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2010 AGREEMENT AND CONSENT PURSUANT TO SETTLEMENT AGREEMENT

This 2010 AGREEMENT AND C0fltEd' PURSUANT TO SETTLEMENT AGREEMENT (this "Agreement"), dated as of \ ~L1)Lolo, is between THE CITY OF NEW YORK (the "City"), a municipal corporation of the State of New York, and the BATTERY PARK CITY AUTHORITY d/b/a Hugh L. Carey Battery Park City Authority ("BPCA"), a public benefit corporation of the State of New York.

WIT N E SSE T H:

WHEREAS, the City and the New York State Urban Development Corporation ("UDC") entered into a Settlement Agreement, dated as of June 6, 1980 (the "Settlement Agreement") regarding the premises (the "Project Area") generally known as Battery Park City (the "Project"); and

WHEREAS, UDC, among other things, has assigned all of its right, title and interest in and to the Settlement Agreement to BPCA and BPCA has assumed the same pursuant to an Assignment and Assumption Agreement, dated August 12" 1986; and

WHEREAS, the City and BPCA have amended the Settlement Agreement pursuant to an Amendment to Settlement Agreement dated as of August 15, 1986, between the City and BPCA (the "1986 Amendment") and have amended or otherwise modified the Settlement Agreement by an Agreement for Certain Payments and an Infrastructure Agreement and Consent, each dated June 28, 1989, by an Agreement and Consent made on December 30, 1989, by an Amendment and Agreement and Consent Pursuant to Settlement Agreement dated as of May 18, 1990, by an Amendment and Agreement and Consent Pursuant to Settlement Agreement dated as of October 15, 1993, by a Second Infrastructure Agreement and Consent, dated as of October 25, 1993, by an Agreement and Consent Pursuant to Settlement Agreement dated as of April 10, 1995, by a 1996 Agreement and Consent Pursuant to Settlement Agreement dated as of October 1, 1996, by a 1998 Agreement and Consent Pursuant to Settlement Agreement dated as of May 1, 1998, by a Third Infrastructure Agreement and Consent, dated as of January 11,2000, by a 2001 Agreement and Consent Pursuant to Settlement Agreement dated as of December 27, 2001, by a Site 22 Agreement and Consent made as of May 3, 2002, by an Agreement and Consent Pursuant to Settlement Agreement for Site 18a Green Building Development, dated as of May 14, 2002; by a 2003 Agreement and Consent Pursuant to Settlement Agreement dated 'as of September 9,2003, by a 2005 Agreement and Consent Pursuant to Settlement Agreement dated as of August 23, 2005; and by a 2006 Agreement and Consent Pursuant to Settlement Agreement dated as of July 3 I, 2006 (the Settlement Agreement, as amended and supplemented by the foregoing, the "Amended Settlement Agreement"); and

WHEREAS, the BPC Development Corporation, a subsidiary of UDC, and BPCA entered into a Restated Amended Agreement of Lease, made as of June 10, 1980, as amended by First Amendment to Restated Amended Lease dated as of June 15, 1983, Second Amendment to Restated Amended Lease dated June 15, 1983, Third Amendment to Restated Amended Lease dated as of August 15, 1986, and Fourth Lease Amendment to Restated Amended Lease dated as of May 25, 1990 (the "Master Lease"); and

WHEREAS, the Governor of the State of New York (the "Governor"), the Mayor of the City of New York (the "Mayor"), the President and Chief Executive Officer ofUDC, and BPCA entered into a Memorandum of Understanding, dated as of November 8, 1979, as modified by the 1986 Supplemental Memorandum of Understanding among the Governor, the Mayor, and BPCA, and as modified by the Amendment to the Memorandum of Understanding dated as of January 9, 1995 among the Governor, the Mayor and BPCA (the "MOU"); and

WHEREAS, Section 7.A.(ii) of the Amended Settlement Agreement ("Section 7.A.(ii)") contemplates that certain funds as described therein ("Slection 7 .A.(ii) funds") are to be spent only in such manner and for such purposes as may be jointly determined from time to time by the Mayor, the Comptroller of the City (the "Comptroller") and BPCA; and

WHEREAS, Local Law No. 58 of 2006 established an affordable housing trust fund (the "421-A Fund") in conjunction with the City's amendments to the tax exemption program established pursuant to Section 421-A of the Real Property Tax Law; and

WHEREAS, the Mayor, the Comptroller and BPCA have now jointly determined that a total of $861 million in Section 7.A.(ii) funds are to be spent as follows as further described herein: $200 million shall be paid to the 421-A Fund and $200 million shall be paid to the City and $200 million shall be paid to the State for the reduction of the City and State budget gaps, respectively, and $261 million will be paid to the City for pay-as-you-go capital and

WHEREAS, the City is undertaking to contribute $200 million in City Capital funds to the 421-A Fund, as provided herein;

WHEREAS, the 421-A Fund provides a funding source to be used by the New York City Department of Housing Preservation and Development ("HPD") and New York City Housing Development Corporation ("HDC") to address New York City's affordable housing challenges with priority given to the fifteen sub-borough areas with the highest percentage of households below the poverty line according to the most recent United States census bureau data.

NOW, THEREFORE, the parties hereto hereby agree and consent as follows:

1. Term.

The term of this Agreement shall commence upon execution of this Agreement and end upon the expenditure from the 421-A Fund of the $400 million contributed to it, as provided herein, or the transfer of$261 million of7.A.(ii) funds to the City for purposes described in Section 2 (v) hereof whichever occurs later.

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2. Funding Source.

By execution of this Agreement, BPCA, the Mayor and the Comptroller hereby jointly determine, in accordance with Section 7.A.(ii) of the Amendment to Settlement Agreement, dated as of August 15, 1986, between the City and BPCA, that: (i) Section 7.A.(ii) funds in the amount of $200 million shall be transferred by BPCA on the date hereof to the City for deposit in its general fund; (ii) Section 7.A.(ii) funds in the amount of $200 million shall be transferred by BPCA on the date hereof to the State of New York for deposit in its general fund; (iii) after giving effect to the transfers described in clauses (i) and (iii) hereof, any Section 7.A.(ii) funds remaining available to BPCA on the date hereof shall be transferred to HDC for deposit to the 421-A Fund; (iv) Section 7.A.(ii) funds shall be transferred by BPCA annually as provided herein to HDC for deposit to the 421-A Fund, until such time as the total amount of such funds transferred to HDC pursuant to clause (iii) and this clause (iv) equals $200 million; and (v) subject to the rights of the City under the Amended Settlement Agreement, Section 7.A.(ii) funds will then be transferred by BPCA annually to the City and used for pay-as-you-go capital, until such time as the total amount of such funds transferred pursuant to this clause equals $261 million. In the event that, upon execution of this agreement, there are insufficient 7.A.(ii) funds to fully pay the City and State $200 million each, the City and State will be paid pro rata from

the 7.A.(ii) funds based on the amounts available therein until each has received $200 million.

The parties hereto acknowledge and agree that this joint determination is final and that no other consents or authorizations are required as a condition to the transfers of Section 7.A.(ii) funds provided for in this Section 2.

3. Sources and Uses.

In consideration of the foregoing, the City agrees that it will allocate $200 million to HPD's Capital Commitment Plan for the 421-A Fund.

2010 Agreement and Consent - Sources and Uses

Dollars in millions

TOTAL

Sources

BPCA 7.A.(ii} Funds

City Capital allocation to HPD Total

861 200 1,061

Uses

New York State General Fund

200 200 400 261

1,061

New York City General Fund

NYC 421-A Affordable Housing Trust Fund New York City Pay as you Go Capital

Total

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a. The portion of the 421-A Fund funded with Section 7.A.{ii) proceeds will be transferred by BPCA annually to HOC in accordance with the schedule set forth below and held in a separate account maintained by HDC. Additionally, $200 million in City capital funds will be allocated to HPO to supplement the 421-A Fund. Such funds are expected to be allocated according to the schedule in Section 7 below. Amounts will be disbursed from the 421-A Fund in accordance with this Agreement.

4. Permissible Uses - 421-A Fund

a. HOC will provide mortgage loans ("421-A Mortgages") to 421-A Fund projects.

The 421-A Mortgages will be funded with proceeds of the 421-A Fund and may be used in combination with funds from HOC corporate reserves. Loan repayments of the 421-A Mortgages funded by the HOC component of the 421-A Fund will be repaid to the HOC unrestricted corporate reserve account. Loan repayments of the 421-A Mortgages originally funded with City capital dollars will be repaid to the City for credit to the City's Miscellaneous revenue budget.

b. The 421-A Fund shall not be used to finance any project in an amount that is greater than $100,000 per affordable unit. The 421-A Fund contribution, of no more than $100,000 per affordable unit to any project, may be in addition to per unit subsidies allocated by either or both HPO and HOC, as per HPO and HOC's published program parameters.

c. Priority for affordable units developed with financing from the 421-A Fund shall be given to residents of the community in which projects funded with 421-A proceeds are situated, in accordance with HPO and HOC guidelines.

d. Projects financed with the HOC component of the 421-A Fund shall provide thirty years or more of affordability through one of the following options to be chosen by HDC:

1. An agreement to maintain affordability restrictions for a minimum of fifty years,

11. An agreement to maintain affordability restrictions for a minimum of thirty years and to give HDC a right to extend the affordability for an additional 30 years at their expiration, subject to an evaluation of income and expenses as well as other projections deemed prudent at that time,

in. An agreement to maintain affordability restriction for a minimum of thirty years and to give the residents a right to purchase property at the expiration of the affordability restrictions or,

IV. Other means that are mutually agreeablle to the Mayor, the New York City Council and HDC.

e. Projects financed with the HPO component of the 421-A Fund shall be subject to legally binding restrictions to assure a minimum period of affordability pursuant to HPD's published program parameters.

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f. No more than $30 million in 421A-Fund proceeds shall be used for any single housing project.

g. A minimum of 25% of the total number of housing units will be used for the preservation of the housing stock as affordable housing

5. Administrative Expenses.

Agency personnel costs and administrative expenses for the program will be borne by HDC. HDC shall be entitled to collect from the loan recipient a servicing fee not to exceed 25 basis points on the original principal amount of each 421-A Mortgage for projects serviced by HDC.

6. Reporting Requirements.

On or before November 30th of each year beginning 2010 and until the balance of the 421-A Fund is expended, HDC and HPD will provide the City of New York Office of Management and Budget ("OMB"), and the Comptroller with a progress report on the 421-A Fund with detailed information on the projects and amounts funded in the prior HDC fiscal year, which ends October 31 st.

OMB and the Comptroller may request, and HDC and HPD will use commercially reasonable efforts to provide, the following items, where applicable:

a. Detailed list of units to be constructed/rehabilitated

b. Location of units

c. Number of units

d. Projected affordability requirements

e. Construction milestones

f. Status update on various program components

g. Pertinent financial and programmatic documents

h. Such additional items as may be required to monitor compliance with this Agreement.

The Comptroller shall have the authority throughout the term of this Agreement to audit the receipt, investment and expenditure of all funds covered by this Agreement. Notwithstanding anything else to the contrary contained in this Agreement, the parties acknowledge and agree that the powers, duties and obligations of the Mayor and Comptroller, pursuant to the provisions of the New York City Charter, shall not be diminished, compromised or abridged in any way.

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7. Disbursements.

Section 7.A.(ii) funds for the HDC component of the 421-A Fund will be disbursed by BPCA annually, no later than 30 days following the release ofBPCA's audited financial statements. The City Capital allocation to the 421·A Fund will be scheduled into HPO's capital commitment plan at the earliest opportunity following the date of this Agreement.

Funding for the 421-A Fund is anticipated to be disbursed to HOC or HPO on the following schedule (based on City fiscal years).

In mil/ions

FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 TOTAL

Estimated City Capital Allocation to HPD

43

24

19

81

33

200

Estimated Section 7.A.{ii} Funds to HDC Cumulative Funds to HDC

16 16

28 44

29 73

29 29

102 131

29 28 12

160 188 200

200 200

Estimated 421-A Trust Fund FY Total

59

52

48

110 62

29 28 12

400

The 421-A Fund shall cease to exist when the amounts set forth above have been expended for the purposes of the Fund.

8. HDC Investment Guidelines of the HDC component of the 421-A Fund.

With respect to funds deposited pursuant to this Agreement, HOC will follow its investment guidelines, as amended or modified from time to time by HOC's Members.

Interest and investment returns earned on the HOC 421-A Fund shall be credited to HOC corporate reserves to be used in the furtherance of the creation and preservation of affordable housing.

9. Management of 421-A Fund projects - HDC allocation.

Approval and supervision of individual projects funded by the Section 7.A.(ii) funds will be at the discretion of HOC within the guidelines slet forth by this Agreement.

10. Management of 421-A Fund projects - HPD City Capital allocation.

Approval and supervision of individual projects funded with City capital funds will be at the discretion of HPD within the guidelines set forth by this agreement. Projects funded with City Capital funds will be subject to standard OMB review and approval.

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It. Other provisions.

a. This Agreement, along with the Memorandwn of Understanding signed by the Mayor, the Speaker of the City Council and the HPD Commissioner on December 19, 2006, represents the entire agreement among the parties with respect to the 421-A Fund.

b. The parties agree that this Agreement will not be modified in any respect without the written consent of all parties hereto.

ACCEPTED AND AGREED as of the date first above written.

CITY OF NEW YORK

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