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HomeMy WebLinkAbout11289-26 Authorizing the City to Fund Its Taxable Economic Development Revenue Note, Series 2026 (Beacon Heights Project) and Approving and Authorizing Other Actions in Respect Thereto ORDINANCE No . 11289-26 Passed by the Common Council of the City of South Bend, Indiana June 22, 20 26 Attest:_ 4/ ---- City Clerk ianca L. Tirado Attest: C;& President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana June 29, 20 26 City Clerk Bianca irado Approved and signed by me J vh*. 17 20 26 I if ifiA ------ Mayor '''..--.UT if . 4,� 0 A ��sil'i'J►ii7 �O 'W � ,-a) ,..N N '%)% eCI ‘'4‘ 4.4 ,1•114 1865 2"D SUBSTITUTE BILL NO. 37-26 ORDINANCE NO. 11289-26 AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING A DIRECT LOAN TO THE DEVELOPER OF AN ECONOMIC DEVELOPMENT FACILITY (BEACON HEIGHTS PROJECT) AND APPROVING OTHER MATTERS IN CONNECTION THEREWITH STATEMENT OF PURPOSE AND INTENT The City of South Bend, Indiana (the "City"), is a municipal corporation and political subdivision of the State of Indiana and by virtue of I.C. 36-7-11.9, I.C. 36-7-12 and I.C. 36-7-14 (collectively, the"Act"), is authorized and empowered to adopt this ordinance (this "Ordinance") and to carry out its provisions. The Act declares that the financing and refinancing of economic development facilities(as defined in the Act) constitutes a public purpose. Pursuant to the Act, the City is authorized to make loans for the purpose of financing, reimbursing or refinancing all or a portion of the costs of acquisition, construction, renovation, installation and equipping of economic development facilities in order to foster diversification of economic development and creation or retention of opportunities for gainful employment in or near the City. Beacon Apartments Preservation LLC, an Indiana limited liability company (the "Developer")has informed the City that it desires to construct,renovate and/or rehabilitate certain economic development facilities within the City which will consist of up to one hundred seventy- four(174) affordable housing rental units in the existing Beacon Heights development in the River West Development Area in the City,with an approximate total redevelopment cost of Forty-Seven Million Dollars ($47,000,000) including a private investment of no less than Forty-Seven Million Dollars ($47,000,000) to be expended by the Developer (collectively, the "Project"), and has requested that the City make a loan to the Developer for the purposes of financing or reimbursing the Developer for a portion of the costs of construction, renovation and/or rehabilitation of the Project. The Project will be located in or physically connected to, and will directly serve and benefit,the River West Development Area and the River West Development Area Allocation Area (the"Allocation Area"). The Developer has requested from the City and the City of South Bend Economic Development Commission (the "Commission") that the City make a loan to the Developer pursuant to the Act in a total amount not to exceed One Million Two Hundred Fifty Thousand Dollars ($1,250,000) for the purpose of financing or reimbursing a portion of the costs of the Project (the "Loan") as described in the proposed Financing and Loan Agreement between the City and the Developer(the"Loan Agreement"). The completion of the Project will result in the creation of jobs, the diversification of industry and the creation of business opportunities in the City. Pursuant to I.C. § 36-7-12-24,the Commission published notice of a public hearing on,the proposed financing of a portion of the Project costs (the"Public Hearing"). On the date specified in the notice of the Public Hearing, the Commission conducted the Public Hearing, and adopted its evaluative report and resolution, which have been transmitted to the Common Council, finding that the financing of a portion of the Project complies with the purposes and provisions of the Act and that such financing will be of benefit to the health and welfare of the City and its citizens. The Commission has performed all actions required of it by the Act preliminary to the adoption of this Ordinance and has approved and forwarded to the Common Council the forms of: (1) the Loan Agreement; (2) the Funding and Reimbursement Agreement (the "Funding Agreement") between the City and the South Bend Redevelopment Commission (the "Redevelopment Commission"); and (3) this Ordinance (the Loan Agreement, the Funding Agreement, and this Ordinance, collectively, the"Financing Agreements"). Pursuant to Indiana Code 36-7-14-39(b)(4), the Redevelopment Commission may use certain incremental property taxes, among other purposes, to reimburse the City for expenditures (including loans)made for local public improvements(which include buildings,parking facilities, and all expenses reasonably incurred in connection with the acquisition and redevelopment of property) that are physically located in or physically connected to the Allocation Area. The Redevelopment Commission has adopted its Resolution No. 3672 on June 11, 2026, determining, subject to appropriation by the Redevelopment Commission, to make available tax increment revenues on deposit in the allocation fund for the Allocation Area(the"River West TIF Revenues") to simultaneously reimburse the City for its costs incurred to fund the Loan to the Developer with respect to the Project. NOW,THEREFORE,BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: SECTION I. Findings; Public Benefits. The Common Council hereby finds and determines that the Project involves the acquisition and construction of an"economic development facility" as that phrase is used in the Act; that the Project will increase employment opportunities and increase diversification of economic development in the City, will improve and promote the economic stability, development and welfare in the City, will encourage and promote the expansion of industry, trade and commerce in the City and the location of other new industries in the City; that the public benefits to be accomplished by the making of the Loan to the Developer to finance and/or reimburse Project costs, intending to overcome insufficient employment opportunities,insufficient diversification of industry and lack of adequate housing,are greater than the cost of public works or services (as that phrase is used in the Act) which will be required by the Project; and,therefore, that the financing of a portion of the Project by the making the Loan to the Developer under the Act: (i) will be of benefit to the health and general welfare of the City; and(ii) complies with the Act. SECTION II. Approval of Financing. The proposed financing of the Project by the funding of the Loan to the Developer under the Act, in the form that such financing was approved by the Commission, is hereby approved. SECTION III. Terms of the Loan. (a) A portion of the costs of the Project will be funded by the Loan to the Developer. The City shall fund the Loan in the aggregate principal amount not to exceed One Million Two Hundred Fifty Thousand Dollars($1,250,000),from River West TIF Revenues then on deposit in the allocation fund for the Allocation Area, and made available by the Redevelopment Commission to the City for the purposes of making the Loan to the Developer under the Act and the terms of the Loan Agreement. The Loan shall (i) mature no later than December 31, 2056, on the date set forth in the final Loan Agreement (the "Maturity Date"), (ii) bear no interest, except as provided herein, and (iii) be secured by the pledge of an unsecured promissory note of the Developer. Subject to the Unavoidable Delay provisions of the Loan Agreement, the principal of the Loan may be forgiven, in the sole discretion of the City, following the expiration of the Qualified Project Period (as defined in the Loan Agreement) and subject to the conditions contained in Section 4.3 of the Loan Agreement. In the event that the Developer abandons the Project or otherwise fails to proceed to substantially complete the Project as required by the Loan Agreement and the Development Agreement between the Redevelopment Commission and the Developer (the "Development Agreement"), the repayment of any outstanding amount of the Loan(the"Outstanding Amount")will be on a date not later than thirty (30) days from the date when the City's Department of Community Investment, on behalf of the City,provides written notice to the Developer that, in its sole discretion, it has determined that the Developer has abandoned or failed to proceed with the Project as required by the Loan Agreement and the Development Agreement(the date of such written notice being the"Trigger Date")subject 2 in all respects to the rights of Developer's senior lenders. Interest will begin to accrue on the Outstanding Amount beginning on the Trigger Date at the Prime Rate (as defined in the Loan Agreement)plus three percent(3.0%)until the Outstanding Amount is fully paid by the Developer. In the event that the Loan is forgiven, it is hereby acknowledged that the consideration received by the City for the Loan being forgiven is the completion of the Project by the Developer and the economic benefits resulting to the City therefrom. (b) The Loan does not and shall never constitute an indebtedness of,or a charge against the general credit or taxing power of,the City. Forms of the Financing Agreements are before this meeting and are by this reference incorporated in this Ordinance, and the Clerk of the City is hereby directed, in the name and on behalf of the City, to insert them into the minutes of the Common Council and to keep them on file. SECTION IV. Execution and Delivery of Financing Agreements. The Mayor, the Clerk and the Controller of the City are hereby authorized and directed, in the name and on behalf of the City,to execute or endorse and deliver the Financing Agreements, submitted to the Common Council, which are hereby approved in all respects. SECTION V. Changes in Financing Agreements. The Mayor, the Clerk and the Controller of the City are hereby authorized, in the name and on behalf of the City,without further approval of the Common Council or the Commission, to approve such changes in the Financing Agreements as may be permitted by the Act, such approval to be conclusively evidenced by their execution thereof. SECTION VI. General. The Mayor, the Clerk and the Controller of the City, and each of them, are hereby authorized and directed,in the name and on behalf of the City,to execute or endorse any and all agreements, documents and instruments,perform any and all acts, approve any and all matters, and do any and all other things deemed by them, or either of them, to be necessary or desirable in order to carry out and comply with the intent, conditions and purposes of this Ordinance(including the preambles hereto and the documents mentioned herein), the Project, the making of the Loan, and the securing of the Loan under the Financing Agreements, and any such execution, endorsement, performance or doing of other things heretofore effected be, and hereby is, ratified and approved. SECTION VII. Counsel for the Developer will notify the Attorney for the South Bend Common Council,in writing,of the status of litigation involving the Owner's project at PS90 in Harlem, New York. SECTION VIII. The Developer will report to the Common Council in person or virtually, at a Common Council meeting, every six (6) months, together with any resident who also desire to appear and speak, on the status of the project. SECTION IX. Binding Effect. The provisions of this Ordinance and the Financing Agreements shall constitute a binding contract between the City and the Developer, and after making the Loan, this Ordinance shall not be repealed or amended in any respect which would adversely affect the rights of the Developer. SECTION X. Repeal. All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION XI. Effective Date. This Ordinance shall be in full force and effect immediately upon adoption and compliance with I.C. 36-4-6-14. SECTION XII. Copies of Financing Agreements on File. Two copies of the Financing Agreements incorporated into this Ordinance were duly filed in the office of the Clerk of the City, and are available for public inspection in accordance with I.C. 36-1-5-4. [Signature Page Follows] 3 Duly passed and adopted on this ZZ day of 5466 , 2026 by the Common Council of the City of South Bend, Indiana. Canneth J. Lee, Cou it President South Bend Common Council Attest: Bianca L. Tirado, C' C erk Office of the City erk Presented by me, the undersigned Clerk of the City of South Bend, to the Mayor of the City of South Bend, Indiana on the 24** day of JN„e. , 2026, at 4 o'clock .m. ianca L. Tira , i Clerk Office of the City lerk Approved and signed by me on the ZA day of liN t , 2026, at y o'clock r .m. ,,,,,---- Jame ueller, Mayor City of South Bend, Indiana DMS 5274458Iv2 4 FINANCING AND LOAN AGREEMENT between CITY OF SOUTH BEND,INDIANA and BEACON APARTMENTS PRESERVATION LLC Re: CITY OF SOUTH BEND,INDIANA (BEACON HEIGHTS PROJECT) Dated as of July 1,2026 FINANCING AND LOAN AGREEMENT THIS FINANCING AND LOAN AGREEMENT made and entered into as of July 1,2026, by and between the City of South Bend, Indiana, a municipal corporation and political subdivision existing under the laws of the State of Indiana(the "City"), and Beacon Apartments Preservation LLC, an Indiana limited liability company (the "Borrower"), under the following circumstances summarized in the following recitals(the capitalized terms not defined in the recitals are as defined in Article I hereof): A. Indiana Code, Title 36,Article 7, Chapters 11.9 and 12, each as supplemented and amended (collectively, the "Act"), authorizes and empowers the City to make loans to provide funding for economic development projects and facilities and vests the City with powers that may be necessary to enable it to accomplish such purposes. B. The Borrower has requested a certain economic development incentive from the City in the form of a loan to the Borrower in the amount not to exceed One Million Two Hundred Fifty Thousand Dollars ($1,250,000) (the "Loan"), to finance a portion of the construction, renovation and/or rehabilitation of economic development projects and facilities within the meaning of the Act, consisting of the construction, renovation and/or rehabilitation of up to one hundred seventy-four (174) affordable housing rental units in the existing Beacon Heights development in the River West Development Area in the City, with an approximate total redevelopment cost of Forty-Seven Million Dollars ($47,000,000.00) including a private investment of no less than Forty-Seven Million Dollars ($47,000,000.00) to be expended by the Borrower(collectively, the"Project"). C. The City believes that developing the Project as described herein is in the best interests of the health, safety and welfare of the City and its residents and complies with the public purposes and provisions of the Act, and based upon the information presented to the City by the Borrower, the City has determined that the Project constitutes an economic development project and an economic development facility as defined by applicable law. D. The City desires to facilitate the development of the Project by making the Loan to the Borrower from available funds of the City and the Redevelopment Commission(as hereinafter defined)to finance a portion of the Project. E. This Loan Agreement provides for the repayment by the Borrower of the Loan and further provides for the Borrower's repayment obligation to be evidenced by the promissory note in substantially the form attached as Exhibit A hereto (the "Note"), unless the Loan is forgiven upon satisfaction of the conditions set forth in Section 4.3 hereof. F. The parties hereto agree that it is of mutual benefit for the parties hereto to enter into this Agreement relating to the Project and the Loan that will include the commitments of each of the parties. G. The South Bend Redevelopment Commission, for and on behalf of the City of South Bend, Department of Redevelopment, and the Borrower have entered into a Development Agreement dated as of the date hereof(the "Development Agreement") pursuant to which the parties agreed to their respective commitments with respect to the development of the Project. NOW,THEREFORE, in consideration of the premises and the mutual representations and agreements hereinafter contained, the City and the Borrower agree as follows: ARTICLE I. DEFINITIONS Section 1.1. Use of Defined Terms. In addition to the words and terms defined elsewhere in this Agreement or by reference to another document, the words and terms set forth in Section 1.2 hereof shall have the meanings set forth therein unless the context or use clearly indicates another meaning or intent. Such definitions shall be equally applicable to both the singular and plural forms of any of the words and terms defined therein. Section 1.2. Definitions. As used herein: "Act"means,collectively, Indiana Code 36-7-11.9 and 36-7-12,as enacted and amended. "Agreement" means this Financing and Loan Agreement as amended or supplemented from time to time. "Bond Regulatory Agreement" means that certain Regulatory Agreement or similar agreement to be executed by the Borrower, as the same may be amended, restated, supplemented or otherwise modified from time to time, relating to the tax-exempt bonds to be issued to finance the Project and imposing certain income and rent restrictions on the Project pursuant to Section 142(d)of the Internal Revenue Code of 1986, as amended. "Borrower" means Beacon Apartments Preservation LLC, an Indiana limited liability company, and its lawful successors and assigns to the extent permitted by this Agreement and the Development Agreement. "Business Day"means any day other than a Saturday, Sunday,or a day on which banks in the State of Indiana or the Federal Reserve Bank of Chicago are authorized or required by law or executive order to be closed. "City" means the City of South Bend, Indiana, a municipal corporation and political subdivision existing under the laws of the State of Indiana. "Closing Date" mean July_, 2026. "Common Council"means the Common Council of the City. "Completion Date" means the date of completion of the Project evidenced in accordance with the requirements of Section 3.2 hereof. "Designated Representative" means Jeffrey Moelis, Adam Hellegers, Eben Ellerston and/or Carrie Van Syckel or the person at the time designated to act on behalf of the Borrower by 2 written certificate furnished to the City and signed on behalf of the Borrower by a duly authorized officer. That certificate may designate an alternate or alternates. In the event that all persons so designated become unavailable or unable to act and the Borrower fails to designate a replacement within 10 days after such unavailability or inability to act, the City may appoint an interim Designated Representative until such time as the Borrower designates that person. "Development Agreement" means the Development Agreement, dated as of the date hereof, by and between the Borrower and the City of South Bend, Department of Redevelopment, acting by and through its governing body, the Redevelopment Commission. "Event of Default"means any of the events described as an Event of Default in Section 6.1 hereof. "Land Use Restriction Agreement"means that certain Land Use Restriction Agreement or similar agreement to be executed by the Borrower, as the same may be amended, restated, supplemented or otherwise modified from time to time, imposing certain income and rent restrictions on the Project pursuant to Section 42 of the Internal Revenue Code of 1986, as amended. "Loan"means the loan by the City to the Borrower pursuant to the terms of this Agreement. "Mandatory Project Completion Date" means December 31, 2029, or as agreed to by the Borrower or the Redevelopment Commission pursuant to Section 3.3 of the Development Agreement, subject to the Unavoidable Delay provisions of Section 7.12 of this Agreement and Force Majeure provisions of Section 6.2 of the Development Agreement. "Maturity Date"means December 31, 2056. "Note" means the Borrower's promissory note in the form attached as Exhibit A hereto, which shall be unsecured. "Notice Address"means: As to the City: City of South Bend Department of Community Investment 215 S. Dr. Martin Luther King,Jr. Blvd., Suite 500 South Bend,IN 46601 Attention: Executive Director With a copy to: South Bend Legal Department 215 S. Dr. Martin Luther King,Jr. Blvd., Suite 600 South Bend,IN 46601 Attn: Corporation Counsel As to the Borrower: Beacon Apartments Preservation LLC 3 2 Park Avenue, 23rd Floor New York, New York 10016 Attention: Jeffrey Moelis and Adam Hellegers, Esq. Email:jmoelis@lmdp.com and ahellegers@lmdp.com With a copy to: Cohen Liuzzo PLLC 88 Pine Street, Suite 1430 New York, New York 10005 Attention: Anthony Bargnesi, Esq. and Eleor Cohen, Esq. Email: abargnesi@cohenliuzzo.com and ecohen@cohenliuzzo.com As to Investor Member: Cinnaire Fund for Housing Limited Partnership 45 c/o Cinnaire 45, LLC 1118 South Washington Lansing,Michigan48910 With a copy to Kutak Rock LLP 1650 Farnam Street Omaha,NE 68102 Attn: Asher R. Ball or such additional or different address,notice of which is given under Section 7.2 hereof. "Ordinance" means Ordinance No. 36-27 of the Common Council of the City adopted on June 22, 2026, authorizing the Loan and the execution and delivery of this Agreement. "Person" or words importing persons mean firms, associations, partnerships (including without limitation, general and limited partnerships), limited liability companies,joint ventures, societies, estates, trusts, corporations, public or governmental bodies, other legal entities and natural persons. "Project" has the meaning set forth in Recital B hereof. "Redevelopment Commission"means the South Bend Redevelopment Commission. "State"means the State of Indiana. Section 1.3. Interpretation. Any reference herein to the City, to the Common Council, to the Redevelopment Commission, or to any member or officer of the City includes entities or officials succeeding to their respective functions, duties or responsibilities pursuant to or by operation of law or lawfully performing their functions. Any reference to a section or provision of the Constitution of the State or the Act, or to a section,provision or chapter of the Indiana Code or to any statute of the United States of America, 4 includes that section, provision or chapter or statute as amended,modified, revised, supplemented or superseded from time to time;provided,that no amendment,modification,revision, supplement or superseding section, provision or chapter or statute shall be applicable solely by reason of this provision, if it constitutes in any way an impairment of the rights or obligations of the City or the Borrower under this Agreement. Unless the context indicates otherwise, words importing the singular number include the plural number, and vice versa; the terms "hereof', "hereby", "herein", "hereto", "hereunder" and similar terms refer to this Agreement; and the term "hereafter" means after, and the term "heretofore" means before, the date of the Loan. Words of any gender include the correlative words of the other genders, unless the sense indicates otherwise. The Form of Promissory Note, attached hereto as Exhibit A, is by reference made a part hereof. Section 1.4. Captions and Headings. The captions and headings in this Agreement are solely for convenience of reference and in no way define, limit or describe the scope or intent of any Articles, Sections, subsections, paragraphs, subparagraphs or clauses hereof. ARTICLE II. REPRESENTATIONS; LOAN TO THE BORROWER Section 2.1. Representations of the City. The City represents and warrants that: (a) The City is a municipal corporation organized and existing under the laws of the State. Under the provisions of the Act, the City is authorized to enter into the transactions contemplated by this Agreement and to carry out its obligations hereunder. The City has been duly authorized to execute and deliver this Agreement. (b) The City agrees to make the Loan to the Borrower in the amount of not to exceed $1,250,000 pursuant to the terms and conditions hereof and the Development Agreement for the costs associated with the acquisition, construction, reconstruction and/or rehabilitation of the Project to create additional employment opportunities in the City and to benefit the health, safety, morals and general welfare of the citizens of City and the State. Section 2.2. Representations and Covenants of the Borro«er. The Borro«er represents and warrants,as of the date hereof,that: (a) It is an Indiana limited liability company duly organized and validly existing under the laws of the State and authorized to do business in the State, is not in violation of any laws in any manner material to its ability to perform its obligations under this Agreement and the Note, has full power to enter into and perform its obligations under this Agreement and the Note, and by proper action has duly authorized the execution and delivery of this Agreement and the issuance of the Note. 5 (b) All of the proceeds from the Loan provided hereunder (including any income earned on the investment of such proceeds) will be used for costs of acquiring, constructing, reconstructing and/or rehabilitating the Project. (c) The provision of financial assistance to be made available to it under this Agreement from the proceeds of the Loan and the commitments therefor made by the City have induced the Borrower to undertake the Project and such Project will create additional jobs and employment opportunities within the boundaries of the City and result in the private investment of the Project of approximately Forty-Seven Million Dollars ($47,000,000). (d) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby including execution and delivery of the Note,nor the fulfillment of or compliance with the terms and conditions of this Agreement, conflicts with or results in a breach of the terms, conditions or provisions of the Borrower's Articles of Organization or any restriction or any agreement or instrument to which the Borrower is now a party or by which it is bound or to which any of its property or assets is subject or of any statute,order,rule or regulation of any court or governmental agency or body having jurisdiction over the Borrower or its property that will have a material and adverse effect on the Borrower, City or the Project, or constitutes a default under any of the foregoing that will have a material and adverse effect on the Borrower, City or the Project, or results in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of the Borrower under the terms of any instrument or agreement, except as set forth in this Agreement or in such manner as will not materially and adversely impair the ability of the Borrower to perform its obligations hereunder. (e) The execution, delivery and performance by the Borrower of this Agreement and the Note do not require the consent or approval of,the giving of notice to,the registration with,or the taking of any other action in respect of, any federal, state or other governmental authority or agency,not previously obtained or performed. (f) This Agreement and the Note have been duly executed and delivered by the Borrower and constitute the legal, valid and binding agreements of the Borrower, enforceable against the Borrower in accordance with their respective terms, except as may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights in general. The enforceability of the Borrower's obligations under said documents is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity). (g) The Borrower shall use commercially reasonable efforts to complete the rehabilitation of the Project by not later than the Mandatory Project Completion Date, subject to the Unavoidable Delay provisions of Section 7.12 of this Agreement and the Force Majeure provisions of Section 6.2 of the Development Agreement. The Borrower shall apply all of the proceeds of the Loan toward the costs of the Project and shall finance all remaining costs of the Project from other available funds of the Borrower, including, but not limited to, construction financing. (h) No portion of the proceeds of the Loan will be used to provide any private or commercial golf course,country club,massage parlor,tennis club,skating facility(including roller 6 skating, skateboard and ice skating), racquet sports facility(including any handball or racquetball court), hot tub facility, suntan facility, racetrack, airplane, skybox or other private luxury box, health club facility, facility primarily used for gambling or store, the principal business of which is the sale of alcoholic beverages for off premises consumption. (i) No litigation at law or in equity nor any proceeding before any governmental agency or other tribunal involving the Borrower is pending or, to the actual knowledge of the Borrower threatened,in which any liability of the Borrower is not adequately covered by insurance and in which any judgment or order would have a material and adverse effect upon the business or assets of the Borrower or would materially and adversely affect the Project, the validity of this Agreement or the performance of the Borrower's obligations thereunder or the transactions contemplated hereby. (j) No event has occurred and is continuing which with the lapse of time or the giving of notice would constitute an event of default under this Agreement or the Note. Section 2.3. Loan . The City will fund the Loan in full on the Closing Date, provided that the Borrower provides the City with at least ten (10) Business Days advance notice of said Closing Date, utilizing tax increment revenues then currently on deposit in the allocation fund for the River West Allocation Area of the River West Development Area available to the Borrower as provided herein (it being understood the total amount of the Loan shall not exceed $1,250,000). The Borrower acknowledges and agrees that such tax increment revenues are subject to appropriations thereof by the Redevelopment Commission. Such Loan is being evidenced by the execution and delivery by the Borrower of the Note substantially in the form attached hereto as Exhibit A. Within ninety (90) days after the Closing Date, and every ninety (90) days thereafter until all Project costs paid from the Loan have been reported, the Borrower shall submit to the City's Department of Community Investment (the "Department") a report detailing: (a) the costs of the Project paid from the Loan; (b) a summary of vendors and amounts paid to each; and (c) copies of paid invoices. ARTICLE III. COMPLETION OF THE PROJECT Section 3.1. Acquisition, Construction, Reconstruction, Rehabilitation, Equipping and Improving of Project. It is understood that improvements made for the Project are that of the Borrower and any contracts made by the Borrower with respect thereto shall acquire, construct, reconstruct and/or rehabilitate the Project.The Borrower shall use commercially reasonable efforts to construct,reconstruct and/or rehabilitate the Project with all reasonable dispatch and to complete the Project by no later than the Mandatory Project Completion Date, and shall pay when due all fees, costs and expenses incurred in connection with that acquisition,construction, reconstruction and/or rehabilitation from funds made available therefor. It is further understood that any contracts made by the Borrower with respect to the Project, whether construction contracts or otherwise,or any work to be done by the Borrower on the Project are made or done by the Borrower on its own behalf and not as agent or contractor for the City. Section 3.2. Completion Date. The Borrower shall notify the City of the Completion Date for the Project by a certificate signed by the Designated Representative stating: 7 (a) the date on which the Project is substantially completed, which shall be evidenced by the issuance of a temporary or permanent certificate of occupancy by the City (or its local equivalence), if the City provides such certificates of occupancy, (b) that all other facilities necessary in connection with the Project have been acquired, constructed, reconstructed, rehabilitated,equipped and improved, and (c) that to the date hereof, the acquisition, construction, reconstruction, rehabilitation, equipping and improvement of the Project and those other facilities have been accomplished in such a manner as to conform in all material respects with all applicable zoning,planning,building, environmental and other similar governmental regulations. The certificate shall be delivered as promptly as practicable after the occurrence of the events and conditions referred to in subsections(a)through(c)of this Section(the date of delivery of such certificate being, the "Completion Date"). The Project must be completed prior to the Mandatory Project Completion Date. ARTICLE IV. LOAN BY CITY; FORGIVENESS OF THE LOAN Section 4.1. Loan. The City hereby makes the Loan to the Borrower. Subject to the terms and conditions hereof, the Loan shall bear no interest and shall be evidenced by the Note. The Loan shall be non-recourse against the Borrower and the Project. Section 4.2. Payment of Principal, Premium and Interest. (a) Subject at all times to Section 4.3 hereof, the Borrower will duly and punctually pay the principal of, premium, if any, and interest on the Note at the rates, at the times and the places and in the manner mentioned in the Note and this Agreement according to the true intent and meaning thereof and hereof,until the principal of, premium, if any, and interest on the Note shall have been fully paid. (b) Subject at all times to Section 4.3 hereof, the Borrower also agrees to pay (i) all reasonable out of pocket expenses incurred in connection with the enforcement of any rights under this Agreement; and (ii) all other payments of whatever nature which the Borrower has agreed to pay or assume under the provisions of this Agreement;provided,however,that the Borrower may, without creating a default under this Agreement, contest in good faith the necessity for any such services and expenses and the reasonableness of any such fees, charges or expenses. (c) Subject at all times to Section 4.3 hereof, except as provided herein, the Borrower covenants and agrees with and for the express benefit of the City that all payments pursuant hereto and to the Note shall be made by the Borrower on or before the date the same become due,and the Borrower shall perform (in all material respects) all of its other obligations, covenants and agreements hereunder, without notice or demand (except as provided herein), and without abatement, deduction, reduction, diminution, waiver, abrogation, set-off, counterclaim, recoupment,defense or other modification(except for defenses and counter claims brought in good faith and excepting the defense of full payment and/or performance)or any right of termination or cancellation arising from any circumstance whatsoever,whether now existing or hereafter arising, and notwithstanding any damage to,or loss,theft or destruction of,the Project or any part thereof, 8 expiration of this Agreement, any failure of consideration or frustration of purpose, or whether with or without the approval of the City, any change in the tax or other laws of the United States of America, the State of Indiana, or any political subdivision of either thereof, any change in the City's legal organization or status, and regardless of the invalidity of any portion of this Agreement; and to the extent permitted by applicable law, the Borrower hereby waives the provisions of any statute or other law now or hereafter in effect impairing or conflicting with any of its obligations, covenants or agreements under this Agreement or which releases or purports to release the Borrower therefrom. Nothing in this Agreement shall be construed as a waiver by the Borrower of any rights or claims the Borrower may have against the City under this Agreement or otherwise, but any recovery upon such rights and claims shall be had from the City separately, it being the intent of this Agreement that the Borrower shall be unconditionally and absolutely obligated without right of set-off or abatement, to perform fully all of its obligations, agreements and covenants under this Agreement in all material respects for the benefit of the City. (d) Subject at all times to Section 4.3 hereof, the obligations of the Borrower to make the required payments and to perform and observe the other agreements on its part shall be absolute and unconditional,irrespective of any defense or any rights of set-off,recoupment or counterclaim it might otherwise have against the City(except for defenses and counter claims brought in good faith and excepting the defense of full payment and/or performance), and the Borrower shall pay absolutely during the term of this Agreement the payments to be made on account of the Loan and all other payments required thereunder free of any deductions and without abatement, diminution or set-off; and the Borrower: (i) will not suspend or discontinue any payments of the Loan; (ii) will perform and observe all of its other agreements contained in this Agreement; and(iii)will not terminate this Agreement for any cause,including,without limiting the generality of the foregoing, failure of the Borrower to complete the Project, the occurrence of any acts or circumstances that may constitute failure of consideration, commercial frustration of purpose, any change in the tax laws of the United States of America or of the State of Indiana or any political subdivision of either thereof, liability or obligation arising out of or connected with this Agreement. (e) Subject to receipt by the Borrower of sufficient insurance and/or condemnation proceeds, the Borrower shall be obligated to continue to pay all amounts specified herein and in the Note regardless of whether any portion of the Project is damaged, destroyed, or taken by condemnation, and there shall be no abatement of any such payments or other charges by reason of any such damage, destruction,or taking. Section 4.3. Forgiveness. Notwithstanding anything herein to the contrary, but subject to the Unavoidable Delay provisions of Section 7.12 of this Agreement, the principal of the Loan may be forgiven, in the sole discretion of the City,following the expiration of the Qualified Project Period (as defined in the Land Use Restriction Agreement); provided that, as a condition of any such forgiveness, the Borrower shall be in compliance with all of its obligations under the Land Use Restriction Agreement, the Bond Regulatory Agreement and the Development Agreement at the time of forgiveness. In the event the Loan is forgiven by the City,in its sole discretion,pursuant to this Section 4.3, it is hereby acknowledged that the consideration for the Loan is the completion of the construction, reconstruction and/or rehabilitation of the Project by the Borrower and the resulting economic benefits to the City. In the event that the Borrower abandons the Project or otherwise fails to proceed to substantially complete the Project by the Mandatory Project 9 Completion Date as required by this Agreement and the Development Agreement subject to the Unavoidable Delay provisions of Section 7.12 hereof and the Force Majeure provisions of Section 6.2 of the Development Agreement, the repayment of any outstanding amount of the Loan (the "Outstanding Amount") will be on a date not later than thirty (30) days from the date when the Department, on behalf of the City, provides written notice to the Borrower that, in its sole discretion, it has determined that the Borrower has abandoned or failed to proceed with the Project as required by this Agreement and the Development Agreement (the date of such written notice being the"Trigger Date")subject in all respects to the rights of Borrower's senior lenders. Interest will begin to accrue on the Outstanding Amount beginning on the Trigger Date at the Prime Rate plus three percent(3.0%)(where the"Prime Rate" shall mean the Prime Rate as published in The Wall Street Journal,and which is described as the base rate on corporate loans at large U.S. money center commercial banks, as such rate may vary from time to time, to be determined as of the Trigger Date) until the Outstanding Amount is fully paid by the Borrower. In the event The Wall Street Journal ceases to publish a Prime Rate, the City shall use a similar source to determine the Prime Rate. ARTICLE V. ADDITIONAL AGREEMENTS AND COVENANTS Section 5.1. Indemnification. The Borrower releases the City(including,but not limited to, members of the Common Council, the Economic Development Commission, and the Redevelopment Commission, and their respective attorneys, agents and employees) from, agrees that the City (including, but not limited to, members of the Common Council, the Economic Development Commission, and the Redevelopment Commission, and their respective attorneys, agents and employees) shall not be liable for, and indemnifies the City against, all actual, out of pocket liabilities, claims, costs and expenses, including reasonable attorneys' fees and expenses, imposed upon, incurred or asserted against the Common Council, Economic Development Commission or the Redevelopment Commission,on account of: (a)any loss or damage to property or injury to or death of or loss by any person that may be occasioned by any cause whatsoever pertaining to the construction, maintenance, operation and use of the Project; and (b) any claim, action or proceeding brought with respect to the matters set forth in(a)above. In case any action or proceeding is brought against the City in respect of which indemnity may be sought hereunder, the City promptly shall give notice of that action or proceeding to the Borrower, and the Borrower upon receipt of that notice shall have the obligation and the right to assume the defense of the action or proceeding;provided,that failure of the City to give that notice shall not relieve the Borrower from any of its obligations under this Section unless that failure prejudices the defense of the action or proceeding by the Borrower. At its own expense, the City may employ separate counsel and participate in the defense. The Borrower shall not be liable for any settlement made without its consent. The indemnification set forth above is intended to and shall include the indemnification of all affected officials, directors, officers and employees of the City, the Common Council, the Economic Development Commission and the Redevelopment Commission. That indemnification is intended to and shall be enforceable by the City to the full extent permitted by law. Notwithstanding anything herein,no indemnity shall be required hereunder for damages that result from the negligence,gross negligence, fraud or willful misconduct on the part of any of the parties 10 subject to indemnification hereby,nor shall the Borrower have any liability hereunder with respect to any claims or liability that arises from actions that first occur after the Borrower is no longer in possession of the Project. ARTICLE VI. EVENTS OF DEFAULT AND REMEDIES Section 6.1. Events of Default. Each of the following shall be an Event of Default: The Borrower shall fail to observe and perform in all material respects any agreement,term or condition contained in this Agreement or the Development Agreement, and the continuation of such failure for a period of thirty (30) days after notice thereof shall have been given to the Borrower by the City and received by it, or for such longer period as the City may agree to in writing; provided, that if the failure is of such nature that it can be corrected but not within the applicable period,that failure shall not constitute an Event of Default so long as the Borrower institutes curative action within the applicable period and diligently pursues that action to completion. The declaration of an Event of Default, and the exercise of remedies upon any such declaration, shall be subject to any applicable limitations of federal bankruptcy law affecting or precluding that declaration or exercise during the pendency of or immediately following any bankruptcy, liquidation or reorganization proceedings, and shall be subject in all respects to the rights of Borrower's senior lenders. To the extent permitted by applicable law, the Borrower hereby unconditionally waives diligence, presentment, protest, notice of dishonor, and notice of default of the payment of any amount at any time payable to the City under or in connection with the Loan except as required herein, including, but not limited to the first paragraph of this Section 6.1. All amounts payable under the Loan and the Note are payable with reasonable attorney fees and costs of collection and without relief from valuation and appraisement laws. Section 6.2. Remedies on Default. Whenever an Event of Default shall have happened and be subsisting past the expiration of any notice and cure period, any one or more of the following remedial steps may be taken: (a) The City may have access to, inspect, examine and make copies of the books, records, accounts and financial data of the Borrower pertaining to the Project; and (b) The City may pursue all remedies now or hereafter existing at law or in equity,plus recover all actual expenses including reasonable attorney fees as provided in Section 6.4 or to enforce the performance and observance of any other obligation or agreement of the Borrower hereunder. Notwithstanding the foregoing or any other provision in this Agreement, the City shall not be obligated to take any step that in its opinion will or might cause it to expend time or money or otherwise incur liability unless and until a satisfactory indemnity bond has been furnished to the City at no cost or expense to the City. 11 Section 6.3. No Remedy Exclusive. No remedy conferred upon or reserved to the City by this Agreement is intended to be exclusive of any other available remedy or remedies,but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement, or now or hereafter existing at law, in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair that right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the City to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than any notice required by law or for which express provision is made herein. Section 6.4. Attorneys'Fees and Costs of Collection. If a default by the Borrower or the City shall occur, the Prevailing Party shall, to the extent permitted by applicable law, be entitled to recover from the non-prevailing party all reasonable costs, actual expenses and attorneys' fees (including court costs and other expenses through all appellate levels) that it incurs in connection therewith. For purposes hereof, the term "Prevailing Party" includes a party who obtains legal counsel or brings any action against another party by reason of an alleged breach or default and obtains substantially the relief sought,whether by compromise, settlement or judgment. Section 6.5. No Waiver. No failure by the City to insist upon the strict performance by the Borrower of any provision hereof shall constitute a waiver of their right to strict performance and no express waiver shall be deemed to apply to any other existing or subsequent right to remedy the failure by the Borrower to observe or comply with any provision hereof. The City may waive any Event of Default hereunder. Section 6.6. Notice of Default. The Borrower shall notify the City promptly if it becomes aware of the occurrence of any Event of Default hereunder or of any fact, condition or event which, with the giving of notice or passage of time or both, would become an Event of Default. ARTICLE VII. MISCELLANEOUS Section 7.1. Term of Agreement. This Agreement shall be and remain in full force and effect from the date of Loan until such time as Loan shall have been fully paid or forgiven,pursuant to the terms hereof except for obligations of the Borrower under Sections 5.1 hereof, which shall survive any termination of this Agreement. Section 7.2. Notices. All notices, certificates, requests or other communications hereunder shall be in writing and shall be deemed to be sufficiently given when mailed by registered or certified mail,postage prepaid,and addressed to the appropriate Notice Address. The Borrower and the City,by notice given hereunder,may designate any further or different addresses to which subsequent notices, certificates, requests or other communications shall be sent. Section 7.3. Extent of Covenants of the City: No Personal Liability. All covenants, obligations and agreements of the City contained in this Agreement shall be effective to the extent authorized and permitted by applicable law. No such covenant, obligation or agreement shall be deemed to be a covenant, obligation or agreement of any present or future member, officer, agent 12 or employee of the City or the Common Council in other than his or her official capacity, and neither the members of the Common Council nor any official of the City shall be subject to any personal liability or accountability by reason of the covenants, obligations or agreements of the City contained in this Agreement. Section 7.4. Binding Effect. This Agreement shall inure to the benefit of and shall be binding in accordance with its terms upon the City, the Borrower and their respective permitted successors and assigns. This Agreement may be enforced only by the parties, their assignees and others who may,by law, stand in their respective places. Section 7.5. Amendments and Supplements. This Agreement may not be effectively amended, changed, modified, altered or terminated except as may be evidenced in a writing executed by the appropriate representatives of the City and the Borrower. Section 7.6. Execution Counterparts. This Agreement may be executed in any number of counterparts,each of which shall be regarded as an original and all of which shall constitute but one and the same instrument. Section 7.7. Severability. If any provision of this Agreement, or any covenant, obligation or agreement contained herein is determined by a court to be invalid or unenforceable, that determination shall not affect any other provision, covenant, obligation or agreement, each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained herein. That invalidity or unenforceability shall not affect any valid and enforceable application thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. Section 7.8. Successors and Assigns. Whenever in this Agreement any of the parties hereto is named or referred to, the successors and assigns of such party shall be deemed to be included and all the covenants, promises and agreements in this Agreement contained by or on behalf of the Borrower, or by or on behalf of the City, shall bind and inure to the benefit of the respective successors and assigns, whether so expressed or not. The Borrower may assign its interest in this Agreement to any affiliate of the Borrower(or any direct or indirect member of the Borrower) or any third party with the prior approval of the City, which approval shall not be unreasonably withheld,conditioned or delayed,and the Borrower may further mortgage and assign all of the Borrower's interest in this Agreement to secure mortgage loans or other indebtedness incurred by the Borrower with respect to the acquisition, construction, reconstruction, rehabilitation,equipping and improvement of the Project. The Borrower may not otherwise assign its interest in this Agreement without obtaining the prior approval of the City,which approval shall not be unreasonably withheld, conditioned or delayed. Notwithstanding any such assignment,the Borrower shall not be released from any liability or obligations hereunder. Notwithstanding anything to the contrary contained herein or in the Note, the following shall be permitted without consent of the City and shall not constitute an event of default or result in any fee: (i) the transfer of investor member interests in Borrower pursuant to the terms of Borrower's First Amended and Restated Operating Agreement ("Operating Agreement"); (ii) transfer of an interest in Cinnaire Fund for Housing Limited Partnership 45 to Affiliates of Cinnaire Corporation(including,but not limited to, a transfer to a fund in which an Affiliate of Cinnaire Corporation is a manager or 13 managing member); (iii) the removal and replacement of the managing member of the Borrower in accordance with the terms of the Operating Agreement; and/or (iv) an amendment of the Operating Agreement memorializing the transfers or removal described above. In addition to the foregoing, and notwithstanding anything to the contrary contained herein or in the Note, for the avoidance of doubt, the transfer of any direct or indirect interest in the Borrower to a constituent owner of the Borrower, including, but not limited to, the managing member of the Borrower, its managers, members, partners and/or shareholders (or any affiliate of the foregoing) shall be permitted without consent of the City and shall not constitute an event of default or result in any fee. Section 7.9. Third Party Beneficiary. The Borrower acknowledges and agrees that (i) the Redevelopment Commission is hereby deemed a third-party beneficiary of this Agreement and (ii) the terms of this Agreement may be enforced by the Redevelopment Commission. Section 7.10. Governing Law. This Agreement shall be deemed a contract made under the laws of the State and for all purposes shall be governed by and construed in accordance with the laws of the State without giving effect to its conflict of laws rules. Section 7.11. Dispute Resolution. The Borrower and the City agree to use their best efforts to resolve quickly and informally any disputes that may arise under this Agreement. In the event such informal means are unsuccessful, any such disputes shall be attempted to be resolved first by mediation in accordance with the Indiana Rules of Dispute Resolution;provided,however, the City may exercise any remedy available to it in the event the Borrower fails to pay, when due, any outstanding amount of the Loan. Any litigation commenced by either of the City or the Borrower related to or arising out of this Agreement must be filed in the state courts of St. Joseph County,Indiana. The Parties further consent to the personal jurisdiction by said courts over it and hereby expressly waive, in the case of any such action,any defenses thereto based on jurisdictions, venue or forum non conveniens. Section 7.12. Unavoidable Delay. In the event that the Borrower shall be delayed, hindered in or prevented from the performance of any act required under this Agreement by reason of any unusually inclement weather,strikes,lock-outs,labor troubles,inability to procure materials which could not have been reasonably anticipated and avoided by the Borrower, failure of power to the Project for reason other than acts of the Borrower or any person or party acting by, through or under the Borrower,restrictive governmental laws or regulations, act of God, fire,earthquake, flood, explosion, terrorism, action of the elements, war (declared or undeclared), police action, invasion, insurrection, riot, mob violence, sabotage, health pandemic or epidemic, the act, failure to act or default of the City, or other causes beyond the Borrower's reasonable control, then performance of such act shall be extended for a period necessitated by such delay. Section 7.13. Subordination and No Limitation on Mortgagee or Financing Party. Any and all rights of the City and obligations and liabilities of the Borrower under this Agreement and/or relating to the Loan shall be expressly subject and subordinate to any mortgage loans or other indebtedness incurred by the Borrower with respect to the acquisition, construction, reconstruction and/or rehabilitation of the Project. Notwithstanding anything in this Agreement to the contrary,(a)no provision of this Agreement shall restrict or otherwise limit(i)any foreclosure by or other transfer of title to any mortgagee or financing party of the Project, or (ii) any transfer 14 of ownership of any interest in the Borrower to such mortgagee or financing party or any constituent owner of the Borrower,and(b)in the event of any such foreclosure by or other transfer of title to any mortgagee or financing party,as permitted in clause(a)(i)above,any such mortgagee or financing party(or any party taking by,through or under any such mortgagee or financing party) shall take title to the Project free and clear of any responsibility, obligation and/or liability under this Agreement and/or the Loan and without liability for the responsibilities, obligations and/or liabilities of the Borrower under this Agreement and/or with respect to the Loan. Section 7.14. Limitation of Liability. Notwithstanding anything contained herein to the contrary,the parties hereby agree that(i) the obligations of the Borrower hereunder shall not be recourse to the members,partners, shareholders, agents or employees of the Borrower; (ii)no punitive, special, speculative, loss of profit or consequential damages shall be awarded in any suit,action or other proceeding arising out of or based upon this Agreement or the subject matter hereof; (iii) the Borrower shall not be liable to the extent any liability hereunder arose from the fraud, gross negligence or willful misconduct of the City, Commission or any of their agents and (iv)the Borrower shall not be liable for any liability hereunder that first arises after the Borrower is no longer in possession of the Project. [Signature Page Follows] 15 IN WITNESS WHEREOF, the City and the Borrower have caused this Agreement to be duly executed in their respective names, all as of the day and year first written above. City: CITY OF SOUTH BEND, INDIANA By: ayor ATT Clerk Borrower: BEACON APARTMENTS PRESERVATION LLC an Indiana limited liability company By: Name: Adam Hellegers Title: Authorized Signatory Signature Page to the Financing and Loan Agreement, dated as of July 1, 2026, between the City of South Bend, Indiana and Beacon Apartments Preservation LLC EXHIBIT A FORM OF PROMISSORY NOTE Original Principal: $1,250,000 Maturity Date: December 31, 2056 Interest Rate: 0%* FOR VALUE RECEIVED, the undersigned, Beacon Apartments Preservation LLC ("Borrower"), a limited liability company organized and existing under the laws of the State of Indiana, hereby promises to pay to the order of the City of South Bend, Indiana ("City"), in immediately available funds, the principal, interest, if any, and any other amounts due under the Financing and Loan Agreement, dated as of July 1, 2026, between the City and Borrower (the "Loan Agreement"), upon maturity or earlier under the terms of the Loan Agreement,unless this Promissory Note is forgiven in the sole discretion of the City pursuant to the Loan Agreement, at such place as the City may direct. In certain events and in the manner set forth in the Loan Agreement, payments due under this Promissory Note may be subject to forgiveness in the sole discretion of the City. This Promissory Note is issued pursuant to the Loan Agreement, and is entitled to the benefits, and is subject to the conditions thereof The Borrower's obligations under this Promissory Note are subject in all respects to the further provisions of the Loan Agreement. The obligations of the Borrower to make the payments required hereunder shall be absolute and unconditional without any defense or right of set-off, counterclaim or recoupment by reason of any default by the City under the Loan Agreement or under any other agreement between the Borrower or the City or out of any indebtedness or liability at any time owing to the Borrower by the City or for any reason, except for the forgiveness of the Loan as described in the Loan Agreement. This Promissory Note is the Note referred to in the Loan Agreement and is subject to, and is executed in accordance with,all of the terms, conditions and provisions thereof,including those respecting prepayments. In any case where the date of payment hereunder shall not be on a Business Day(as defined in the Loan Agreement), then such payment shall be made on the next succeeding Business Day with the same force and effect as if made on the date of payment hereunder. The Borrower hereby unconditionally waives diligence, presentment, protest, and notice of dishonor of the payment of any amount at any time payable to the City under or in connection with this Note. All amounts payable hereunder are payable with reasonable attorneys' fees and costs of collection and without relief from valuation and appraisement laws. All terms used in this Promissory Note which are defined in the Loan Agreement shall have the meanings assigned to them in the Loan Agreement. Section 7.14 of the Loan Agreement is hereby included by reference with the same force and effect as if set forth herein in its entirety. * Subject to Section 4.3 of the Loan Agreement A-l IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed and attested by its duly authorized officers or representatives. Dated: , 2026. BEACON APARTMENTS PRESERVATION LLC an Indiana limited liability company By: Name: Adam Hellegers Title: Authorized Signatory DMS 52595667v3 A-2 FUNDING AND REIMBURSEMENT AGREEMENT between CITY OF SOUTH BEND,INDIANA and CITY OF SOUTH BEND, INDIANA, REDEVELOPMENT DISTRICT Re: CITY OF SOUTH BEND,INDIANA (BEACON HEIGHTS PROJECT) Dated as of Jule 1, 2026 FUNDING AND REIMBURSEMENT AGREEMENT This FUNDING AND REIMBURSEMENT AGREEMENT, is made and entered into as of July 1, 2026(the"Agreement") by and between the CITY OF SOUTH BEND, INDIANA (the "City"),a municipal corporation duly organized and validly existing under the laws of the State of Indiana (the "State"), and the SOUTH BEND REDEVELOPMENT COMMISSION (the "Redevelopment Commission"), as governing body of the CITY OF SOUTH BEND REDEVELOPMENT DISTRICT, a special taxing district duly organized and validly existing under the laws of the State of Indiana(the"District"). WHEREAS, Indiana Code 36-7-11.9 and 36-7-12, as supplemented and amended (collectively, the "Act"), authorizes and empowers the City to make direct loans to users or developers(each as defined under the Act) for the cost of acquisition, construction, or installation of economic development facilities, with such loans to be secured by the pledge of one or more taxable or tax-exempt debt obligations of the users or developers, for diversification of economic development and promotion of job opportunities in or near such City and vests the City with powers that may be necessary to enable it to accomplish such purposes; and WHEREAS, the City, upon finding that the Project (as hereinafter defined) and the proposed financing of the construction thereof will create additional employment opportunities in the City; will benefit the health, safety, morals, and general welfare of the citizens of the City and the State; and will comply with the purposes and provisions of the Act, adopted an ordinance approving a loan to Beacon Apartments Preservation LLC, an Indiana limited liability company (the"Borrower"); and WHEREAS, the City intends to make a direct loan to the Borrower, pursuant to the provisions of the Act,this Agreement,and the Financing and Loan Agreement, dated as of July 1, 2026,between the City and the Borrower(the"Loan Agreement"), all for the purpose of financing a portion of the Project; and WHEREAS,pursuant to Indiana Code 36-7-14-39(b)(4), the Redevelopment Commission may use certain incremental property taxes to reimburse the City for expenditures(including loans) made for local public improvements(which include buildings and all expenses reasonably incurred in connection with the acquisition and redevelopment of property)that are physically located in or physically connected to the Allocation Area(as defined herein); and WHEREAS,pursuant to Resolution No.3672,adopted by the Redevelopment Commission on June 11,2026,a copy of which is attached hereto as Exhibit A(the"Authorizing Resolution"), the Commission has authorized the use of Tax Increment Revenues(as defined herein), in the total amount of not to exceed One Million Two Hundred Fifty Thousand Dollars ($1,250,000) from moneys then currently on deposit in the Allocation Fund(as defined herein), in order to reimburse the City for expenditures made, or to be made, to finance a portion of the Project costs. NOW THEREFORE, in consideration of the premises, the covenants and agreements hereinafter contained, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the District hereby agree and covenant. (End of Recitals) ARTICLE I. DEFINITIONS AND EXHIBITS Section 1.1. Terms Defined. As used in this Agreement,the following terms shall have the following meanings unless the context clearly otherwise requires: "Act" means, collectively, Indiana Code 36-7-11.9, Indiana Code 36-7-12, Indiana Code 36-7-14, and Indiana Code 36-7-25, each as amended. "Allocation Area" means the River West Development Area Allocation Area previously established by the Redevelopment Commission within the River West Development Area in accordance with Indiana Code 36-7-14-39 for the purposes of capturing incremental ad valorem real property taxes levied and collected on all taxable property in such allocation area. "Allocation Fund" means the River West Development Area Allocation Area Allocation Fund established under Indiana Code 36-7-14 for the Tax Increment Revenues collected in the Allocation Area. "Authorizing Resolution"shall have the meaning set forth in the recitals hereof. "Borrower" means Beacon Apartments Preservation LLC, an Indiana limited liability company,duly organized and validly existing under the laws of the State of Indiana and qualified to do business in the State of Indiana, or any successors thereto. "City"means the City of South Bend,Indiana,a municipal corporation duly organized and validly existing under the laws of the State. "Costs of Construction" means the costs of providing for an "economic development facility"as defined and set forth in the Act,including any legal,accounting,management,program or consulting fees and expenses of the Borrower, the City or the District, and any other costs permitted under the Act related thereto. "Development Agreement" means the Development Agreement, dated as of July 1, 2026, by and between the Borrower, the City and the Redevelopment Commission. "District" means the Redevelopment District of the City. "Loan" means the loan from the City to the Borrower in the original aggregate principal amount of not to exceed$1,250,000, which will be made under the terms of the Loan Agreement, the proceeds of which will be used by the Borrower to pay a portion of the Costs of Construction for the Project. "Loan Agreement" means the Financing and Loan Agreement, dated as of July 1, 2026, between the City and the Borrower. "Project" means the construction, renovation and/or rehabilitation of up to one hundred seventy-four(174) affordable housing rental units in the existing Beacon Heights development in the River West Development Area in the City, with an approximate total redevelopment cost of Forty-Seven Million Dollars ($47,000,000) including a private investment of no less than Forty- Seven Million Dollars($47,000,000)to be expended by the Borrower. 2 "Project Fund" means the Project Fund established and held by the City or by a financial institution or custodian selected by the City for such purpose, as the case may be, for purposes of paying Costs of Construction of the Project. "Redevelopment Commission" means the South Bend Redevelopment Commission, governing body of the District. "River West Development Area"means the economic development area within the District previously established by the Redevelopment Commission in accordance with Indiana Code 36- 7-14. "State"means the State of Indiana. "Tax Increment Revenues" means the property tax proceeds received by the Redevelopment Commission which are derived from the assessed valuation of real property in the Allocation Area in excess of the assessed valuation described in Indiana Code 36-7-14-39(b)(1) and Indiana Code 36-7-14-39(b)(2), as such statutory provision exists on the date of execution of this Agreement. Section 1.2. Exhibits. The following Exhibits are attached to and by reference made a part of this Agreement. Exhibit A. Copy of Authorizing Resolution. (End of Article I) 3 ARTICLE II. REPRESENTATIONS; LOAN TO BORROWER Section 2.1. Representations by City. The City represents and warrants that: (a) The City is a municipal corporation organized and existing under the laws of the State of Indiana. Under the provisions of the Act, the City is authorized to enter into the transactions contemplated by this Agreement and to carry out its obligations hereunder. City has been duly authorized to execute and deliver this Agreement. City agrees that it will do or cause to be done all things within its control and necessary to preserve and keep in full force and effect its existence. (b) Concurrently with the execution and delivery of the Loan Agreement and this Agreement, the City agrees to make the Loan to the Borrower (upon the District making funds available to simultaneously reimburse the City for such purpose in accordance with the terms of this Agreement) for the purpose of financing a portion of the Costs of Construction for the Project, in order to create additional employment opportunities in the City and to benefit the health, safety, morals and general welfare of the citizens of the City and the State. Section 2.2. Representations by Redevelopment District. The Redevelopment Commission, governing body for the District, represents and warrants that: (a) The Redevelopment Commission is the governing body of the District, which is a special taxing district organized and existing under the laws of the State of Indiana. Under the provisions of the Act, the Redevelopment Commission is authorized to enter into the transactions contemplated by this Agreement and to carry out its obligations hereunder. The Redevelopment Commission has been duly authorized to execute and deliver this Agreement. The Redevelopment Commission agrees that it will do or cause to be done all things within its control and necessary to preserve and keep in full force and effect its existence. (b) In order to simultaneously reimburse the City for its costs incurred, or to be incurred,in providing the Loan pursuant to Section 2.3 of the Loan Agreement to finance a portion of the Costs of Construction for the Project, the Redevelopment Commission agrees that it will consider appropriations from the Tax Increment Revenues then currently on deposit in the Allocation Fund for the purpose of paying to,or upon the order of, the City for depositing into the Project Fund, with the sum of such appropriations not to exceed an aggregate principal amount equal to One Million Two Hundred Fifty Thousand Dollars($1,250,000). (c) The Redevelopment Commission acknowledges and agrees that the Loan being made by the City to the Borrower is subject to forgiveness in the sole discretion of the City and upon the Borrower's satisfaction of certain conditions set forth in Section 4.3 of the Loan Agreement. (End of Article II) 4 ARTICLE III. MISCELLANEOUS PROVISIONS Section 3.1. Supplements and Amendments to this Agreement. The Borrower, the City and the District may from time to time, upon the written agreement of all parties hereto, enter into such supplements and amendments to this Agreement as to them may seem necessary or desirable to effectuate the purposes or intent hereof, which consent and agreement to such supplement or amendment hereto may be withheld in the sole discretion of any party. Section 3.2. Agreement for Benefit of Parties Hereto. Nothing in this Agreement, express or implied, is intended or shall be construed to confer upon, or to give to, any person other than the parties hereto, and their successors and assigns, any right, remedy or claim under or by reason of this Agreement or any covenant, condition or stipulation hereof; and the covenants, stipulations and agreements in this Agreement contained are and shall be for the sole and exclusive benefit of the parties hereto, and their successors and assigns. Section 3.3. Severability. In case any one or more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. Section 3.4. Counterparts. This Agreement is being executed in any number of counterparts, each of which is an original and all of which are identical. Each counterpart of this Agreement is to be deemed an original hereof and all counterparts collectively are to be deemed but one instrument. Section 3.5. Governing Law. It is the intention of the parties hereto that this Agreement and the rights and obligations of the parties hereunder shall be governed by and construed and enforced in accordance with, the laws of the State of Indiana. (End of Article III) 5 IN WITNESS WHEREOF, the City and the Redevelopment Commission, acting for and on behalf of the District,have caused this Agreement to be executed in their respective names,and the City and the Redevelopment Commission,acting for and on behalf of the District,have caused their corporate seals to be hereunto affixed and attested by their duly authorized officers, all as of the date first above written. CITY OF SOUTH BEND, INDIANA By: ✓ `� (SEAL) Nv o►- Attest- ‘.a t Clerk CITY OF SOUTH BEND REDEVELOPMENT DISTRICT, acting by and through the SOUTH BEND REDEVELOPMENT COMMISSION President Attest: Secretary Signature Page to the Funding and Reimbursement Agreement, dated as of July 1, 2026, between the City of South Bend, Indiana and the City of South Bend, Indiana, Redevelopment District EXHIBIT A Copy of Authorizing Resolution I DMS 52744203.2 A-1