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Special Board of Aldermen 11-24-2020 Page 4

Technology-wise this evening, just to set the stage, | am going to be sharing my screen for the most part
this evening. At one point | am going to stop sharing my screen; Niel Cannon is going to share his screen
when he speaks and then he’ll be handing it back over to me. | say that to everyone so logistically you can
just become acclimated to that. When we are done speaking, I'll bring down my shared screen as quickly
as possible so we can have the full context of everyone for participation purposes. So, with that being said,
Madam President, | am sharing my screen here and | am just going to quickly read this to you. Again, an
overview: A New Market Tax Credit is a Federal Financial Program that aims to stimulate business and
real estate investment in low income communities through a Federal Tax Credit. The program is
administered by the US Treasury Departments, Community Development Financial Institutions Fund known
as CFI and allocated by and through Community Development Entities known as CEE’s.

Early on we anticipated using the New Market Tax Credit as a tool for the benefit of the Performing Arts
Center Project. In 2018 and 2020 a Comprehensive Tax New Market Credit 101 type briefings were
provided by our Development and Finance Consultant, Niel Cannon who is on this call with us this evening.
During the briefings, Niel explained in detail how the program works. R-20-094 which is the subject of
tonight’s conversation is an omnibus piece of Legislation that provides multiple authorizations necessary for
the City to proceed with the New Market Tax Credit. The structure before you is pretty simple, pretty
standard deal structure; ultimately, however, every New Market Tax Credit transaction is unique and may
require certain nuances tweaks. A New Market Transaction is like a multiple dial lock, that you need to
align the dials to unleash its potential.

The following describes how we are aligning the dials to make the program work for us as we are a
Municipal Corporation. And why are we doing this? As you all know, there is a $4 million-dollar
requirement for non-Nashua tax dollars to be contributed to the project in order for it to proceed. The New
Market Tax Credits afford us this opportunity to proceed now, because the New Market Tax Credit
Transaction will net to us $2.446 million coupled with local philanthropic donations of $1.553 million. We
achieved the $4 million-dollar requirement that needs to be satisfied. Needless to say, we had a unique
condition placed upon us and it calls for a unique solution. The chart beside you outlines the sources and
the amounts that achieves that $4 million dollars that | referenced.

Unique constraints, speaking of unique solutions, we also have some unique constraints when dealing with
the New Market Tax Credit. One of these constraints is time. From the very beginning we outlined that time
is going to be of the essence which does not lend itself toward our unique Government structure. We
would need to adapt this to this condition and this omnibus does just that. If you recall, we outlined that
once a CDE decides to make a Quality Equity Investment, known as a QEI, we would need to move
expeditiously. A second issue is the evolving nature of the deal structure, which means that as we look to
align the dials, new issues and details arise which must be addressed. The varied documents are typically
evolving all the way up until closing and this body is accustomed to seeing set deals with a handful of
documents. The omnibus addresses a dynamic and multi-part deal structure of the New Market Tax Credit
transaction by employing a typical tool that other municipalities use which is to seek approval to allow for
the overall effectuation of the deal and empowers the professional staff in administration to execute based
upon details and overall concepts.

So, my request this evening is two-fold. Tonight, | ask for favorable consideration and our recommendation
in order to proceed with the New Market Tax Credit Transaction with a favorable approval of the omnibus
addition to that, | am requesting a verbal report at your regularly scheduled Board of Aldermen Meeting just
following this meeting for final passage of R-20-094. With that being said, Madam President and through
you to the body, this evening, we have put together a small presentation that | would like to go through; and
the team that has been working on this so Celia Leonard and me, we’ve been working hand in hand on this,
Attorney John Kaminski who is with us this evening, is our outside New Market Tax Credit Counsel. And
then Neil Cannon, our Development and Finance Professional along with Andy Prolman our local Real
Estate Attorney is here with us this evening. Each one of those individual members will speak this evening
on the various parts of the deal that they are involved with.

Special Board of Aldermen 11-24-2020 Page 5

We have been working on this avenue of the financing plan for well over 3 years and as of recently we
have been working on this twice a week on closing coordination calls, in order to meet our deadline of
December 15™ which is why | am asking for this special consideration. So, tonight’s Agenda, we are going
to start will Niel Cannon, he’s going to go through the flow of funds which have already been provided to
you, but | am going to stop sharing my screen; | am going to ask Niel to share his. After Niel speaks, then
John Kaminski and Celia Leonard are going to present exactly how we are going to execute the deal and |
believe John Kaminski will be leading off that conversation and handing it off to Celia. | will begin sharing
my screen again at that point and then rounding things out with have Andy Prolman who will talk about the
Real Estate matters relative to this transaction. So, if | may, Madam President, | am going to stop sharing
my screen and ask Niel Cannon to pull up his so we can actually get into the details of how the transaction
will commence.

President Wilshire

Thank you, Director Cummings.

Director Cummings

Thank you.

President Wilshire

Mr. Cannon?

Niel Cannon

Thank you. | think it’s up now, can everybody see it?

President Wilshire

Yes.

Mr. Cannon

What | do is | take my Zoom screen and move it down to the lower right-hand corner so we can see this
whole thing. So, thank you for the opportunity to present tonight and I'll be short and as quick as possible.
Before | start, | just want to say that it’s been a real pleasure working with your municipal staff. | have been
working with Tim for close to 3 years on this. Over the last year or so, a lot with Celia and, of course, with
your finance staff. | want to say if it wasn’t for their confidence and their patience in dealing with these rules
as well as in dealing with me, it wouldn’t be going so smoothly. So, with that said, I’d like to start by asking
you to focus on this top box which | just lost — | don’t know what happened with it. | am going to try to bring
it up again.

Alderwoman Kelly

Alderman Wilshire, while we are waiting | just wanted to say that I’m here.

President Wilshire

Thank you, Alderman Kelly.

Alderwoman Lu

Excuse me, Alderman Wilshire?

Special Board of Aldermen 11-24-2020 Page 6
President Wilshire

Yes?

Alderwoman Lu

| just wanted to ask is this the sheet of paper that we all received today? Perhaps we are all looking at it?
President Wilshire

I’m not sure everyone has one.

Alderwoman Lu

Ok.

Mr. Cannon

Ok we are back, I’m sorry. Can we all see it?

President Wilshire

Mr. Cannon

Mr. Cannon

| apologize for that. So, I’d like you to look at the top box here, which basically shows the sources of funds
as well as the uses. And very simply, there’s 3 sources; there’s your $21 million-dollar bond; there’s the
$2.446 million-dollar New Market Tax Credit Equity, which is what this is all about. And there’s a donation
of $1.5 million dollars and change from the Nashua Community Arts. That totals $25 million. The uses are
without getting into the detail, is a total development budget for the building itself including acquisition of the
land of $22,550,000.00 and for furnishing and fixtures, this is special equipment audio/visual, stage lighting,
etc., of $2.45 which brings you to your total. So, given that | want to talk a little bit about how this works in
terms of this project. As you all know, because we’ve talked about it before, as many of you know, the New
Market Tax Credit Program is an incentive for communities or individuals to invest in distressed
communities. And a distressed community is a census track which meets certain criteria. The Census
Tract in Downtown Nashua that this project is located in is the most distressed census tract in the State.
So, it is eligible.

The amount of the Tax Credit available to investor is 39% of the qualified equity investment. Now the
Qualified Equity Investment which you see here is $9.75 million. We tried, Tim and |, for more than a year
to make like that $15 million, so that the number, you know, we were talking about $5 or $6 million dollars
and add up see equity. But unfortunately, we couldn’t get an allocation any greater than this. It’s for
several reasons, number one) Mascoma which is the only CDE that serves New Hampshire exclusively did
not have an allocation from US Treasury. Number two) the market for these things is very competitive and
when you go outside of New Hampshire asking for a CDE to make an allocation to do a project inside New
Hampshire, the first they do is they look at New Hampshire’s statistics and say, “you are too well off, you
have a median family income way about the national average, so we are not going to spend money there”.
Well, that’s too bad. They are very macro oriented rather than micro oriented.

So anyway, if you take that number of $9,750,000.00, the Tax Credit 39% of that or $3.8 million dollars
which is this number right here. So, for an investor to get that credit, he has to buy it from us because we
don’t want it. We want to raise cash. So, we effectively are selling him that credit, the $3,802,500.00 for
$.76 cents on the dollar, which is another number that’s gone way, way down because of the Tax Act of
2017, COVID and other issues. But we did well.

Special Board of Aldermen 11-24-2020 Page 7

The nationwide average right now is $.70 cents, we’ve got $.76. So, we are going to take it and run. So, if
you multiply the $.76 cents times 3.8 you get the $2,889,900,00. That’s cash in at the top of the deal from
the equity investor before we start taking fees out. So, if we look at this number down here, again the
$9,750,00.00, | want to focus at what’s in the shade are first, because that’s the New Market Deal. If we
look at the $9,750,000, b which is what we have been allocated, we have to raise to get $9,750,000.00
down here, which is here, we have to raise $9,998, 750.00 because we got fees to pay for $248,000. So,
the difference between this, this less this equals this over here, the $7 million. So, between a loan from
201 Main Street Financing Corp. which is most cases is a bank but this case because it is municipal
finance, it’s an entity that has been created under 152-G and you guys created it. That loan which is the
portion of your bond goes into the investment fund box. In addition, the $2,889,000.00 goes into that box
and $248,000.00 which is about 2.5% in fees, are taken out. Then they make the Qualified Equity
Investment which is the whole key to this New Market jargon and qualifies us for the deal.

Their investment into a subsidiary of Mascoma Community Development established solely for the
purposes of this deal. Mascoma Community Development is the managing partner of 14, or 15, or 16 or 17
of these sub CDE’s, we call sub-CDE’s. Again, there’s another fee paid to them so the $975 is reduced to
this and they make a loan to, in this case, Impact Corp. which is, go all the way down here. Impact Corp is
an entity that is an affiliate entity of 201 Main Street, which is another 162-G with a separate governance
than the 162-G created up here. So, we now have $9.555 million dollars in Impact Corp. in the form of
loans. Well that’s not going to cover the whole deal is it? That’ not enough, but it’s how we got

$2,446, 150.00 into it, that’s the important thing. How do we finance the balance of the deal, the stuff that’s
outside the gray area? That’s not a good term, “gray area” | should use a different color.

But the way we finance the balance and | think this is the stuff that Celia and John are going to get into
because it involves transactions that you have to authorize. Well, number one) we are going to take $13
million dollars, the balance of the bond, the $21 million dollars less the $7, I’m sorry this number here is
wrong, this is the right number, | don’t know how that happened. $13,891,000.00 which is this plus this
equals $21 million. We are going to take that and we are going to make a grant to 201 Main Street
Corporation, which is the non-profit 162-G entity that you created. At the same time, Nashua Community
Arts is going to donate $1.5 million dollars into 201 Main Street Real Estate Corp. So now, 201 Main Street
is going to have $15,445,000.00 in the bank for a couple of seconds at least. What are they going to do
with it? Number one) they are going to make a capital contribution of $12,995,000.00 the QALICB
Borrower, which is Impact Corp. which owns the building.

So now between this contribution of $12,995 and the $9,555 we have the total, we go up here, total
$22,550 that’s needed to build the building and acquire the land. After 201 Main Street makes that capital
contribution it’s going to have $2,450,000.00 left over. Going back up again, that’s the cost of the
equipment, you see it here, $2,450,000.00. So, Impact, | should say more than just equipment, FF&E,
specialty stuff mostly including seating, by the way, including this portable seating, that 201 Main Street will
purchase and lease to the City of Nashua which is the Master Tenant. And in conjunction with that, which
is sort of outside the deal, the City signs an Operator Agreement with Spectacle Management and has a
Trustee established to oversee the programming and the deals of this agreement.

| think that covers it. Tim, do you want me to take questions now or do | just let you go?

Director Cummings

Thank you, Neil, Madam President if | may, | would suggest that we hold questions until the end. What I’d
like to do is ask Niel to turn off the sharing of his screen so | can share my screen, if | could, Madam
President.

President Wilshire

Sure.

Special Board of Aldermen 11-24-2020 Page 8

Director Cummings

Thank you. So now I’d like to pivot and ask John Kaminski who is our New Market Tax Credit Counsel to
start the legal overview. And | am now sharing my screen, hopefully everyone can see it. | am going to
pull up a similar type diagram that was just shown but it’s going to have a little nuance to it to make sure we
are very clear on the legal aspects of this transaction. John?

John Kaminski, Attorney

Madam President, Members of the Board of Aldermen, it is my pleasure to be here with you this evening.
You may remember | was with you some time ago when we first were discussing this transaction, you
approved the creation of the two corporations. | do a fair amount of New Market Tax Credit transactional
work and am happy to be working with the City and the City team in putting together this transaction. And |
imagine by now you are asking yourself, “Why the devil is this so complicated”. And | think the answer is
that we are taking a program that the Federal Government created for the purpose of providing subsidies
and providing incentives to businesses to be located in distressed communities and we are adapting it and
using it to help serve municipal purposes so we need to create a business entity and create a business in
order to take advantage of this program.

| have to say that this transaction is not totally unique, I’ve worked on other transactions, representing other
municipal entities to utilize the credit. And the transaction you see is a typical New Market Tax Credit
structure that has evolved as people have used the law since the New Market Tax Credits were enacted by
the Federal Government back in 2001. So, this is a fairly standard transaction. | think one way to think
about this transaction is that it takes place in three phases. The first Phase is the Acquisition and
Financing Phase that Niel talked about and we are going to talk about more this evening. The second
Phase is the Operational Period of 7 years after we close in December on the New Markets Tax Credit
transaction there will be a 7-year period through December of 2027 in which we will need to be in
compliance with all the Federal requirements for the New Market Tax Credit Transactions. And then the
third Phase is what happens after the 7-year period.

| want to spend some time which you this evening talking about each of these three Phases because | think
it's important as you consider the Omnibus Resolution before you and potentially approving this program.
The Acquisition and Financing phase as Niel has gone over for you this evening, involves the various loans
and other transactions between the City’s entities, 201 Main Street Financing, Impact, and 201 Main Street
Real Estate. All of these three entities are affiliates of the City. We had to create Impact Corp. which is a
New Hampshire Business Corporation to serve as the location for the business that’s going to be financed
with the New Market Tax Credit money. Impact Corp.’s business is leasing property. It is in the business
of developing the site at 201 Main Street and leasing it to the City. So, the facility will be constructed and
equipped under the plans that the City has evolved over the last several years.

The City will then have a 25-year lease of the facility and will have a 5-year renewal option on the facility.
The purpose for this lease is to demonstrate that the Impact Corp. has an ongoing business. We can’t
simply have a business that lasts for 7 years and qualify for the New Market Tax Credits, we have to have a
business that is a long-term operational potential in front of it. So, we demonstrate that Impact Corp. has a
business going on and that enables us to qualify for the New Market Tax Credits. The investors, Mascoma
in this case, in New Markets Tax Credit transactions, have some requirements that they be assured that
they are going to get the credits and that everything is going to operate appropriately over the 7-year period
of time and that they will not incur any unanticipated environmental problems. All of these things are baked
into the program for Impact Corp. but the investors require that the City as the sponsor of this transaction,
guarantee the obligations of Impact Corp. to operate appropriately over the 7-year period of time and
guarantee construction completion and that there will be no unanticipated environmental liabilities. And you
will see that in one of our Omnibus Resolutions.

Special Board of Aldermen 11-24-2020 Page 9

The acquisition in financing is done through a complex set of documents that are designed to meet New
Market Tax Credit requirements, investor requirements and to achieve the ability of tax counsel, myself
included and Mascoma’s National Counsel included to give a tax opinion to Mascoma that the transaction
qualifies for the New Market Tax Credit. So that’s Phase One, that’s the acquisition and financing Phase.

Second is the Operational Phase during 7 years after the closing of the financing. During this period of
time, the project needs to continue to be operated, continue to be an active business. Spectacle
Management is going to be managing the project during that period of time. You don’t see the funds flow
during that period of time on this chart, but what’s going to happen is that the City is going to pay rent to
Impact Corp. under its lease and (audio cuts out) lease are going to find their way back to the City in the
form of repayment of debt because the City has made this $7 million dollar loan and also find their way
back to the City because any rental funds that are paid to Impact Corp. in excess of what Impact Corp has
for debt service and costs, will be distributed back up to the City through 201 Main Street Real Estate.

During the Operational Phase there will also be some reporting obligations, the Impact is going to need to
file reports with Mascoma so that Mascoma can demonstrate to the Federal Government that everything is
being done appropriately. There are some community benefits obligations as well, that the project be
providing benefits to the community through the existence of the Performing Arts Center and attendance at
events and things of that nature. That’s the second phase.

The third Phase is what happens at the end of the 7-year New Markets Tax Credit compliance period. After
7 years, there is no longer a requirement to continue to comply with the requirements of the New Markets
Program. Unfortunately, the IRS does not allow us to simply today enter into a binding contract, it says
after 7 years we erase the slate completely clean and undo all of this, were that life were so simple.

Instead what has evolved is a system where Mascoma has a document that is called a Put Option.
Mascoma can Put its interest in the Impact Investment fund the yellow box at the top, Mascoma being the
equity investor shown to the right there. Mascoma has the ability to put its interest in the investment fund to
201 Main Street Financing Corp. the City’s affiliate for $1,000.00. At that point, if Mascoma chooses to Put
201 Main Street pays Mascoma $1,000.00 and Mascoma is out of the deal completely. Notice | use the
word, if Mascoma chooses to put, because they are the ones that have the option at that point in time.

What has happened over time in the industry, is that equity investors almost always want to get out of
transactions at that point, they have received all their bargained for benefits, there’s nothing left for them in
the transaction, other than have to continue to report this on their tax return and their financial statements
and it becomes an administrative burden to them. So basically investors, the expectation is, although there
can’t be an assurance of it, that they will Put after the end of the 7 years. And you might say, well what
happens if they don’t? Suppose that Mascoma doesn’t Put. Well if they don’t Put, then 201 Finance
Corporation has what’s called a Call Option. 201 Real Estate Finance Corporation can elect to purchase
Mascoma?’s interest in the investment fund at the fair market value of that interest at that point in time. Fair
market value at that point in time is going to be very small because they’ve already gotten all the economic
benefits out of the transaction. So, one way or the other, there is the ability to at least wipe the Mascoma
part of this screen clear and have every entity that remains be the City or a City affiliate. And after the
interest and investment fund is acquired, the City can, at that point in time, opt to retain some or all of the
aspects of this structure or simplify it. That will be dictated at that point in time, 7 years out by tax,
business, and other considerations that the City can evaluate after the end of 7 years but at that point in
time, everything will be back in the control of the City.

So that’s sort of an overview of the transaction, an overview of the three Phases and an overview of the
documentation that will be signed in this transaction which is very typical of New Markets deals as they are
done nationally. And at this point, | think | am going to turn it over to Celia Leonard, who will go over the
Omnibus Resolution and link the approvals that you are being asked to give tonight to the provisions of the
transaction. And certainly, | too, am available to answer any questions when the question and comment
time arrives.

Special Board of Aldermen 11-24-2020 Page 10

Celia Leonard, Deputy Corporation Counsel

Ok thank you John and thank you President. Good evening everyone. So! am going to talk about action
items which are reflected in the Omnibus for consideration in front of you today. There’s a $21 million
dollar bond which has been authorization and we’ve gone through the flow of funds, how that’s going to
work. And so the City has action items to get there. | am going to do them in order, both looking at the
Omnibus Resolution and | keep looking to the left because my screen is up on the left and also Tim’s
awesome graph where he put the approvals with the lines, even with my reading glasses it is a little hard
for me to see so we will wing it here. But overall approval of the deal as John was saying, the New Market
Tax Credit deal has a lot of variables as the overall projects sponsor, the City has responsibilities for
various guarantees and documents. And approval of one is a general Omnibus Approval within an
Omnibus. Even if we don’t know the name of the document now, if it comes up in the next two weeks, if it
helps to effectuate and is necessary, which actually is pretty much more where we are at now. We are
doing the necessary — it will be approved and we can move forward with confidence that the Board
understands and approves the actions the City needs to take.

We don’t anticipate much unanticipated, but of course that’s in here, so that’s why that’s one is there, that’s
why it is up at the top. Approval One — this is the structure and you agree that the City can forward under
these known details. Approval Two — is authorizing the transfer of title from the City who purchased it from
Alec’s Shoe Store to the QALIGB, the Impact Corp. there. That is the sale, it will net or bring $2 million
back to the City. The next approval is the City and these aren’t necessarily sequential, honestly it’s how |
thought of them in my mind, so that’s how it came out on the approval list. So the City will — on the other
side you can see Approval Three is the City entering into the Master Tenancy that has been discussed.
And also entering into equipment leases to fit up the Performing Arts Center with the specialty equipment
and AV and everything that goes into that, two separate documents, but Approval Three covers both of
them.

Approval Four has 3 parts; one is the loan which was discussed in detail by Niel of the $7 million, the
number says “up to $8 million” because at the time of drafting, there were still questions as to how much
exactly would have to go in. This number is driven exactly by how much New Market Tax Credit equity is
available. So that number, depending on how much equity is going to be — would have changed but we are
very confident it is pretty much going to be this $7,108,850.00 or whatever Niel said. But it will not be more
than $8 million. The next 4B is the payment or the transfer of the not to exceed $14 million; it is around
$13,8 million | think from Niel’s presentation apparently. That transfer of money to 201 Main Street Real
Estate Corp. and then Niel explained how that comes back up in to Impact Corp. the QALICB borrower.
And | think, I’m not positive if John mentioned it, but I'll just say again that Impact Corp. is a taxable entity
and that does impact the lease in that the City will issue real estate tax to Impact Corp. for holding,
obviously the real estate at what we call 201 Main Street. That is factored into the lease payments and will
be a circular transaction back to the City.

The Third Approval 4C is that in addition to the loan and the transfer of those bond funds, there’s various
documents that need signing, closing statements, department certificates, settlement statements, etc., and
this authorizes the City to not only do those discreet transactions but all of the dozens, I’m trying to think,
we go through a closing agenda now twice a week of what over 100 documents that we are looking at,
different discreet. Approval 5 is authorizing the City as Master Tenant to enter into an agreement with
Spectacle. Now the Board has already approved an MOU as | recall, put it in the whereas is. And this is
further authorization that the final agreement can be entered into. The Reference Community Benefits
Agreement which | know is very important to the Board and to the City is also important to our investor and
to the overall New Market Tax Credit structure and portions of that — important portions about tracking the
community benefits are going to be incorporated via contract into that Spectacle Management Contract.
We have been in negotiations and discussions with Spectacle and they have been really open and excited
to participate with the City.

Special Board of Aldermen 11-24-2020 Page 11

The next approval is Approval 6 which authorizes the City to then sign all the contracts that you’ve and the
Finance Committee have already approved such as the construction contract and the architect contract.
Those are the two main ones that I’m thinking of, but if we find any other what | would call “smaller” but |
don’t mean to say that they are less important, PO’s or items that didn’t rise to the level of the City’s
purchasing threshold to come to Finance or the Board all those Performing Arts Center contracts that are
still viable and need action will be assigned to the QALICB, the Impact Corp. Next is Authorizing — there’s 7
and 8 are guarantees but they are different guarantees. Approval 7 relates back to the community, the
CDFA, the Community Development Finance Authority Tax Credits that came into the City and this Board
recently authorized their transfer to the fundraising arm, Nashua Community, not arm excuse me,
fundraising entity Nashua Community Arts. And the City’s guarantee there is that there’s going to be a
performance guarantee meaning that Performing Arts Center will, in fact, be run as a Performing Art
Center. So that is not a debt guarantee, that is an actual performance guarantee.

Approval 8 is a debt guarantee. What it allows the City to do is utilize future funds for current gain, the
Mascoma money goes away at the end of the year. If we were not able to close this deal, we would not be
able to avail ourselves the non-City money of almost $2.5 million dollars. So as part of that, there’s a
bridge fund because there are pledges that are going to come in over a little bit of time, they are not going
to come in directly on or before December 15" come in as cash. That amount is under $100,000.00, | think
at last tally that might be, | know Rich Lannan is on but it’s down lower. So the City will step into the shoes
of Nashua Community Arts there if for some reason Nashua Community Arts isn’t able to gather the
pledges, the City can take over and get those pledges and make sure that those private funds come into
the deal.

And lastly is Approval 9 which with the transfer of real estate to a for profit corporation, Impact, comes the
City’s fee structure. As other developers in the City face on a daily and weekly basis, but this is asking you
to waive for this project the permit and inspection fees which, although we don’t have any final numbers,
very ballpark figure, we are looking at around, that would be a cost to the project about 50, five-zero,
thousand dollars so that’s Approval 9. So those are the Action Items. A little more background information
about what this Resolution, if approved, would effectuate for the City and for the New Market Tax Credit
Deal.

Director Cummings

So if | may, Madam President, just lastly, | would ask Andy Prolman to talk about his involvement relative to
the real estate.

Andy Prolman, Attorney

Madam President and members of the Board, Good Evening, | am Andy Prolman with Prunier & Prolman.
My role in this transaction is relatively simple and straight-forward. | am the Title guy. My task is to make
sure that the Title of the real estate into Impact is good and it is, we’ve run our Title updates so we are in
good shape there. | am to help coordinate the transfer from the City of Nashua to Impact, do the actual
hands-on recording at the Registry of Deeds. | record the mortgage that Impact will be granting back to the
Mascoma subsidiary entity. We will be reviewing the lease and recording a Notice of Lease at the Registry
as John said for the 25 year lease with the 5-year option. And | can tell you that from my perspective,
everything looks good with respect to the title aspect. First American Title Insurance Company has issued
a title of commitment to ensure Title to both Impact and the Mascoma entity. And we look like we are teed
up to get this closed by the December 15" deadline. We've been working with Celia and Tim and the whole
team and we will be ready to go, ready to record to close this on the 15". That’s all | had. Thank you.

Director Cummings

And thank you Andy. So first | want to apologize, | didn’t realize, | wanted to double check to make sure
that the other piece of Legislation that is important to this deal structure was on the Agenda this evening
and itis. And it’s relative to creating a Board of Trustees as a standing Committee of the City of Nashua.

Special Board of Aldermen 11-24-2020 Page 12

That’s this blue, highlighted entity right here which is essentially the same language that was used to create
the Hunt Board for the Hunt Library. So that’s a separate piece of Legislation, though it goes part and
parcel with this. | just wanted to reference it because, of course, we are looking to try to get a favorable
recommendation on that piece of Legislation after this particular topic closes this evening. It is not as
imperative that that piece of Legislation get voted on at your following evening. But, of course, if you are of
interest and of mind to do it, we would certainly welcome it. But there is not as much time sensitivity for
that separate piece of Legislation so that could go through the normal course of business.

Anyway, so | wanted to just quickly clarify that and Madam President, | am going to stop sharing my screen
here as that is essentially our formal remarks that we had prepared to quickly highlight how this deal was
going to be effectuated and | would close my comments by reminding everyone that we have been working
on this for a really long time and it’s been a huge effort within the community. We have got some great
support from various volunteers, | can’t say enough about all of them who have been involved; | am not
going to name them out of fear that | might leave someone out. But they all know who they are and it’s
been a pleasure working on this project. | am excited to bring it to fruition. So thank you and | ask for your
favorable consideration.

President Wilshire

Thank you everyone, thank you Director Cummings and everyone who was here to present, Mr. Cannon,
Celia, everyone who was involved, thank you all very much. | am going to start with questions from the
Board, if anyone has questions? No questions? Alderwoman Lu?

Alderwoman Lu

Thank you Madam Chairman, Madam President. | have several questions, so | am sorry if | am the rare
person who needs some help here. So if | could just get some clarification on — | understand the dynamics
of the Call and the Put, but what | am confused about is whether the Put is to sell their part, Mascoma’s

Put, they may be willing to sell for $1,000.00 or is it $10,000.00 or something, their interest in the financing
corp. or their interest in the real estate or is it their interest in the Impact?

Attorney Kaminski

Madam Chair, may | answer that?

President Wilshire

Mr. Kaminski, please?

Attorney Kaminski

It is their interest in the investment fund. Tim, if you could put that diagram up please?

Alderwoman Lu

Maybe he’s not here.

Mr. Kaminski

No | see him staring at the screen intently, trying to make it happen but as he’s doing that, let me explain
further. All that Mascoma is going to own here is an interest in the investment fund. The investment fund
doesn’t own the real estate, all the investment fund is, is the pooling vehicle that pools the Mascoma money
and the City’s $7.something million dollar loan together and sends that money down through the structure.

So they don’t own the real estate, all they own is an interest in the investment fund and all the investment
fund owns are the rights to collect the loans that are being paid by Impact through the structure.

Special Board of Aldermen 11-24-2020 Page 13

As those loans are being paid up through the structure, remember that money to repay those loans goes
over to repay the City’s $7. something million dollar loan. So once they have finished taking the Tax
Credits over the 7 year period of time, they don’t own very much at all. They own just a few rights in the
investment fund, nothing to do really with the real estate, just with respect to that debt that is largely being
repaid back to the City. Does that answer your questions?

Alderwoman Lu

Yes, | am not sure | understand it completely. But does their interest, is it their interest in the fund reduced
over time?

Mr. Kaminski

Their benefit is reduced over time because they claim the New Market Tax Credits. They claim their credit
over a 7 year period of time; a slice in Year 1, a slice in Year 2 and so forth. By year 7, they claim them all
and that’s their primary economic benefit.

Alderwoman Lu

Ok, thank you that makes sense. So they don’t have anything to gain after the 7 years? OK. So could |
just ask three other questions?

President Wilshire
Yes.
Alderwoman Lu

Ok, how is it, | think Attorney Leonard mentioned that when we close on the sale of the building that the
purchase price will go back to the City. Now is that going to stay back at the City?

Mr. Kaminski

Yes the City is selling the real estate for $2 million dollars to Impact Corp. and that $2 million dollars that is
received from Impact Corp. is the sale proceeds to the City.

Alderwoman Lu
OK, | didn’t remember whether our bond amount included the purchase price for the building. | am
guessing it did. And how many municipalities, | understand this sounds like a process that is typically

geared toward businesses and we are kind of going some convoluted actions here to make it fit within a
municipality. Do many municipalities go through this rigmarole? Thank you?

Director Cummings
| can speak to it as well after Niel.
President Wilshire

Mr. Cannon.