14-20 Cedar Glen Bond Ordinance Addendums

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(c) The provision of financial assistance to be made available to it under the Loan Agreement and the commitments therefor made by the Issuer have induced the Borrower to undertake the transactions contemplated by the Loan Agreement; (d) It presently intends to use or operate the Project in a manner consistent with the Act and in accordance with the Regulatory Agreement for the life of the Bonds or for such longer period as may be required by the Regulatory Agreement and knows of no reason why the Project will not be so operated. If, in the future, while the Bonds are outstanding, there is a cessation of that operation, it will use its best efforts to resume that operation or accomplish an alternate use by the Borrower or others approved by the Issuer which will be consistent with the Act and the Regulatory Agreement; (e) The Project will be completed in accordance with the Plans and Specifications (as defmed in the Indenture) and the portion of the Project funded with the proceeds of the Bonds will constitute a qualified residential rental project within the meaning of Section 142(d) of the Code and will be operated and maintained in such manner as to conform in all material respects with all applicable zoning, planning, building, environmental and other applicable Governmental regulations and as to be consistent with the Act; (f) The Project will be located entirely within the boundaries of the Issuer's jurisdiction; (g) At least 95% of the net proceeds of the Bonds (as defined in Section 150 of the Code) will be used to provide a qualified residential rental project (as defmed in Section 142(d) of the Code), and the Borrower will not request or authorize any disbursement pursuant to the Loan Agreement, which, if paid,would result in less than 95%of the net proceeds of the Bonds being so used; (h) The costs of issuance financed by the Bonds will not exceed 2% of the proceeds of the Bonds (within the meaning of Section 147(g)of the Code), and the Borrower will not request or authorize any disbursement pursuant to the Loan Agreement or otherwise, which, if paid, would result in more than 2% of the proceeds of the Bonds being so used. Except as permitted by Treasury Regulations 1.148- 6(d)(3)(ii),none of the proceeds of the Bonds will be used for working capital purposes; and (i) The proceeds of the Bonds will be used exclusively to pay costs that (i) are (A) capital expenditures (as defined in Section 1.150-1(a) of the Code's regulations) and (B) not made for the acquisition of existing property, to the extent prohibited in Section 147(d) of the Code, and (ii) are made exclusively with respect to a"qualified residential rental project"within the meaning of Section 142(d) of the Code and that for the greatest number of buildings the proceeds of the Bonds will be deemed allocated on a pro rata basis to each building in the Project and the land on which it is located so that each building and the land on which it is located will have been financed fifty percent(50%) or more by the proceeds of the Bonds for the purpose of complying with Section 42(h)(4)(B) of the Code; provided, however, the foregoing representation, covenant and warranty is made for the benefit of the Borrower and its members and neither the Trustee nor the Issuer will have any obligation to enforce this covenant nor will they incur any liability to any person, including without limitation, the Borrower, the members of the Borrower, any other affiliate of the Borrower or the holders of the Bonds for any failure to meet the intent expressed in the foregoing representation, covenant and warranty; and provided further, failure to comply with this representation, covenant and warranty will not constitute a default or event of default under the Loan Agreement or the Indenture. The Borrower acknowledges that the representations and covenants in the Loan Agreement made by the Borrower have been expressly and specifically relied upon by the Issuer in determining to make the Loan to the Borrower and the Loan would not have been made but for such representations and covenants. -27-