KEY ISSUES IN DOCUMENTING THE Y10-15 FEE SALE The Sellers Perspective Allen Lynch Nixon Peabody LLP 100 Summer Street Boston, MA

Preliminary Matters Portfolio sales & different investors Implications of packaging purchase access with equity/debt Engagement/alignment of all partners Who drives the bus? Who takes the pen? Know your LURA, Reg. Agreement, Loan Agreement

The Property Whats in? Whats out?

Feasibility Period Sellers materials Buyers reports LURA

Approvals Period Sellers Approvals – LP Consent – Investment Committee – Lender issues Buyers Approvals – State Agency – Municipality – HUD

Title and Survey Title – before, not after Permitted Exceptions

Warranties Not a substitute or supplement for DD 10 year hold Limitations – Actual knowledge of Designated Person – Acquired knowledge of Buyer – Survival period – Basket & cap – Disclaimer (as is/no re-syndication or subsidy guaranty*)

Tax Credits Buyer covenants – Compliance – CC annual compliance certification,8609s Procurement of recapture bond – Who obtains – Who pays premium – Who indemnifies (the rich Uncle) – Who fixes noncompliance – When

Tax Credits II Buyer indemnity of Seller – Breach of compliance/reporting covenants – Post-transfer noncompliance – Cancellation of bond – Cause Guarantor to deliver separate indemnity at closing Seller indemnity of Buyer – Pre-transfer noncompliance

Tax Credits III Buyer transfer within compliance period – Risk – Notice – Effect on indemnities – Consent to change of management agent

Pre-Closing Obligations Maintain normal course ops Stabilized assets: vacant units rent ready or allowance ($500)

Conditions to Close of Escrow I Seller – Approvals – Recapture Bond issued (or available for issuance but for payment of premium) – Experienced management agent – No default under Related Agreements – No Buyer default

Conditions to Close of Escrow II Buyer – Approvals – No Seller default – Issuance of title policy – No default under Related Agreements

Conditions to Close of Escrow III Deposits fully refundable for all unsatisfied conditions (e.g., Approvals)? Extension of Closing for Approvals? – Additional extension deposit (refundable vs. hard) – Additional purchase price

Close of Escrow Buyer delivers recapture indemnity agreement signed by SPE and the guarantor of the surety (the rich Uncle) – They are not parties to the PSA

Default and Remedies 15 day notice and cure period (excluding title) Seller default – Buyer gets (i) specific performance or (ii) refund of deposit and if intentional default documented third party costs capped at X. Thats it. Buyer default – Seller gets deposit and Buyers third party reports. Thats it. Cross default – default under one = all

Why Read the Boilerplate? Assignment – Only to SPE majority controlled/owned by Buyer. Buyer remains obligated. No flipping. Limited liability – principals excluded.

KEY ISSUES IN DOCUMENTING THE Y10-15 FEE SALE The Sellers Perspective Allen Lynch Nixon Peabody LLP 100 Summer Street Boston, MA