Exhibit 10.10

 

Execution Version

 

GUARANTY OF

NEW MARKETS TAX CREDITS

 

THIS GUARANTY OF NEW MARKETS TAX CREDITS (this “Guaranty”), is made as of
February 3, 2012, by TEACHERS VILLAGE SCHOOL QALICB URBAN RENEWAL, LLC, a New
Jersey Urban Renewal limited liability company, and RBH-TRB NEWARK HOLDINGS,
LLC, a New York limited liability company (each a “Guarantor” and collectively,
the “Guarantors”, jointly and severally) for the benefit of GSB NMTC INVESTOR
LLC, a Delaware limited liability company, its successors and assigns and any
transferees of its interest in the Fund (as hereinafter defined) (collectively,
the “Investor”).

 

RECITALS

 

WHEREAS, Gateway CDE, LLC, a Delaware limited liability company (“Gateway
Allocatee”), has received an allocation of NMTCs (as hereinafter defined) under
Section 45D of the Code (as hereinafter defined), in the amount of $50,000,000
(the “Gateway Allocation”); and

 

WHEREAS, on the date hereof, Gateway Allocatee will make a sub-allocation of the
Gateway Allocation to Gateway Sub-CDE I, LLC, a Delaware limited liability
company (the “Gateway Sub-CDE”), in the amount of $50,000,000 (the “Gateway
Sub-Allocation”); and

 

WHEREAS, Community Loan Fund of New Jersey, Inc., a New Jersey not-for-profit
corporation (“NJCC Allocatee” and together with Gateway Allocatee, collectively,
the “Allocatee”), has received an allocation of NMTCs under Section 45D of the
Code, in the amount of $35,000,000 (the “NJCC Allocation” and together with the
Gateway Allocation, collectively, the “Allocation”); and

 

WHEREAS, NJCC Allocatee will make a sub-allocation of the NJCC Allocation to
NJCC CDE Essex, LLC, a New Jersey limited liability company (the “NJCC Sub-CDE”
and together with the Gateway Sub-CDE, collectively, the “Sub-CDE”), in the
amount of $10,000,000 (the “NJCC Sub-Allocation” and together with the Gateway
Sub-Allocation, collectively, the “Sub-Allocation”); and

 

WHEREAS, the Investor has made or agreed to make equity investments in GS Halsey
NMTC Investment Fund LLC, a Delaware limited liability company (the “Fund”), in
the amounts of $30,000,000, $5,689,766 and $2,500,234 (collectively, the “Fund
Capital Contribution”) (although it is not certain that the equity investment in
the amount of $9,158,368 shall occur and if such equity investment does not
occur, all references to the Fund Capital Contributions shall refer to only the
amount of the Fund Capital Contributions that have been made) in exchange for a
100.00% ownership interest in the Fund; and

 

WHEREAS, the Fund will obtain a loan from RBH-TRB East Mezz Urban Renewal
Entity, LLC, a New Jersey urban renewal limited liability company (the “Senior

 

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Leverage Lender”), in the amount of $27,795,619 (the “Senior Leverage Loan”),
which shall be evidenced by two promissory notes, one in the amount of
$17,550,000 and one in the amount of $10,245,619; and

 

WHEREAS, the Fund will obtain a loan from Goldman Sachs Bank USA, a New York
banking corporation (the “First Subordinate Leverage Lender”), in the amount of
$8,400,000 (the “First Subordinate Leverage Loan”);

 

WHEREAS, the Fund will obtain a second subordinate leverage loan from RBH-TRB
Newark Holdings, LLC (the “Second Subordinate Leverage Lender”), in the amount
of $766,248 (the “Second Subordinate Leverage Loan” and together with the Senior
Leverage Loan and the First Subordinate Leverage Loan, collectively, the
“Leverage Loan”); and

 

WHEREAS, the Fund will use the proceeds of the Fund Capital Contribution and
Leverage Loan to make capital contributions to the NJCC Sub-CDE in the amount of
$5,000,000 and to the Gateway Sub-CDE in the amount of $15,841,632 (each such
capital contribution, a “QEI” and collectively the capital contributions shall
be referred to as the “QEIs”) in exchange for a 99.99% equity interest in the
NJCC Sub-CDE and a 100% equity interest in the Gateway Sub-CDE; and

 

WHEREAS, on or before May 4, 2012, the following may occur: (i) the Fund will
obtain a leverage loan from the Senior Leverage Lender, in the aggregate
principal amount of $6,658,133 (the “Second Senior Leverage Loan”); and (ii) the
Fund will use the proceeds of the Second Senior Leverage Loan to (a) make a
second equity investment in the NJCC Sub-CDE in the amount of $5,000,000 and a
third equity investment in the Gateway Sub-CDE in the amount of $4,158,368 (each
such capital contribution shall be a QEI, although it is not certain that such
capital contributions shall occur), and (b) pay certain operating expenses of
the Fund.  If such capital contributions do not occur, all the references to
QEIs shall refer to the QEIs made on the date hereof; and

 

WHEREAS, the Sub-CDE is expected to designate any QEI which it receives as a
“qualified equity investment” as defined under Section 45D of the Code; and

 

WHEREAS, the Sub-CDE will use substantially all of the proceeds of the QEIs to
make certain loans (collectively, the “Project Loan”) to Teachers Village School
QALICB Urban Renewal, LLC, a New Jersey urban renewal limited liability company
(in such capacity, the “Borrower”); and

 

WHEREAS, Borrower is a QALICB (as defined herein); and

 

WHEREAS, the Project Loan is expected to constitute a QLICI (as defined herein);
and

 

WHEREAS, as a result of the transactions described in these recitals the
Investor’s investment in the Fund is expected to generate NMTCs pursuant to
Section 45D of the Code; and

 

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WHEREAS, the Guarantors will receive certain benefits in connection with the
QEIs, the Leverage Loan, and the Project Loan; and

 

WHEREAS, the parties hereto now desire to enter into this Guaranty as
hereinafter provided.

 

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises of the
parties hereto, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantors hereby covenant and
agree as follows:

 

1.                                      Definitions.

 

“Accountants” means The Reznick Group, P.C., or such other firm of independent
certified public accountants as may be engaged by the Fund with the consent of
the Investor.

 

“Affiliate” means, when used with reference to a specified Person; (a) any
Person that, directly or indirectly, through one or more intermediaries,
controls or is controlled by or is under common control with the specified
Person, including by means of a non-member manager; (b) any Person that is an
officer or director of, partner in, or trustee of, or serves in a similar
capacity with respect to the specified Person or of which the specified Person
is an officer, director, partner, or trustee, or with respect to which the
specified Person serves in a similar capacity; (c) any Person that, directly or
indirectly, is the beneficial owner of, or controls, ten percent (10%) or more
of any class of equity securities of, or otherwise has a substantial beneficial
interest (ten percent (10%) or more) in, the specified Person, or of which the
specified Person is directly or indirectly the owner of ten percent (10%) or
more of any class of equity securities, or in which the specified Person has a
substantial beneficial interest (ten percent (10%) or more); and (d) any
relative or spouse of the specified Person.

 

“After-Tax Basis” means, with respect to any payment to be received by the
Investor, the amount of such initial payment supplemented by a further payment
or payments so that, after deducting from such payments the amount of all income
taxes imposed on the Investor by any governmental authority with respect to such
payments, the remaining balance of such payments shall be equal to the amount of
the initial payment.

 

“Allocatee” has the meaning set forth in the Recitals.

 

“Allocation” has the meaning set forth in the Recitals.

 

“Allocation Agreement” means, collectively, the Gateway Allocation Agreement and
the NJCC Allocation Agreement.

 

“Borrower” has the meaning set forth in the Recitals.

 

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“CDFI Fund” means the Community Development Financial Institutions Fund of the
United States Department of Treasury, or any successor agency charged with
oversight responsibility for the NMTC program.

 

“Certification Application” means the Community Development Entity Certification
Application of the CDE, as the same may have been supplemented or amended,
together with the notice issued by the CDFI Fund of the certification of the CDE
as a “qualified community development entity” as such term is defined in
Section 45D of the Code and the Treasury Regulations and Guidance thereunder.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Entity” means any general partnership, limited partnership, limited liability
company, corporation, joint venture, trust, business trust, cooperative,
association, foreign trust or foreign business organization.

 

“Financial Projections” means those certain financial projections prepared by
the Accountants dated February 3, 2012 and attached hereto as Exhibit A.

 

“First Subordinate Leverage Lender” has the meaning set forth in the Recitals.

 

“First Subordinate Leverage Loan” has the meaning set forth in the Recitals.

 

“Fund” has the meaning set forth in the Recitals.

 

“Fund Agreement” means the Operating Agreement of the Fund, dated as of even
date herewith, by and between the Investor, as investor member, and Community
Loan Fund of New Jersey, Inc., as non-member manager, as amended from time to
time.

 

“Fund Capital Contribution” has the meaning set forth in the Recitals.

 

“Gateway Allocation Agreement” means, collectively, that certain New Markets Tax
Credit Program Allocation Agreement (Control Number: 07NMA003142), with a Notice
of Allocation date of September 20, 2007, by and among the Gateway Allocatee,
the Gateway Sub-CDE, other Subsidiary Allocatees of the Gateway Allocatee, and
the CDFI Fund, governing the Allocation and Sub-Allocation, dated February 24,
2008, as such agreement may be further amended from time to time.

 

“Gateway Sub-CDE Agreement” means that certain First Amended and Restated
Operating Agreement of the Gateway Sub-CDE, effective as of the date hereof, by
and between Gateway Allocatee, as manager, and the Fund, as investor member, as
amended from time to time.

 

“Guarantor” and “Guarantors” each has the meaning set forth in the preamble.

 

“Guaranty” has the meaning set forth in the preamble.

 

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“Indemnified Matters” has the meaning set forth in Section 2(a).

 

“Internal Rate of Return” or “IRR” means, with respect to the Investor’s Fund
Capital Contribution, the discount rate that causes the sum of net present value
of all cash inflows from the Investor (i.e., Capital Contributions) and the net
present value of all cash distributions and other cash outflows to the Investor
resulting from the investment (including the After-Tax Basis of tax credits, the
tax liabilities allocated to the Investor by the Fund and distributions from the
Fund to the Investor, whether from operating cash flow or capital transaction
proceeds) to equal zero dollars ($0).  The Investor will be deemed to receive a
specified Internal Rate of Return, with respect to any Capital Contributions,
when the Investor has received net After Tax benefits equal to a return of all
those Capital Contributions plus a cumulative, annually compounded, return on
those Capital Contributions at the specified annual rate, calculated commencing
on the date or dates those Capital Contributions are made and compounded
annually to the extent the return is not paid on a current basis, taking into
account the timing and amounts of all previous distributions, benefits and
detriments made (or deemed made) or allocated to the Investor by the Fund.  For
purposes of computing the Internal Rate of Return, (i) all cash in-flows, cash
out-flows, benefits and detriments will be discounted to present value using
monthly measuring periods and (ii) the calculation of Internal Rate of Return
will be made using Microsoft Excel XIRR or similar calculation.

 

“Investor” has the meaning set forth in the preamble.

 

“IRS” means the United States Internal Revenue Service.

 

“Leverage Loan” has the meaning set forth in the Recitals.

 

“Leverage Loan Documents” means, collectively, the documents evidencing and/or
securing the Leverage Loan.

 

“Loan Agreement” means that certain Loan Agreement by and among Gateway Sub-CDE,
NJCC Sub-CDE, and Teachers Village School QALICB Urban Renewal, L.L.C, a New
Jersey urban renewal limited liability company, dated as of the date hereof.

 

“NJCC Allocation Agreement” means, collectively, that certain New Markets Tax
Credit Program Allocation Agreement (Control Number: 08NMA000129), by and among
the NJCC Allocatee, the NJCC Sub-CDE, other Subsidiary Allocatees of the NJCC
Allocatee, and the CDFI Fund, governing the Allocation and Sub-Allocation, dated
March 18, 2009, as amended by those certain Amendments of NMTC Allocation
Agreement dated December 23, 2009, December 17, 2010, and October 27, 2011, as
such agreement may be further amended from time to time.

 

“NJCC Sub-CDE Agreement” means that certain Amended and Restated Operating
Agreement of the NJCC Sub-CDE, dated as of even date herewith, by and between
NJCC Allocatee, as managing member and the Fund, as investor member, as amended
from time to time.

 

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“NMTCs” means New Market Tax Credits as provided in Section 45D of the Code.

 

“NMTC Program Requirements” means, collectively, the provisions of Section 45D
of the Code, the Treasury Regulations and Guidance, and the Allocation
Agreements.

 

“NMTC Recapture Amount” means the amount equal, on an After-Tax Basis, to the
sum, as determined by the Accountants, necessary to be paid to the Investor to
cause the Internal Rate of Return to the Investor on its Fund Capital
Contribution through and including the date of the notice of the applicable NMTC
Recapture Event to equal the Target Rate of Return.  For purposes of determining
the NMTC Recapture Amount, all assumptions and methods (including but not
limited to, timing of tax credit recognition and IRR) will conform to those used
in the Financial Projections.  All tax benefits and obligations, as determined
by the Accountants, realized by the Investor as a result of its Fund Capital
Contribution plus any interest and penalties resulting from the NMTC Recapture
Event will be considered in the determination of the NMTC Recapture Amounts.

 

“NMTC Recapture Event” means a recapture or disallowance of any Tax Credits
attributable to the QEIs made by the Fund in the Sub-CDE to the extent that is
caused by or results from, in whole or in part, (a) any failure of the Borrower
to satisfy the requirements for being and continuing to be a qualified active
low income business under Section 45D(d)(2) of the Code and Treasury Regulation
1.45D-1(d)(4), unless such failure is a result of the change in the Code or
Treasury Regulations with which the Borrower is unable to comply without
unreasonable effort or expense, (b) prepayment of any principal on the Project
Loan caused by a breach by Borrower under the Project Loan Documents, whether
voluntarily, involuntarily, through foreclosure or other exercise of remedies by
the Sub-CDE or otherwise, (c) the failure of any of Borrower’s tenants or
subtenants under any lease or sublease, if any, to comply with the requirements
for lessees under Section 1.45D-1(d)(5)(ii) of the Treasury Regulations,
(d) failure of the Borrower to meet the non-qualified financial property test
under Section 1.45D-1(d)(4)(i)(E) of the Treasury Regulations, (e) any other
recapture or disallowance of Tax Credits arising from the fraud, gross
negligence, willful misconduct, malfeasance, misrepresentation, or violation of
law of the Borrower or its Affiliates or any breach of any provision of the
Transaction Documents that the Borrower or any Guarantor is a party to by the
Borrower or its Affiliates or any breach by the Borrower or its Affiliates of
any of the representations or warranties of the Borrower in the Transaction
Documents that the Borrower or any Guarantor is a party to, or (f) any other act
by or failure to act when action is required by or within the control of any of
the Guarantors or any of their Affiliates.

 

“Payment Date” means, with respect to any NMTC Recapture Amount or NMTC
Recapture Event, (i) the date of filing of a federal income tax return with
respect to Investor’s activities that reflects an amount payable by reason of
recapture or disallowance of Tax Credits; (ii) the date of entry into a closing
agreement or other

 

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settlement with the IRS which reflects a disallowance or recapture of Tax
Credits; (iii) the expiration of ninety days from the date of the issuance of a
statutory notice or similar demand of payment from the Internal Revenue Service
that asserts a disallowance or recapture of Tax Credits, unless the Investor
determines (in its sole discretion) to seek review through the IRS Appeals
Division or a determination by a court of competent jurisdiction; (iv) the
expiration of thirty days after a decision by the IRS Appeals Division that
upholds a disallowance or recapture of Tax Credits, unless the Investor
determines (in its sole discretion) to seek review by a court of competent
jurisdiction; or (v) the date of entry of judgment by a court of competent
jurisdiction upholding a disallowance of recapture of Tax Credits, whether or
not such decision is subject to appeal.

 

“Person(s)” means any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors, and assigns of such “Person”
where the context so permits.

 

“Project Loan” has the meaning set forth in the Recitals.

 

“Project Loan Documents” means, collectively, the documents evidencing and/or
securing the Project Loan.

 

“QALICB” means a “qualified active low-income community business” as such term
is defined in Section 45D(d)(4) of the Code and the Treasury Regulations and
Guidance.

 

“QEI” and “QEIs” each has the meaning set forth in the Recitals.

 

“QLICI” means a “qualified low income community investment” as such term is
defined in Section 45D(d)(1) of the Code and the Treasury Regulations and
Guidance.

 

“Refunded Credit Amount” has the meaning set forth in Section 2(b).

 

“Rights and Obligations” has the meaning set forth in Section 23.

 

“Satisfied Obligations” has the meaning set forth in Section 2(b).

 

“Second Subordinate Leverage Lender” has the meaning set forth in the Recitals.

 

“Second Senior Leverage Loan” has the meaning set forth in the Recitals.

 

“Second Subordinate Leverage Loan” has the meaning set forth in the Recitals.

 

“Senior Leverage Lender” has the meaning set forth in the Recitals.

 

“Senior Leverage Loan” has the meaning set forth in the Recitals.

 

“Sub-Allocation” has the meaning set forth in the Recitals.

 

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“Sub-CDE” has the meaning set forth in the Recitals.

 

“Sub-CDE Agreement” means, collectively, the Gateway Sub-CDE Agreement and the
NJCC Sub-CDE Agreement.

 

“Target Rate of Return” means a projected, after-tax Internal Rate of Return to
the Investor on account of its Fund Capital Contribution (and the Fund’s QEIs in
the Sub-CDE) equal to 7.61%, taking into account the dates and amount of such
Fund Capital Contribution, all cash distributions, Tax Credits and other tax
benefits, and any offsetting tax detriments, as shall be determined under the
Financial Projections, and utilizing the methodology contained in the Financial
Projections.

 

“Tax Credits” means New Market Tax Credits.

 

“Transaction Documents” means the Fund Agreement, the Sub-CDE Agreement, the
Leverage Loan Documents, the Project Loan Documents, and all related documents
executed and delivered in connection therewith.

 

“Treasury Regulations” or “Treas. Reg.” means any temporary or final regulations
promulgated from time to time under the Code.

 

“Treasury Regulations and Guidance” means the Treasury Regulations and any
guidance, rule, or procedure published by the CDFI Fund or the U.S. Department
of Treasury, including without limitation the Certification Application and the
Allocation Agreements.

 

2.                                      Indemnification and Payment.

 

(a)                                 In the event a NMTC Recapture Event shall
occur and the Guarantors have received written notice thereof from Investor
indicating that a Payment Date has occurred, the Guarantors hereby absolutely
and unconditionally agree, notwithstanding any standstill provisions that may
exist with respect to any other Loan Documents (as such term is defined in the
Loan Agreement), to pay to the Investor the NMTC Recapture Amount within ten
(10) days after receipt of said written notice from Investor, and to indemnify
and hold harmless the Investor, from and against any costs, expenses, claims,
demands, penalties, fines, liabilities, settlements, losses or damages of
whatever kind or nature (including reasonable counsel and attorney’s fees),
known or unknown, contingent or otherwise, arising out of or in any way related
to any costs, expenses, claims, demands, penalties, fines, liabilities,
settlements, losses or damages of whatever kind or nature that shall be incurred
by the Investor as a result of the failure of the Guarantor to perform its
obligations hereunder (collectively, the “Indemnified Matters”).  If Guarantor
has paid the NMTC Recapture Amount with respect to a notice under this
Section 2(a) hereof, and there is a subsequent appeal of any court decision
leading to such notice in which the Investor or its affiliates recovers all or
part of such amounts, the Investor will promptly repay a corresponding portion
of the amount paid by Guarantor to Guarantor.  In addition, to prevent a double
recovery, if the Investor has been paid by Guarantors the maximum amount that
could be due to Investors hereunder

 

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(reflecting a full disallowance of all Tax Credits contemplated for the QEIs for
all years and all amounts payable with respect to such Tax Credits), and
Investor later receives any cash amounts with respect to its capital
contributions to the Fund (whether from distributions or upon sale of its
interest), Investor shall return such amounts to the Guarantors in proportion to
and to the extent of the amounts previously paid to Investor by such Guarantors.

 

(b)                                 If the Borrower has fully satisfied its
obligation to pay a NMTC Recapture Amount pursuant to Section 2(a) hereof (the
“Satisfied Obligations”), and the Investor shall have been allowed tax credits
attributable to any Recaptured Credits or Disallowed Credits (a “Refunded Credit
Amount”), whether due to changes in the Code or Treasury Regulations, or
otherwise, the Investor shall pay to the Guarantors within thirty (30) days
after Investor has recognized the Refunded Credit Amount for tax purposes an
amount equal to the lesser of: (i) the Refunded Credit Amount, or (ii) the
Satisfied Obligations.

 

(c)                                  In addition to the foregoing, the
Guarantors shall also be obligated to pay, notwithstanding any standstill
provisions that may exist with respect to any other Loan Documents (as such term
is defined in the Loan Agreement): (i) all reasonable legal, accounting, and
other fees and costs incurred by the Investor in connection with any tax audit,
litigation or other proceedings challenging the Investor’s entitlement to the
Tax Credits as a result of an actual or alleged NMTC Recapture Event;
(ii) interest and any penalties on the NMTC Recapture Amount unpaid from time to
time, if any, at the rate of two percent (2%) over the long-term applicable
federal rate (as prescribed under Section 1274(d) of the Code) at the end of the
calendar month preceding the date on which the specified NMTC Recapture Event
occurs (payable on the later of (A) the tenth (10th) calendar day following the
receipt of notice from the Lender of the amount of any such interest and
penalties, or (B) the date on which the NMTC Recapture Amount is required to be
paid), until paid in full; and (iii) all reasonable legal, accounting, and other
fees and costs incurred by the Investor in connection with the enforcement of
its rights under this Agreement.

 

3.                                      Representations.

 

(a)                                 Execution of this Guaranty has been duly
authorized by each Guarantor. The consummation of all transactions contemplated
herein and in any agreement incident to the transactions described above to be
performed by the Guarantors does not and will not result in any breach or
violation of, or default under any agreements by which the Guarantors or any of
their respective property is bound, or under any applicable law, administrative
regulation, or court decree, the effect of which will impair performance by such
Guarantor of its obligations hereunder.  This Guaranty is enforceable against
the Guarantors in accordance with its terms.

 

(b)                                 Each Guarantor further covenants, represents
and warrants to and for the benefit of the Investor as follows:

 

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(i)                         there are no facts or circumstances of any kind or
nature whatsoever of which it is aware that could in any way impair or prevent
it from performing its obligations under this Guaranty;

 

(ii)                      any and all financial information with respect to it
that it has given to the Investor in connection with the transactions
contemplated by this Guaranty fairly and accurately presents its financial
condition as of the respective dates thereof and for the respective dates
indicated therein, and, since the respective dates thereof, there has been no
adverse change in its financial condition;

 

(iii)                   with the assistance of counsel of its choice, it has
read and reviewed this Guaranty and such other documents as it and its counsel
deemed necessary or desirable to read;

 

(iv)                  each representation made by it or in any of the documents
evidencing or securing any QLICI to which it is a party is true and correct in
all respects and the Investor may rely thereon;

 

(v)                     each Guarantor covenants and agrees to provide to the
Investor (i) within 120 days of the end of the calendar year its audited
financial statements prepared by a certified public accountant in accordance
with generally accepted accounting practice, (ii) within 10 days of filing the
same, its Federal tax returns prepared by a certified public accountant in
accordance with generally accepted accounting practice, (iii) within 60 days of
the end of each fiscal quarter, quarterly unaudited financial statements
(including a balance sheet, income statement and operating statement for such
fiscal quarter) and (iv) such other financial information as the Investor shall
reasonably request within twenty (20) days of any such request; and

 

(vi)                  it acknowledges receipt of valid and sufficient
consideration for providing this Guaranty.

 

(c)                                  Each Guarantor further covenants and agrees
to immediately notify the Investor of any change in its financial condition that
adversely affects its ability to perform hereunder.

 

4.                                      Intended Beneficiary.  The parties
intend that the Investor, and its successors and assigns (including, without
limitation, successors, assigns and transferees of the Investor’s interest in
the Fund), is a direct beneficiary of this Guaranty and that the Investor, and
its successors, assigns and transferees of the Investor’s interest in the Fund,
shall have the right to directly enforce the Guarantors’ obligations hereunder. 
No person other than the Investor (and its successors, assigns and transferees
of the Investor’s interest in the Fund), may directly or indirectly rely upon or
enforce the provisions of this Guaranty, whether as a third party beneficiary or
otherwise.

 

5.                                      Burden and Benefit.  This Guaranty and
each covenant and agreement contained herein shall be binding on, and the term
“Guarantor” or “Guarantors”, as used herein, shall include the heirs, personal
representatives, successors, assigns, legal representatives and other
transferees of the Guarantors, including, without limitation,

 

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successors by consolidation. This Guaranty shall inure to the benefit of the
Investor and its respective successors and assigns.  The Guarantors shall not
have the right to assign their respective obligations hereunder without the
prior written consent of the Investor.

 

6.                                      Severability of Provisions.  Each
provision of this Guaranty shall be considered severable, and if for any reason
any provision that is not essential to the effectuation of the basic purposes of
this Guaranty is determined to be invalid and contrary to any existing or future
law, such invalidity shall not impair the operation of or affect those
provisions of this Guaranty that are valid.

 

7.                                      No Continuing Waiver.  None of the
parties hereto shall be deemed to have waived any rights hereunder unless such
waiver shall be in writing and signed by such party.  The waiver by any party of
any breach of this Guaranty shall not operate or be construed to be a waiver of
any subsequent breach.

 

8.                                      Governing Law.  This Guaranty shall be
construed and enforced in accordance with the laws of the State of New York
without regard to principles of conflicts of laws, and cannot be modified,
amended or terminated orally.

 

9.                                      Headings.  All headings in this Guaranty
are for convenience of reference only and are not intended to qualify the
meaning of any provision of this Guaranty.

 

10.                               Terminology.  All personal pronouns used in
this Guaranty, whether used in the masculine, feminine, or neuter gender, shall
include all other genders, the singular shall include the plural, and vice versa
as the context may require.

 

11.                               Counterparts.  This Guaranty may be executed
in several counterparts, each of which shall be deemed to be an original copy,
and all of which together shall constitute one agreement binding on all parties
hereto, notwithstanding that all the parties shall not have signed the same
counterpart.

 

12.                               Payment and Performance Guaranty.  Guarantors
hereby agree that this is a guaranty of payment and performance, not collection,
and that this Guaranty is an unconditional, irrevocable primary guaranty and may
be enforced by the Investor directly against Guarantors without first resorting
to or exhausting any other right or remedy.  Guarantors further covenant that
this Guaranty shall remain and continue in full force and effect,
notwithstanding any assignment, modification, extension, compromise or renewal
of the Project Loan Documents, the Sub-CDE Agreement, the Fund Agreement, or any
other document associated with the transactions contemplated herein, or the
release or exchange of any real or personal property or other collateral
security for any of the obligations of the QLICIs, and notwithstanding any
amendment or modification of the Project Loan Documents, the Sub-CDE Agreement,
the Fund Agreement, or any other document associated with the transactions
contemplated herein, and notwithstanding that indulgences or forbearance may be
granted under any or all of such documents, all of which may be made, done, or
suffered without notice to or further consent of the Guarantors.  Guarantors
agree and confirm that their liability hereunder shall not be affected,
impaired, or reduced in any way by any action taken under the foregoing

 

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provisions, or any other provisions hereof, or by any delay, failure or refusal
of the Investor to exercise any right or remedy it may have against any other
Guarantor.  Guarantors agree that this Guaranty, and such Guarantor’s liability
hereunder, shall not be affected or impaired by reason of the existence of any
indemnity or guaranty of any other party covering the same or similar
obligations or by reason of the Investor exercising any rights or remedies
against any such other party.  Each Guarantor acknowledges that it is capable of
informing itself with respect to NMTC Recapture Events.  It shall not be a
condition of the obligations of the Guarantors under this Guaranty that
Guarantors have notice of any NMTC Recapture Event.

 

13.                               Joint and Several.  The obligations under the
term of this Guaranty are joint and several obligations of the Guarantors.

 

14.                               JURY TRIAL.  THE GUARANTORS HEREBY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS
GUARANTY, OR ANY OTHER DOCUMENT DELIVERED HEREUNDER OR IN CONNECTION HEREWITH,
OR ANY TRANSACTION ARISING FROM OR CONNECTED TO ANY OF THE FOREGOING.  THE
GUARANTORS REPRESENT THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY
GIVEN.

 

15.                               ENTIRETY.  THIS GUARANTY EMBODIES THE FINAL,
ENTIRE AGREEMENT OF THE GUARANTORS AND THE INVESTOR WITH RESPECT TO THE
GUARANTORS’ GUARANTY OF THE INDEMNIFIED MATTERS AND SUPERSEDES ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THE SUBJECT MATTER HEREOF.  THIS GUARANTY IS INTENDED BY THE
GUARANTORS AND THE INVESTOR AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF
THE GUARANTY, AND NO COURSE OF DEALING BETWEEN ANY GUARANTOR AND THE INVESTOR,
NO COURSE OF PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC
EVIDENCE OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY
ANY TERM OF THIS GUARANTY.  THERE ARE NO ORAL AGREEMENTS BETWEEN THE GUARANTORS
AND THE INVESTOR.

 

16.                               No Discharge; Successive Actions.  The
Guarantors acknowledge that all of their obligations under this Guaranty are
primary, absolute, irrevocable and unconditional and that their liability shall
not be limited or affected by any release or discharge of any other Guarantor,
whether by operation of law or otherwise, or by any other legal or factual
matter, unless and until all guarantied obligations have been paid and performed
in full, regardless of whether or not notice has then been given to the
Guarantors.  The Investor may maintain successive actions for defaults
hereunder.  The Investor’s rights hereunder shall not be exhausted by its
exercise of any of its rights or remedies or by any such action or by any number
of successive actions until and unless

 

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all obligations guarantied hereunder have been irrevocably paid in full.  In
amplification, and not in limitation, of the provisions set forth above, the
Guarantors hereby waive and agree not to assert or take advantage of:

 

(a)                                  any right to require the Investor to
proceed against any other person;

 

(b)                                 the defense of the statute of limitations in
any action hereunder or in any action for the collection or the performance of
any obligations guaranteed hereby;

 

(c)                                  any defense that may arise by reason of the
incapacity, lack of authority, death or disability of any other person or
persons or the failure of the Investor to file or enforce a claim against the
estate (in administration, bankruptcy or any other proceeding) of any other
person or persons;

 

(d)                                 any defense based upon an election of
remedies by the Investor, or the right of Guarantors to proceed against the
Investor;

 

(e)                                  any duty or obligation on the part of the
Investor to protect, not impair, retain or enforce any security for the payment
of the obligations guaranteed hereby; and

 

(f)                                    any defense related to receipt or
sufficiency of consideration for the Guarantors guaranteeing the obligations
under this Guaranty.

 

17.                               Notice.  All notices, demands, requests or
other communications to be sent by one party to the other hereunder or required
by law shall be in writing and shall be deemed to have been validly given or
served by delivery of same in person to the addressee or by depositing same with
Federal Express for next Business Day delivery or by depositing same in the
United States mail, postage prepaid, registered or certified mail, return
receipt requested, addressed as follows:

 

If to the Investor:

 

c/o Goldman Sachs Bank USA

 

 

200 West Street

 

 

New York, New York 10282

 

 

Attn: Margaret Anadu

 

 

 

With a copy to:

 

Goldman Sachs Bank USA

 

 

200 West Street

 

 

New York, New York 10282

 

 

Attn: Andrea Gift

 

 

 

and another copy to:

 

Jones Day

 

 

222 East 41st Street

 

 

New York, New York 10017

 

 

Attn: Steven C. Koppel, Esq.

 

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If to Guarantors:

 

c/o RBH Group

 

 

89 Market Street, 8th Floor

 

 

Newark, New Jersey 07102

 

 

Attn: Ron Beit-Halachmy

 

 

 

with a copy to:

 

McManimon & Scotland, LLC

 

 

1037 Raymond Boulevard, Suite 400

 

 

Newark, New Jersey 07102

 

 

Attn: Glenn Scotland, Esq.

 

18.                               Fees and Costs.  Guarantors agree that, in the
event this Guaranty is placed in the hands of an attorney for enforcement
following notice of demand for payment as required herein, Guarantors will
reimburse the Investor seeking such enforcement for all expenses incurred in
enforcing this Guaranty, including, without limitation, reasonable attorneys’
fees and expenses (whether or not suit is brought hereon) and all such expenses
incurred in connection with any trial, appeal, arbitration or bankruptcy
proceedings.

 

19.                               Interest. All amounts due under this Guaranty
which are not timely paid by Guarantors shall bear interest from and after the
date due until paid in full, at an annual rate equal to the Target Rate of
Return.

 

20.                               Defenses Not Valid; No Offset.  The Guarantors
further agree that the validity of this Guaranty and the obligations of the
Guarantors hereunder shall in no way be terminated, affected, or impaired (a) by
reason of the assertion by the Investor of any rights or remedies under or with
respect to the Transaction Documents, or any other instruments executed in
connection therewith, against any Person obligated thereunder, (b) by reason of
any failure to exercise, or delay in exercising, any such right or remedy or any
right or remedy hereunder or in respect to this Guaranty, or (c) by reason of
the adjudication in bankruptcy of this Guaranty or any Guarantor or any Person
obligated under the Project Loan Documents, or the filing of a petition for any
relief under any federal, state, or local bankruptcy law by any Guarantor or any
such Person.  No Guarantor shall have the right to offset any of the obligations
guaranteed hereunder against any amount otherwise owed or alleged to be owed by
the Investor to such Guarantor.

 

21.                               Continuing Guaranty.  It is expressly
understood and agreed that this is a primary, continuing guaranty and that the
obligations of Guarantors hereunder are and shall be absolute under any and all
circumstances, without regard to the validity, regularity or enforceability of
the Project Loan Documents, the Fund Agreement, the Sub-CDE Agreement, or any
other instruments executed in connection therewith or otherwise in connection
with the transactions contemplated herein.  Notwithstanding the foregoing,
however, this guaranty shall automatically terminate upon the expiration of the
relevant income tax statutes of limitation applicable with respect to the
Investor for all taxable years for which NMTCs with respect to the QEIs could be
disallowed or recaptured.

 

14

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22.                               Certain Waivers.  Guarantors hereby waive
notice of the acceptance hereof, presentment, demand for payment, protest,
notice of protest and any and all notices of nonpayment, non-performance,
non-observance, and all other notices of any kind, and other proof, and notice
of demand, and Guarantors hereby waive all suretyship defenses and defenses in
the nature thereof.

 

23.                               Assignment.  If any or all of the rights and
obligations with respect to the Investor’s interest in the Fund (the “Rights and
Obligations”) are assigned by the Investor in connection with any assignment of
its interest, this Guaranty shall automatically be assigned therewith in whole
or in part, as applicable, without the need of any express assignment and when
so assigned, the Guarantors shall be bound as set forth herein to each assignee
without in any manner affecting the Guarantors’ liability hereunder for any part
of the Rights and Obligations retained by the Investor.

 

24.                               Section 3213. Each Guarantor acknowledges and
agrees that this Guaranty is and is intended to be, an instrument for the
payment of money only, as such phrase is used in Section 3213 of the Civil
Practice Law and Rules of the State of New York, and each Guarantor has been
fully advised by their counsel of its rights and remedies pursuant to said
Section 3213.

 

25.                               Amendments. This Guaranty may be amended only
by an instrument in writing executed by the party or an authorized
representative of the party against whom such amendment is sought to be
enforced.

 

26.                               Recitals. The recital and introductory
paragraphs hereof are a part hereof, form a basis for this Guaranty and shall be
considered prima facie evidence of the facts and documents referred to therein.

 

[Signatures contained on following page]

 

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SIGNATURE PAGE

 

GUARANTY OF NEW MARKETS TAX CREDITS

 

IN WITNESS WHEREOF, the Guarantors have caused this Guaranty of New Markets Tax
Credits to be duly executed as of the date first above written.

 

 

TEACHERS VILLAGE SCHOOL QALICB URBAN RENEWAL, LLC,

 

a New Jersey Urban Renewal limited liability company

 

 

 

 

 

By:

/s/ Ron Beit-Halachmy

 

 

Name: Ron Beit-Halachmy

 

 

Title: Authorized Signatory

 

 

 

 

 

 

 

RBH-TRB NEWARK HOLDINGS, LLC,

 

a New York limited liability company

 

 

 

 

 

 

 

By:

/s/ Ron Beit-Halachmy

 

 

Name: Ron Beit-Halachmy

 

 

Title: Authorized Signatory

 

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EXHIBIT A

 

FINANCIAL PROJECTIONS

 

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