Terrell Housing Finance Corporation

AGENDA Terrell Housing Finance Corporation 6:00 PM - Tuesday, February 17, 2026 City Council Chambers, 201 E. Nash Street, Terrell, TX Board Members Rick Carmona, President Donna Renee Anderson, Board Member Stephanie Holmes-Thomas, Board Member Phil Robison, Board Member Mayrani Velazquez, Board Member Mark Mills, Executive Director Denish Simon, Deputy Executive Director Dawn Steil, Secretary NOTICE IS HEREBY GIVEN that the Board of Directors of the Terrell Housing Finance Corporation will conduct a Special Meeting at 6:00 p.m. on Tuesday, February 17, 2026, at Terrell City Hall located at 201 East Nash Street. The meeting is open to the public. A quorum of the City Council may be present; however, no City Council action will be taken. Page 1. CALL TO ORDER 2. INVOCATION 3. PLEDGE TO AMERICAN FLAG AND TEXAS FLAG. 4. HEAR REMARKS FROM VISITORS. 5. ADOPTION OF MINUTES Page 1 of 38 5.1. Discuss and Consider Approval of Minutes From the Terrell Housing Finance Corporation Board Meeting on January 13, 2026. 6. NEW BUSINESS 6.1. Discuss presentation by JPI for a Proposed Development. 3 - 14 Terrell HFC - JPI Torrington Tanger meeting 2.17.26 6.2. Discuss and Consider Approval of Memorandum of Understanding 15 - 38 Between Terrell Housing Finance Corporation and Dominium Holdings, LLC. HFC 2026-03 MOU Dominium 6.3. Discuss and Consider Approval of Capital Improvements Development Agreement Between Terrell Leased Housing Associates I, Limited Partnership and City of Terrell, Texas. 7. ADJOURN INTO EXECUTIVE SESSION IN ACCORDANCE WITH SECTION 551 OF THE TEXAS GOVERNMENT CODE TO DISCUSS THE FOLLOWING: 7.1. Section 551.071 Consultation With Attorney. 8. RECONVENE INTO REGULAR SESSION AND CONSIDER ACTION, IF ANY, ITEMS DISCUSSED IN EXECUTIVE SESSION. 9. ADJOURN. I, the undersigned authority, do hereby certify that the above NOTICE OF MEETING of the Terrell Housing Finance Corporation is a true and correct copy of said NOTICE, which has been posted on the front OUTDOOR BULLETIN BOARD CABINET FOR AGENDAS of the Terrell City Hall, Terrell, Texas, a place convenient and readily accessible to the General Public and on the website at cityofterrell.org, and which has been continuously posted for a period of three (3) business days prior to the date and time said meeting was convened. Posted Tuesday, February 10, 2026 –11:00 a.m. _______________________________________ Dawn Steil, City Secretary This facility is wheelchair accessible and accessible parking spaces are available. Requests for accommodations or interpretive services must be made 48 hours prior to this meeting. Please contact the City Secretary’s office at 972-551-6600 for further information. Braille is not available. The HFC Reserves the Right to Adjourn into Executive Session to Seek Legal Counsel on a Matter Which the Canon of Legal Ethics Demands to Preserve the Attorney-Client Privilege Pursuant to Section 551.071(2) of the Texas Government Code. Page 2 of 38  ITEM 6.1. Torrington Tanger Terrell HFC Partnership THFC Meeting February 17 th , 2026 Page 3 of 38 1  ITEM 6.1. Overview 01 02 03 04 HFC TAX - CREDIT TORRINGTON TANGER PROJECT ABOUT OVERVIEW & SUMMARY OVERVIEW OVERVIEW Page 4 of 38 2 2  ITEM 6.1. About JPI EXPERIENCED LOCAL DEVELOPER LARGEST DEVELOPER 36 DFW #8 2023 #23 2024 YEARS HEADQUARTERED LARGEST BUILDER DEVELOPMENT #11 #22 2023 2024 Source the best land acquisition opportunities with proprietary data. Coordinate design, entitlement, project approval process, and project lifecycle to ensure the best outcomes. GENERAL CONTRACTING ASSET MANAGEMENT Function as a general contractor for all project We have an internal asset management team built utilizing best-in-class subcontractors and that is responsible for ensuring that our best-build practices for safety, quality, properties are operating at the highest standard. 141 382 115K schedule, and cost Ensures compliance will all Federal, State, and Page 5 of 38 Local laws and program requirements. CITIES COMMUNITIES HOMES 3 3  ITEM 6.1. Role of the HFC Texas Chapter 394 (HFC) Role as GP Role as Bond Issuer Role as General Contractor Under Chpt 394 HFC’s are The structure is predicated on The HFC can also issue bonds. The HFC can also serve as the formed by local government the HFC forming a land holding For the 4% Tax - Credit program, General Contractor (in which entities to participate in the entity that the HFC controls and the issuance private activity JPI Construction would serve as creation of affordable housing. leases the land back to the bonds is often the starting point the primary Subcontractor). partnership. for most deals. They can partner in Tax - Credit This enables the project and Workforce housing For granting this exemption, the Private Activity Bonds are issued partnership to obtain a material partnerships to serve as the HFC participates in the by the HFC, but are project sales - tax - exemption. For projects General Partner (GP) economics of the development, specific, and are secured by the serving in this role the HFC can and grant an ad - valorem Tax - which help support the HFC’s project/partnership. The collect a fee. Exemption to support the goals in future housing underlying bonds are Tax - feasibility of the proposed programs. The deal terms are Exempt to further help the development. outlined in the MOU which is economic feasibility of the voted upon by the HFC board. structure, and are required under the 4% LIHTC program Page 6 of 38 4  ITEM 6.1. The State Agencies Under • State Agency Responsible for the allocation of Private Activity Bonds TBRB • Private Activity Bonds are allocated based on a Priority/Lottery System Texas Bond Review Board • For HFC’s are allocated by Region (DFW is Region 3) • Once Bonds are awarded, the project has 180 days to close • Once bonds are awarded project will apply to TDHCA for Tax - Credits Under TDHCA • TDHCA has threshold requirements and monitors compliance • Threshold requirements include supportive services & amenity points Texas Department of Housing & Community Affairs • Once approved by TDHCA, they will issue a determination notice • This means that the project qualifies for Tax - Credits and can close Page 7 of 38 5  ITEM 6.1. 4% Tax - Credit Structure Deferral Deferred Deferred Developer fee that is “deferred” Developer Fee Developer Fee and paid out of project Cash-Flow Taxable Bonds Developer Fee Developer Fee Taxable Debt Is paid from closing through (B-Bonds) Cost Certification. Additional debt that can be The project HFC as GP often utilized on the partnership, up Cost of Land participates in this fee. to the TDHCA allowable debt threshold (1.15 DSCR) Soft Cost Soft Cost Costs of the development Tax-Exempt Bonds (Legal Fees, Title, Financing (A-Bonds) Tax-Exempt Costs, Cost to Furnish the Can be utilized under Fannie, Debt development, etc.) Freddie, HUD, Private Placement Debt Executions Hard Cost Project Hard Costs to physically construct the Costs proposed development Tax-Credit Equity Tax-Credit Sold to 3rd Party to generate Equity Equity. These are Federal Tax- Page 8 of 38 Credits generated by the project and administered by TDHCA. Project Project Sources Uses 6  ITEM 6.1. Project Timeline Estimated Project Step Date Initial Presentation to Terrell HFC 0 2/17/202 6 Bond Inducement Resolution (Terrell HFC) 0 3/17/202 6 Submit to the Texas Bond Review Board 04 /15/202 6 Resolution of No Objection (City Council) 0 5/12/202 6 Zoning (P&Z and City Council) 0 6/22 /202 6 Receive Bond Allocation from Texas Bond Review Board 07 /0 1/202 6 Submit Tax - Credit Application to TDHCA 0 7/0 3/2026 HFC Partnership Agreement (MOU) 0 7/14/2026 Submit Building Permits to Terrell 0 8/03 /2026 TDHCA Determination Notice 10/30 /2026 Receive Building Permits & Terrell Final Doc Approval 10/10/2026 Page 9 of 38 Estimated Project Closing 12/0 8/2026 180 Day Bond Expiration (Estimated) 12/28 /2026 7  ITEM 6.1. Torrington Tanger Location Torrington Tanger – Terrell , TX Page 10 of 38 8  ITEM 6.1. The Master Plan FUTURE RETAIL FUTURE MULTIFAMILY LUXURY TOWN HOMES Representative Imagery Page 11 of 38 9  ITEM 6.1. Torrington Tanger Torrington Tanger is anticipated to be a 291-unit affordable housing community located in Terrell, Texas. This carefully planned development offers affordable, high-quality living options for working professionals and families in a conveniently located job center in Kaufman County. This master planned development helps align with Terrell’s plan for growth, retail, trails, and consideration for a mix of housing supply needs. The city’s robust job market is supported by diverse industries, including education, distribution, and manufacturing, make it an ideal location for those seeking quality housing close to a rapidly expanding employment center. JPI is seeking partnership with Terrell HFC to partner in the deal, by providing an Ad Valorem tax-exemption. The development is proposing that the Terrell will receive a portion of the developer fee, admin fees, and cashflows for their participation in the Development. INVESTMENT OPPORTUNITY TRANSACTION DETAIL Location 1705 TX-34, Terrell, TX 75160 Total Project Costs $91,195,713 Lot Size 15.0 Ac Tax-Exempt Bond Req. $50,000,000 Units 312 Partnership GP Structure: 394 Average SF/Unit 1,036 Sqft Credit Pricing $0.83 Total Net Rentable Area 323,269 Sqft Interest Rate Assumption 5.80% Parking Surface, Covered, & EV Ready Parking DSCR 1.15x Product Type Walk-Up Hold Timeline Minimum of 15 Years SOURCES (M) USES (M) 1-BED 2-BED 3-BED 3-BED 4-BED UNIT MIX TOTAL TH TH Perm Loan $50.1 Land $2.9 Page 12 of 38 Units 48 140 92 19 13 312 Tax-Credit Equity $33.8 Hard Costs $56.8 Deferred Fee + NOI $7.4 Soft Costs $31.6 Area Median Income (AMI): $117,300 TOTAL $91.3 TOTAL $91.3 Families Earning 60% AMI: $70,380 10 10  ITEM 6.1. Torrington Tanger Quality Design Best in Class Architect We partner with a best-in-class architect known for delivering thoughtfully designed, cost- efficient residential communities. Their deep understanding of site planning, building systems, and efficient unit layouts consistently results in high-quality, livable spaces that meet both resident needs and developer goals. Quality Amenities Our community is designed with resident comfort and peace of mind at the forefront, featuring controlled access entry, well-lit pathways, and advanced security measures. Residents enjoy top-tier amenities including a 24-hour fitness center, a resort-style Page 13 of 38 swimming pool, and thoughtfully curated spaces that support wellness, relaxation, and everyday convenience. 11 11  ITEM 6.1. Torrington Tanger Quality Housing Quality Finishes Each apartment features modern, high-quality interior finishes designed for both style and durability. Residents enjoy granite countertops, stainless steel appliances, custom cabinetry, and designer lighting. Spacious layouts, and luxury vinyl plank flooring, create a contemporary living experience. Impact for Wilmer This community will provide high- quality housing that enhances neighborhood stability, supports local workforce retention, and contributes to long-term economic vitality. By offering well-designed, amenity-rich residences at accessible price points, the Page 14 of 38 development meets a critical need while fostering a sense of pride and connection among residents. 12 12 ITEM 6.2. RESOLUTION NO. HFC 2026-03 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE TERRELL HOUSING FINANCE CORPORATION AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A MEMORANDUM OF UNDERSTANDING WITH THE DEVELOPER OF THE TERRELL FAMILY APARTMENTS PROJECT. WHEREAS, the City Council of the City of Terrell, Texas authorized and approved the creation of the Terrell Housing Finance Corporation (the “Corporation”) under Chapter 394, Texas Local Government Code, for the purpose of providing a means of financing the costs of residential ownership and development that will provide decent, safe, and sanitary housing for persons of low and moderate income at affordable prices or rentals; and WHEREAS, the Board of Directors of the Corporation (the “Board”) has previously approved the bylaws of the Corporation and undertaken organizational actions necessary and incidental to the Corporation’s operation; and WHEREAS, the Board has previously authorized the submission of an application to the Texas Bond Review Board for private activity bond allocation and adopted a declaration of official intent for the Terrell Family Apartments project (the “Project”), a proposed qualified residential rental housing development located at or near 1010 & 1100 Rose Hill Road, Terrell, Texas, to consist of approximately 350–430 affordable housing units; and WHEREAS, the Project is anticipated to be financed, in part, with 4% low-income housing tax credits and tax-exempt bonds and to be owned by a limited partnership to be formed, with an affiliate of the Corporation expected to serve as the general partner (the "General Partner"); and WHEREAS, the Executive Director has negotiated the terms of a memorandum of understanding (the “MOU”) between the Corporation and the proposed developer for the Project with respect to (a) a limited partnership ownership structure, (b) a ground lease and related ad valorem tax exemption framework, (c) financing arrangements, (d) long-term ownership rights, (e) fees, and (f) other responsibilities and obligations with respect to the Project; and WHEREAS, the Board further finds it is in the best interests of the Corporation to authorize the Executive Director to execute the MOU; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE TERRELL HOUSING FINANCE CORPORATION THAT: Section 1. Authorization of Memorandum of Understanding. The Board hereby authorizes and directs the execution and delivery of the MOU, on behalf of the Corporation, in substantially the form attached hereto as Exhibit A, with such changes, modifications, additions, or deletions as the Executive Director, in consultation with legal counsel, shall deem necessary or appropriate, such execution to be conclusive evidence of the approval thereof by the Board. Section 2. Further Procedures. The Executive Director, the Deputy Executive Director, the Chief Financial Officer, and the Secretary of the Corporation are each hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and -1- 301778212.1 Page 15 of 38 ITEM 6.2. things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the Corporation all agreements, instruments, or such other documents, whether mentioned herein or not, as may be necessary or desirable in order to carry out the terms and provisions of this Resolution. In the event that any officer of the Corporation whose signature shall appear on any document shall cease to be such officer before the delivery of such document, such signature nevertheless shall be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. Section 3. No Personal Liability. No director, officer, employee, or agent of the Corporation shall be personally liable for any action taken or omitted in connection with this Resolution, the MOU, or the Project, except in the case of gross negligence or willful misconduct. Section 4. Conflicts. All resolutions or parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Section 5. Ratification. All prior actions taken by the officers, directors, employees, and agents of the Corporation in connection with the Project and the MOU are hereby ratified, confirmed, and approved in all respects. Section 6. Miscellaneous. (i) If any provision of this Resolution or the application thereof to any circumstance shall be held to be invalid, the remainder of this Resolution or the application thereof to other circumstances shall nevertheless be valid, and this governing body hereby declares that this Resolution would have been enacted without such invalid provision. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas. (ii) The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the Board. (iii) The section headings herein are for convenience of reference only and shall not affect the construction or interpretation hereof. Section 7. Open Meetings; Effective Date. It is hereby officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and that public notice of the time, place, and subject matter of this meeting, including this Resolution, was given as required by Chapter 551, Texas Government Code. This Resolution shall take effect immediately upon its passage. [Remainder of Page Intentionally Left Blank] -2- 301778212.1 Page 16 of 38 ITEM 6.2. PASSED AND ADOPTED this ________ day of __________________, 2026. TERRELL HOUSING FINANCE CORPORATION By: ______________________________ Name: E. Rick Carmona Title: President ATTEST: By: ______________________________ Name: Dawn Steil Title: Secretary -3- 301778212.1 Page 17 of 38 ITEM 6.2. Exhibit A Form of Memorandum of Understanding (See Attached) -4- 301778212.1 Page 18 of 38 ITEM 6.2. MEMORANDUM OF UNDERSTANDING BETWEEN TERRELL HOUSING FINANCE CORPORATION AND DOMINIUM HOLDINGS II, LLC Terrell Family Apartments This Memorandum of Understanding (this "MOU") is executed between Terrell Housing Finance Corporation, a public nonprofit housing finance corporation organized under Chapter 394 of the Texas Local Government Code ("Terrell HFC"), and Dominium Holdings II, LLC, a Minnesota limited liability company ("Developer"), and is dated effective as of [________________], 2026 (the “Effective Date”). Developer is a developer of affordable housing in the State of Texas. Terrell HFC is a public, nonprofit housing finance corporation whose mission is to provide safe, decent and sanitary housing for low and moderate-income persons in the State of Texas. Developer and Terrell HFC hereby agree to work cooperatively to develop affordable housing at the following location, in accordance with the terms of this MOU: Site: 350 to 430-units of newly constructed multifamily development in Terrell, Texas to be known as "Terrell Family Apartments" and financed, in part, with 4% Tax Credits (hereinafter determined) and tax-exempt bonds (the "Development" or the “Project”). In order to accomplish this purpose, the parties agree as follows: AGREEMENTS: A. Ownership Structure. 1. Developer has formed a Texas limited partnership named Terrell Leased Housing Associates I, Limited Partnership (the "Partnership") for the purpose of owning the Development. The sole general partner of the Partnership will be an affiliate of Terrell HFC which will own 0.01% of the Partnership (the "General Partner"). Developer will have primary responsibility for the management of the Partnership. 2. Developer may designate an affiliate to serve as a special limited partner of the Partnership (the "Developer SLP"), which will have certain oversight and approval rights, including without limitation, approval of: (i) the annual budgets for operating and capital expenses; (ii) rent increases and concessions; (iii) withdrawals from reserves; and 1 Page 19 of 38 ITEM 6.2. (iv) any issues arising with TDHCA (as hereinafter defined). The following items shall require the approval of the General Partner: (i) any material change to the Partnership Agreement (hereinafter defined; (ii) any material change in the construction or development plans or budget for the Development; (iii) any material amendment to the Loan or Equity documents (as hereinafter defined); (iv) any refinancing of the Partnership or the Development; (v) any change in the property manager; 3. The duties of General Partner and Developer SLP will be set forth in an amended and restated agreement of limited partnership (the "Partnership Agreement"), to be entered into at Closing (as hereinafter defined) among General Partner, Developer SLP, and the Investor LP (as hereinafter defined). The parties will cooperate in good faith to cause the Partnership Agreement to contain terms consistent with Exhibit B hereto, it being recognized that approval of the Terrell HFC’s Board of Directors is contingent upon, among other things, the Partnership Agreement containing the terms consistent with Exhibit B. Terrell HFC and the Housing Finance Corporation User, as defined in Texas Local Government Code Section 394.9026(a)(2), agrees to satisfy and abide by Texas Law that governs Housing Finance Corporations, including but not limited to Texas Government Code Section 394 and Texas House Bill 21 (2025), as applicable, and agrees to provide reasonable evidence of the same to Developer and other financing and Partnership parties. The General Partner’s execution of the Partnership Agreement shall be subject to the following terms: (i) The General Partner’s representations shall be limited to those within the General Partner’s actual knowledge and in no case shall due inquiry be required, it being understood and agreed that the General Partner will not be looked upon by the Developer SLP or the Investor LP to conduct Project-related diligence; (ii) The General Partner shall be indemnified by the Developer, Developer SLP, the Guarantor (as defined herein) and the Partnership for any liabilities incurred under the Partnership Agreement, except for liabilities incurred as a result of the General Partner’s gross negligence or willful misconduct and in no event shall such indemnification be contingent upon a ruling of a court of law; (iii) The Terrell HFC, the General Partner, and the Ground Lessor (as defined herein) shall be indemnified by the Partnership, Developer SLP and the Guarantor for any liabilities incurred in connection with the Project, except for liabilities incurred as a result of the gross negligence or willful misconduct of the Terrell HFC, the General Partner, or the Ground Lessor, 2 Page 20 of 38 ITEM 6.2. as applicable, and in no event shall such indemnification be contingent upon a ruling of a court of law; (iv) The General Partner shall not be required to covenant to undertake actions or obligations that the Developer SLP will be required to take under the Partnership Agreement; and (v) The Partnership Agreement shall contain a provision wherein the Developer SLP and Investor LP acknowledge that the obligations of the General Partner under the Partnership Agreement are obligations solely of the General Partner and not the owner of the General Partner. The Developer agrees that it will provide an executed copy of this MOU to the Investor LP prior to executing an equity letter of intent or similar document (an “LOI”) and, as set forth in Paragraph C.2 below, agrees to provide the LOI to the Terrell HFC for review and comment prior to execution. The General Partner will file a 168(h) election if such is required or necessary under the terms of the Partnership Agreement. B. Due Diligence As a condition to the Terrell HFC’s participation in the Project, the Terrell HFC requires the Developer to provide due diligence information about the Project and its proposed financing and operations pursuant to the due diligence checklist (the “Checklist”) attached hereto as Exhibit A. The Developer shall deliver the due diligence items on the Checklist within a reasonable time after such due diligence items are available to the Developer. Failure of the Developer to deliver to the Terrell HFC due diligence items acceptable to the Terrell HFC shall be grounds for the Terrell HFC to terminate this MOU in its sole and absolute discretion. C. Financing 1. On behalf of the Partnership, the Developer has applied or will apply for a reservation of up to $72,774,039 in private activity bond volume cap in connection with multifamily housing bonds to be issued by the Terrell HFC (the “Bonds”). The Developer shall be responsible for selecting the manner in which the Bonds will be sold to facilitate debt financing for the Project and negotiating the financing terms of the Bonds on behalf of the Partnership; provided, that the Terrell HFC shall have the right to review and approve the financing arrangements and the terms and conditions of any Bond or loan documents. 2. On behalf of the Partnership, Developer will submit an application to the Texas Department of Housing and Community Affairs ("TDHCA") for an allocation of 4% low income housing tax credits ("Tax Credits"). Developer will be responsible for identifying an investor limited partner (the "Investor LP") with which it will negotiate the sale of the Tax Credits in consideration for Investor LP providing equity financing to the Development (the "Equity") and will negotiate the equity financing terms on behalf of the Partnership; provided, that the Terrell HFC shall have the right to review and approve the identity of the Investor LP, the financing 3 Page 21 of 38 ITEM 6.2. arrangements and the terms and conditions of any Equity financing documents The Equity financing documents are expected to include the Partnership Agreement. 3. On behalf of the Partnership, Developer will apply for construction and permanent debt financing for the Development (the "Loan"). The Developer shall be responsible for selecting the lender and negotiating the loan terms on behalf of the Partnership, provided, that Terrell HFC will have the right to review and approve the financing arrangements and the terms and conditions of any Loan documents. 4. The parties anticipate that the Partnership will enter into documents for the Loan and the Equity financing (including the Partnership Agreement) concurrently. The execution of the documents related to the Loan and the Equity financing and the funding of the Loan and the Equity financing is collectively referred to as the "Closing". 5. Developer will pay all costs and fees associated with the pursuit of the Development prior to Closing, which will include, but is not limited to, the costs and fees to secure the Bonds, the Loan, the Equity, and the Tax Credits. All pre-Closing costs incurred by Developer, including without limitation, costs of legal counsel, will be reimbursed at Closing from the proceeds of the Bonds and the Equity. In the event this MOU is terminated or the transaction fails to close as contemplated herein, Developer will be solely responsible for all costs described above in Section C.5, and Terrell HFC and its affiliates will have no responsibility for payment or reimbursement of such costs. THE DEVELOPER OR ITS AFFILIATES, WILL NEGOTIATE THE SCOPE OF AND SHALL PROVIDE ANY GUARANTEES OF CONSTRUCTION COMPLETION, OPERATING EXPENSES, TAX CREDIT DELIVERY, RECAPTURE, AND THE LIKE THAT MAY BE REQUIRED IN CONJUNCTION WITH THE BOND FINANCING OR THE EQUITY FINANCING. NEITHER TERRELL HFC, THE GENERAL PARTNER, THE GROUND LESSOR, NOR ANY OF THEIR AFFILIATES WILL PROVIDE ANY GUARANTEES OR INDEMNITIES IN CONNECTION WITH THE FINANCING OF THE PROJECT AND SHALL NOT BE LISTED AS A SECTION 50 GUARANTOR SHOULD THE PROJECT BE FINANCED WITH A HUD-INSURED LOAN. 6. Developer and Terrell HFC will cooperate as reasonably necessary and appropriate with respect to responding to due diligence and underwriting requirements for the Loan and the Equity financing. D. Ground Lease; Ad Valorem Tax Exemption. 1. Ground Lease. Title to the fee interest in the land on which the Development is to be located (the "Land") will be owned by an affiliate of Terrell HFC (the “Ground Lessor”), and the Ground Lessor shall enter into a long term ground lease (the "Ground Lease") with the Partnership, as ground lessee, which will be the owner of the leasehold interest in the Land, as well as the fee interest in the buildings and other improvements located on the Land. The Ground Lessor will require delivery by the title company of a title policy showing the Ground Lessor as a named insured. Funding for the acquisition of the Land will come from the Loan and the Equity 4 Page 22 of 38 ITEM 6.2. financing. In addition, Terrell HFC or its affiliate will be paid an up-front Ground Lease payment in the amount equal to the value of the Land at closing, as reflected on the MAI-certified appraisal prepared in connection with the Loan and Equity financing (which appraised value is currently estimated to be at least $3,750,000). Upon termination of the Ground Lease, except for the occurrence of a Lease Termination Event (as hereinafter defined), ownership of the improvements constituting the Development will revert to Terrell HFC or its affiliate. In the event that the Project is sold, the Ground Lease shall provide for a transfer of title to the land to a purchaser upon payment to the Ground Lessor of the acquisition price of the land with a credit in the amount of any unamortized portion of the up-front Ground Lease payment. Terrell HFC or its affiliate will receive a Right of First Refusal and Purchase Option related to the acquisition of the Development, as hereinafter described. Notwithstanding the foregoing, if (i) Terrell HFC defaults under the Partnership Agreement and such default is not cured within 30 days, (ii) the tax exemption is lost for any reason and not restored within 90 days, or (iii) if the General Partner is no longer the general partner of the Partnership ((i) through (iii) collectively, the “Lease Termination Events”), then the Terrell HFC shall transfer fee simple title to the land to the Partnership upon notice by the Investor LP or the Developer SLP and shall relinquish any rights it may have pursuant to the Right of First Refusal and Purchase Option; provided, however, with respect to a Lease Termination Event caused by a loss of the tax exemption that is not caused by the actions of the Terrell HFC and occurs after the expiration of the Compliance Period (as defined herein) the Terrell HFC, or its affiliate, after notice of termination is delivered by the Investor LP or the Developer SLP, shall be entitled to payment of an amount equal to the amortized portion of the upfront Ground Lease payment from the effective date of the Ground Lease through the termination thereof in consideration for transfer of fee simple plus any unpaid fees that accrued that are owed to the General Partner, Ground Lessor or any Terrell HFC affiliates. In no event shall the Developer SLP have the right to assign its interests in the Partnership other than to an affiliate entity that is controlled by the Developer without the written consent of the General Partner, which consent may be granted or withheld in the sole and absolute discretion of the General Partner. The Developer SLP shall have the right to assign its interests in the Partnership to an affiliate entity that is controlled by the Developer without the written consent of the General Partner but shall provide advance written notice of such assignment. 2. Ad Valorem Tax Exemption. The ownership structure contemplated herein is expected to generate an ad valorem tax exemption for the Project, except pursuant to Section 394.905(d) of the Texas Local Government Code (the "Act") with respect to taxes assessed by certain conservation or reclamation districts providing water, sewer or drainage services, and/or emergency service districts (the “Exemption”). The Terrell HFC makes no representations or guaranties that the Exemption will be obtained and will take no responsibility for maintaining the Exemption after Closing other than to provide reasonable cooperation to and at the direction of the Developer SLP. The Ground Lease, combined with General Partner's service as the general partner of the Partnership, the Right of First Refusal, and the Purchase Option, are intended to establish Terrell HFC's equitable ownership of the Development in order for the Development to qualify for the 5 Page 23 of 38 ITEM 6.2. Exemption. Terrell HFC, or its affiliate, will not have any right to terminate the Ground Lease during the 15-year Tax Credit compliance period (the "Compliance Period") without the written approval of Developer SLP, Investor LP, and applicable lending entities. E. Long Term Ownership. 1. Throughout the life of the Partnership, Terrell HFC will have an option to acquire the Development (the "Purchase Option"). The purchase price for the Development under the Purchase Option shall be the greater of: (a) its fair market value and (b) the amount of any outstanding indebtedness of the Development plus other amounts owing pursuant to the Partnership Agreement, including without limitation, exiting partner loans, exit taxes, and liabilities of the Investor LP and the Developer SLP arising from the sale. In addition, if the Purchase Option is exercised during the Compliance Period, the purchase price for the Development will be calculated to include a full return of all investment capital inclusive of a reasonable rate of return by the Investor LP and the Developer SLP, payment of any Tax Credit recapture, penalties, interest, and repayment of all indebtedness, including indebtedness owed to the Investor LP and the Developer SLP, or their respective affiliates. The language related to the price of executing the purchase option shall utilize customary “make-whole” language that exist in Texas ground lease structures consistent with the industry standard. Closing on the sale of the Development shall take place no later than one hundred twenty (120) days after the Terrell HFC's exercise of the Purchase Option. 2. In addition, at the end of the Compliance Period, if a third-party offer is made for the purchase of the Development, and such third-party off is one that the Developer SLP would intent to accept, Terrell HFC shall have a right of first refusal (the "Right of First Refusal") to acquire the Development at a price equal to such third-party offer. If Terrell HFC wishes to exercise the Right of First Refusal, it shall do so within ninety (90) days after receiving notice of the third party offer and will proceed to close on the purchase of the Development within an additional ninety (90) days after exercise of the Right of First Refusal. 3. Notwithstanding the foregoing, after the Compliance Period, the Developer SLP shall have a perpetual right to market the Development for sale (which shall include termination of the Ground Lease and transfer of the fee interest in the Land at no or nominal cost); provided that, the purchase price pursuant to any third party offer shall be at least the minimum purchase price under Section 42(i)(7)(B) of the Code. In the event that Developer SLP receives such an offer to purchase the Development and the offer is acceptable to Developer SLP, the Development and the Land shall be sold to such purchaser unless Terrell HFC (a) exercises the Right of First Refusal in accordance with Section D.2 above or (b) within sixty (60) days purchases the economic interest of each partner for an amount equal to what each partner would otherwise receive under the Partnership Agreement had the purchase offer been accepted. 4. The Purchase Option and Right of First Refusal (once in effect after the Compliance Period) will remain in effect so long as the Ground Lease is in effect, General Partner remains in the Partnership, and General Partner is not in default of its duties in such capacity. The parties acknowledge that Terrell HFC's long-term ownership of the Development is partially in consideration for the Exemption and agree to work together to implement the necessary ownership 6 Page 24 of 38 ITEM 6.2. elements for Terrell HFC in order to facilitate qualification for the Exemption and to accommodate any Investor LP disposition requirements that differ from those herein set forth. 5. Notwithstanding any of the foregoing, if the Exemption terminates or is not obtainable (other than due to a change in law and subject to the requirements in Paragraph D) and/or General Partner is removed as the general partner of the Partnership, the Right of First Refusal and the Purchase Option and any other rights of the Terrell HFC and General Partner with respect to long-term ownership of the Development will terminate. In addition, if Terrell HFC has not acquired the Development through the exercise of either the Purchase Option or the Right of First Refusal, the Purchase Option and the Right of First Refusal will both terminate upon the sale of the Development to a third party. Terrell HFC agrees to reasonably cooperate with Developer SLP and the Partnership as necessary in order to facilitate the sale to such third party, including but not limited to, executing a release or termination of the Purchase Option, the Right of First Refusal, and the Ground Lease, and conveyance documents related to the transfer of the Land to the third party, at no or nominal cost (subject to the provisions of Paragraph D with respect to certain Lease Termination Events occurring after the Compliance Period). 6. Reserved. 7. Reserved. F. Design and Construction. 1. Developer, or an affiliate of Developer, will provide comprehensive development services to the Partnership pursuant to a Development Agreement to be entered into by the Partnership and Developer (or its affiliate). 2. Developer will provide Terrell HFC with a development budget as requested. The Developer shall also promptly provide Terrell HFC any material updates to the development budget for the Development through Closing. 3. Developer will be responsible for obtaining the services of design professionals for the design of the site plan and of the Development. Terrell HFC will be provided copies of the final plans and specifications for the Development, as well as the construction contract. Terrell HFC will have the right to review, comment and approve such plans, specifications and contracts prior to the execution of the contracts and will work in good faith with the Developer to meet any necessary deadlines. 4. In addition to design professionals, Developer will be responsible for the selection and engagement of other consultants and service providers, including without limitation, environmental consultants, zoning analysts, geotechnical consultants, engineers, contractors, subcontractors, architects, market analysts, appraisers, and Developer’s legal counsel. 5. The Partnership may seek to secure an exemption from state sales tax for the acquisition of building materials; if so, a limited liability company wholly-owned by the Terrell HFC, (the "Contractor") will serve as the general contractor and enter into a construction contract 7 Page 25 of 38 ITEM 6.2. with the Partnership. Terrell HFC will enter into a subcontract with a master subcontractor to build the Development. In connection with its services as general contractor, Terrell HFC will receive a fee in the amount of 1% of hard construction costs (less amounts for general conditions, overhead, and profit). Such fee shall be a contractual obligation of the Partnership payable to the Contractor, half of which fee shall be payable at Closing and the remainder of which fee shall be payable upon issuance of the final certificate of occupancy for the Project. THE GUARANTOR AND THE PARTNERSHIP SHALL PROVIDE INDEMNIFICATION TO THE CONTRACTOR FOR ALL LIABILITIES INCURRED BY THE CONTRACTOR IN CONNECTION WITH THE PROJECT EXCEPT THOSE INCURRED AS A RESULT OF THE CONTRACTOR’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN NO EVENT SHALL SUCH INDEMNIFICATION BE CONTINGENT UPON A RULING OF A COURT OF LAW. 6. Developer will be responsible for obtaining all governmental approvals and permits needed to construct and operate the Development. Upon the Developer’s reasonable request, Terrell HFC shall reasonably cooperate with such efforts. 7. The Developer or its affiliates and the Guarantor shall guarantee to the Partnership, the Investor LP and any lender, delivery of the Project on time and within the approved budget (as it may be amended or revised from time to time with appropriate approvals). Terrell HFC or its affiliate shall have the right to review and approve any material change orders or any material changes in the scope of work or plans and specifications (costing over $200,000 for a single change or $500,000 in the aggregate) during construction and shall be provided a minimum of five (5) business days to review, comment on, and approve the same. 8. The Project shall be constructed so as to comply with ADA and Section 504 requirements, as applicable under federal and state law. G. Management and Operation. Dominium Texas Management Services, LLC shall serve as the property manager for the Development, which will be memorialized in a Management Agreement. The Management Agreement will automatically renew upon is scheduled termination unless either party gives ninety (90) days’ notice to renegotiate the terms or terminate the Management Agreement. Annually, by no later than December 1 of the preceding fiscal year, the property manager shall provide the General Partner and Developer SLP with a proposed annual operating budget. The proposed budget shall be subject to the written approval of the General Partner and Developer SLP. H. Social Services Subject to the review and approval of the Terrell HFC, the Developer shall be responsible for initiating and arranging for social services to be provided (as required by the TDHCA) for the residents of the Project. The General Partner shall have the right to monitor the provision of such social services during the Compliance Period (as hereinafter defined). The Developer shall be 8 Page 26 of 38 ITEM 6.2. responsible for providing any evidence of social services which may be required for the Tax Credit application I. Community Support. The Developer will be primarily responsible for interfacing with the local governmental officials in connection with garnering support for the Development, and Terrell HFC shall provide reasonable cooperation in connection with such matters. The parties will consult with each other and coordinate the response to any media inquiries and/or public opposition to the Development that may arise. J. Fees. 1. The General Partner shall be entitled to receive a fee in the initial amount of $25,000, beginning January 1 the year following Closing, which shall be payable prior to deferred Development Fee in the cash flow waterfall under the Partnership Agreement and which fee shall increase by 3% annually for the period of time that the Exemption is in place (the “GP Administration Fee”). In the event that net cash flow is insufficient in any year to pay the full amount of the GP Administration Fee, the amount unpaid shall accrue without interest and be payable in subsequent years. 2. The General Partner shall be entitled to receive a Partnership Management Fee for its services in connection with management of the Partnership (“GP Partnership Management Fee”). which fee shall be in the amount of $25,000, beginning January 1 the year following Closing and shall be payable prior to deferred Developer Fee in the cashflow waterfall under the Partnership Agreement and which fee shall increase by 3% annually. In the event that net cash flow is insufficient in any year to pay the full amount of the GP Partnership Management Fee, the amount unpaid shall accrue without interest and be payable in subsequent years. . 3. The Developer and Terrell HFC shall not enter into any contractual relationship or agreement relating to the Project that would cause either financial or legal liability to the other, without the other party’s prior written consent. 4. All expenses incurred by the Terrell HFC in connection with this MOU, including but not limited to costs for staff time to review the proposed Project, third-party reports, Partnership Counsel (defined below), special real estate counsel, Hilltop Securities (defined below) and other expenses incurred by the Terrell HFC in connection with the proposed Project (the “Costs”), shall be included in the Project’s development budget and reimbursed by the Partnership to the Terrell HFC (except as set forth herein) concurrently with Closing. Developer shall advance and be responsible for all filing fees associated with the private activity bond allocation with the Texas Bond Review Board 5. For the avoidance of doubt, the usual and customary fees received by the Terrell HFC as issuer of the Bonds are separate and apart, and in addition to, all Costs and fees payable to the Terrell HFC, the Ground Lessor, the General Partner, or any of their subsidiaries, affiliates or advisors as described in this MOU. 9 Page 27 of 38 ITEM 6.2. 6. If this MOU or the Project is terminated before the Closing and the Terrell HFC has unreimbursed Costs, the Terrell HFC, Partnership Counsel or Hilltop Securities, as applicable, shall invoice the Developer for these Costs and the Developer shall reimburse the Terrell HFC or such third party directly for these Costs within sixty (60) days of receipt of such invoice. 7. The Developer acknowledges and agrees that it is the intent of the parties hereto that the Terrell HFC shall bear no out-of-pocket costs or expenses in connection with the Project. 8. Developer SLP will be entitled to receive an Incentive Management Fee (herein so called) for services provided in its capacity as a special limited partner. The Incentive Management Fee will be paid from the Partnership's net cash flow (after payment in full of the Development Fee). K. Distributions, Allocations and Expenses. 1. The parties anticipate that cash available for distribution by the Partnership will be paid: (i) To pay Investor LP for certain priority reimbursements; (ii) To replenish reserves as necessary; (iii) To pay the GP Administration Fee; (iv) To pay the GP Partnership Management Fee (v) To pay deferred developer and contractor fee to Developer; (vi) To reimburse guarantors to the extent of reimbursable guaranty payments to the Partnership; (vii) To Developer SLP as an incentive management fee; and (viii) The balance to the Limited Partners in accordance with their percentage interests. 2. The parties anticipate that sale or refinancing proceeds available for distribution by the Partnership will be paid: (i) To pay Investor LP for certain priority reimbursement; (ii) To pay current partnership debt liability; (iii) To pay accrued but unpaid GP Administration Fee; (iv) To pay accrued but unpaid GP Partnership Management Fee; (v) To pay developer fee to Developer; (vi) To reimburse guarantors to the extent of reimbursable guaranty payments to the Partnership; and (vii) The remaining proceeds to be paid in full to Developer SLP. 10 Page 28 of 38 ITEM 6.2. 3. It is anticipated that Partnership allocations of tax items will be made such that Investor LP generally will receive 99.98% of all income, gain, loss, deduction, and credit. Notwithstanding the foregoing, prior to start of the first year of the credit period the Developer SLP shall receive 99.98% of all income, gain, loss, deduction, and credit, however, beginning on January 1 of the first year of the credit period the allocations will flip in which the Investor LP will then receive 99.98% of all income, gain, loss, deduction and credit. L. Miscellaneous. 1. In instances in which a party hereto has the right to provide its consent or approval, or render its determination, judgment, satisfaction, or decision, such party will act in good faith and such consent, approval, determination, judgment, satisfaction, or decision (or the denial thereof, as the case may be) shall not be unreasonably withheld, delayed, or conditioned; provided, that to the extent that any action requires the approval of the Board of Directors of the Terrell HFC, the decision of such Board of Directors shall be in its sole and absolute discretion. 2. Any notice, request, demand, instruction or other document to be given or served hereunder shall be in writing and shall be (a) delivered personally, (b) sent by overnight express courier, postage prepaid, or (c) sent by facsimile or electronically (e-mail), each addressed to the parties at their respective addresses set forth below, and the same shall be effective upon receipt (or refusal) if delivered personally, by overnight courier or by facsimile or electronically (with proof of delivery). A party may change its address for receipt of notices by service of a notice of such change in accordance herewith. If any deadline under this Agreement falls on a Saturday, Sunday or legal holiday, the deadline shall be extended to the next business day. Terrell HFC: Terrell Housing Finance Corporation Attn: Email: With a copy to: Norton Rose Fulbright US LLP 2200 Ross Ave., Suite 3600 Dallas, Texas 75201-7932 Attn: Paul A. Braden Email: paul.braden@nortonrosefulbright.com And with a copy to: Norton Rose Fulbright US LLP 111 W. Houston Street, Suite 1800 San Antonio, Texas 78205 Attn: Katherine A. Tapley Email: katherine.tapley@nortonrosefulbright.com Developer: Terrell Leased Housing Associates I, Limited Partnership 4835 Lyndon B Johnson Fwy 11 Page 29 of 38 ITEM 6.2. Suite 1000 Attn: Austin Holmes Email: aholmes@dominiuminc.com With copy to: Winthrop & Weinstine, P.A. 225 South Sixth Street, Suite 3500 Minneapolis, MN 55402 Attn: Jeffrey S. Drennan Email: jdrennan@winthrop.com 3. This MOU reflects the entire understanding between the parties and may only be amended in writing, signed by both parties. This MOU is a contract and not merely an "agreement to agree". 4. Each party hereto is prohibited from assigning any of its interests, benefits, or responsibilities hereunder to any third party, without the prior written consent of the other party. Notwithstanding the foregoing, the parties acknowledge that it is anticipated that an affiliate of Developer may perform some or all of the activities of Developer set forth in this MOU; provided, however, that any indemnities and guaranties to Terrell HFC and its affiliates, as set forth in this MOU, the Partnership Agreement, and other project documents shall be provided by a well- capitalized Developer affiliate acceptable to Terrell HFC (such entity, the “Guarantor”). For purposes of this MOU, any references to "Developer" shall be deemed to refer, as applicable, to any affiliate thereof that actually performs the activities of the Developer herein set forth. 5. The parties agree to execute such documents and do such things as are reasonably necessary or appropriate to facilitate the development of the Development and the consummation of their agreement herein. 6. The Terrell HFC’s execution of this MOU is subject to approval by the Terrell HFC’s Board of Directors. 7. This MOU may be executed in several counterparts, each of which will be deemed to be an original copy and all of which together will constitute one agreement binding on all parties hereto, notwithstanding that all the parties did not sign the same counterpart. 8. This MOU is governed and construed in accordance with the internal laws of the State of Texas, exclusive of its choice and conflict of law principles to the contrary. 9. In case any one or more of the provisions contained in this MOU for any reason are held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability will not affect any other provision hereof, and this MOU will be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 10. The parties hereto submit exclusively to the jurisdiction of the state and federal courts of Kaufman County, Texas, and venue for any cause of action arising hereunder shall lie exclusively in the state and federal courts of Kaufman County, Texas. 12 Page 30 of 38 ITEM 6.2. 11. Should any party employ an attorney or attorneys to enforce any of the provisions hereof, to protect its interest in any manner arising under this MOU, or to recover damages for the breach of this MOU, the non-prevailing party in any action pursued in courts of competent jurisdiction (the finality of which is not legally contested) agrees to pay to the prevailing party all reasonable, direct costs and expenses, including specifically, but without implied limitation, reasonable attorneys' fees, expended or incurred by the prevailing party in connection therewith. 12. The subject headings contained in this MOU are for reference purposes only and do not affect in any way the meaning or interpretation hereof. 13. This MOU will continue until terminated upon the occurrence of one of the following conditions: (i) If Terrell HFC and Developer sign a mutual consent to terminate this Agreement, this MOU shall terminate on the date set forth in such consent; (ii) If the Development has not received a commitment for Tax Credits by July 15, 2026; (iii) If the Development has not received a commitment for Bond Financing by July 15, 2026; (iv) If Loan and Equity financing for the Development are not closed by August 5, 2026; (v) If terms of the Loan and Equity financing for the Development are unacceptable to the Terrell HFC, in its sole and absolute discretion, and Terrell HFC provides the Developer notice of such fact and a 30-day opportunity to provide Loan and Equity financing terms that are acceptable to Terrell HFC and the Developer, but the Developer does not do so; (vi) If either party breaches its obligations under this MOU, the non-breaching party provides the breaching party written notice of such fact and a 30-day opportunity to cure, and the breaching party fails to do so, then the non-breaching party may terminate this MOU by providing written notice thereof to the breaching party; (vii) If Developer determines that the transactions contemplated by this MOU are not feasible, Developer may terminate this MOU by delivering written notice thereof to Terrell HFC; (viii) If either party files for bankruptcy protection, makes an assignment for the benefit of creditors, has a receiver appointed as to its assets, or generally becomes insolvent, then the non-bankrupt party may terminate this MOU by providing written notice thereof to the bankrupt party; or (ix) If a party is ineligible to participate in the Tax Credit program pursuant TDHCA's rules (which ineligibility will also be deemed an event of default hereunder), then the other party may terminate this MOU by providing written notice thereof to the party found to be ineligible. 13 Page 31 of 38 ITEM 6.2. Upon termination of this MOU for any of the reason cited above, neither party will have any ongoing obligation to the other with respect to this MOU and the Development, except for the obligation of Developer to reimburse Terrell HFC for certain costs as provided herein. In addition, the provisions of this MOU with respect to the Development will be terminated and suspended when Terrell HFC and Developer and their affiliates, as applicable, enter into definitive agreements with respect to the governance of the Partnership and the development, construction, financing, and operation of the Development as contemplated herein, including but not limited to the Loan and Equity documents. The parties acknowledge that the Partnership, the General Partner, Terrell HFC and its affiliates will be represented in this transaction by Norton Rose Fulbright US LLP (“Partnership Counsel”) and by Hilltop Securities Inc. in a financial advisory capacity (“Hilltop Securities”). All costs of Partnership Counsel will be considered Costs hereunder and paid as provided herein. The Developer, the Developer SLP and their affiliates will be represented by separate counsel and will not be entitled to rely on Partnership Counsel for representation in this matter or by Hilltop Securities Inc. in a financial advisory capacity. [Signature Page To Follow] 14 Page 32 of 38 ITEM 6.2. EXECUTED to be effective as of the date above shown. Terrell Housing Finance Corporation a public nonprofit housing finance corporation By: Name: ____________________________________ Title: ____________________________________ Dominium Holdings II, LLC a Minnesota limited liability company By: _________________________ Name: Timothy S. Allen Title: Secretary 15 Page 33 of 38 ITEM 6.2. EXHIBIT A TERRELL HOUSING FINANCE CORPORATION CHECKLIST OF DUE DILIGENCE FOR TAX CREDIT TRANSACTIONS PROPERTY ITEMS RECEIVED ITEM NOTES Project Description, including number of units, unit sizes, and amenities Site Location information, with map Proposed Rent Schedule, with tenant income restrictions Site Plan Market Study Appraisal Phase I Environmental Soils Report Evidence of site control Evidence of zoning Title commitment with all exceptions Survey Physical needs analysis (for rehabilitation projects) Evidence of utility availability Flood certification DEVELOPMENT ITEMS RECEIVED ITEM NOTES Detailed Development Budget Sources and Uses Statement of Developer's experience, including evidence of net worth Plans and Specifications Resume of Architect, with evidence of experience 16 Page 34 of 38 ITEM 6.2. FINANCING ITEMS RECEIVED ITEM NOTES 15-year Pro Forma Debt financing commitment Equity financing commitment Description of all other sources of financing Application for debt financing Application for Tax Credits OPERATIONAL ITEMS RECEIVED ITEM NOTES Resume of property management company, with evidence of experience Description of social services to be provided and information regarding social services provider Proposed Rent Schedule, with tenant income restrictions Current rent roll (if applicable) ORGANIZATIONAL ITEMS RECEIVED ITEM NOTES Organizational documents for limited partnership 17 Page 35 of 38 ITEM 6.2. EXHIBIT B PARTNERSHIP AGREEMENT TERMS The following is a summary of terms that the Terrell HFC will require in the Partnership Agreement. The following list is not intended to be exhaustive and is intended to supplement and not limit the terms of the MOU. REPRESENTATIONS  The General Partner will make representations only as to its existence and due authorization and execution of Partnership documents.  The General Partner will become a partner in the Partnership at Closing, therefore pre- closing items must be addressed by the Developer SLP or other Developer affiliate. Under no circumstances will the General Partner execute documents on behalf of the Partnership that are effective prior to the General Partner’s admission to the Partnership.  The General Partner is not performing due diligence on the Project. Therefore, any representations regarding the Project must be provided by the Developer SLP.  The General Partner’s representations are generally as to its own knowledge. The knowledge of the General Partner may not be qualified by phrases such as “after due inquiry.” The General Partner will make no inquiry. COVENANTS  The General Partner may covenant not to take affirmative actions, but the General Partner cannot covenant not to permit or allow others to do things.  The General Partner cannot covenant to maintain the Exemption, but the General Partner may agree to cooperate with the Developer SLP in making any required filings.  Any covenants relating to the operation of the Partnership or the construction or operation of the Project shall be made by the Developer SLP (including, but not limited to, qualification for tax credits).  The General Partner will not covenant to maintain adequate capital. INDEMNITIES AND GUARANTEES  The General Partner shall be indemnified for all losses other than those caused by the General Partner’s gross negligence or willful misconduct.  The General Partner’s indemnification shall not be conditioned on a court determination.  The General Partner will indemnify only for its own gross negligence or willful misconduct and only to the extent permitted by law. The General Partner will not indemnify for actions or inactions of the Developer SLP or any other party.  The General Partner will not provide completion guarantees, environmental guarantees, credit guarantees, or covenant to make up for cash flow short falls.  The General Partner will not be required to make loans to the Partnership. Page 36 of 38 ITEM 6.2.  If the Partnership is required to provide a guarantee, the guarantee should either be limited to the assets of the Partnership or should explicitly state that the guarantee is not intended to be recourse to the General Partner. DUTIES AND OBLIGATIONS FOR ADMINISTRATION OF PARTNERSHIP  The General Partner will make a broad delegation to the Developer SLP with respect to the administration of the Partnership and the operation of the Project.  The Developer SLP will be responsible for obtaining any insurance required by the Partnership Agreement or other Partnership documents and will name the General Partner and Contractor as additional insured parties where applicable.  The Developer SLP will be responsible for ensuring any requirements for applying for and maintaining the Exemption are met, including any ongoing correspondence with the applicable appraisal district. The Developer SLP shall cause its counsel (or outside counsel), at the expense of the Partnership, to deliver an opinion regarding the Exemption, which opinion must be addressed to and in form and substance acceptable to the Terrell HFC and the Ground Lessor. The General Partner will agree to provide reasonable cooperation at the direction of the Developer SLP with respect to the Exemption.  All reports that are required by the Investor LP shall be made by the Developer SLP, and any penalties imposed for late reports shall be imposed only on the Developer SLP.  Notices required by the Investor LP shall be made by the Developer SLP. OPTIONS/RIGHTS OF FIRST REFUSAL  The Terrell HFC will be granted the Purchase Option and Right of First Refusal described in the MOU.  The Developer SLP shall receive and be granted the sole right to acquire the Investor LP’s Partnership interests, but under no circumstances shall the Developer SLP be granted an option to purchase the Project or the General Partner’s Partnership interests. The Developer SLP’s option to acquire the Investor LP’s Partnership interests does not trigger the right of the Terrell HFC, or any of its affiliates, to exercise a right of first refusal on the Developer SLP’s acquisition of the Investor LP’s Partnership interests. TAXES AND ALLOCATIONS  The Developer SLP will be responsible for the preparation of the tax return and tax filings. The General Partner will reasonably cooperate with the Developer SLP to the extent its signature is required.  Losses in excess of capital accounts are allocated to the Developer SLP rather than the General Partner.  The General Partner will not have a deficit restoration obligation either annually or on liquidation.  The Developer SLP will be the “partnership representative” for the purposes of tax audits. Page 37 of 38 ITEM 6.2.  If the Partnership has an adjustment on audit, the General Partner will pay its allocated share but will not put additional funds into the Partnership. REMOVAL  Unless a removal is caused by its own gross negligence or willful misconduct, the General Partner will not be liable for the costs related to removal or replacement.  The General Partner will not be liable for events after removal. MISCELLANEOUS  The governing law for all debt and equity document will be the State of Texas, and jurisdiction and venue for such documents will be Kaufman County, Texas. 41928106v2 Page 38 of 38