one party or its counsel. Whenever a provision of this Agreement uses the words include, including or words of similar meaning, the words shall not be construed so as to be limiting but shall be treated as illustrative. Paragraph headings are for convenience only and shall not be a part of this Agreement or considered in its interpretation. 1. Termination. This Agreement will terminate if the Property or the Project receives federal or state subsidies which include payment of local taxes for more than twenty five percent (25%) of the dwelling units in the Project. [SIGNA TURE PAGE FOLLOWS]

___________________________

ed this Agreement as of IN WITNESS WHEREOF, the parties hereto have execut the Effective Date. MEPT CHAPEL: MEPT Chapel Street LLC, a Delaware limited liability company By: MEPT Chapel Street Member LLC, its Managing Member By: MEPT Edgemoor REIT LLC, its Manager By:__________________ Name:_______________________ Its:________________________________ MEPT CHAPEL QALICB: MEPT Chapel Street QALICB LLC, a Delaware limited liability company By: MEPT Chapel Street LLC, its Managing Member By: MEPT Chapel Street Member LLC, its Managing Member By: MEPT Edgemoor REIT LLC, its Manager By:_______________ Name:___________________ Its:__________________________ CITY: Approved as to Form and Correctness: The City of New Haven: Name:____________________________ Its:______________________________________ By:______________________ Name:__________________________ Its:

EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Commercial Unit All that certain real property situated in the City of New Haven, County of New Haven, and State of Connecticut designated as Commercial Unit together with all appurtenances thereto, being more particularly designated and described in a certain Declaration of 360 State Street Condominiums Declared by MEPT Chapel Street LLC dated September 2, 2010 and recorded on September 3, 2010 in Volume 8594 at Page 38 of the New Haven Land Records. Parking Unit All that certain real property situated in the City of New Haven, County of New Haven, and State of Connecticut designated as Parking Unit together with all appurtenances thereto, being more particularly designated and described in a certain Declaration of 360 State Street Condominiums Declared by MEPT Chapel Street LLC dated September 2, 2010 and recorded on September 3, 2010 in Volume 8594 at Page 38 of the New Haven Land Records. Residential Unit All that certain real property situated in the City of New Haven, County of New Haven, and State of Connecticut designated as Residential Unit together with all appurtenances thereto, being more particularly designated and described in a certain Declaration of 360 State Street Condominiums Declared by MEPT Chapel Street LLC dated September 2, 2010 and recorded on September 3, 2010 in Volume 8594 at Page 38 of the New Haven Land Records.

0018-278 bg232f2Otn.006 2012-07-31

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STATE OF COUNTY OF On this the personally officer,

)
)ss.

)
day of appeared 2012, before me, the undersigned the

known to me (or of the CITY OF NEW HAVEN, rument se name is subscribed to the within inst satisfactorily proved) to be the person who ed as same for the purposes therein contain acknowledged that he/she executed the and his/her free act and deed. hand. IN WITNESS WHEREOF, I hereto set my

Notary Public My Commission Expires:

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__________________
___________ ___

STATE OF COUNTY OF

)
)ss.

2012, before me, the undersigned day of On this the a Manager of MEPT officer, personally appeared Edgemoor REIT LLC, which limited liability company is the Manager of MEPT Chapel Street Member LLC, which limited liability company is the Managing Member of MEPT Chapel Street LLC, which limited liability company is the Managing Member of MEPT CHAPEL STREET QALICB LLC, a Delaware limited liability company, known to me (or satisfactorily proved) to be the person whose name is subscribed to the within instrument and acknowledged that he/she executed the same for the purposes therein contained as his/her free act and deed. IN WITNESS WHEREOF, I hereto set my hand.

Notary Public My Commission Expires:

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___________________________,
______________.

STATE OF COUNTY OF On this the

)
)ss.

)
day of 2012, before me, the undersigned a Manager of MEPT

officer, personally appeared

Edgemoor REIT LLC. which limited liability company is the Manager of MEPT Chapel Street Member LLC, which limited liability company is the Managing Member of MEPT CHAPEL STREET LLC, a Delaware limited liability company, known to me (or satisfactorily proved) to be the person whose name is subscribed to the within instrument and acknowledged that he/she executed the same for the purposes therein contained as his/her free act and deed. IN WITNESS WHEREOF, I hereto set my hand.

Notary Public My Commission Expires: